SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended
September 30, 1997 Commission file #0-16976
ARVIDA/JMB PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 36-3507015
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Avenue., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/440-4800
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such a shorter period that
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]
<PAGE>
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . 21
PART II OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . 27
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 30
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- -----------
<S> <C> <C>
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 15,617,330 53,635,737
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,513,592 11,833,522
Trade and other accounts receivable (net of allowance for doubtful
accounts of $254,732 at September 30, 1997 and $261,326 at
December 31, 1996). . . . . . . . . . . . . . . . . . . . . . . . . 8,925,159 3,582,995
Mortgages receivable, net . . . . . . . . . . . . . . . . . . . . . . 442,224 1,269,460
Real estate inventories . . . . . . . . . . . . . . . . . . . . . . . 183,919,038 174,638,454
Property and equipment held for disposition or sale . . . . . . . . . 43,867,455 --
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . 35,764,691 79,373,444
Investments in and advances to joint ventures, net. . . . . . . . . . 2,106,101 2,739,842
Equity memberships. . . . . . . . . . . . . . . . . . . . . . . . . . 4,886,021 5,457,880
Amounts due from affiliates, net. . . . . . . . . . . . . . . . . . . 1,347,327 1,003,732
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . 10,542,067 7,105,077
------------ ------------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . $322,931,005 340,640,143
============ ============
<PAGE>
ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(UNAUDITED)
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- -----------
Liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . $ 18,436,605 21,532,400
Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,846,233 17,287,325
Accrued expenses and other liabilities. . . . . . . . . . . . . . . 18,537,365 15,324,815
Notes and mortgages payable, net. . . . . . . . . . . . . . . . . . 97,675,505 36,843,778
------------ ------------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . 159,495,708 90,988,318
------------ ------------
Partners' capital accounts:
General Partner and Associate Limited Partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net income . . . . . . . . . . . . . . . . . . . . . . 39,766,027 35,750,061
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (38,508,251) (34,492,285)
------------ ------------
1,277,776 1,277,776
------------ ------------
Limited Partners:
Capital contributions, net of offering costs. . . . . . . . . . . 364,841,815 364,841,815
Cumulative net income . . . . . . . . . . . . . . . . . . . . . . 44,810,571 36,071,642
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (247,494,865) (152,539,408)
------------ ------------
162,157,521 248,374,049
------------ ------------
Total partners' capital accounts. . . . . . . . . . . . . . 163,435,297 249,651,825
------------ ------------
Total liabilities and partners' capital . . . . . . . . . . $322,931,005 340,640,143
============ ============
<FN>
The accompanying notes are an integral part
of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ARVIDA/JMB PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------------------------------------
1997 1996 1997 1996
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Revenues:
Housing . . . . . . . . . . . . . . . . . . . $56,850,265 54,010,856 134,740,429 154,106,035
Homesites . . . . . . . . . . . . . . . . . . 6,109,836 6,388,362 14,841,540 14,809,610
Land and property . . . . . . . . . . . . . . 633,940 5,093,464 3,914,289 19,853,665
Operating properties. . . . . . . . . . . . . 7,509,103 6,726,081 24,289,366 22,300,362
Brokerage and other operations. . . . . . . . 7,085,481 7,142,108 18,774,739 20,931,980
----------- ---------- ----------- -----------
Total revenues. . . . . . . . . . . . . 78,188,625 79,360,871 196,560,363 232,001,652
----------- ---------- ----------- -----------
Cost of revenues:
Housing . . . . . . . . . . . . . . . . . . . 47,964,413 48,047,779 115,347,052 132,596,690
Homesites . . . . . . . . . . . . . . . . . . 3,835,008 4,238,549 9,049,395 10,182,604
Land and property . . . . . . . . . . . . . . 507,056 1,371,878 3,034,835 13,298,625
Operating properties. . . . . . . . . . . . . 6,178,530 6,771,381 20,118,274 21,119,659
Brokerage and other operations. . . . . . . . 5,828,873 6,510,860 17,005,323 19,346,466
----------- ---------- ----------- -----------
Total cost of revenues. . . . . . . . . 64,313,880 66,940,447 164,554,879 196,544,044
----------- ---------- ----------- -----------
Gross operating profit. . . . . . . . . . . . . 13,874,745 12,420,424 32,005,484 35,457,608
Selling, general and administrative expenses. . (5,044,291) (5,206,752) (17,243,606) (14,993,374)
----------- ---------- ----------- -----------
Net operating income. . . . . . . . . . 8,830,454 7,213,672 14,761,878 20,464,234
Interest income . . . . . . . . . . . . . . . . 500,338 344,098 1,531,724 1,125,991
Equity in earnings (losses) of
unconsolidated ventures . . . . . . . . . . . 53,692 (18,076) 73,497 (134,989)
Interest and real estate taxes, net . . . . . . (1,640,154) (836,180) (3,612,204) (2,719,005)
----------- ---------- ----------- -----------
<PAGE>
ARVIDA/JMB PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------------------------------------
1997 1996 1997 1996
------------ ----------- ------------ -----------
Net income. . . . . . . . . . . . . . . $ 7,744,330 6,703,514 12,754,895 18,736,231
=========== ========== ========== ==========
Net income per Limited
Partnership Interest. . . . . . . . . $ 12.56 16.42 21.63 44.74
=========== ========== ========== ==========
Cash distributions per
Limited Partnership
Interest. . . . . . . . . . . . . . . $ 175.00 -- 235.04 25.85
=========== ========== ========== ==========
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 12,754,895 18,736,231
Charges (credits) to net income not requiring (providing) cash:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . 2,974,154 4,320,628
Equity in (earnings) losses of unconsolidated ventures. . . . . . . . . . (73,496) 134,989
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . 49,719 (10,272)
Gain on disposition of property and equipment . . . . . . . . . . . . . . 2,814 (8,591)
Changes in:
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,680,070) 301,851
Trade and other accounts receivable . . . . . . . . . . . . . . . . . . . (5,391,883) 19,202,471
Real estate inventories:
Additions to real estate inventories. . . . . . . . . . . . . . . . . . (122,775,973) (144,705,804)
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,811,464 148,616,606
Capitalized interest. . . . . . . . . . . . . . . . . . . . . . . . . . (2,517,104) (3,841,138)
Capitalized real estate taxes . . . . . . . . . . . . . . . . . . . . . (2,798,971) (2,982,168)
Equity memberships. . . . . . . . . . . . . . . . . . . . . . . . . . . . 571,859 769,122
Amounts due from affiliates, net. . . . . . . . . . . . . . . . . . . . . (343,595) 164,194
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . (3,817,916) 870,504
Accounts payable, accrued expenses and other liabilities. . . . . . . . . 574,304 2,018,785
Deposits and unearned income. . . . . . . . . . . . . . . . . . . . . . . 7,558,908 (4,178,750)
------------ -----------
Net cash provided by operating activities . . . . . . . . . . . . 1,899,109 39,408,658
------------ -----------
<PAGE>
ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
1997 1996
------------ -----------
Cash flows from investing activities:
Mortgages receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 827,236 750,637
Acquisitions of property and equipment. . . . . . . . . . . . . . . . . . (2,857,482) (11,892,813)
Proceeds from sales and disposals of property and equipment . . . . . . . 2,739 24,863
Joint venture distributions (contributions), net. . . . . . . . . . . . . 249,699 (14,276)
Payments from (advances to) joint ventures. . . . . . . . . . . . . . . . (12) 4,167,035
Proceeds from sale of joint venture interest. . . . . . . . . . . . . . . -- 6,111,440
------------ -----------
Net cash used in investing activities . . . . . . . . . . . . . . (1,777,820) (853,114)
------------ -----------
Cash flows from financing activities:
Proceeds from notes and mortgages payable . . . . . . . . . . . . . . . . 86,580,797 30,980,173
Payments of notes and mortgages payable . . . . . . . . . . . . . . . . . (25,749,070) (61,915,441)
Distributions to General Partner and Associate Limited Partners . . . . . (4,015,966) (580,251)
Distributions to Limited Partners . . . . . . . . . . . . . . . . . . . . (94,955,457) (10,444,636)
Bank overdrafts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (3,822,094)
------------ -----------
Net cash used in financing activities . . . . . . . . . . . . . . (38,139,696) (45,782,249)
------------ -----------
Decrease in Cash and cash equivalents . . . . . . . . . . . . . . . . . . . (38,018,407) (7,226,705)
Cash and cash equivalents, beginning of year. . . . . . . . . . . . . . . . 53,635,737 20,171,289
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . . . . . $ 15,617,330 12,944,584
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest, net of amounts capitalized . . $ 799,794 292,173
============ ===========
Non-cash investing and financing activities . . . . . . . . . . . . . . . $ -- --
============ ===========
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1996,
which are included in the Partnership's 1996 Annual Report on Form 10-K
(File No. 0-16976) filed on March 31, 1997, as certain footnote disclosures
which would substantially duplicate those contained in such audited
financial statements have been omitted from this report. Capitalized terms
used but not defined in this quarterly report have the same meanings as in
the Partnership's 1996 Annual Report.
GENERAL
Capitalized Interest and Real Estate Taxes
Interest, including the amortization of loan fees, of $2,874,645 and
$3,841,138 was incurred for the nine months ended September 30, 1997 and
1996, respectively, of which $2,517,104 and $3,841,138 was capitalized,
respectively. Interest payments, including amounts capitalized, of
$3,316,898 and $4,133,311 were made during the nine months ended September
30, 1997 and 1996, respectively. Interest, including the amortization of
loan fees, of $1,558,878 and $1,005,182 was incurred for the three months
ended September 30, 1997 and 1996, respectively, of which $1,201,337 and
$1,005,182 was capitalized, respectively. Interest payments, including
amounts capitalized of $2,041,607 and $1,263,416, were made during the
three months ended September 30, 1997 and 1996, respectively. The increase
in interest incurred and paid during the three months ended September 30,
1997 as compared to the same period in 1996 is due to the Partnership
obtaining a new credit facility on July 31, 1997, as discussed in detail in
the "Notes and Mortgages Payable" section of the Notes.
Real estate taxes of $6,053,634 and $5,701,173 were incurred for the
nine months ended September 30, 1997 and 1996, respectively, of which
$2,798,971 and $2,982,168 were capitalized, respectively. Real estate tax
payments of $579,935 and $573,108 were made during the nine months ended
September 30, 1997 and 1996, respectively. In addition, real estate tax
reimbursements totaling $244,706 and $165,682 were received from the
Partnership's escrow agent during the nine months ended September 30, 1997
and 1996, respectively. Real estate taxes of $2,202,929 and $1,932,966
were incurred for the three months ended September 30, 1997 and 1996,
respectively, of which $920,316 and $1,096,786 were capitalized,
respectively. Real estate tax payments of $257,622 and $195,761 were made
during the three months ended September 30, 1997 and 1996, respectively.
The preceding analysis of real estate taxes does not include real estate
taxes incurred or paid with respect to the Partnership's club facilities
and other operating properties as these taxes are included in cost of
revenues for operating properties.
Property and Equipment and Other Assets
Depreciation expense of $2,593,228 and $4,019,257 was incurred for the
nine months ended September 30, 1997 and 1996, respectively. Amortization
of other assets, excluding loan fees, of $212,466 and $115,718 was incurred
for the nine months ended September 30, 1997 and 1996, respectively.
Amortization of loan fees, which is included in interest expense, of
$168,460 and $185,653 was incurred for the nine months ended September 30,
1997 and 1996, respectively. Depreciation expense of $752,083 and
$1,350,783 was incurred for the three months ended September 30, 1997 and
1996, respectively. Amortization of other assets, excluding loan fees, of
<PAGE>
$130,698 and $38,335 was incurred for the three months ended September 30,
1997 and 1996, respectively. Amortization of loan fees, which is included
in interest expense, of $60,402 and $58,179 was incurred for the three
months ended September 30, 1997 and 1996, respectively. The decrease in
depreciation expense for the three and nine months ended September 30, 1997
as compared to the same periods in 1996 is due to the elimination of
depreciation expense for assets held for disposal in accordance with FASB
Statement 121. The Partnership's application of this statement is
discussed further in the "Impact of Recently Issued Accounting Standards"
section of the Notes.
During August 1997, the Partnership entered into an agreement with an
unaffiliated third party for the sale of its two retail shopping centers
located in Weston. The closing of the sale is currently expected to occur
in December 1997. The closing is subject to various conditions, and there
is no assurance that such sale will occur. The sale, if consummated, is
expected to generate a profit for financial reporting and Federal income
tax purposes.
Partnership Distributions
During February 1997, the Partnership made a distribution for 1996 of
$24,240,000 to its Holders of Interests ($60.00 per Interest) and
$1,346,651 to the General Partner and Associate Limited Partners,
collectively. These distributions are the primary cause for the decrease
in Cash and cash equivalents at September 30, 1997 as compared to December
31, 1996. During August 1997, the Partnership made a distribution of
$70,700,000 to its Holders of Interests ($175 per Interest) and $2,668,455
to its General Partner and Associate Limited Partners, collectively. The
Partnership's cash balance was not impacted by the August 1997 distribution
as such distribution was made with the proceeds from the new credit
facility, as discussed in the "Notes and Mortgages Payable" section of the
Notes. In addition, during 1997 distributions totaling $15,457
(approximately $.04 per Interest) were deemed to be paid to the Holder's of
Interests, $15,372 of which was remitted to North Carolina tax authorities
on their behalf for the 1996 non-resident withholding tax. Distributions
totaling $860 were also paid during 1997 on behalf of the General Partner
and Associate Limited Partners, collectively, a portion of which was also
remitted to the North Carolina tax authorities on their behalf.
Reclassifications
Certain reclassifications have been made to the 1996 financial
statements to conform to the 1997 presentation.
NOTES AND MORTGAGES PAYABLE
The Partnership's credit facility previously consisted of a term loan
in the original amount of $85,252,520, a revolving line of credit facility
up to $20 million, an income property term loan in the original amount of
$18,233,326 and a $15 million letter of credit facility, all of which
matured in July 1997. The balances outstanding under this facility were
paid off in conjunction with the Partnership obtaining a new credit
facility, as discussed below.
Under the previous term loan agreement, the Partnership made scheduled
principal payments of $10 million in March 1994, February 1995 and February
1996 and $5 million principal payments in July 1995 and July 1996. The
term loan agreement also provided for additional principal repayments based
upon a specified percentage of available cash flow and upon the sale of
certain assets. During the year ended December 31, 1996, the Partnership
made such additional term loan payments totaling approximately $12.3
million. In January 1997, the Partnership paid off the remaining principal
balance of $5,234,008 outstanding under the term loan. Under the income
property term loan, principal payments of $0.1 million were required to be
paid monthly until maturity. The terms of the Partnership's credit
facility required that upon satisfaction of the principal due under the
term loan, the additional term loan principal repayments described above
<PAGE>
would be applied to the principal outstanding under the income property
term loan. Accordingly, the Partnership made such additional income
property term loan repayments totaling approximately $1.3 million during
1997. The Partnership utilized a portion of the proceeds from its new
credit facility, which is discussed in detail below, as well as operating
cash on hand to pay off the remaining principal balance outstanding under
the income property term loan of $9,522,126 in July, 1997. As a result, at
September 30, 1997, there were no balances outstanding on the revolving
line of credit facility and income property term loan. Due to the
replacement of the Partnership's previous letter of credit facility by the
new credit facility, which is discussed below, the Partnership was required
to post approximately $4.2 million in cash as collateral with its previous
lender for the letters of credit which continue to be obligations of that
lender. The posting of this cash as collateral is the primary cause for
the increase in Restricted cash on the accompanying consolidated balance
sheets at September 30, 1997 as compared to December 31, 1996. Such
letters of credit are expected to be replaced by either letters of credit
issued under the new credit facility or by bonds. Once the letters of
credit are replaced, the cash collateral will be released to the
Partnership. As of September 30, 1997, approximately $609,000 of such cash
collateral had been released to the Partnership due to the replacement of
the letters of credit issued by the previous lender, leaving a balance
outstanding under this previous letter of credit facility of approximately
$3.6 million.
On July 31, 1997, the Partnership obtained a new credit facility from
Barnett Bank, N.A. ("Barnett") and certain other banks. The new credit
facility consists of a $75 million term loan, a $20 million revolving line
of credit and a $5 million letter of credit facility. The new term loan
has a term of four years with annual scheduled principal repayments of
$12.5 million, as well as additional annual principal repayments based upon
a specified percentage or amount of the Partnership's available cash. The
maximum required principal repayments, including the scheduled repayments,
generally will not exceed $18.75 million per annum. The remaining
outstanding balance on the new facility is due upon maturity. Interest on
the facility is based, at the Partnership's option, on the relevant LIBOR
plus 2.25% per annum or Barnett's prime rate (8.5% at September 30, 1997).
The Partnership has obtained an interest rate swap for two thirds of the
outstanding balance of the term loan. The Partnership paid loan fees
totaling 1% of the total facility upon the closing of the loan. Such fees
have been capitalized and are being amortized over the life of the loan.
The payment of these fees is the primary cause for the increase in Prepaid
expenses and other assets on the accompanying consolidated balance sheets
at September 30, 1997 as compared to December 31, 1996. The term loan,
revolving line of credit and letter of credit facility are secured by
recorded mortgages on real property of the Partnership (including certain
of its consolidated ventures) and pledges of certain other assets. All of
the loans under this new facility are cross-collateralized and cross-
defaulted. The proceeds from the new financing were used to make a
distribution during August 1997 in the amount of approximately $73.4
million, including a distribution of $175 per Interest to the Holders of
Interests, and to pay off the remaining balances outstanding under the
Partnership's previous credit facility, as discussed above. At September
30, 1997, the balances outstanding on the term loan, the revolving line of
credit and the letter of credit facility were approximately $75,000,000, $0
and $1,211,000, respectively. For the nine month period ended September
30, 1997, the combined effective interest rate for the Partnership's credit
facilities, including the amortization of loan origination fees, was
approximately 9.6% per annum.
During April 1996, the Partnership refinanced the loan on one of its
retail properties located in its Weston Community with a different lender.
The outstanding principal balance on such loan of approximately $7.9
million is included in Notes and mortgages payable at September 30, 1997.
In addition, $3.1 million of subordinated debt attributable to the
Cullasaja Joint Venture is included in Notes and mortgages payable at
September 30, 1997.
<PAGE>
During January 1996, the Partnership executed a note for a $7.5
million construction loan for the construction and development of a second
retail shopping center located in its Weston Community. The Partnership,
at its option, extended the loan upon its maturity, at which time it was
converted to a mini-permanent loan. The loan bears the same rate of
interest as the original construction loan (lender's prime rate (8.5% at
September 30, 1997) plus 1/2% per annum), and matures in July 2000.
Principal and interest on the loan are payable monthly, based on a 25-year
amortization schedule. The outstanding principal balance on this loan at
September 30, 1997 is approximately $7.5 million.
During September 1997, the Partnership borrowed against its $24
million revolving construction line of credit to fund construction of one
of the two remaining buildings within Arvida's Grand Bay. This line of
credit bears interest at the lender's prime rate (8.5% at September 30,
1997) plus 1/2% per annum. At September 30, 1997, there was approximately
$2.1 million outstanding under this line of credit. The Partnership
anticipates it will obtain funding under this line of credit during 1998
for the remaining building to be constructed within Arvida's Grand Bay.
INVESTMENTS IN AND ADVANCES TO JOINT VENTURES
During March 1996, the Partnership closed on the sale of its 20% joint
venture interest in Coto de Caza, including the related promissory note for
advances previously made to the joint venture, to unaffiliated third
parties for a cash sales price of $12 million. This transaction is
reflected in Land and property revenues for the nine months ended September
30, 1996 on the accompanying consolidated statements of operations and is
the primary cause for the decrease in Land and property revenues and cost
of revenues for the nine months ended September 30, 1997 as compared to the
same period in 1996.
On December 31, 1996, the Partnership purchased its joint venture
partner's 50% interest in the Arvida Boose Joint Venture for a purchase
price of approximately $1.8 million and formed a new joint venture in the
name of Metrodrama Joint Venture. As a result of this transaction, the
Partnership changed from the equity method of accounting to the
consolidated method of accounting for the joint venture effective December
31, 1996. During October 1997, Metrodrama Joint Venture entered into a
contract for the sale of approximately 29 acres of undeveloped commercial
property to an unaffiliated third party. The closing of the sale is
currently expected to occur in the first quarter of 1998. The closing is
subject to the satisfaction of various conditions, and there can be no
assurance that the closing will occur. The sale, if consummated, is
expected to generate a profit for financial reporting and Federal income
tax purposes in 1998.
During July 1997, the Partnership entered into a joint venture
agreement with an unaffiliated third party to form A&D Title, L.P. The
joint venture was formed to act as an agent in connection with the issuance
of title insurance, primarily related to closings in the Partnership's
Weston community. The Partnership obtained a 50% ownership interest in the
joint venture, and is accounting for its investment in accordance with the
equity method of accounting.
During August 1997, the remaining properties owned by the Tampa 301
Associates and Ocala 202 joint ventures were sold. The net profit
generated by the sales of these properties resulted in approximately
$91,000 of earnings for the Partnership, which is the primary cause for the
increase in Equity in earnings (losses) of unconsolidated ventures on the
accompanying consolidated statements of operations for the three and nine
months ended September 30, 1997 as compared to the same periods in 1996.
<PAGE>
TRANSACTIONS WITH AFFILIATES
The Partnership, subject to certain limitations, may engage affiliates
of the General Partner for property management, insurance and certain other
administrative services to be performed in connection with the
administration of the Partnership and its assets. The total of such costs
for the nine months ended September 30, 1997 was approximately $324,700,
all of which was paid as of September 30, 1997. The total of such costs
for the nine months ended September 30, 1996 was approximately $296,300.
In addition, the General Partner and its affiliates are entitled to
reimbursements for salaries and salary-related costs relating to the
administration of the Partnership and the operation of the Partnership's
properties. Such costs were approximately $154,500 and $151,500 for the
nine months ended September 30, 1997 and 1996, respectively, all of which
were paid as of September 30, 1997.
The Partnership receives reimbursements from or reimburses other
affiliates of the General Partner engaged in real estate activities for
certain general and administrative costs including, and without limitation,
salary and salary-related costs relating to work performed by employees of
the Partnership and certain out-of-pocket expenditures incurred on behalf
of such affiliates. For the nine month period ended September 30, 1997,
the amount of such costs incurred by the Partnership on behalf of these
affiliates totaled approximately $280,800. At September 30, 1997, approxi-
mately $267,900 was owed to the Partnership, of which approximately
$158,700 was received as of November 12, 1997. For the nine month period
ended September 30, 1996, the Partnership was entitled to reimbursements of
approximately $189,100.
Prior to June 1996, the Partnership and Arvida/JMB Partners, L.P.-II
(a publicly-held limited partnership affiliated with the General Partner)
each employed project related and administrative personnel who performed
services on behalf of both partnerships. In addition, certain out-of-
pocket expenditures related to such services and other general and
administrative costs were incurred and charged to each partnership as
appropriate. The Partnership receives reimbursements from Arvida/JMB
Partners, L.P.-II for these costs (including salary and salary-related
costs). Subsequent to June 1996, Arvida/JMB Partners, L.P.-II no longer
employed any project-related or administrative personnel and incurred no
costs on behalf of the Partnership. For the nine month periods ended
September 30, 1997 and 1996, the Partnership was entitled to receive
approximately $90,800 and $1,242,300, respectively, from Arvida/JMB
Partners, L.P.-II. At September 30, 1997, approximately $8,800 was owed to
the Partnership, none of which was received as of November 12, 1997. In
addition, for the nine month periods ended September 30, 1997 and 1996, the
Partnership was obligated to reimburse Arvida/JMB Partners, L.P.-II
approximately $0 and $113,700, respectively. At September 30, 1997,
approximately $1,800 was unpaid, which represents amounts owed from the
prior year, all of which was outstanding as of November 12, 1997.
Arvida Company ("Arvida"), pursuant to an agreement with the
Partnership, provides development, construction, management and other
personnel and services to the Partnership for all of its projects and
operations. Pursuant to such agreement, the Partnership reimburses Arvida
for all of its salary and salary-related costs incurred in connection with
work performed on behalf of the Partnership, subject to certain
limitations. The total of such costs for the nine month periods ended
September 30, 1997 and 1996 were approximately $5,141,000 and $5,020,500,
respectively, all of which were paid at September 30, 1997. In addition,
the Partnership was owed approximately $18,100 from Arvida at September 30,
1997, for overpayments of salary and salary related costs, all of which was
paid as of November 12, 1997.
The Partnership pays for certain general and administrative costs on
behalf of its equity clubs, homeowners associations and maintenance
associations (including salary and salary-related costs and legal fees).
The Partnership receives reimbursements from these entities for such costs.
For the nine month periods ended September 30, 1997 and 1996, the
Partnership was entitled to receive approximately $4,275,700 and
<PAGE>
$3,291,100, respectively, from these entities. At September 30, 1997,
approximately $119,200 was owed to the Partnership, of which approximately
$76,500 was received as of November 12, 1997. In addition, the Partnership
owes its equity clubs for certain costs incurred by the clubs which are
obligations of the Partnership. For the nine month periods ended September
30, 1997 and 1996, the Partnership was obligated to reimburse its equity
clubs approximately $35,000 and $13,700, respectively. At September 30,
1997, approximately $14,500 was unpaid, of which approximately $3,200 was
paid as of November 12, 1997.
The Partnership, pursuant to an agreement, provides management and
other personnel and services to one of its equity clubs. Pursuant to this
agreement, the Partnership is entitled to receive a management fee for the
services provided to the club. For the nine months ended September 30,
1997 and 1996, the Partnership was entitled to receive approximately
$387,800 and $295,000. At September 30, 1997, approximately $437,800 was
unpaid (including amounts owed from the previous year), none of which was
received as of November 12, 1997.
The Partnership funds certain capital expenditures, working capital
advances and operating deficits of its equity clubs, as well as operating
deficits of its homeowners associations as required or deemed necessary.
The working capital advances and certain capital expenditure fundings are
non-interest bearing, short-term in nature, and are expected to be
reimbursed from future cash flows of the equity clubs. The funding of
operating deficits is expensed by the Partnership. At September 30, 1997,
the Partnership was owed approximately $458,500 from its equity clubs, none
of which was received as of November 12, 1997.
The Partnership periodically incurs salary and salary-related costs on
behalf of an affiliate of the General Partner of the Partnership. The
Partnership was entitled to receive approximately $255,700 and $228,000 for
such costs for the nine months ended September 30, 1997 and 1996,
respectively, of which approximately $53,300 was owed to the Partnership at
September 30, 1997, none of which was received as of November 12, 1997.
In accordance with the Partnership Agreement, the General Partner and
Associate Limited Partners have deferred a portion of their distributions
of net cash flow from the Partnership totaling approximately $6,476,000 as
of September 30, 1997. This amount does not bear interest and is expected
to be paid in future periods subject to certain restrictions contained in
the partnership agreement of the Partnership. In addition, the General
Partner and Associate Limited Partners have deferred approximately
$1,259,000 of their share of the distribution made during August 1997,
pursuant to the terms of an agreement reached in the settlement of certain
litigation.
All amounts receivable from or payable to the General Partner or its
affiliates do not bear interest and are expected to be paid in future
periods.
COMMITMENTS AND CONTINGENCIES
As security for performance of certain development obligations, the
Partnership is contingently liable under standby letters of credit and
performance bonds for approximately $4,851,000 and $9,959,000, respec-
tively, at September 30, 1997. In addition, certain joint ventures in
which the Partnership holds an interest are also contingently liable under
performance bonds for approximately $1,020,000 at September 30, 1997.
<PAGE>
On or about September 27, 1996, a lawsuit entitled Vanderbilt Income
and Growth Associates, L.L.C. and Raleigh Capital Associates L.P.,
individually and derivatively on behalf of Arvida/JMB Partners, L.P. v.
Arvida/JMB Managers, Inc., Judd D. Malkin, Neil G. Bluhm, Burton E. Glazov,
Stuart C. Nathan, A. Lee Sacks, John G. Schreiber, BSS Capital II, L.L.C.,
Starwood Capital Group I, L.P., Starwood/Florida Funding, L.L.C., Starwood
Opportunity Fund, IV, L.P. and Barry Sternlicht, Defendants, and Arvida/JMB
Partners, L.P., nominal defendant, was filed in the Court of Chancery of
the State of Delaware in and for New Castle County, Civil Action No. 15238
("Raleigh action"). The Raleigh action was filed as a verified complaint
for declaratory and injunctive relief. Plaintiffs claimed that the
defendants in entering into the financing commitment letter for a proposed
$160 million term loan from Starwood/Florida Funding L.L.C. (the "Starwood
financing") violated, or aided and abetted, or participated in the
violation of, fiduciary duties owed to the Partnership and the Holders of
Interests, and put their personal interests ahead of the interests of the
Partnership and the Holders of Interests. In the first claim for relief,
plaintiffs sought a declaratory judgment that the terms of the financing be
declared null, void and unenforceable. In the second claim for relief,
plaintiffs asserted a claim derivatively on behalf of the Partnership
alleging, among other things, that the financing commitment letter was not
the product of a valid exercise of business judgment. In addition to
relief described above, plaintiffs sought to preliminarily and permanently
enjoin any actions in furtherance of the financing commitment letter, an
award of compensatory damages, interest, costs and disbursements, including
reasonable attorneys' and experts' fees and such other relief as the Court
might deem just and proper. The General Partner and the Partnership filed
a motion to dismiss the Raleigh action which was granted on November 7,
1996. In granting the motion, the Court held that Raleigh was not a
Limited Partner and did not have standing to file the derivative claims.
The Court further determined that Raleigh did not have the right to vote.
Plaintiffs asked the Court to reconsider its ruling, but the Court denied
the request to change its ruling.
Plaintiffs appealed the November 7, 1996 dismissal order. On December
12, 1996, the Delaware Supreme Court reversed the trial court order on a
procedural ground. The Delaware Supreme Court concluded that the trial
court should not have considered matters outside of the pleadings in
dismissing the Raleigh action without providing the plaintiffs some limited
discovery. Accordingly, the Delaware Supreme Court remanded the case back
to the trial court for further proceedings.
On December 16, 1996, the Partnership filed a counterclaim against
Vanderbilt Income and Growth Associates, L.L.C. and Raleigh Capital
Associates L.P. ("Raleigh"), seeking a declaratory judgment that Raleigh
had no right to vote on Partnership matters. On January 28, 1997, the
trial court granted plaintiffs leave to dismiss their own complaint
concerning the Starwood financing, leaving the Partnership's counterclaim
pending.
By letter dated January 10, 1997, Raleigh requested admission as a
Substituted Limited Partner of the Partnership. The Partnership referred
the request to the Special Committee. On February 11, 1997, the Special
Committee denied the request. Thereafter, the Partnership supplemented its
counterclaim, as amended, and sought a court declaration that Raleigh is
not entitled to be admitted as a Substituted Limited Partner. On February
20, 1997, Raleigh filed a reply and counterclaim against the Partnership,
the General Partner, and the Special Committee. The reply counterclaim
sought, among other things, a declaration that Raleigh has voting rights in
the Partnership and that defendants' breached their fiduciary duties by
failing to admit Raleigh as a Substituted Limited Partner. The reply
counterclaim also sought to enjoin the Partnership, the General Partner,
and the Special Committee from refusing to admit Raleigh as a Substituted
Limited Partner, an award of damages, interest, fees, and costs.
On or about February 28, 1997, Gladys Beasley, individually and as a
representative of a class of persons similarly situated, filed an
intervenor complaint for declaratory relief against the Partnership. In
the intervenor complaint, plaintiff sought a declaration that purchasers
<PAGE>
who obtained Interests in the Partnership in the public offering and
subsequent Holders of Interests in the Partnership by assignment from
original Holders have the same voting rights in the Partnership, among
other things, to remove and replace the General Partner. In addition,
plaintiff Gladys Beasley, sought an order adjudging and decreeing that the
intervenor action was properly maintained as a class, an award of her costs
and expenses of the litigation, and such other relief as the Court deemed
appropriate.
The trial of all claims in the Raleigh action was held on April 7
through April 9, 1997. In a memorandum opinion dated May 23, 1997, the
Court concluded that, while neither the partnership agreement nor the
assignment agreement of the Partnership expressly states whether subsequent
Holders of Interests have voting rights, a reasonable investor could have
read the operative agreements as providing that subsequent Holders of
Interests, such as Raleigh, have voting rights. The Partnership believes,
among other things, that the Court erred in its application of the law to
the facts on this issue and is appealing the Court's decision on this
aspect of the case. On the issue of whether Arvida/JMB Managers, Inc.
properly denied Raleigh's request for admission as a Substituted Limited
Partner, the Court upheld the denial of Raleigh's request.
The Partnership was named a defendant in a number of homeowner
lawsuits, certain of which purported to be class actions, that allegedly in
part arose out of or related to Hurricane Andrew, which on August 24, 1992
resulted in damage to a former community development known as Country Walk.
The homeowner lawsuits alleged, among other things, that the damage
suffered by the plaintiffs' homes and/or condominiums within Country Walk
was beyond what could have been reasonably expected from the hurricane
and/or was a result of the defendants' alleged defective design,
construction, inspection and/or other improper conduct in connection with
the development, construction and sales of such homes and condominiums,
including alleged building code violations. The various plaintiffs sought
varying and, in some cases, unspecified amounts of compensatory damages and
other relief. In certain of the lawsuits injunctive relief and/or punitive
damages were sought.
Several of these lawsuits alleged that the Partnership was liable,
among other reasons, as a result of its own alleged acts of misconduct or
as a result of the Partnership's alleged assumption of Arvida Corporation's
liabilities in connection with the Partnership's purchase of Arvida
Corporation's assets from Disney in 1987, which included certain assets
related to the Country Walk development. Pursuant to the agreement to
purchase such assets, the Partnership obtained indemnification by Disney
for certain liabilities relating to facts or circumstances arising or
occurring prior to the closing of the Partnership's purchase of the assets.
Over 80% of the Arvida-built homes in Country Walk were built prior to the
Partnership's ownership of the Community. Where appropriate, the
Partnership has tendered or will tender each of the above-described
lawsuits to Disney for defense and indemnification in whole or in part
pursuant to the Partnership's indemnification rights. Where appropriate,
the Partnership has also tendered these lawsuits to its various insurance
carriers for defense and coverage. The Partnership is unable to determine
at this time to what extent damages in these lawsuits, if any, against the
Partnership, as well as the Partnership's cost of investigating and
defending the lawsuits, will ultimately be recoverable by the Partnership
either pursuant to its rights of indemnification by Disney or under
contracts of insurance.
One of the Partnership's insurance carriers has been funding
settlements of various litigation related to Hurricane Andrew. In some,
but not all, instances, the insurance carrier has provided the Partnership
with written reservation of rights letters. The aggregate amount of the
settlements funded to date by this carrier is approximately $8.0 million.
The insurance carrier that funded these settlements pursuant to certain
reservations of rights has stated its position that it has done so pursuant
to various non-waiver agreements. The carrier's position was that these
non-waiver agreements permitted the carrier to fund settlements without
<PAGE>
barring the carrier from raising insurance coverage issues or waiving such
coverage issues. On May 23, 1995, the insurance carrier rescinded the
various non-waiver agreements currently in effect regarding the remainder
of the Hurricane Andrew litigation, allegedly without waiving any future
coverage defenses, conditions, limitations, or rights. For this and other
reasons, the extent to which the insurance carrier may recover any of these
proceeds from the Partnership is uncertain. Therefore, the accompanying
consolidated financial statements do not reflect any accruals related to
this matter.
Currently, the Partnership is involved in three subrogation lawsuits.
On April 19, 1993, a subrogation claim entitled Village Homes at Country
Walk Master Maintenance Association, Inc. v. Arvida Corporation et al., was
filed in the 11th Judicial Circuit for Dade County. Plaintiffs filed this
suit for the use and benefit of American Reliance Insurance Company
("American Reliance"). In this suit, as amended, plaintiffs seek to
recover damages and pre- and post-judgment interest in connection with
$10,873,000 American Reliance has allegedly paid, plus amounts it may have
to pay in the future, to the condominium association at Country Walk in the
wake of Hurricane Andrew. Disney is also a defendant in this suit. The
Partnership believes that the amount of this claim that allegedly relates
to units it built and sold is approximately $3,600,000. Plaintiffs also
seek a declaratory judgment seeking to hold the Partnership and other
defendants responsible for amounts American Reliance must pay in the future
to its insured as additional damages beyond the $10,873,000 previously
paid. The Partnership has filed motions directed to the complaint, as
amended, and the litigation is in the discovery stage. The Partnership
intends to vigorously defend itself. On or about May 10, 1996, a
subrogation claim entitled Juarez et al. v. Arvida Corporation et al. was
filed in the Circuit Court of the Eleventh Judicial Circuit in and for Dade
County. Plaintiffs filed this suit for the use and benefit of American
Reliance. In this suit, plaintiffs seek to recover damages, pre-and post-
judgment interest, costs and any other relief the Court may deem just and
proper in connection with $3,200,000 American Reliance allegedly paid on
specified claims at Country Walk in the wake of Hurricane Andrew. Disney
is also a defendant in this suit. The Partnership is advised that the
amount of this claim that allegedly relates to units it sold is
approximately $350,000. The Partnership intends to defend itself
vigorously in this matter. The Partnership was also involved in a
subrogation action brought by the Insurance Company of North America
("INA") arising out of a claim that INA allegedly paid on a single home in
Country Walk. The Partnership has settled this claim for approximately
$5,600 with the settlement being funded by the Partnership's insurance
carrier. On April 24, 1997, the Metropolitan Property and Casualty Company
("Metropolitan") filed a lawsuit entitled Metropolitan Property and
Casualty Company v. Arvida/JMB Partners in the Circuit Court of the 11th
Judicial Circuit in and for Dade County for subrogation in which it seeks
compensatory damages, costs, interest and any other relief the court may
deem just in connection with money Metropolitan allegedly paid to its
homeowner insureds in the wake of Hurricane Andrew. Metropolitan has
advised the Partnership that in connection with this suit there are three
claims, totaling approximately $505,000. The Partnership could be named in
other subrogation actions, and in such event, the Partnership intends to
vigorously defend itself in such actions. Due to the uncertainty of the
outcome of these subrogation actions, the accompanying consolidated
financial statements do not reflect any accruals related to these matters.
The Partnership has been advised by Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") that various investors have sought to
compel Merrill Lynch to arbitrate claims brought by certain investors of
the Partnership representing approximately 5% of the total of approximately
404,000 Interests outstanding. Merrill Lynch has asked the Partnership and
its General Partner to confirm an obligation of the Partnership and its
General Partner to indemnify Merrill Lynch in these claims against all
loss, liability, claim, damage and expense, including without limitation
attorneys' fees and expenses, under the terms of a certain Agency Agreement
dated September 15, 1987 ("Agency Agreement") with the Partnership relating
to the sale of Interests through Merrill Lynch on behalf of the
Partnership. These claimants have sought and are seeking to arbitrate
<PAGE>
claims involving unspecified damages against Merrill Lynch based on Merrill
Lynch's alleged violation of applicable state and/or federal securities
laws and alleged violations of the rules of the National Association of
Securities Dealers, Inc., together with pendent state law claims. The
Partnership believes that Merrill Lynch has resolved some of these claims
through litigation and otherwise, and that Merrill Lynch is defending other
claims. The Agency Agreement generally provides that the Partnership and
its General Partner shall indemnify Merrill Lynch against losses occasioned
by any actual or alleged misstatements or omissions of material facts in
the Partnership's offering materials used in connection with the sale of
Interests and suffered by Merrill Lynch in performing its duties under the
Agency Agreement, under certain specified conditions. The Agency Agreement
also generally provides, under certain conditions, that Merrill Lynch shall
indemnify the Partnership and its General Partner for losses suffered by
the Partnership and occasioned by certain specified conduct by Merrill
Lynch in the course of Merrill Lynch's solicitation of subscriptions for,
and sale of, Interests. The Partnership is unable to determine the
ultimate investment of investors who have filed arbitration claims as to
which Merrill Lynch might seek indemnification in the future. At this
time, and based upon the information presently available about the
arbitration statements of claims filed by some of these investors, the
Partnership and its General Partner believe that they have meritorious
defenses to demands for indemnification made by Merrill Lynch and intend to
vigorously pursue such defenses. Although there can be no assurance
regarding the outcome of the claims for indemnification, at this time,
based on information presently available about such arbitration statements
of claims, the Partnership and its General Partner do not believe that the
demands for indemnification by Merrill Lynch will have a material adverse
effect on the financial condition of the Partnership.
On or about October 16, 1995, a lawsuit was filed against the
Partnership and others in the Circuit Court of the 15th Judicial Circuit,
in and for Palm Beach County, Florida, and amended on or about February 20,
1996, entitled Council of Villages, Inc. et al v. Arvida/JMB Partners,
Arvida/JMB Managers, Inc., Arvida/JMB Partners, Ltd., Broken Sound Club,
Inc., and Country Club Maintenance Association, Inc. The multi-count
complaint, as amended, is brought as a class action, and individually, on
behalf of various residents of the Broken Sound Community, and alleges that
defendants engaged in various acts of misconduct in, among other things,
the establishment, operation, management and marketing of the Broken Sound
golf course and recreational facilities, as well as the alleged improper
failure to turn over such facilities to the Broken Sound homeowners on a
timely basis. Plaintiffs seek, through various theories, including but not
limited to breach of ordinance, breach of fiduciary duty, fraud, unjust
enrichment and civil theft, damages in excess of $45 million, the
appointment of a receiver for the Broken Sound Club, other unspecified
compensatory damages, the right to seek punitive damages, treble damages,
prejudgment interest, attorneys' fees and costs. The Partnership believes
that the lawsuit is without merit and intends to vigorously defend itself
in this matter.
On or about July 30, 1996, Savoy v. Arvida/JMB Partners, Arvida/JMB
Managers, Inc., Arvida/JMB Partners, Ltd., and Broken Sound Club, Inc. was
filed against the Partnership and others in the Circuit Court of the 15th
Judicial Circuit, in and for Palm Beach County, Florida. The lawsuit is
filed as a three-count complaint for dissolution of the Broken Sound Club,
Inc. ("Club"), and seeks, among other things, the appointment of a
custodian or receiver for the Club, a determination that certain acts be
deemed wrongful, the return to the Club of in excess of $2.5 million in
alleged "operating profits", an injunction against the charging of certain
dues, an injunction requiring the Club to produce certain financial
statements, and such other relief as the Court deems just, fair and proper.
The Partnership believes the lawsuit is without merit and intends to
vigorously defend itself.
The Partnership owns a 50% joint venture interest in 31 commercial/
industrial acres in Pompano Beach, Florida, which is encumbered by a
mortgage loan in the principal amount of approximately $4 million at
September 30, 1997. During April 1992, as a result of the Partnership's
<PAGE>
previous determination that the development of the land was no longer
economically profitable, the Partnership and its joint venture partner each
tendered payment in the amount of approximately $3.1 million to the lender
for their respective shares of the guarantee payment required under the
loan agreement and certain other holding costs, the majority of which
reduced the outstanding mortgage loan to its current balance. The venture
also intended at that time to convey title to the property to the lender;
however, such conveyance is pending until resolution of certain
environmental issues. The joint venture had been negotiating with the
lender regarding the scope of the development work required to be done.
Negotiations with the lender were unsuccessful, and the lender filed a
lawsuit entitled Bankers' Trust Company v. Arvida/JMB Partners, L.P., et
al., Case No. 95-2780 in the Broward County Circuit Court in which the
lender asserted, among other things, that the mortgage loan is with
recourse to the joint venture partners as a result of the partners' failure
to perform in accordance with the terms of the loan agreement. The lender
demanded payment of the outstanding loan balance plus interest thereon.
The lawsuit has been resolved. On or about July 18, 1997, the parties
entered into a settlement agreement which provides for, among other things,
the payment of $300,000 by the Partnership, $300,000 on behalf of the joint
venture partner, the payment of back taxes on the property by the joint
venture in the amount of $302,398, a commitment by the joint venture to
remediate the property on or before June 30, 2000 in accordance with the
settlement agreement, issuance of a new non-recourse note, a mortgage
modification and dismissal of the lawsuit with prejudice and without costs.
With respect to the environmental issues, the previous owner remains
obligated to undertake the clean-up. The clean-up began in July 1994, and
the first phase of the remedial action plan was completed in October 1994.
Further action plans are now being discussed with state environmental
officials. If the previous owner is unable to fulfill all its obligations
as they relate to this environmental issue, the venture and ultimately the
Partnership may be obligated for such costs. Should this occur, the
Partnership does not anticipate the cost of this clean-up to be material to
its operations.
The Partnership is also a defendant in several actions brought against
it arising in the normal course of business. It is the belief of the
General Partner, based on knowledge of facts and advice of counsel, that
the claims made against the Partnership in such actions will not result in
any material adverse effect on the Partnership's consolidated financial
position or results of operations.
The Partnership may be responsible for funding certain other ancillary
activities for related entities in the ordinary course of business which
the Partnership does not currently believe will have any material adverse
effect on its consolidated financial position or results of operations.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
The Partnership adopted the Financial Accounting Standard's Board's
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of", effective January 1, 1995.
Reference is made to the "Subsequent Events" section of the Notes for a
discussion regarding the sale of certain of the Partnership's operating
properties. In accordance with Statement No. 121, the Partnership
discontinued recording depreciation on its assets held for disposal in the
first quarter of 1997. The combined results of operations for the
Partnership's assets held for disposal totaled approximately $4.1 million
and $1.7 million for the nine months ended September 30, 1997 and 1996,
respectively, and are included in operating properties revenues and cost of
revenues on the accompanying consolidated statements of operations. The
Partnership requires no impairment losses or other adjustments to be
recorded as of September 30, 1997 as a result of the application of this
statement.
During August 1997, the Partnership entered into an agreement with an
unaffiliated third party for the sale of its two retail shopping centers
located in Weston. Although there can be no assurance, the Partnership
<PAGE>
anticipates that the sale of these shopping centers will close prior to
December 31, 1997. The sale, if consummated, is expected to generate a
profit for financial reporting and Federal income tax purposes.
During the second quarter of 1997, Statements of Financial Accounting
Standards No. 128 ("Earnings per Share") and No. 129 ("Disclosure of
Information about Capital Structure") were issued. As the Partnership's
capital structure consists of only general and limited partnership
interests, the Partnership does not expect any significant impact on its
consolidated financial statements upon adoption of these standards when
required at the end of 1997.
ADJUSTMENTS
In the opinion of the General Partner, all adjustments (consisting
solely of normal recurring adjustments) necessary for a fair presentation
have been made to the accompanying consolidated financial statements as of
September 30, 1997 and December 31, 1996 and for the three and nine months
ended September 30, 1997 and 1996.
SUBSEQUENT EVENTS
During October 1997, the Partnership closed on the sale of its mixed-
use center in Boca Raton, Florida known as Parkway Center to an
unaffiliated third party for $38.5 million. The Partnership made certain
representations, warranties and indemnities for the benefit of the buyer
under the Sale and Purchase Agreement which will survive the closing for a
period of one year from the date of closing. Parkway Center consists of
approximately 258,000 square feet of space in a mix of offices,
restaurants, retail, financial institutions and a Radisson Suite Hotel.
The sale generated a profit for financial reporting and Federal income tax
purposes.
Pursuant to Section 5.5 J of the Partnership Agreement, on October 23,
1997, the Board of Directors of the General Partner met and approved a
resolution selecting the option set forth in Section 5.5 J.(i)(c) of the
Partnership Agreement for the Partnership to commence an orderly
disposition of its remaining assets that is to be completed within the next
five years.
During November 1997, the Partnership closed on the sale of the Cabana
Club, located within its Sawgrass Community, to an unaffiliated third party
for $3.5 million. The sale generated a profit for financial reporting and
Federal income tax purposes.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying consolidated
financial statements ("Notes") contained in this report for additional
information concerning certain of the Partnership's investments.
At September 30, 1997 and December 31, 1996, the Partnership had cash
and cash equivalents of approximately $15,617,000 and $53,636,000,
respectively. The decrease in Cash and cash equivalents at September 30,
1997 as compared to December 31, 1996 is due primarily to distributions to
partners and Holders of Interests of approximately $25.6 million made in
February 1997, the payoff of the balance of $5,234,008 outstanding under
the Partnership's term loan in January 1997, and the payoff of the
remaining $9,522,126 balance outstanding under the income property term
loan in July 1997.
Pursuant to Section 5.5 J of the Partnership Agreement, on October 23,
1997, the Board of Directors of the General Partner met and approved a
resolution selecting the option set forth in Section 5.5 J.(i)(c) of the
Partnership Agreement for the Partnership to commence an orderly
disposition of its remaining assets that is to be completed within the next
five years.
The Partnership's previous revolving line of credit, income property
term loan and letter of credit agreement matured in July 1997. On July 31,
1997, the Partnership obtained a new credit facility from Barnett Bank,
N.A. ("Barnett") and certain other banks. The proceeds from the new
financing were used to make a distribution during August 1997 in the amount
of approximately $73.4 million, including a distribution of $175 per
Interest to the Holders of Interests, and to payoff the remaining balance
outstanding under the Partnership's previous credit facility. The new
credit facility consists of a $75 million term loan, a $20 million to the
Partnership's revolving line of credit and a $5 million letter of credit
facility. The new facility has a term of four years with annual scheduled
principal repayments of $12.5 million, as well as additional annual
principal repayments based upon a specified percentage or amount of the
Partnership's available cash. The maximum principal repayments, including
the scheduled repayments, generally will not exceed $18.75 million per
annum. The remaining outstanding balance on the new facility is due upon
maturity. Interest on the facility is based, at the Partnership's option,
on the relevant LIBOR plus 2.25% per annum or Barnett's prime rate. The
Partnership has obtained an interest rate swap for two-thirds of the
outstanding balance of the term loan. The Partnership paid loan fees
totaling 1% of the total facility upon the closing of the loan. Such fees
have been capitalized and are being amortized over the life of the loan.
The payment of these fees is the primary cause for the increase in Prepaid
expenses and other assets on the accompanying consolidated balance sheets
at September 30, 1997 as compared to December 31, 1996. In addition, due
to the replacement of the Partnership's existing letter of credit facility
by the new credit facility, the Partnership was required to post
approximately $4.2 million cash as collateral with its previous lender for
letters of credit which continue to be obligations of that lender. The
posting of this cash as collateral is the primary cause for the increase in
Restricted cash on the accompanying consolidated balance sheets at
September 30, 1997 as compared to December 31, 1996. The letters of credit
are expected to be replaced by either letters of credit issued under the
Barnett facility or by bonds, at which time the cash collateral will be
released to the Partnership. As of September 30, 1997, approximately
$609,000 of such cash collateral had been released to the Partnership due
to the replacement of the letters of credit issued by the previous lender,
leaving a balance outstanding under this previous letter of credit facility
of approximately $3.6 million. The term loan, revolving line of credit and
letter of credit facility are secured by recorded mortgages on real
property of the Partnership (including certain of its consolidated
ventures) and pledges of certain other assets. All of the loans under this
<PAGE>
new facility are cross-collateralized and cross-defaulted. At September
30, 1997, the balances outstanding under the term loan, the revolving line
of credit and the letter of credit facility were approximately $75,000,000,
$0 and $1,211,000, respectively.
During August 1997, the Partnership entered into an agreement with an
unaffiliated third party for the sale of its two retail shopping centers
located in Weston. The closing of the sale is currently expected to occur
in December 1997. The closing is subject to various conditions, and there
is no assurance that such sale will occur. The sale, if consummated, is
expected to generate a profit for financial reporting and Federal income
tax purposes.
During September 1997, the Partnership borrowed against its $24
million revolving construction line of credit to fund construction of one
of the two remaining buildings within Arvida's Grand Bay. This line of
credit bears interest at the lender's prime rate (8.5% at September 30,
1997) plus 1/2% per annum. At September 30, 1997, there was approximately
$2.1 million outstanding under this line of credit. The Partnership
anticipates it will obtain funding under this line of credit during 1998
for the remaining building to be constructed within Arvida's Grand Bay.
During October 1997, Metrodrama Joint Venture entered into a contract
for the sale of approximately 29 acres of undeveloped commercial property
to an unaffiliated third party. The closing of the sale is currently
expected to occur in the first quarter of 1998. The closing is subject to
the satisfaction of various conditions, and there can be no assurance the
closing will occur. The sale, if consummated, is expected to generate a
profit for financial reporting and Federal income tax purposes in 1998.
During October 1997, the Partnership closed on the sale of its mixed-
use center in Boca Raton, Florida known as Parkway Center to an
unaffiliated third party for $38.5 million. The Partnership made certain
representations, warranties and indemnities for the benefit of the buyer
under the Sale and Purchase Agreement which will survive the closing for a
period of one year from the date of closing. Parkway Center consists of
approximately 258,000 square feet of space in a mix of offices,
restaurants, retail, financial institutions and a Radisson Suite Hotel.
The sale generated a profit for financial reporting and Federal income tax
purposes.
During November 1997, the Partnership closed on the sale of the Cabana
Club, located within its Sawgrass Community, to an unaffiliated third party
for $3.5 million. The sale generated a profit for financial reporting and
Federal income tax purposes.
The Holders of Interests have received several unsolicited offers to
purchase their Interests in the Partnership. The General Partner of the
Partnership has established a special committee (the "Special Committee")
to review such offers and make a recommendation to the Holders of Interests
with respect to the offers. In addition, the Partnership has engaged
Lehman Brothers Inc. ("Lehman") as a financial advisor to assist the
Special Committee in evaluating and responding to the offers. Lehman was
asked to render its estimate of the present discounted value ("Estimated
Liquidation Value") of an Interest based on the assumption that the
Partnership commences an orderly liquidation in October 1997 and completes
that liquidation by October 2002. In preparing its Estimated Liquidation
Value, Lehman has relied upon the Partnership's estimate of the gross cash
distributions that a Holder of Interests would receive through the assumed
liquidation period, discounted to reflect the present value of such
distributions. Certain assumptions and other factors, including risk
factors, that should be considered when analyzing the projected budgets
which were the basis of such estimate of gross distributions can be found
in the Partnership's Schedule 14D-9 dated July 3, 1996, as amended, which
was filed with the Securities and Exchange Commission. Reference to such
Schedule 14D-9 is hereby made for a discussion of such assumptions and
other factors.
<PAGE>
During April 1997, Smithtown Bay, L.L.C. ("Smithtown") commenced an
offer to acquire up to 17,000 Interests, which represents approximately
4.2% of the outstanding Interests in the Partnership. Smithtown's offer had
a purchase price of $475 and expired on May 30, 1997. In connection with
the Smithtown offer, Lehman prepared an Estimated Liquidation Value as of
March 31, 1997 (the "March Estimated Liquidation Value"). In arriving at
the March Estimated Liquidation Value, Lehman relied upon the Partnership's
estimate of the gross cash distributions that the Holders of Interests
would receive through the assumed liquidation period. These estimated
gross distributions were then discounted to reflect the present value of
such distributions as of March 31, 1997, which ranged from $540 to $585 per
Interest, depending on the different discount rates used.
Based on its analysis and its consultation with its advisors, the
Special Committee determined that with respect to Holders of Interests who
had the expectation of retaining their Interests through an anticipated
orderly liquidation of the Partnership's assets by October 2002 and who had
no current or anticipated need or desire for liquidity, the Smithtown offer
was inadequate and not in the best interests of such Holders of Interests.
Accordingly, the Special Committee recommended that such Holders of
Interests reject the Smithtown offer and not tender their Interests
pursuant to such offer. However, the Special Committee recommended that
Holders of Interests who had a current need or desire for liquidity tender
their Interests to Smithtown.
During July 1997, Lafayette Bay, LLC ("Lafayette") commenced an offer
to acquire up to 10,400 Interests, which represents approximately 2.6% of
the outstanding Interests in the Partnership. Lafayette's offer had a
purchase price of $540 per Interest. However, under the terms of
Lafayette's offer, Lafayette reduced its offer price of $540 per Interest
by the $175 per Interest distributed to the Holders of Interests during
August 1997 (for a new purchase price under the Lafayette offer of $365 per
Interest). Lafayette's offer expired on August 29, 1997. During November
1997, Lafayette re-commenced its offer at $365 per Interest but reduced the
maximum number of Interests to be acquired to 8,000 Interests, which
represents approximately 2.0% of the outstanding Interests in the
Partnership. Lafayette's offer is currently scheduled to expire on
December 4, 1997.
The Special Committee expressed no opinion and remained neutral in
regard to the Lafayette offer for those Holders of Interests who had no
current or anticipated need or desire for liquidity and who expect to
retain the Interests through an anticipated orderly liquidation of the
Partnership by October 2002. However, the Special Committee recommended
that Holders of Interests who had a current need or desire for liquidity
tender their Interests to Lafayette. Lehman was not requested to render,
and did not render, any opinion as to the adequacy or fairness of the
Lafayette offer.
The Partnership's estimate of the present discounted value (the
"Partnership's Estimated Liquidation Value") of an Interest on a
liquidation basis, as of June 30, 1997, was a range of approximately $590
to $640 per Interest. The Partnership's Estimated Liquidation Value is
based on the Partnership's projected budgets and the underlying assumptions
thereto, and the assumption that the Partnership completes an orderly
liquidation of its assets by October 2002. The Partnership's Estimated
Liquidation Value represents the Partnership's estimate of the gross cash
distributions that a Holder of Interest would receive per Interest from
June 30, 1997, through the assumed liquidation, discounted to reflect the
present value of such distributions. Based upon its estimate of the gross
cash distributions to be received, the Partnership believes that a Holder
of Interest would receive total distributions from June 30, 1997, through
October 2002 in excess of $1,000, including the distribution of $175 per
Interest made in August 1997 from the proceeds of the new credit facility
discussed above.
<PAGE>
The Partnership began incurring significant expenditures in connection
with the various unsolicited tender offers for Interests during the third
quarter of 1996, and may incur significant additional costs in the future
in connection therewith.
In November 1997, St. Joe Corporation completed its acquisition of a
controlling interest in a new venture that holds the major assets of
Arvida. Affiliates of JMB Realty Corporation own a minority interest in
the new venture. Arvida has provided development, construction, management
and other personnel and services to the Partnership for all of its projects
and operations. The services provided to the Partnership by Arvida
pursuant to its management agreement will continue to be provided by the
same personnel. The transaction did not involve the sale of any assets of
the Partnership, nor the sale of the General Partner's interest in the
Partnership.
RESULTS OF OPERATIONS
The results of operations for the three and nine months ended
September 30, 1997 are primarily attributable to the development and sale
or operation of the Partnership's assets.
For the three months ended September 30, 1997, the Partnership
(including its consolidated ventures and its unconsolidated ventures
accounted for under the equity method) closed on the sale of 311 housing
units, 66 homesite lots and approximately 37 acres of developed land. This
compares to closings in the third quarter of 1996 of 296 housing units, 82
homesite lots and approximately 16 acres of undeveloped land. Outstanding
contracts ("backlog") as of September 30, 1997 were for 674 housing units
and 71 homesites. This compares to a backlog as of September 30, 1996 of
730 housing units, 47 homesites and approximately 44 acres of developed and
undeveloped land tracts.
The Partnership's Communities are in various stages of development,
with estimated remaining build-outs ranging from one to nine years.
Notwithstanding the estimated duration of the remaining build-outs, the
Partnership currently expects to complete its orderly liquidation by
October 2002. The Weston Community, located in Broward County, Florida, is
the Partnership's largest Community and is in its mid-stage of development.
Also in their mid-stages of development are the River Hills Country Club in
Tampa, Florida; the Water's Edge Community in Atlanta, Georgia; The
Cullasaja Club, near Highlands, North Carolina and the Partnership's
condominium project on Longboat Key, Florida known as Arvida's Grand Bay.
The Partnership's Jacksonville Golf & Country Club Community in Florida is
in its late stage of development. All of the remaining units in the
Partnership's Sawgrass Country Club and Dockside Communities in
Jacksonville, Florida and Atlanta, Georgia, respectively, closed during
1996. In addition, the Broken Sound Community, located in Boca Raton,
Florida, had its final closings in 1995; however, the Partnership still has
equity memberships in the Broken Sound Club to sell. Future revenues will
be impacted to the extent that there are lower levels of inventories
available for sale as the Partnership's remaining Communities approach or
undertake their final phases.
The increase in housing revenues for the three months ended September
30, 1997 as compared to the same period in 1996 is due to a higher volume
of units closed in Weston during the third quarter of 1997 as compared to
the same quarter in 1996. This favorable variance was partially offset by
decreased revenue recognition on the condominiums at Arvida's Grand Bay,
and a lower volume of units closed at the Partnership's Waters Edge and
Jacksonville Golf & Country Club Communities, as discussed more fully
below. The decrease in housing revenues for the nine months ended
September 30, 1997 as compared to the same period in 1996 is due primarily
to a decrease in revenues recognized on the condominiums at Arvida's Grand
Bay. Substantial revenues were recognized from three of the buildings at
Arvida's Grand Bay in 1996. The Partnership expects to recognize the
remaining revenues from these buildings prior to the end of 1997. The
Partnership commenced construction on one of the two buildings still to be
<PAGE>
completed at Arvida's Grand Bay during the second quarter of 1997.
However, no revenues are expected to be recognized for this building until
1998. The decrease in revenues for the nine months ended September 30,
1997 as compared to the same period in 1996 is also due to a lower volume
of units closed in the Partnership's Jacksonville Golf & Country Club and
Water's Edge Communities during 1997 as compared to 1996. The lower volume
of units closed in Waters Edge is attributable to a decrease in the
availability of lower priced product within the Community during 1997 as
compared to 1996. In addition, the Partnership's sales of higher priced
product in Waters Edge have been slower than anticipated due to competition
from third party builders. These unfavorable variances are partially
offset by an overall increase in the average sales price for units closed
in 1997 as compared to 1996. The lower volume of units closed in
Jacksonville Golf & Country Club is due to the late stage of development of
the Community and decreased levels of inventory as it nears completion.
The close out of the remaining units in Sawgrass Country Club in
Jacksonville and Dockside in Atlanta in 1996 also contributed to the
decrease in revenues for 1997 as compared to 1996.
The decrease in homesite revenues for the three months ended September
30, 1997 as compared to the same period in 1996 is due primarily to a
decrease in the number of lots closed in Jacksonville Golf & Country Club
due to the late stage of development of the Community. The decrease in
revenues was partially offset by an increase in the number of lots closed
and revenues generated at Waters Edge as compared to the same period in
1996, as well as an increase in the average sales price of lots closed in
Waters Edge and Weston. Homesite revenues for the nine months ended
September 30, 1997 were slightly higher than the same period in 1996,
despite fewer lot closings in 1997. This favorable variance is due
primarily to the recognition of deferred income in 1997 for lot sales at
Weston recorded in previous years which did not yet meet the requirements
for income recognition. The increase in the average sales prices at Weston
and Waters Edge also contributed to the favorable variance.
The increase in the gross operating profit margin from homesite
activities resulted from the favorable pricing of lots in Weston and
Water's Edge, as well as the recognition of the deferred income in 1997 for
lots in Weston, which closed in previous years.
The decrease in land and property revenues for the three months ended
September 30, 1997 as compared to the same period in 1996 due primarily to
the closing in August 1996 of an approximate sixteen acre developed
commercial parcel located in Palm Beach County, Florida. The decrease in
land and property revenues for the nine months ended September 30, 1997 as
compared to the same period in 1996 is due primarily to the sale of the
Partnership's 20% joint venture interest in the Coto de Caza Joint Venture
and related promissory note in March 1996 for a cash sales price of $12
million.
The increase in operating properties revenues for the three and nine
months ended September 30, 1997 as compared to the same periods in 1996 is
due primarily to rental income generated at the Partnership's new retail
shopping center in Weston, which opened in the fourth quarter of 1996. In
addition, revenues from the Partnership's club operations increased in 1997
as compared to 1996 due primarily to an overall increase in membership dues
and golf revenues at the Partnership's country clubs in Weston and River
Hills, and increased revenues from the restaurant operations at one of the
Partnership's clubs in Jacksonville, Florida.
The increase in the gross operating profit margin from operating
properties activities is due primarily to the elimination of depreciation
expense recorded on assets held for disposal. Due to the intended sale of
the assets, and in accordance with FASB Statement 121, the Partnership
discontinued recording depreciation on its two retail shopping centers and
cable operation in Weston, the beach club in Jacksonville, Florida, as well
as its hotel operation and mixed use office/retail plaza in Boca Raton,
Florida.
<PAGE>
The decrease in revenues from brokerage and other operations for the
three and nine months ended September 30, 1997 as compared to the same
periods in 1996 is due primarily to a decrease in the volume of resale
brokerage activity in Palm Beach County, Florida, as well as the
Partnership's sale of its resale operation located in Longboat Key near
Sarasota, Florida in October 1996. Also contributing to the unfavorable
variance are decreased commissions earned from the sales of builders' homes
within the Partnership's Weston Community due to a decrease in the number
of builder units closed in 1997 as compared to 1996.
The increase in the gross operating profit margin from brokerage and
other operations for the three and nine months ended September 30, 1997 as
compared to the same periods in 1996 is primarily due to the expansion and
improved operating results of the mortgage brokerage operation in Weston,
as well as an increase in management fees received from the various
homeowners associations in Weston.
The increase in selling, general and administrative expenses for the
nine months ended September 30, 1997 as compared to the same period in 1996
is due primarily to the approximate $1.8 million payment of certain
attorneys' fees and expenses as a result of the approved settlement in
certain litigation. In addition, the Partnership began incurring
significant expenditures in the third quarter of 1996 in connection with
the various unsolicited tender offers made for Interests. Such
expenditures incurred during the nine months ended September 30, 1997 also
contributed to the increase in selling, general and administrative expenses
as compared to the same periods in 1996.
The average balances invested in interest bearing accounts increased
for the three and nine months ended September 30, 1997 as compared to the
same period in 1996 resulting in increased interest income for the periods.
During August 1997, the remaining properties owned by the Tampa 301
Associates and Ocala 202 joint ventures were sold. The net profit
generated by the sales of these properties resulted in approximately
$91,000 of earnings for the Partnership, which is the primary cause for the
increase in Equity in earnings (losses) of unconsolidated ventures on the
accompanying consolidated statements of operations for the three and nine
months ended September 30, 1997 as compared to the same periods in 1996.
The increase in interest and real estate taxes for the three and nine
months ended September 30, 1997 as compared to the same periods in 1996 is
due primarily to the levying of taxes by the Indian Trace Community
Development District (the "District") on property in Weston which was not
previously taxable by the District. Also contributing to the increase is
an increase in interest expense resulting from a decrease in the amount of
interest eligible for capitalization.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to the Commitments and Contingencies Section of
Notes for a detailed discussion regarding certain lawsuits which allegedly
in part arose out of or related to Hurricane Andrew, which on August 24,
1992 resulted in damage to a former community development known as Country
Walk, which discussion is hereby incorporated herein by reference.
On or about September 27, 1996, a lawsuit entitled Vanderbilt Income
and Growth Associates, L.L.C. and Raleigh Capital Associates L.P.,
individually and derivatively on behalf of Arvida/JMB Partners, L.P. v.
Arvida/JMB Managers, Inc., Judd D. Malkin, Neil G. Bluhm, Burton E. Glazov,
Stuart C. Nathan, A. Lee Sacks, John G. Schreiber, BSS Capital II, L.L.C.,
Starwood Capital Group I, L.P., Starwood/Florida Funding, L.L.C., Starwood
Opportunity Fund, IV, L.P. and Barry Sternlicht, defendants, and Arvida/JMB
Partners, L.P., nominal defendant, was filed in the Court of Chancery of
the State of Delaware in and for New Castle County, Civil Action No. 15238
("Raleigh action"). The Raleigh action was filed as a verified complaint
for declaratory and injunctive relief. Plaintiffs claimed that the
defendants in entering into the financing commitment letter for a proposed
$160 million term loan from Starwood/Florida Funding L.L.C. (the "Starwood
financing") violated, or aided and abetted, or participated in the
violation of, fiduciary duties owed to the Partnership and the Holders of
Interests, and put their personal interests ahead of the interests of the
Partnership and the Holders of Interests. In the first claim for relief,
plaintiffs sought a declaratory judgment that the terms of the financing be
declared null, void and unenforceable. In the second claim for relief,
plaintiffs asserted a claim derivatively on behalf of the Partnership
alleging, among other things, that the financing commitment letter was not
the product of a valid exercise of business judgment. In addition to
relief described above, plaintiffs sought to preliminarily and permanently
enjoin any actions in furtherance of the financing commitment letter, an
award of compensatory damages, interest, costs and disbursements, including
reasonable attorneys' and experts' fees and such other relief as the Court
might deem just and proper. The General Partner and the Partnership filed
a motion to dismiss the Raleigh action which was granted on November 7,
1996. In granting the motion, the Court held that Raleigh was not a
Limited Partner and did not have standing to file the derivative claims.
The Court further determined that Raleigh did not have the right to vote.
Plaintiffs asked the Court to reconsider its ruling, but the Court denied
the request to change its ruling.
Plaintiffs appealed the November 7, 1996 dismissal order. On December
12, 1996, the Delaware Supreme Court reversed the trial court order on a
procedural ground. The Delaware Supreme Court concluded that the trial
court should not have considered matters outside of the pleadings in
dismissing the Raleigh action without providing the plaintiffs some limited
discovery. Accordingly, the Delaware Supreme Court remanded the case back
to the trial court for further proceedings.
On December 16, 1996, the Partnership filed a counterclaim against
Vanderbilt Income and Growth Associates, L.L.C. and Raleigh Capital
Associates L.P. ("Raleigh"), seeking a declaratory judgment that Raleigh
had no right to vote on Partnership matters. On January 28, 1997, the
trial court granted plaintiffs leave to dismiss their own complaint
concerning the Starwood financing, leaving the Partnership's counterclaim
pending.
By letter dated January 10, 1997, Raleigh requested admission as a
Substituted Limited Partner of the Partnership. The Partnership referred
the request to the Special Committee. On February 11, 1997, the Special
Committee denied the request. Thereafter, the Partnership supplemented its
counterclaim, as amended, and sought a court declaration that Raleigh is
not entitled to be admitted as a Substituted Limited Partner. On February
20, 1997, Raleigh filed a reply and counterclaim against the Partnership,
the General Partner, and the Special Committee. The reply counterclaim
<PAGE>
sought, among other things, a declaration that Raleigh has voting rights in
the Partnership and that defendants' breached their fiduciary duties by
failing to admit Raleigh as a Substituted Limited Partner. The reply
counterclaim also sought to enjoin the Partnership, the General Partner,
and the Special Committee from refusing to admit Raleigh as a Substituted
Limited Partner, an award of damages, interest, fees, and costs.
On or about February 28, 1997, Gladys Beasley, individually and as a
representative of a class of persons similarly situated, filed an
intervenor complaint for declaratory relief against the Partnership. In
the intervenor complaint, plaintiff sought a declaration that purchasers
who obtained Interests in the Partnership in the public offering and
subsequent Holders of Interests in the Partnership by assignment from
original Holders have the same voting rights in the Partnership, among
other things, to remove and replace the General Partner. In addition,
plaintiff Gladys Beasley, sought an order adjudging and decreeing that the
intervenor action was properly maintained as a class, an award of her costs
and expenses of the litigation, and such other relief as the Court deemed
appropriate.
The trial of all claims in the Raleigh action was held on April 7
through April 9, 1997. In a memorandum opinion dated may 23, 1997, the
Court concluded that, while neither the partnership agreement nor the
assignment agreement of the Partnership expressly states whether subsequent
Holders of Interests have voting rights, a reasonable investor could have
read the operative agreements as providing that subsequent Holders of
Interests, such as Raleigh, have voting rights. The Partnership believes,
among other things, that the Court erred in its application of the law to
the facts on this issue and is in the process of appealing the Court's
decision on this aspect of the case. On the issue of whether Arvida/JMB
Managers, Inc. properly denied Raleigh's request for admission as a
Substituted Limited Partner, the Court upheld the denial of Raleigh's
request.
On or about October 16, 1995, a lawsuit was filed against the
Partnership and others in the Circuit Court of the 15th Judicial Circuit,
in and for Palm Beach County, Florida, entitled Council of Villages, Inc.
et al v. Arvida/JMB Partners, Arvida/JMB Managers, Inc., Arvida/JMB
Partners, Ltd., Broken Sound Club, Inc., and Country Club Maintenance
Association, Inc. The multi-count lawsuit, as amended, is brought as a
class action, and individually, on behalf of various residents of the
Broken Sound Community, and alleges that defendants engaged in various acts
of misconduct in, among other things, the establishment, operation,
management and marketing of the Broken Sound golf course and recreational
facilities, as well as the alleged improper failure to turn over said
facilities to the Broken Sound homeowners on a timely basis. Plaintiffs
seek, through various theories, including but not limited to breach of
ordinance, fiduciary duty, fraud, and civil theft, damages in excess of $45
million, the appointment of a receiver for the Broken Sound Club, other
unspecified compensatory damages, the right to seek punitive damages,
treble damages, prejudgment interest, attorneys' fees and costs. The
Partnership believes that the lawsuit is without merit and intends to
vigorously defend itself in this matter.
On or about July 30, 1996, Savoy v. Arvida/JMB Partners, Arvida/JMB
Managers, Inc., Arvida/JMB Partners, Ltd., and Broken Sound Club, Inc. was
filed against the Partnership and others in the Circuit Court of the 15th
Judicial Circuit, in and for Palm Beach County, Florida. The lawsuit is
filed as a three-count complaint for dissolution of the Broken Sound Club,
Inc. ("Club"), and seeks, among other things, the appointment of a
custodian or receiver for the Club, a determination that certain acts be
deemed wrongful, the return to the Club of in excess of $2.5 million in
alleged "operating profits", an injunction against the charging of certain
dues, an injunction requiring the Club to produce certain financial
statements, and such other relief as the Court deems just, fair and proper.
The Partnership believes the lawsuit is without merit and intends to
vigorously defend itself.
<PAGE>
Bankers' Trust Company v. Arvida/JMB Partners, L.P., et. al., Case No.
95-2780 was filed in the Broward County Circuit Court in which the
plaintiff asserted, among other things, that the mortgage loan on a joint
venture in which the Partnership owns a 50% joint venture interest is with
recourse to the joint venture partners as a result of the partners' failure
to perform in accordance with the terms of the loan agreement. The lender
demanded payment of the outstanding loan balance plus interest thereon.
The lawsuit has been resolved. On or about July 18, 1997, the parties
entered into a settlement agreement which provides for, among other things,
the payment of $300,000 by the Partnership, $300,000 on behalf of the Joint
Venture Partner, the payment of back taxes on the property by the Joint
Venture in the amount of $302,398, a commitment by the Joint Venture to
remediate the property on or before June 30, 2000 in accordance with the
settlement agreement, issuance of a new non-recourse note, a mortgage
modification and dismissal of the lawsuit with prejudice and without costs.
Other than as described above, the Partnership is not subject to any
material pending legal proceedings, other than ordinary routine litigation
incidental to the business of the Partnership. However, reference is made
to the Commitments and Contingencies Section of the Notes for a discussion
of certain claims asserted by Merrill Lynch for indemnification by the
Partnership and the General Partner in connection with claims for
arbitration filed by certain investors in the Partnership.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1. Amended and Restated Agreement of Limited Partnership.*
3.2. Assignment Agreement by and among the General Partner, the
Initial Limited Partner and the Partnership.*
4.1. Various mortgages and other security interests dated October
7, 1992 related to the assets of Arvida/JMB Partners, Center Office
Partners, Center Retail Partners, Center Hotel Limited Partnership, Weston
Hills Country Club Limited Partnership which secure loans under the Amended
and Restated Credit Agreement referred to in Exhibit 4.1 are herein
incorporated by reference to Exhibit No. 4.7 of the Partnership's Report on
Form 10-Q (File number 0-16976) dated November 11, 1992.
4.2. Second Amended and Restated Credit Agreement dated November
29, 1994, among Arvida/JMB Partners, L.P., Arvida/JMB Partners, Southeast
Florida Holdings, Inc., Center Office Partners, Center Retail Partners,
Center Hotel Limited Partnership, Weston Hills Country Club Limited
Partnership and Chemical Bank and Nationsbank of Florida, N.A. ***
4.3. Affirmation and Amendment of Security Documents dated November
29, 1994, among Arvida/JMB Partners, Arvida/JMB Partners, L.P., Southeast
Florida Holdings, Inc., Center Office Partners, Center Retail Partners,
Center Hotel Limited Partnership, Weston Hills Country Club Limited
Partnership and Chemical Bank. ***
4.4. Modification of Mortgage and Security Agreement and Other loan
Documents dated November 29, 1994, among Arvida/JMB Partners, Weston Hills
Country Club Limited Partnership and Chemical Bank. ***
4.5. Modification of First Mortgage and Security Agreement and
Other Loan Documents dated November 29, 1994, among Arvida/JMB Partners,
Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership and Chemical Bank. ***
4.6. Credit Agreement extension dated July 28, 1995 made by
Arvida/JMB Partners, L.P., Arvida/JMB Partners, Southeast Florida Holdings,
Inc., Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership, Weston Hills Country Club Limited Partnership and Chemical
Bank is incorporated by reference to the Partnership's Report for June 30,
1995 on Form 10-Q (File No. 0-16976) dated August 9, 1995.
4.7. Letter Agreement dated January 17, 1996, among Arvida/JMB
Partners, L.P., Arvida/JMB Partners, Southeast Florida Holdings, Inc.,
Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership, Weston Hills Country Club Limited Partnership and Chemical
Bank and Nationsbank of Florida, N.A. regarding the release of a certain
parcel from the lender's lien is herein incorporated by reference to
Exhibit 4.15 to the Partnership's report for December 31, 1995 on Form 10-K
(File No. 0-16976) dated March 25, 1996.
4.8. Letter Agreement dated March 1, 1996 regarding the sale of the
Partnership's interest in the Coto de Caza Joint Venture and the extension
of the maturity date of the revolving line of credit facility and the
income property term loan is incorporated herein by reference to Exhibit
4.16 to the Partnership's report for December 31, 1995 on Form 10-K (File
No. 0-16976) dated March 25, 1996.
<PAGE>
4.9. Commitment for a term loan by and between Starwood/Florida
Funding, L.L.C. and Arvida/JMB Partners, L.P. dated September 12, 1996 is
incorporated herein by reference to Exhibit 4.1 to the Partnership's Report
on Form 8-K (File No. 0-16976) dated September 12, 1996.
4.10. Letter dated March 12, 1997, from Barnett Bank of Broward
County, N.A. containing a term sheet for a $100 million financing is
incorporated herein by reference to Exhibit 4.10 of the Partnership's
Report for December 31, 1996, as amended, on Form 10-K (File No. 0-16976)
dated May 1, 1997.
4.11. Credit Agreement dated July 31, 1997 between Barnett Bank,
N.A. and The Other Lenders and Arvida/JMB Partners, L.P. is hereby
incorporated by reference to the Partnership's Report for June 30, 1997 on
Form 10-Q (File No. 0-16976) dated August 8, 1997, as amended.
10.1. Agreement between the Partnership and The Walt Disney Company
dated January 29, 1987 is hereby incorporated by reference to Exhibit 10.2
to the Partnership's Registration Statement on Form S-1 (File No. 33-14091)
under the Securities Act of 1933 filed on May 7, 1987.
10.2. Management, Advisory and Supervisory Agreement is hereby
incorporated by reference to Exhibit 10.2 to the Partnership's report for
December 31, 1990 on Form 10-K (File No. 0-16976) dated March 27, 1991.
10.3. Letter Agreement, dated as of September 10, 1987, between the
Partnership and The Walt Disney Company, together with exhibits and related
documents.**
10.4. Joint Venture Agreement dated as of September 10, 1987, of
Arvida/JMB Partners, a Florida general partnership. **
10.5. Stipulation of settlement dated April 1, 1997, filed in the
Circuit Court of Cook County, Illinois, Chancery Department is incorporated
herein by reference to Exhibit 16.5 of the Partnership's Report for
December 31, 1996, as amended, on Form 10-K (File No. 0-16976) dated May 1,
1997.
10.6. Agreement for Sale and Purchase of Real Property dated July
25, 1997 by and between Center Retail Partners, Center Office Partners,
Center Hotel Limited Partnership, and Arvida/JMB Partners, L.P. and
Stanford Hotels Corporation for the sale of Arvida Parkway Center is
incorporated herein by reference to Exhibit 2.1 to the Partnership's report
on Form 8-K (File No. 0-16976) dated July 25, 1997.
10.7 Agreement for Purchase and Sale dated August 22, 1997 by and
between Arvida/Lakes Plaza L.P. and Principal Mutual Life Insurance Company
with respect to Weston Lakes Plaza is filed herewith.
10.8 Agreement for Purchase and Sale dated August 22, 1997 by and
between Country Isles Associates and Principal Mutual Life Insurance
Company with respect to Country Isles Plaza is filed herewith.
10.9 Agreement for Purchase and Sale dated October 21, 1997 by and
between Metrodrama Joint Venture and AutoNation USA Corporation is filed
herewith.
10.10 Agreement for Purchase and Sale dated October 8, 1997 by and
between Arvida/JMB Partners and PV Resort, Inc. joined by Resort Holdings
I, Ltd. for the sale of the Cabana Club is filed herewith.
<PAGE>
10.11 Amendment dated August 22, 1997 to Agreement for Sale and
Purchase by and between Center Retail Partners, Center Hotel Limited
Partnership, Center Office Partners and Arvida/JMB Partners, L.P. and
Stanford Hotels Corporation is filed herewith.
10.12 Second Amendment dated October 17, 1997 to Agreement for Sale
and Purchase by and between Center Retail Partners, Center Hotel Limited
Partnership, Center Office Partners and Arvida/JMB Partners, L.P. and
Stanford Hotels Corporation is filed herewith.
27. Financial Data Schedule
------------------------------
* Previously filed with the Securities and Exchange
Commission as Exhibits 3. and 4.0, respectively, to the Partnership's Form
10-K Report (File No. 0-16976) filed on March 27, 1990 and incorporated
herein by reference.
** Previously filed with the Securities and Exchange
Commission as Exhibits 10.4 and 10.5, respectively, to the Partnership's
Registration Statement (as amended) on Form S-1 (File No. 33-14091) under
the Securities Act of 1933 filed on September 11, 1987 and incorporated
herein by reference.
*** Previously filed with the Securities and Exchange
Commission as Exhibits 4.10, 4.11, 4.12 and 4.13, respectively, to the
Partnership's Form 10-K Report (File No. 0-16976) filed on March 27, 1995
and hereby incorporated herein by reference.
(b) The following report on Form 8-K was filed since the
beginning of the last quarter of the period covered by this report.
The Partnership's report dated October 17, 1997
describing the sale of Arvida Parkway Center in Boca Raton, Florida.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ARVIDA/JMB PARTNERS, L.P.
BY: Arvida/JMB Managers, Inc.
(The General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Vice President
Date: November 12, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
By: GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: November 12, 1997
EXHIBIT 10.7
- ------------
AGREEMENT FOR PURCHASE AND SALE
(Retail Shopping Center)
-------------------------------
This Agreement for Purchase and Sale is made and entered into as of
the 22nd day of August, 1997 ("Contract Date"), by and between ARVIDA/LAKES
PLAZA L.P., d/b/a ARVIDA LAKES PLAZA LIMITED PARTNERSHIP, a Delaware
limited partnership ("Seller"), and PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY, an Iowa corporation ("Buyer").
RECITALS:
--------
WHEREAS, Seller is the owner of a certain parcel of real property
which is located in the City of Weston, Broward County, Florida, all as
hereinafter more particularly described; and
WHEREAS, Seller proposes to sell the Property (as hereinafter
defined) to Buyer and Buyer proposes to purchase the Property from Seller,
all for the Purchase Price (as hereinafter defined) and upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, and other good and valuable considerations,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby covenants and agree as follows:
TERMS AND CONDITIONS
I. DEFINITIONS. The following terms as used herein shall have the
following meanings:
1.1 "Adjustment Date" shall mean midnight of the day prior to
the Closing Date.
1.2 "Affidavit" shall have the meaning ascribed thereto in
SECTION 7.1.13 hereof.
1.3 "Affiliate" shall have the meaning ascribed thereto in
SECTION 28 hereof.
1.4 "Agreement" shall mean this instrument, together with all
exhibits, addenda and amendments hereto.
1.5 "Anchor Tenants" shall mean collectively: (i) Publix
Super Markets, Inc., a Florida corporation; (ii) Eckerd Corporation, a
Delaware corporation; and (iii) Blockbuster Videos, Inc., a Texas
corporation.
1.6 "Approved Leases" shall mean collectively, the Leases and
all Proposed Leases which become Approved Leases in accordance with the
terms of SECTION 13.2 and 13.3 hereof.
1.7 "Assignment of Leases" shall have the meaning ascribed
thereto in SECTION 7.1.5 hereof.
1.8 "Assignment of Service Contracts" shall have the meaning
ascribed thereto in SECTION 7.1.4 hereof.
<PAGE>
1.9 "Business Days" shall mean any day other than a Saturday,
Sunday or a day upon which banking institutions in the State are authorized
or required by law to close.
1.10 "Buyer" shall have the meaning ascribed to the same in
the introductory paragraph.
1.11 "CAM Charges" shall have the meaning ascribed thereto in
SECTION 4.8.2 hereof.
1.12 "Claims" shall have the meaning ascribed thereto in
SECTION 9.5.
1.13 "Closing" shall have the meaning ascribed thereto in
SECTION 5.1 hereof.
1.14 "Closing Date" shall have the meaning ascribed thereto in
SECTION 5.1 hereof.
1.15 "Committee Approval" shall mean the approval of Buyer's
Business Investment Committee of the terms of this Agreement and the
transactions contemplated hereby.
1.16 "Committee Approval Period" shall mean that certain
period of time commencing on the thirty-first (31st) day after the Contract
Date and terminating at 5:00 p.m. (E.S.T.) on the fortieth (40th) day
following the Contract Date.
1.17 "Contract Date" shall have the meaning ascribed to the
same in the introductory paragraph.
1.18 "County" shall mean Broward County, Florida.
1.19 "Current Funds" shall mean immediately available federal
wired funds.
1.20 "Deed" shall have the meaning ascribed in SECTION 7.1.2
hereof.
1.21 "Deposit" shall have the meaning ascribed thereto in
SECTION 3.1.1 hereof.
1.22 "Escrow Agent" shall mean Chicago Title Insurance
Company, Attn: Paulette Stevenson, Piper Jaffrey Tower, 222 South Ninth
Street, Suite 3900, Minneapolis, Minnesota 55402.
1.23 "Estoppel Certificates" shall have the meaning ascribed
thereto in SECTION 13.5 hereof.
1.24 "Foundation" shall have the meaning ascribed thereto in
SECTION 18 hereof.
1.25 "Improvements" shall mean any and all buildings,
structures and other improvements located on the Real Property.
1.26 "Inspection Documents" shall have the meaning ascribed
thereto in SECTION 10 hereof.
1.27 "Inspection Period" shall mean that certain period of
time commencing on the Contract Date and terminating at 5:00 p.m. (E.S.T.)
on the thirtieth (30th) day after the Contract Date.
1.28 "Inspections" shall have the meaning ascribed thereto in
SECTION 10 hereof.
<PAGE>
1.29 "Intangible Property" shall mean collectively the right
to use the name "Weston Lakes Plaza" or membership in any property owner's
association, provided, however, that, in connection with the use of the
word "Weston", Buyer shall sign the License Agreement as a condition
precedent of its right to use the same.
1.30 "License Agreement" shall mean a non-exclusive, non-
transferable written license agreement which is intended to protect all
rights of Arvida Company to the "Weston" mark, and shall be in form and
substance acceptable to Arvida/JMB Partners and Buyer, the terms of which
shall be agreed upon during the Inspection Period.
1.31 "Leases" shall mean collectively, those certain leases of
space in the Improvements, as more particularly described in EXHIBIT 1.31
attached hereto and incorporated herein by this reference.
1.32 "Management Agreement" shall mean that certain management
agreement between Seller and Urban Retail Properties Co..
1.33 "Permitted Exceptions" shall have the meaning ascribed
thereto in SECTION 6.1 hereof.
1.34 "Personal Property" shall mean collectively, all
fixtures, equipment and other items of tangible personal property, if any,
owned by Seller and located on the Property and, to the extent transferable
by Seller, all licenses, permits, authorizations, warranties, telephone
exchange numbers, architectural or engineering plans and specifications,
certificates of occupancy and other approvals which are in Seller's
possession and are in effect and necessary for the current use and
operation of the Real Property.
1.35 "Property" shall mean collectively, all of the Real Property,
the Approved Leases, the Improvements, the Intangible Property and the
Personal Property.
1.36 "Proposed Lease" shall have the meaning ascribed thereto in
SECTION 13.2 hereof.
1.37 "Purchase Price" shall have the meaning ascribed thereto in
SECTION 3.2 hereof.
1.38 "Real Property" shall mean that certain real property located
in Weston, Broward County, Florida, known as Weston Lakes Plaza, as
legally described in EXHIBIT 1.38 attached hereto and incorporated herein
by this reference, together with all rights, privileges, benefits and
easements appurtenant thereto.
1.39 "Release Date" shall have the meaning ascribed thereto in
SECTION 9.5.
1.40 "Scheduled Closing Date" shall have the meaning ascribed
thereto in SECTION 5.1 hereof.
1.41 "Seller" shall have the meaning ascribed to the same in the
introductory paragraph.
1.42 "Service Contracts" shall mean collectively, those certain
service contracts and agreements relating to the operation of the Property,
as more particularly described in EXHIBIT 1.42 attached hereto and
incorporated herein by this reference.
1.43 "Settlement Statement" shall have the meaning ascribed thereto
in SECTION 7.1.12 hereof.
<PAGE>
1.44 "State" shall mean the State of Florida.
1.45 "Survey Defects" shall have the meaning ascribed thereto in
SECTION 6.3.2 hereof.
1.46 "Survey Notice" shall have the meaning ascribed thereto in
SECTION 6.3.2 hereof.
1.47 "Termination Notice" shall have the meaning ascribed thereto in
SECTION 10 hereof.
1.48 "Title Defects" shall have the meaning ascribed thereto in
SECTION 6.2 hereof.
1.49 "Title Evidence" shall have the meaning ascribed thereto in
Section 6.1 hereof.
1.50 "Title Insurer" shall have the meaning ascribed thereto in
Section 6.1 hereof.
1.51 "Title Notice" shall have the meaning ascribed thereto in
SECTION 6.2 hereof.
1.52 "Title Policy" shall have the meaning ascribed thereto in
SECTION 6.1 hereof.
2. PURCHASE AND SALE OF PROPERTY. Seller agrees to sell and convey to
Buyer and Buyer agrees to purchase from Seller, for the Purchase Price and
upon the terms and conditions herein set forth, the Property.
3. DEPOSIT, PURCHASE PRICE AND PAYMENT.
3.1 DEPOSIT.
3.1.1 Within three (3) Business Days after the Contract Date,
Buyer shall pay to the Escrow Agent the amount of ONE HUNDRED THIRTY-TWO
THOUSAND THREE HUNDRED AND NO/100 DOLLARS ($132,300.00) (the "Deposit") as
an earnest money deposit payment.
3.1.2 Escrow Agent shall hold the Deposit in accordance with an
escrow agreement in form and substance acceptable to the Escrow Agent,
Seller and Buyer, which the parties hereto shall execute on the Contract
Date. The Deposit together with all accrued interest thereon, if any,
shall be a credit to the Buyer against the Purchase Price and applied as a
payment on account thereof at Closing. In the event the transaction
contemplated by this Agreement fails to close, Escrow Agent shall disburse
the Deposit together with all accrued interest thereon, if any, to the
party entitled to such Deposit in accordance with the terms of this
Agreement.
3.2 PURCHASE PRICE. The purchase price ("Purchase Price") to be
paid to Seller by Buyer for the Property shall be THIRTEEN MILLION TWO
HUNDRED THIRTY THOUSAND AND NO/100 DOLLARS ($13,230,000.00).
3.3 PAYMENT OF PURCHASE PRICE. The Purchase Price, less any
portion of the Deposit held in escrow, plus or minus prorations and other
adjustments as provided for hereinafter, shall be paid by Buyer by Current
Funds before 1:00 p.m. (local time in the County) on the Closing Date, and
the Escrow Agent shall simultaneously disburse the Deposit at Closing to
the Seller.
<PAGE>
4. APPORTIONMENTS, PRORATIONS AND ADJUSTMENTS.
4.1 APPORTIONMENTS. The following items shall be apportioned on
the Closing Date as of the close of business on the Adjustment Date:
4.1.1 RENT.
(a) CURRENT RENT. Rents that are payable for the month in
which Closing occurs, and rents that are actually paid for the period prior
thereto. If at the time of the Closing Date there are past-due rents owed
by tenants for the month immediately prior to the month in which the
Closing occurs, then Buyer agrees that the first moneys received by Buyer
from any tenant or tenants for the month of the Closing and the month
immediately prior to the month of Closing, shall be received on account of
or in payment of such past-due rents and Seller's share will be remitted by
Buyer to Seller forthwith. The provisions of this paragraph shall survive
the Closing.
(b) RENT ARREARS. With respect to any arrears for periods
of more than one (1) month (not including the month in which the Closing
occurs), Seller shall assign or transfer such arrears to Buyer against
Buyer's agreement to use reasonable diligence to collect such amounts on
behalf of Seller and to pay such arrears to Seller as and when collected,
less reasonable collection charges (including, without limitation,
reasonable attorneys' fees) not in excess of the local prevailing rates
(which collection charges shall be prorated against other amounts collected
by Buyer from such tenant). The provisions of this paragraph shall survive
the Closing.
(c) PERCENTAGE RENT. As to the Leases which provide for the
payment of a so-called "percentage rent" based upon the amount of the
tenant's business during a specified annual or other period, if the Closing
Date shall occur on other than the last day of any such year or period, the
percentage rent for the year or period in which title shall close shall be
apportioned between the parties hereto, that is to say, Seller shall
receive the proportion of such percentage rent which the portion of such
year or other period during which Seller owned the Property bears to the
entire year or period, to be credited or payable as follows:
(i) If any percentage rent under a Lease shall become
due in respect of a percentage rent year or other period attributable to
the period prior to the Closing Date but which shall become payable or
shall be paid after the Closing Date, Buyer shall promptly pay to Seller
within five (5) days after receipt, the amount to which Seller may be
entitled as above provided. Buyer shall exercise reasonable diligence in
the collection of any such percentage rent when due. In the event of a
dispute with a tenant regarding the amount of percentage rent owed, Buyer
agrees not to compromise or settle with a tenant as to said amount without
the prior written consent of Seller. Buyer agrees to provide Seller with
copies of all correspondence with tenants regarding such percentage rent.
(ii) If, prior to the Closing Date, Seller shall have
collected any sums on account of percentage rent for a year or other period
beginning prior but ending subsequent to the Closing Date, Seller shall be
entitled to retain such sum until the balance of the percentage rent for
such year or other period shall be determined and collected and thereupon
Seller shall pay over to the Buyer, any excess of the amount so retained
over the amount to which Seller may be entitled upon the apportionment of
the percentage rent for the entire year or other period between Seller and
Buyer. Seller agrees to provide Buyer with copies of all sales figures and
all correspondence with tenants regarding such percentage rent for the past
two (2) years to the extent that the same are in Seller's possession.
<PAGE>
4.2 REAL ESTATE AND PERSONAL PROPERTY TAXES. Real estate taxes,
personal property taxes, assessments, and sewer rents, if any, on the basis
of the fiscal year for which assessed, except that if the Closing Date
shall occur before the tax rate is fixed, then the apportionment of taxes
shall be upon the basis of the tax rate for the immediately preceding year
applied to the latest assessed valuation and when the tax rate is fixed
there shall be a recomputation and any additional payment or refund shall
be made accordingly. The provisions of this paragraph shall survive the
Closing. Any installment assessment shall be subject to apportionment as
herein provided.
4.3 WATER CHARGES. Unmetered sewer or similar charges on the basis
of the calendar year in which the Closing shall occur. If there are water
meters on the Property that are not the responsibility of a tenant in the
Property, then Seller shall furnish a reading as of a date not more than
thirty (30) days prior to the Closing Date to the extent the same is
obtainable. The unfixed water meter charges, if any, based thereon for the
intervening period shall be apportioned on the basis of such last reading,
and, upon the taking of a subsequent actual reading, the apportionment will
be readjusted and Seller or Buyer, as the case may be, will promptly
deliver to the other the amount determined to be so due upon the
readjustment. If Seller is unable to furnish the prior reading, any
reading subsequent to the Closing Date will be apportioned on a per diem
basis from the date of such reading and the reading immediately prior
thereto and the Seller shall pay the proportionate charge due up to the
Closing Date. Unpaid water meter bills which are the obligations of
tenants in possession in accordance with the terms of leases shall not be
deemed an objection to title and Buyer will take title subject thereto.
The amounts owing by tenant will be assigned by Seller to Buyer. The
provisions of this paragraph shall survive the Closing.
4.4 UTILITY CHARGES. Seller will use reasonable efforts to cause
all the utility meters to be read to and including the Adjustment Date and
will be responsible therefor. Seller shall be entitled to the refund of
any existing utility security deposits. To the extent Seller cannot obtain
the utility meter readings on the Adjustment Date, the parties shall adjust
the foregoing based upon estimates and final meter readings after the
Closing. The provisions of this paragraph shall survive the Closing.
4.5 SECURITY DEPOSITS AND OTHER PREPAYMENTS. All security deposits
and other prepayments of money as required by the Leases will be turned
over by Seller to Buyer on the Closing Date or, in the alternative, Buyer
shall receive a credit against the Purchase Price for the aggregate amount
of all security deposits and other prepayments. Buyer shall indemnify and
hold Seller harmless from and against any loss, damage, cost or expense
incurred by Seller as a result of any claims against Seller for the amount
so turned over or credited to Buyer in accordance herewith.
4.6 SERVICE CONTRACTS. All charges payable under the Service
Contracts that Buyer has elected to assume, it being agreed that Buyer must
provide Seller with written notice at least ten (10) business days prior to
the Closing of the Service Contracts that Buyer has elected to assume,
otherwise the Service Contracts shall be terminated on the Closing Date for
the Service Contracts as to which such 10-day notice was not so provided.
4.7 OTHER INCOME AND EXPENSES. All other income and expenses
reasonably capable and, subject to the provisions of this Agreement,
properly the subject of adjustment in connection with the ownership,
operation and management of the Property of whatsoever nature.
<PAGE>
4.8 OTHER ADJUSTMENTS ATTRIBUTABLE TO LEASES.
4.8.1 Buyer shall be responsible for all real estate
commissions, tenant allowances and tenants inducements (i) payable with
respect to Proposed Leases which become Approved Leases, and (ii) due for
any leases which Buyer enters into after the Closing Date which leases were
procured prior to the Closing Date. Buyer shall be responsible for and
shall receive no credit toward the Purchase Price with respect to any rent
abatements or other rent concessions which are applicable to that portion
of the term of any Lease or Approved Lease which follows the Closing Date.
This provision shall survive the Closing.
4.8.2 If any common area maintenance charges ("CAM Charges")
and/or other payments due from tenants for any period up to the Adjustment
Date: (a) have been billed as of the Adjustment Date based upon an
estimated budget (and are subject to recalculation and adjustment after the
Adjustment Date based upon actual CAM Charges); (b) have not been billed;
or (c) if billed, have not been collected by Seller as of the Closing Date,
then if applicable, Buyer promptly will adjust CAM charges to actual
expenses, and upon receiving such CAM Charges and/or other payments
(including such adjusted payments) from tenants shall pay over to Seller
the proportion of such CAM Charges and/or other payments from tenants which
are due Seller for the period of time up to Adjustment Date. Buyer shall
exercise reasonable diligence in the collection of any such amounts and
shall promptly pay to Seller within five (5) days after receipt, the amount
to which Seller may be entitled as above provided. Notwithstanding the
foregoing, the CAM Charges and/or other payments due from tenants shall, to
the extent ascertainable and payable, be credited and paid to Seller as if
the same were rents under SECTION 4.1.1(a) and (b). This provision shall
survive the Closing.
4.9 POST-CLOSING ADJUSTMENTS. Any matter specified in this Section
that cannot reasonably be determined and apportioned between Seller and
Buyer on the Closing Date shall be specified by Buyer and Seller in writing
at Closing, and shall be subject to final settlement at such time as such
matter is finally determined (but in no event later than one hundred eighty
(180) days after the Closing Date). Such apportionments shall be effective
as of the Adjustment Date. The provisions of this paragraph shall survive
the Closing.
5. CLOSING.
5.1 SCHEDULED CLOSING DATE. The consummation of the purchase and
sale of the Property as contemplated by this Agreement (the "Closing")
shall take place at the offices of Seller's attorney, Gunster, Yoakley,
Valdes-Fauli & Stewart, P.A., 500 East Broward Boulevard, Suite 1400, Fort
Lauderdale, Florida 33394, commencing at 10:00 A.M. (local time in the
County) on the date that is the earlier to occur of: (a) ten (10) days
after the Committee Approval has been issued or has been deemed to have
been issued; or (b) fifty (50) days after the Contract Date. The scheduled
date of Closing is herein referred to as the "Scheduled Closing Date" and
the actual date of Closing is herein referred to as the "Closing Date."
5.2 EXTENSION OF SCHEDULED CLOSING DATE. Notwithstanding anything
contained herein to the contrary, upon written notice to Buyer, Seller
shall have, in its sole discretion, the right to extend the Scheduled
Closing Date, from time to time, for up to thirty (30) days in the
aggregate in order to cure any Title Defects or any misrepresentation or
breach of warranty of Seller which may exist on the Scheduled Closing Date,
or to satisfy any conditions precedent to Buyer's obligation to close under
this Agreement.
5.3 TIME OF THE ESSENCE. Time shall be of the essence with respect
to Seller's and Buyer's obligation to consummate the Closing on the
Scheduled Closing Date and perform their other respective obligations
hereunder.
<PAGE>
6. EVIDENCE OF AND ENCUMBRANCES UPON TITLE.
6.1 TITLE COMMITMENT. Buyer acknowledges that Seller has caused to
be prepared and delivered to Buyer prior to the Contract Date, at Seller's
expense, a commitment for a policy of owners' title insurance (the "Title
Evidence") covering the Real Property. The Title Evidence shall be written
by Gold Coast Title Company, 75 S.E. 3rd Street, Boca Raton, Florida 33432,
as authorized agent for Chicago Title Insurance Corporation ("Title
Insurer"). The Escrow Agent and Title Insurer shall cooperate on title
matters and in effecting the Closing. The Title Evidence shall bind the
Title Insurer to deliver to Buyer, at Seller's expense, a policy of owner's
title insurance (A.L.T.A. Owner's Policy (10-17-92) with Florida
Modifications) which shall insure Buyer's title to the Property in an
amount equal to the Purchase Price ("Title Policy"). The Title Evidence
shall show that Seller is vested with and can convey to Buyer good,
marketable and insurable fee simple title to the Property, free and clear
of all liens, encumbrances, objections, defects and exceptions, except the
following (herein called the "Permitted Exceptions"):
6.1.1 Real property taxes, assessments and special district
levies, for the year in which the Closing occurs, which shall be prorated
as provided for herein, and for subsequent years;
6.1.2 Zoning and other regulatory laws and ordinances affecting
the Property;
6.1.3 The restrictive covenants and conditions and other
matters described in the Deed;
6.1.4 Easements, reservations, restrictions, rights of way and
other matters of record, including, but not limited to, those certain
easements set forth in SECTION 14 hereof;
6.1.5 Liens, encumbrances, objections, defects and exceptions
which can be and are discharged by Seller out of the cash paid by Buyer at
Closing (in accordance with SECTION 3.3 hereof);
6.1.6 Amended and Restated Declaration of Town Foundation
Covenants, dated May 17, 1985 and recorded in Official Records Book 12546
at Page 921 of the Public Records of the County, as may be supplemented and
amended from time to time;
6.1.7 The Leases; and
6.1.8 That certain Lake Maintenance Easement, in form and
substance attached hereto as EXHIBIT 6.1.8, which shall be recorded
immediately prior to the Deed.
All of the Permitted Exceptions are subject to the review and
approval of Buyer during the Inspection Period.
A. TITLE DEFECTS. Prior to the expiration of the Inspection
Period, Buyer will cause the Title Evidence to be examined and will notify
Seller of any objections (including objections to the Permitted Exceptions)
to Seller's title reflected by the Title Evidence ("Title Defects").
Seller shall have no obligation to cure any Title Defects. Upon the
earlier to occur of Seller's notification to Buyer (herein called the
"Title Notice") that: (i) Seller is unwilling to cure or remove the Title
Defects, or (ii) after due diligence, Seller fails or is unable to cure or
remove any Title Defects prior to the Scheduled Closing Date as extended,
pursuant to SECTION 5.2 hereof, Buyer, at Buyer's sole option, may:
<PAGE>
A. agree to accept title to the Property in its then
existing condition, without reduction in the Purchase Price, whereupon
Closing shall occur upon the later to occur of (i) ten (10) days after
Buyer's receipt of the Title Notice or (ii) the Closing Date set forth in
this Agreement; or
B. terminate this Agreement by written notice to Seller, at which
time the Agreement will be null and void and the parties hereto will have
no further rights or obligations hereunder as to any part of the Property.
Upon such termination and release of rights and obligations, the Deposit
(with accrued interest, if any) shall be returned to Buyer. Buyer's
failure to elect to terminate this Agreement within ten (10) days after
receipt of the Title Notice in accordance with this subparagraph (B) shall
be deemed to be a wavier of Buyer's right to terminate this Agreement under
this subparagraph (B).
Notwithstanding anything herein to the contrary, in no event shall Seller
be deemed to have any obligation to cure any Title Defects.
6.3 SURVEY.
6.3.1 Buyer acknowledges that Seller has caused to be prepared
and delivered to Buyer prior to the Contract Date an as-built survey of the
Real Property prepared by a duly licensed land surveyor in accordance with
the requirements of the State and will provide copies of same to the Title
Insurer. The cost of said survey shall be borne by Buyer unless this
Agreement is terminated through no fault of Buyer in which case the Seller
shall bear the expense of the survey. Buyer reserves the right to require
changes or modifications to the survey at Buyer's expense, including,
without limitation, revising the same to comply with ALTA standards and
Buyer is obligated to pay such expenses regardless of whether the Agreement
is terminated through no fault of Buyer.
6.3.2 Prior to the expiration of the Inspection Period: (a)
Buyer will cause the Survey be examined; and (b) will notify Seller of any
objections (other than Permitted Exceptions) to the Survey which, in
Buyer's sole discretion, adversely and materially affect the marketability
of title to the Property ("Survey Defects"). Upon the earlier to occur of,
Seller's notification to Buyer (herein called the "Survey Notice") that:
(i) Seller is unwilling to cure or remove the Survey Defects or, (ii)
after due diligence, Seller fails or is unable to cure or remove any Survey
Defects prior to the Scheduled Closing Date as extended, pursuant to
SECTION 5.2 hereof, Buyer, at Buyer's sole option, may:
A. agree to accept title to the Property in its then existing
condition, without reduction in the Purchase Price, whereupon, the Closing
shall occur upon the later to occur of (i) ten (10) days after Buyer's
receipt of the Survey Notice or (ii) the Closing Date set forth in this
Agreement; or
B. terminate this Agreement by written notice to Seller, within
ten (10) days after receipt of the Survey Notice, at which time this
Agreement will be null and void and the parties hereto will have no further
rights or obligations hereunder as to any part of the Property. Upon such
termination and release of rights and obligations, the Deposit (with
accrued interest, if any) shall be returned to Buyer. Buyer's failure to
elect to terminate this Agreement within ten (10) days after receipt of the
Survey Notice in accordance with this subparagraph (B) shall be deemed to
be a wavier of Buyer's right to terminate this Agreement under this
subparagraph (B).
<PAGE>
7. CLOSING DELIVERIES.
7.1 SELLER'S DELIVERIES. At Closing, Seller shall deliver or cause
to be delivered to Buyer the following:
7.1.1 ASSIGNMENT OF INTANGIBLE PROPERTY - an assignment,
registration or other conveyance in form reasonably acceptable to Buyer and
Seller of Seller's interest in the Intangible Property.
7.1.2 DEED. A special warranty deed (the "Deed") in recordable
form conveying the Property to Buyer free and clear of all claims, liens,
encumbrances and other matters affecting title except for the Permitted
Exceptions, substantially in the form attached hereto as EXHIBIT 7.1.2.
7.1.3 BILL OF SALE - a quit-claim Bill of Sale conveying the
Personal Property without warranty of title, substantially in the form
attached hereto as EXHIBIT 7.1.3.
7.1.4 ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS - at
Buyer's election, an assignment by Seller, without warranty of title,
whereby Seller shall assign and Buyer shall assume, the Service Contracts,
substantially in the form attached hereto as EXHIBIT 7.1.4 (the "Assignment
of Service Contracts").
7.1.5 ASSIGNMENT AND ASSUMPTION OF LEASES - an assignment and
assumption of leases, whereby Seller shall assign, without warranty of
title, and Buyer shall assume all of Seller's right, title and interest and
obligations in and to the Leases, substantially in the form attached hereto
as EXHIBIT 7.1.5 (the "Assignment of Leases").
7.1.6 LEASES - originals of all of the Leases, to the extent in
Seller's possession.
7.1.7 ESTOPPEL CERTIFICATES - the Estoppel Certificates.
7.1.8 SERVICE CONTRACTS - to the extent in Seller's possession,
originals of all of the Service Contracts and any warranties or guaranties
received or held by Seller from any contractors, subcontractors, suppliers
or materialmen in connection with the Improvements and the Personal
Property.
7.1.9 NOTICE TO TENANTS - notice to all tenants executed by
Seller indicating the sale of the Property to Buyer.
7.1.10 TITLE POLICY. The Title Policy or a "marked-up" title
commitment therefor issued by the Title Insurer dated as of the Closing
Date in such amounts and containing the terms as are required pursuant to
SECTION 6 hereof, with all exceptions, other than Permitted Exceptions,
omitted or insured over.
7.1.11 RESOLUTIONS. Certified resolutions and such other
instruments as may be required by the Title Insurer, evidencing the
authority of Seller to enter into and perform this Agreement and to perform
Seller's obligations hereunder.
7.1.12 SETTLEMENT STATEMENT. A counterpart, executed by
Seller, of a summary statement mutually agreed to by Buyer and Seller
describing in detail the consideration, prorations, adjustments, costs and
expenses associated with this transaction ("Settlement Statement").
<PAGE>
7.1.13 NO LIEN AFFIDAVIT. A no-lien FIRPTA affidavit
("Affidavit"), substantially in the form attached hereto as EXHIBIT 7.1.13.
7.1.14 OTHER DOCUMENTS. Such other documents and instruments
as are contemplated hereunder or as may be reasonably required by Buyer,
its counsel or the Title Insurer and necessary to consummate this
transaction and to otherwise effectuate the agreements of the parties
hereto.
7.2 BUYER'S DELIVERIES. At Closing, Buyer shall deliver to Seller
the following:
7.2.1 PURCHASE PRICE. The Purchase Price, less any portion of
the Deposit held in cash, plus or minus any other prorations and other
adjustments to be made in accordance with this Agreement.
7.2.2 SETTLEMENT STATEMENT. A counterpart, executed by Buyer,
of the Settlement Statement.
7.2.3 RESOLUTIONS. Certified resolutions and such other
instruments as may be required by Title Insurer, evidencing the authority
of Buyer to enter into and perform this Agreement and to perform Buyer's
obligations hereunder.
7.2.4 ASSIGNMENT OF SERVICE CONTRACTS - an executed counterpart
of the Assignment of Service Contracts.
7.2.5 ASSIGNMENT OF LEASES - an executed counterpart of the
Assignment of Leases.
7.2.6 OTHER DOCUMENTS. Such other documents and instruments as
are contemplated hereunder or as may be reasonably required by Seller, its
counsel or the Title Insurer and necessary to consummate this transaction
and to otherwise effectuate the agreements of the parties hereto and such
other payments as are contemplated hereunder.
8. CLOSING EXPENSES.
8.1 TITLE COSTS. All premiums and fees for the Title Evidence and
Title Policy obtained in connection with this Agreement shall be paid by
Seller or credited to Buyer against the Purchase Price at Closing.
8.2 SURVEY. The cost of the Survey shall be borne by Buyer.
8.3 ESCROW COSTS. All charges imposed by the Escrow Agent or the
Title Agent, as applicable, for holding any documents in escrow shall be
borne equally by Seller and Buyer.
8.4 DOCUMENTARY STAMPS. The cost of State documentary tax stamps
on the Deed shall be paid by Seller or credited to Buyer against the
Purchase Price at Closing.
8.5 RECORDING FEES. All recording fees shall be paid by Seller at
Closing.
8.6 FEES AND EXPENSES. Seller and Buyer shall each bear the
professional fees and expenses of its attorneys, accountants, consultants,
and other professionals incurred in connection with the preparation of this
Agreement, the Closing pursuant hereto and the transactions contemplated
hereby. Except as otherwise provided herein, Seller and Buyer shall each
pay such other costs as are customarily paid by a seller and buyer,
respectively, of real property in the County.
<PAGE>
9. REPRESENTATIONS.
9.1 Seller represents to Buyer that:
9.1.1 LAWFUL EXISTENCE. Seller is a general partnership
organized under the laws of the State.
9.1.2 AUTHORIZATION. Seller's execution and delivery of this
Agreement to Buyer and the sale of the Property provided for in it have
been duly authorized by all necessary partnership action and in accordance
with Seller's partnership agreement.
9.1.3 OWNERSHIP. Seller is the lawful owner of the fee simple
title to the Property with full right and authority to convey the Property
without the consent or joinder of any party.
9.1.4 MANAGEMENT AGREEMENTS. There are no management
agreements or other such agreements affecting the Property other than the
Management Agreement. As of the Closing Date, the Management Agreement
will have been terminated in all respects, and no further rights shall
exist thereunder.
9.1.5 SERVICE CONTRACTS. There are no service, supply and
similar agreements affecting the Property other than the Service Contracts.
9.1.6 LEASES. There are no leases or tenancies on the Real
Property other than the Leases. To the best of Seller's knowledge, there
are no current defaults by Seller or the applicable tenants under the
Leases.
9.1.7 LAWSUITS. Except as set forth in EXHIBIT 9.1.7, to the
best of Seller's knowledge, there are no pending or threatened lawsuits
with respect to the Property.
9.1.8 ZONING VIOLATIONS. Seller has not received any written
notice that the Property is in violation of any zoning ordinances.
9.1.9 DELIVERY OF DOCUMENTS, CONTRACTS. The survey,
mechanical, structural plans and specifications, soil reports, certificates
of occupancy, warranties, operating statements, rent roll and income and
expense reports delivered to Buyer pursuant to this Agreement or in
connection with the execution hereof are true and complete copies of each;
and, to the best of Seller's knowledge, the contracts and documents
delivered to Buyer and listed in EXHIBIT 9.1.9 attached hereto are true and
correct copies thereof and are in full force and effect, without default by
any party thereunder.
9.1.10 PROCEEDINGS. Except as disclosed to Buyer in writing,
Seller does not have any actual knowledge of any condemnation,
environmental, zoning or other land use regulation proceedings, either
instituted, or planned to be instituted, which would affect the use and
operation of the Property for its intended purpose or the value of the
Property, nor has Seller received notice of any special assessment
proceedings affecting the Property. Notwithstanding the foregoing, Seller
hereby advises the Buyer that the Property is in the recently incorporated
City of Weston and the City has been and will be conducting proceedings
listed above that may or may not pertain to the Property.
9.1.11 At the time of Closing, there will be no outstanding
contracts made by Seller for any improvements to the Property which have
not been fully paid for and Seller shall cause to be discharged all
mechanics' or materialmen's liens arising from any labor or materials
furnished to the Property prior to the time of Closing.
<PAGE>
9.1.12 LEASING COMMISSIONS. There are no liabilities for
leasing commissions with respect to any tenants occupying the Property that
will not be paid on or before the Closing.
9.1.13 CONSUMMATION OF TRANSACTION. No injunctions,
restraining orders or court order of any nature have been issued which
would in any way affect the consummation of the transaction contemplated in
this Agreement.
9.1.14 DRY CLEANING PLANT. There has never been a dry cleaning
plant on the Property.
9.2 Buyer represents to Seller that:
9.2.1 LAWFUL EXISTENCE. As of the Contract Date and Closing
Date, Buyer is an Iowa corporation validly existing and in good standing
under the laws of the State of Iowa.
9.2.2 AUTHORIZATION. Buyer's execution and delivery of this
Agreement to Seller and its purchase of the Property provided for herein
have been authorized by all necessary corporate action and all other
actions required to be taken to authorize execution of this Agreement and
Buyer's performance of all obligations undertaken by it hereunder have been
duly and regularly taken.
9.3 SPECIAL PROVISIONS REGARDING SELLER'S WARRANTIES AND
REPRESENTATIONS. All warranties and representations of Seller made herein
are made to "Seller's knowledge" as of the Contract Date. "Seller's
knowledge" shall be deemed to mean only the actual knowledge of Daniel
Brown or Donald Mears.
9.4 SPECIAL PROVISIONS REGARDING BUYER'S WARRANTIES AND
REPRESENTATIONS. All warranties and representations of Buyer made herein
are made to "Buyer's knowledge" as of the Contract Date. "Buyer's
knowledge" shall be deemed to mean only the actual knowledge of Buyer, and
no other person or entity.
9.5 DISCLAIMERS AND LIMITATIONS. Buyer expressly acknowledges that
there exist no warranties or representations of Seller, expressed or
implied, other than those expressly set forth in SECTION 9.1 of this
Agreement, and Seller has no obligation to determine whether there are
material matters that should be disclosed to Buyer to the extent those
matters have not been expressly set forth herein. NOTWITHSTANDING ANYTHING
TO THE CONTRARY HEREIN CONTAINED (OTHER THAN AS EXPRESSLY SET FORTH IN
SECTION 9.1 OF THIS AGREEMENT), BUYER EXPRESSLY UNDERSTANDS, ACKNOWLEDGES
AND AGREES THAT THE CONVEYANCE OF THE PROPERTY SHALL BE MADE BY SELLER TO
BUYER ON AN "AS IS, WHERE IS" BASIS, AND "WITH ALL FAULTS," AND BUYER
ACKNOWLEDGES THAT BUYER HAS AGREED TO BUY THE PROPERTY IN ITS PRESENT
CONDITION (SUBJECT TO BUYER'S RIGHT OF INSPECTION AND REVIEW AS PROVIDED
HEREIN) AND THAT BUYER IS RELYING SOLELY ON ITS OWN EXAMINATION AND
INSPECTIONS OF THE PROPERTY AND NOT ON ANY STATEMENTS OR REPRESENTATIONS
MADE BY SELLER OR ANY AGENTS OR REPRESENTATIVES OF SELLER, EXCEPT AS
OTHERWISE SPECIFICALLY SET FORTH HEREIN. ADDITIONALLY, BUYER HEREBY
ACKNOWLEDGES THAT, EXCEPT AS OTHERWISE SPECIFIED HEREIN, SELLER MAKES NO
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF
LAW, INCLUDING BUT IN NO WAY LIMITED TO, ANY WARRANTY OF CONDITION,
HABITABILITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PROPERTY OR ANY PORTION THEREOF, OR WITH RESPECT TO THE ECONOMICAL,
FUNCTIONAL, ENVIRONMENTAL OR PHYSICAL CONDITION, OR ANY OTHER ASPECT, OF
THE PROPERTY. EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH HEREIN, SELLER
<PAGE>
HEREBY SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR REPRESENTATION,
ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, OR CONCERNING:
(I) THE NATURE AND CONDITION OF THE PROPERTY OR ANY PART THEREOF,
INCLUDING BUT NOT LIMITED TO, ITS WATER, SOIL, OR GEOLOGY, OR THE
SUITABILITY THEREOF FOR ANY AND ALL ACTIVITIES AND USES WHICH BUYER MAY
ELECT TO CONDUCT THEREON, OR ANY IMPROVEMENTS BUYER MAY ELECT TO CONSTRUCT
THEREON OR THAT ARE ALREADY CONSTRUCTED THEREON, OR ANY INCOME TO BE
DERIVED THEREFROM, OR ANY EXPENSES TO BE INCURRED WITH RESPECT THERETO, OR
ANY OBLIGATIONS OR ANY OTHER MATTER OR THING RELATING TO OR AFFECTING THE
SAME; (II) THE ABSENCE OF ASBESTOS OR ANY ENVIRONMENTALLY HAZARDOUS
SUBSTANCES ON, IN OR UNDER THE PROPERTY OR ON, IN OR UNDER ANY PROPERTY
NEAR, ADJACENT TO OR ABUTTING THE PROPERTY; (III) THE MANNER OF
CONSTRUCTION OR CONDITION OR STATE OF REPAIR OR LACK OF REPAIR OF ANY OF
THE IMPROVEMENTS ON THE PROPERTY; (IV) THE NATURE, EXTENT OF OR STATUS OF
ANY EASEMENT, RESTRICTIVE COVENANT, RIGHT-OF-WAY, LEASE, POSSESSION, LIEN,
ENCUMBRANCE, LICENSE, RESERVATION, CONDITION OR OTHER SIMILAR MATTER
PERTAINING TO THE PROPERTY, OR PORTION THEREOF; AND (V) THE COMPLIANCE OF
THE PROPERTY OR THE OPERATION OF THE PROPERTY OR PORTION THEREOF WITH ANY
LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY GOVERNMENT OR OTHER BODY. THE
PROVISIONS OF THIS SECTION 9.5 SHALL SURVIVE THE EXECUTION AND DELIVERY OF
THE DEED BY SELLER AND THE CLOSING OF THE TRANSACTION CONTEMPLATED BY THIS
AGREEMENT.
Buyer hereby waives and releases Seller, Seller's Affiliates,
representatives, agents and employees from any present or future claims
(hereinafter referred to as the "Claims") arising from or relating to the
presence or alleged presence of hazardous substances in, on, under or about
the Property including, without limitation, any claims under or on account
of (i) the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as the same may have been or may be amended from time to time,
and similar federal, state or local statutes, and any regulations
promulgated thereunder, (ii) any other federal, state or local law,
ordinance, rule or regulation, now or hereafter in effect, that deals with
or otherwise in any manner relates to, environmental matters of any kind,
or (iii) this Agreement. For the purposes hereof the term "hazardous
substances" shall have the meaning given to such term or similar terms
under any applicable federal, state or local laws, rules or regulations.
The foregoing waiver set forth above shall not be deemed to be effective
until the second anniversary of the Closing Date (the second anniversary of
the Closing Date is herein referred to as the "Release Date"), whereupon
such release shall automatically be in full force and effect from and after
the Release Date with respect to any claims for which Seller has not been
notified prior to the Release Date in writing. Notwithstanding anything
contained in this Agreement to the contrary, in the event that Buyer
notifies Seller of any any Claims against Seller prior to the Release
Date, Seller's liability with respect thereto shall in no event exceed
$500,000.
10. PROPERTY INSPECTION. Except as set forth herein, during the
Inspection Period, Buyer or Buyer's agents, employees and/or contractors,
shall have the right to conduct such investigations and inspections as to
the Property, the physical condition thereof, matters of zoning and all
other matters with respect to the Property (the "Inspections") which are in
Buyer's judgment relevant to Buyer's determination whether to purchase the
Property or to terminate this Agreement. Buyer hereby acknowledges that
Seller has provided Buyer with an environmental study by Dames & Moore
dated March 28, 1997 (the "Dames & Moore Study"), and further acknowledges
that although Buyer may confirm the results of the Dames & Moore Study, no
invasive environmental tests (such as drilling or soil or groundwater
testing) may be performed by Buyer unless Seller has provided its written
consent thereto. Buyer's Inspections shall be at Buyer's sole cost and
expense. Seller shall cooperate in good faith with Buyer in Buyer's
efforts to investigate the Property during the Inspection Period, provided,
however, prior to consultation with any third parties as to the Property,
Buyer shall first consult with Seller and provide Seller the opportunity,
at Seller's expense, to assist Buyer in such examination, including, at
Seller's option, the right to attend any discussions or meetings concerning
<PAGE>
the Property with Buyer and such third parties. Buyer shall indemnify
Seller from and against any loss, damage, cost or expense incurred by
Seller as a result of Buyer's Inspections, and Buyer shall, following any
such Inspections, promptly restore the Property to the condition existing
immediately prior to such Inspections, it being understood and agreed that
Buyer shall have no right to perform any physically invasive Inspections of
the Improvements or any other tests that may damage the same, without
Seller's prior written consent, which may be withheld in Seller's sole and
absolute discretion. Notwithstanding the foregoing indemnification
agreement, Buyer shall not be responsible or liable for any environmental
conditions found on the Property as a result of the Inspections that are
conducted in accordance with the terms of this SECTION 10. If for any
reason whatsoever, in Buyer's sole discretion, Buyer determines during the
Inspection Period that it does not wish to purchase the Property and to
close the transaction contemplated hereby, Buyer shall have the absolute
right to terminate this Agreement by giving written notice of such
termination to Seller in the manner hereinafter provided for the giving of
notices (the "Termination Notice"), prior to the expiration of the
Inspection Period, and delivering to Seller all prepared materials procured
by Buyer in Buyer's inspection of the Property ("Inspection Documents").
Upon receipt of such notice, the Deposit (with accrued interest, if any)
shall be returned to Buyer and thereafter this Agreement shall be deemed
terminated and of no further force and effect and both parties shall be
released and relieved of any liability or obligations hereunder, except for
the provisions of this SECTION 10, SECTION 12.2 and SECTION 24. If Buyer
does not provide the Termination Notice prior to the expiration of the
Inspection Period as provided above, then it shall be conclusively presumed
that Buyer is satisfied with its Inspections, and thereafter Buyer shall
have no further right to terminate this Agreement in accordance with the
provisions of this SECTION 10, and, subject to the provisions of SECTION 17
hereof, shall be obligated to close the transaction contemplated herein on
the Closing Date, and shall be deemed to have accepted title to the
Property in accordance with SECTION 9.5 hereof.
Notwithstanding anything contained herein to the contrary,
Buyer's Inspections shall be subject to the following terms and conditions:
10.1 COPIES TO SELLER; CONFIDENTIALITY. Buyer shall, promptly upon
receipt of any report or other information produced as a result of any
Inspections, provide Seller with a copy or detailed description thereof so
long as Seller pays for one-half (1/2) of the cost of such report. Buyer
and its agents, employees and contractors shall keep in strict confidence
all information obtained in the course of any such Inspections in
accordance with the provisions of SECTION 12.2 hereof; and this obligation
shall survive the termination of this Agreement.
10.2 RIGHT TO REPRESENTATIVE AT INSPECTIONS. Seller may have a
representative present at any Inspection, including, without limitation, an
environmental audit.
10.3 ADVANCE NOTICE. Buyer and its agents, employees and
contractors shall make any request to Seller to conduct an Inspection at
least 24 hours prior to the proposed time for the conduct thereof, which
notice shall specify the type of Inspection to be conducted by Buyer.
10.4 NO INTERFERENCE WITH BUSINESS. No Inspection shall interfere
with the operation of the Property or the conduct of business by Seller or
any tenants or other occupants of the Property.
10.5 EVIDENCE OF INSURANCE. Prior to any such Inspections,
including, without limitation, an environmental audit, Buyer or its
contractors shall obtain and provide Seller with evidence of comprehensive
general liability insurance coverage in an amount not less than $1,000,000
naming Seller as an insured and which policy shall be kept in force until
the Closing Date.
<PAGE>
11. COMMITTEE APPROVAL. In the event that Buyer has not provided written
notice to Seller in the manner hereinafter provided for the giving of
notices that Buyer has obtained the Committee Approval prior to the
expiration of the Committee Approval Period, then this Agreement shall be
deemed automatically terminated whereupon the Deposit (with accrued
interest, if any) shall be returned to Buyer and thereafter this Agreement
shall be of no further force and effect and both parties shall be released
and relieved of any liability or obligations hereunder, except for the
provisions of SECTION 10, SECTION 12.2 and SECTION 24 hereof.
12. DOCUMENTS TO BE FURNISHED BY SELLER.
12.1 DOCUMENTS FURNISHED. Seller has furnished to Buyer copies of
all Leases and Service Contracts.
12.2 CONFIDENTIALITY. Buyer shall keep in strict confidence all
information obtained with respect to the Property pursuant to or in
connection with this Agreement (including, without limitation, all terms
and provisions of this Agreement including the Purchase Price, all
information obtained with respect to the tenants and other occupants of the
Property, and all information obtained in connection with any Inspections
until such time as the Closing is completed). Buyer agrees to instruct its
agents, employees, advisers and consultants to comply with the provisions
of this SECTION 12.2 and any confidentiality agreement executed in
connection with the Property. Notwithstanding the foregoing, Buyer may
disclose all information obtained with respect to the Property to its
directors, bankers and advisors as long as such parties agree to keep the
information confidential until such time as the Closing is completed.
Notwithstanding the foregoing, Buyer may disclose information obtained with
respect to the Property to governmental authorities as may be required by
any law, rule or regulation promulgated thereby. If the purchase and sale
of the Property contemplated hereby is not completed for any reason, Buyer
shall, upon request, promptly return to Seller all instruments and
materials or copies of instruments and materials delivered pursuant hereto
or obtained by Buyer, so long as Seller pays for one-half (1/2) of the cost
of such instruments and materials. The provisions of this Section shall
survive any termination of this Agreement.
13. LEASES.
13.1 NO WARRANTIES REGARDING LEASES. Except as otherwise set forth
in SECTION 9.1.6 herein, Seller makes no representations to Buyer regarding
the Leases, including, without limitation, whether in fact the tenants
under the existing Leases will be in possession and/or not in default on
the Closing Date. Except as otherwise expressly set forth in SECTION 13.6
below, no lack of possession and/or default on the part of any tenant shall
affect Buyer's obligations hereunder. Notwithstanding anything that may be
contained herein to the contrary, in the event of a conflict between the
information set forth in this Agreement and the actual provisions of the
Leases, then the provisions of the Leases shall prevail.
13.2 Leases. Prior to the Closing Date, Seller shall not:
(i) modify, amend, alter, cancel or accept a surrender or forfeiture of any
of the Leases; or (ii) enter into any bona fide lease, offer to lease,
expansion of lease or renewal of space in the Improvements (a "Proposed
Lease") without the prior written approval of Buyer, all of which consents
and approvals shall not be unreasonably withheld, conditioned or delayed in
accordance with SECTION 13.3 hereof. Any such Proposed Lease entered into
by Seller prior to the Closing Date that is approved or deemed approved by
Buyer in accordance with SECTION 13.3 hereof shall render such lease an
"Approved Lease".
<PAGE>
13.3 APPROVAL PROCEDURE. Within five (5) Business Days after the
date of Buyer's receipt of a request from Seller for consent to, or
approval of: (i) any written amendment or modification, acceptance of a
surrender, cancellation or forfeiture of any of the Leases; or (ii) any
Proposed Lease, Buyer shall deliver to Seller its written approval, consent
or rejection (with reasons) of any such proposal, failing which Buyer shall
be deemed to have given its written consent or approval therein rendering,
as applicable, such Lease, as amended or modified, or Proposed Lease an
Approved Lease. Buyer shall only have the right to reject: (i) any
written amendment or modification, acceptance of a surrender, cancellation
or forfeiture of any of the Leases (herein collectively called
"Revisions"); or (ii) any Proposed Lease, under this SECTION 13.3 if Buyer
determines in its reasonable opinion, with respect to clause (i), that such
Revisions are commercially unreasonable, considering the type of tenant
and the terms of the related lease and, with respect to clause (ii), that
such Proposed Lease is not commercially reasonable considering similar
leases for similar tenants in the Property.
13.4 LEASE DEFAULTS. Anything herein to the contrary
notwithstanding, Seller reserves the right at any time prior to the Closing
Date to terminate Leases for defaults by tenants and to institute and
prosecute available remedies for default thereunder, except that Seller
agrees before instituting any such proceedings to notify Buyer to that
effect and obtain the consent of Buyer thereto. The foregoing consent or
approval shall not be unreasonably withheld, conditioned or delayed and
shall be deemed to be given in the event that Buyer fails to deliver its
written consent, approval or rejection (with reasons) to Seller within five
(5) Business Days from Buyer's receipt of Seller's request therefor.
13.5 TENANT ESTOPPEL CERTIFICATES.
13.5.1 Seller agrees to deliver to each tenant an estoppel
certificate substantially in the form attached hereto as EXHIBIT 13.5, or
as set forth in the respective Lease(s) or attached thereto as an exhibit
(if different than EXHIBIT 13.5). Buyer agrees that in no event shall
Seller be responsible for the tenants' execution and delivery to Buyer of
such estoppel certificates; provided, however, that in the event that
Seller does not obtain executed tenant estoppel certificates prior to the
expiration of the Inspection Period from: (i) the Anchor Tenants; and (ii)
all other tenants leasing at least a combined seventy percent (70%) of the
occupied square footage of the Improvements other than the square footage
under lease to the Anchor Tenants (collectively, the "Estoppel
Certificates"), then Buyer may terminate this Agreement in accordance with
SECTION 10 hereof.
13.5.3 Notwithstanding the foregoing, Seller shall have
the right to rescind any termination that is based solely upon Seller's
lack of receipt of sufficient Estoppel Certificates by electing to require
the delivery of such Estoppel Certificates as a condition of the Closing.
In such event, if Seller shall still not have received sufficient Estoppel
Certificates by the Closing Date, then Seller may elect, in its sole and
absolute discretion, to execute the required number of estoppel
certificates in substantially the same form as delivered to the tenants of
the Property and Buyer shall have no further right to terminate this
Agreement with respect thereto; provided, however that, in the event that
Seller elects not to execute such an estoppel, Buyer may: (a) terminate
this Agreement by giving written notice thereof to Seller within five (5)
days after Buyer's receipt of notice that Seller has not received the
required number of Estoppel Certificates by the Closing Date, in which
event the Deposit (with accrued interest, if any) shall be immediately
refunded to Buyer, and this Agreement shall be deemed null and void and no
party shall have any further rights or obligations hereunder, except for
those rights and obligations that specifically survive the termination of
this Agreement, or (b) proceed to Closing with no reduction in the Purchase
Price. Except for those rights, obligations and remedies that specifically
<PAGE>
survive the closing or termination of this Agreement, these are the sole
remedies of Buyer in the event Seller shall fail to receive sufficient
Estoppel Certificates as provided for herein. If applicable, in the event
that an estoppel certificate is received by Buyer, from a tenant, after the
Closing and such estoppel certificate does not conflict with the estoppel
certificate given by Seller at the Closing for such tenant, then Seller's
estoppel certificate given with respect to such tenant shall be null and
void. Seller does not warrant or guarantee any of the information
contained in tenant estoppel certificates that are actually executed by the
tenants.
13.6 MATERIAL ADVERSE CHANGE IN ANCHOR TENANTS. Notwithstanding
anything in this Agreement to the contrary, Buyer shall have the right to
terminate this Agreement in the event that any material adverse change, as
determined by Buyer in its reasonable opinion, shall occur in an Anchor
Tenant between the time that Committee Approval is obtained and the Closing
Date. For the purposes hereof, a material adverse change shall not be
deemed to occur in an Anchor Tenant merely due to such Anchor Tenant's
decision to operate its business differently than previous practice. Buyer
must elect to terminate this Agreement on the earlier to occur of five (5)
days after Buyer receives notice of such material adverse change or the
Closing Date by delivering written notice to Seller of such election to
terminate this Agreement together with an explanation of the material
adverse change in the applicable Anchor Tenant, otherwise Buyer shall be
deemed to have waived its right to so terminate this Agreement in
accordance with the provisions of this SECTION 13.6. In the event Buyer
terminates this Agreement in accordance with the provisions of this SECTION
13.6 then the Deposit (with accrued interest, if any) shall be returned to
Buyer and thereafter this Agreement shall be deemed terminated and of no
further force and effect and both parties shall be released and relieved of
any liability or obligations hereunder, except for the provisions of this
SECTION 10, SECTION 12.2 and SECTION 24.
14. EASEMENTS AND OTHER CONDITIONS. On or before the Closing Date,
Seller shall provide notice to Buyer of any easements which Seller will
reserve in the Deed, Buyer will grant to Seller or to which Buyer shall be
subject.
15. SELLER'S OPERATION OF PROPERTY. Seller covenants and agrees that
between the date hereof and the Closing Date, Seller will keep and maintain
the Property in its present condition (ordinary wear and tear excepted),
will not violate or breach any zoning ordinance nor commit any waste or
nuisance, and will promptly advise Buyer of any litigation, arbitration or
administrative hearing before any governmental authorities concerning or
affecting the Property arising or threatened after the Contract Date.
16. DAMAGE OR DESTRUCTION; CONDEMNATION.
16.1 DAMAGE OR DESTRUCTION: The risk of loss of or damage to the
Property by reason of any insured or uninsured casualty during the period
up to and including the Closing Date shall be borne by Seller. In the
event of any "material damage", as hereinafter defined, to or destruction
of the Property or any portion thereof, Buyer may, at its option, by notice
to Seller, given within ten (10) days after Buyer is notified of such
material damage or destruction (but before the Closing): (i) unilaterally
terminate this Agreement and the Deposit shall be immediately returned to
Buyer, together with all interest earned thereon; or (ii) proceed under
this Agreement with no reduction in the Purchase Price, receive any
insurance proceeds due Seller as a result of such damage or destruction and
assume responsibility for such repair. If the Property is not materially
damaged, then Buyer shall not have the right to terminate this Agreement,
but Seller shall, at its cost, repair the damage before the Closing in a
manner reasonably satisfactory to Buyer, or, credit Buyer at Closing for
the reasonable cost to complete the repair. (Seller and Buyer shall
mutually agree as to the reasonable cost to complete the repair in this
circumstance). For purposes of this SECTION 16.1, "material damage" and
"materially damaged" means damage reasonably exceeding $200,000 to repair,
as determined by an independent architect reasonably satisfactory to Seller
and Buyer.
<PAGE>
16.2 Condemnation. In the event of any threatened, contemplated,
commenced or consummated proceedings in eminent domain (notice of which
shall be given to Buyer by Seller immediately) respecting the Property
which are "material in nature" (as hereinafter defined), Buyer may, at its
option, by notice to Seller given within ten (10) days after Buyer is
notified of such actual or possible proceedings (but before the Closing);
(i) unilaterally terminate this Agreement and the Deposit and all interest
earned thereon shall be immediately returned to Buyer; or (ii) proceed
under this Agreement with no reduction in the Purchase Price, in which
event Seller shall, at the Closing, assign to Buyer, its entire right,
title and interest in and to any condemnation award. If Buyer does not
terminate this Agreement as set forth in clause (i) above, then Seller and
Buyer shall mutually negotiate and otherwise deal with the condemning
authority in respect of such matter. For purposes of this SECTION 16.2,
the phrase "material in nature" as it pertains to any threatened,
contemplated, commenced or consummated proceedings in eminent domain, shall
mean a taking of the Premises the value of which exceeds $200,000, as
determined by an independent appraiser doing business in the County, which
appraiser shall be reasonably satisfactory to Seller and Buyer. Seller
shall bear the entire risk of loss of the Property occurring prior to the
Closing.
17. REMEDIES FOR DEFAULT. If Buyer fails to perform any of the material
covenants, terms and conditions hereof and Seller has complied with the
material covenants, terms and conditions of this Agreement, Seller shall
receive the Deposit paid and agreed to be paid and all interest earned
thereon, together with the Inspection Documents, so long as Seller pays for
one-half (1/2) of the cost of such Inspection Documents, as liquidated
damages as and for its sole remedy hereunder and thereafter, this Agreement
shall be deemed to be terminated and of no force and effect, except for the
provisions of SECTION 12.2, SECTION 21, SECTION 24 and the indemnification
provisions of SECTION 10 hereof and any other provisions which expressly
survive termination. Seller waives all other remedies it may have against
Buyer at law or in equity. Buyer acknowledges that Seller will take
certain actions, forego opportunities and incur expenses related to and
arising out of Seller's obligations and duties as contained in this
Agreement. Buyer further acknowledges, having been carefully advised by
counsel at the time of the execution of this Agreement, that the Deposit
paid, and agreed to be paid, to Seller pursuant to the provisions hereof,
represents a reasonable endeavor by the parties to ascertain that said sums
would be the minimal damages suffered by Seller in the event of a default
or breach hereof by Buyer. If Seller fails to perform any of the covenants
hereof prior to Closing, Buyer may, at its option, if it is not in default
hereunder, elect any one of the following as Buyer's sole and exclusive
remedy: (i) terminate this Agreement and receive the Deposit and all
interest earned thereon, if any; or (ii) pursue the remedy of specific
performance; and Buyer waives all other remedies it may have against Seller
at law or in equity in connection with the foregoing. If, after Closing,
Seller fails to perform any of the covenants hereof that specifically
survive Closing, then Buyer, as its sole and exclusive remedy, shall have
the right to seek damages from Seller for such failure, except that Buyer
hereby waives and shall have no right to seek indirect, consequential or
punitive damages against Seller.
18. PROPERTY OWNER'S ASSOCIATIONS. Buyer acknowledges that if it accepts
the Deed at the Closing, Buyer shall become a member of The Town
Foundation, Inc. (the "Foundation"), the Declarations of which have been
recorded in the Public Records of the County. Buyer hereby acknowledges
and agrees that the Foundation is separate and distinct from Seller and
that Seller has in no manner contracted, guaranteed, represented or
warranted that the Foundation will take or forebear any action with regard
to Buyer, the Property or any of Buyer's activities thereon. Further,
Seller shall not, in any manner, be responsible to Buyer or any other
person or entity for any action taken or forborne by the Foundation. The
provisions of the Section shall survive Closing and delivery of the Deed.
<PAGE>
19. TRADE NAMES AND SERVICE MARKS. The names "Arvida [servicemark]",
"JMB", "Weston [registered trademark]" and all similar names, along with
all logos associated therewith, are the proprietary TRADE NAMES and service
marks of Arvida/JMB Partners or its affiliates. Except as may be permitted
by the License Agreement, Buyer shall have no rights to use the same for
advertising or other purposes. The provisions of the Section shall survive
Closing and delivery of the Deed.
20. RECOURSE LIMITED TO PROCEEDS OF SALE; SURVIVAL.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE AGREEMENT, NEITHER
SELLER NOR ANY PRESENT OR FUTURE CONSTITUENT PARTNER IN OR AFFILIATE OF
SELLER, NOR ANY SHAREHOLDER, OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF ANY
CORPORATION THAT IS OR BECOMES A CONSTITUENT PARTNER IN SELLER, SHALL BE
PERSONALLY LIABLE, DIRECTLY OR INDIRECTLY, UNDER OR IN CONNECTION WITH THE
AGREEMENT, OR ANY DOCUMENT, INSTRUMENT OR CERTIFICATE SECURING OR OTHERWISE
EXECUTED IN CONNECTION WITH THE AGREEMENT, OR ANY AMENDMENTS OR
MODIFICATIONS TO ANY OF THE FOREGOING MADE AT ANY TIME OR TIMES, HERETOFORE
OR HEREAFTER, OR IN RESPECT OF ANY MATTER, CONDITION, INJURY OR LOSS
RELATED TO THE AGREEMENT OR THE PROPERTY, AND ONLY SELLER'S INTEREST IN
THE PROPERTY (OR PROCEEDS THEREOF) SHALL BE AVAILABLE TO SATISFY ANY
CLAIMS AGAINST SELLER; AND THE BUYER AND EACH OF ITS SUCCESSORS AND
ASSIGNEES WAIVES AND DOES HEREBY WAIVE ANY SUCH PERSONAL LIABILITY. For
purposes of the Agreement, and any such instruments and certificates, and
any such amendments or modifications, neither the negative capital account
of any Constituent Partner in Seller, nor any obligation of any Constituent
Partner in Seller to restore a negative capital account or to contribute
capital to Seller or to any other Constituent Partner in Seller, shall at
any time be deemed to be the property or an asset of Seller or any such
other Constituent Partner (and neither Buyer nor any of its successors or
assignees shall have any right to collect, enforce or proceed against or
with respect to any such negative capital account or a Constituent
Partner's obligation to restore or contribute). As used in this Paragraph,
a "Constituent Partner" in Seller shall mean any direct partner in Seller
and any person that is a partner in any partnership that, directly or
indirectly through one or more other partnerships, is a partner in Seller.
Unless otherwise noted herein, none of Seller's representations,
warranties, covenants or agreements shall survive Closing and all of the
same shall merge into the Deed to be given by Seller except as and to the
extent expressly provided to the contrary herein; provided however, that
notwithstanding the foregoing, if Buyer learns of any breach or
non-performance of any representation, warranty, covenant or agreement
prior to Closing, Buyer shall promptly notify Seller thereof, and such
representation, warranty, covenant or agreement shall not survive Closing
(whether or not Buyer notifies Seller thereof) but, rather, shall merge
into the Deed to be given by Seller, it being the intention of the parties
that no breach or non-performance of which Buyer has knowledge prior to
Closing shall survive Closing should Buyer elect to close notwithstanding
knowledge of such breach or non-performance. Enforcement by Seller, its
successors and assignees, of each and every covenant and obligation
(including but not by way of limiting, obligations to indemnify and hold
harmless) of Buyer set forth herein, and exercised by Seller, its
successors and assignees, of all rights granted to any of them herein,
shall survive all closings and deliveries of deeds or termination of this
Agreement, notwithstanding anything set forth herein to the contrary.
21. ATTORNEYS' FEES. In the event of litigation between Buyer and Seller
concerning this Agreement or any documents related thereto, the prevailing
party shall be entitled to attorneys' fees and costs. The provisions of
the Section shall survive Closing, delivery of the Deed, and termination
under this Agreement.
<PAGE>
22. ASSIGNMENTS. Buyer shall not assign this Agreement nor any interest
therein without obtaining the prior written consent of Seller, which
consent may be withheld in its sole and absolute discretion, provided,
however, that Buyer may assign this Agreement or any interest therein to an
Affiliate of Buyer. If Buyer or any permitted successor or assignee of
Buyer is a corporation, the transfer of any corporate shares therein shall
be deemed a prohibited assignment of the Agreement. If Buyer or any
permitted successor or assignee of Buyer is a partnership, the transfer of
any general partnership interest therein shall be deemed a prohibited
assignment of this Agreement. Seller may assign any of its rights
hereunder without the consent of Buyer, so long as Seller remains
responsible and liable for its obligations under this Agreement.
23. THIRD PARTY BENEFICIARY. The provisions of this Agreement are for
the exclusive benefit of the Seller and Buyer hereto, and their respective
successors and permitted assigns, and no other party shall have any right
or claim against the Seller and Buyer, or either of them, by reason of
those provisions or be entitled to enforce any of those provisions against
the Seller and Buyer hereto, or either of them. The provisions of this
Section shall survive the Closing and delivery of the Deed.
24. BROKERS. Buyer and Seller represent and warrant to each other that
neither has dealt or negotiated in any manner with any real estate broker,
salesperson or agent concerning the purchase of the Property, except for
Richard Ellis, LLC, licensed real estate broker ("Ellis") and Marcus &
Millichap, licensed real estate broker ("Marcus"). Seller shall be
responsible for payment of any commission due to Ellis and Buyer shall be
responsible for payment of any commission due to Marcus upon consummation
of this transaction. Seller and Buyer shall not be obligated to pay any
commissions unless this transaction is fully consummated in accordance with
the terms of this Agreement. Each party agrees to indemnify and hold
harmless the other from and against any and all claims, damages, expenses
(including reasonable attorneys' fees and court costs) and liabilities of
any nature whatsoever asserted against or incurred by either party in
connection with: (a) claims of any entity (other than Ellis with respect to
Seller and Marcus with respect to Buyer) with whom such party may have
consulted, dealt or negotiated; or (b) the failure of Seller to pay Ellis
or Buyer to pay Marcus pursuant to the terms hereof or any separate
agreement between the respective parties.
25 SIMULTANEOUS CLOSING CONTINGENCY. As a material inducement for
Seller to enter into this Agreement, Buyer acknowledges and agrees that
Seller's obligation to close hereunder is contingent upon the simultaneous
closing of the transaction contemplated by that certain Agreement for
Purchase and Sale (the "Country Isles Agreement") of even date herewith
between Country Isles Associates, as seller, and Buyer, as buyer, for real
property known as Country Isles Plaza located in Weston, Florida. In
addition, a default by Buyer under the Country Isles Agreement shall also
be deemed to be a default by Buyer under this Agreement and, in such event,
Seller shall have the right to exercise any and all rights and/or remedies
that are available to Seller under this Agreement as a result of Buyer's
default hereunder.
26. NOTICES. All notices and communications required or allowed by this
Agreement shall be in writing and delivered as set forth in the immediately
succeeding paragraph, addressed to the party or person to whom the notice
is being given at the following addresses:
TO SELLER: ARVIDA/LAKES PLAZA, L.P.
c/o Arvida Company
Attention: James Motta
7900 Glades Road, Suite 200
Post Office Box 100
Boca Raton, Florida 33434
Fax: (561) 479-1227
Confirmation: (561) 479-1144
<PAGE>
ARVIDA COMPANY
Attention: General Counsel
7900 Glades Road, Suite 200
Post Office Box 100
Boca Raton, Florida 33434
Fax: (561) 479-1227
Confirmation: (561) 479-1144
COPY TO: Gunster, Yoakley, Valdes-Fauli & Stewart, P.A.
500 East Broward Boulevard, Suite 1400
Fort Lauderdale, Florida 33394
Attention: Daniel M. Mackler, Esq.
Fax: (954) 523-1722
Confirmation: (954) 462-2000
TO BUYER: PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
711 High Street
Des Moines, Iowa 50392-1370
Attention: Eric W. Johnson, Acquisitions Manager
Commercial Real Estate Asset Management
Fax: (515) 248-0484
Confirmation: (515) 248-0057
Notices are to be delivered by certified mail, postage prepaid,
return-receipt requested and shall be deemed to have been delivered three
(3) Business Days after mailing, or, if sooner, on the date the receipt for
certified mail is signed by the addressee or its authorized agent or
employee. Notices may also be made by couriers, telephone facsimile, hand
delivery, overnight delivery by a reputable overnight delivery service, or
telegram and shall be deemed to have been delivered on the date a receipt
or confirmation of receipt is (a) signed by the addressee or its authorized
agent or employee, or (b) received by the sender in the event a notice is
sent via facsimile. A notice delivered to Seller or Buyer shall not be
deemed effective unless it refers to all of the following: the parties to
this Agreement, the Contract Date and the name of the Project. Seller's and
Buyer's attorneys are hereby authorized to send and receive notices
hereunder on behalf of their respective clients.
27. BUSINESS DAY. If any date herein set forth for the performance of any
obligations by Seller or Buyer or for the delivery of any instrument or
notice as herein provided should be on a day other than a Business Day, the
compliance with such obligations or delivery shall be deemed acceptable on
the next occurring Business Day.
28. AFFILIATE. "Affiliate" means a person or entity which (either
directly or indirectly, through one or more intermediaries) controls, is in
common control with or is controlled by, another person or entity, and any
person or entity that is a director, trustee, officer, employee, agent,
partner, shareholder, subsidiary or attorney of any of the foregoing. For
the purposes of this definition, the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management or policies of a person or entity, whether through the
ownership of voting securities, by contract or otherwise.
29. SEVERABILITY AND INVALIDITY. If any provision of this Agreement, or
the application of such provision to any person or circumstance, shall be
held invalid, the remainder of the Agreement, or the application of such
provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby. The provisions of this Section
shall survive the Closing and delivery of the Deed.
<PAGE>
30. RECORDATION. Buyer agrees that disclosure of this Agreement would be
detrimental to Seller and hamper its future negotiations with third parties
and, therefore, it is agreed that no disclosure shall be made by Buyer
without the written approval of Seller and that this Agreement shall not be
recorded in any public records. Seller agrees that Buyer may disclose the
terms and provisions of this Agreement without prior approval to those
lending institutions of which it requests financing for the financing of
the Property, to prospective investors from whom it seeks capital for the
acquisition of the Property, as well as to such attorneys, accountants and
investment bankers as are engaged by Buyer to assist it with this
transaction. The provisions of this Section shall survive Closing and
delivery of the Deed.
31. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding
between Seller and Buyer and shall not be altered, modified or amended
unless such alteration, modification or amendment is set forth in writing
and signed by the party against whom he enforcement of any such alteration,
modification or amendment is sought.
32. NUMBER AND GENDER. The terms "Seller" and "Buyer" shall include the
heirs, executors, administrators, personal representatives, successors and
assigns of the respective parties hereto. Whenever used the singular
number shall include the plural and the plural the singular, and the use of
any gender shall include all genders.
33. GOVERNING LAW AND VENUE. This Agreement shall be governed by a
construed in accordance with the laws of the State without reference to the
laws of any other jurisdiction. The parties agree that any litigation
arising from this Agreement shall be maintained in a court of competent
jurisdiction sitting in the County.
34. ADVICE OF COUNSEL. EACH PARTY ACKNOWLEDGES THAT IT HAS BEEN ADVISED
BY ITS OWN COUNSEL WITH RESPECT TO THE TRANSACTION GOVERNED BY THIS
AGREEMENT.
35. CONSTRUCTION; CAPTIONS. The language in all parts of this Agreement
shall be in all cases construed simply according to its fair meaning and
not strictly for or against any of the parties hereto. The captions and
headings of various sections and paragraphs in this Agreement are for
convenience only and are not to be utilized in construing the content or
meaning of the provisions hereof and shall not be deemed to constitute a
part hereof. No reference or use shall be made of any previous draft of
this Agreement or of any negotiations with respect thereto in construing
this Agreement. As used herein, the word "including" shall be construed to
mean "including, without limitation."
36. ANNOUNCEMENTS. Seller and Buyer shall consult with each other with
regard to all press releases and other announcements issued at or prior to
the Closing concerning this Agreement or the transactions contemplated
hereby and, except as may be required by applicable laws or the applicable
rules and regulations or any governmental agency or stock exchange, neither
Seller nor Buyer shall issue any such press release or other such publicity
prior to the Closing Date without the prior written consent of the other
party.
37. NO WAIVER. No failure of any party to exercise any power given such
party hereunder or to insist upon strict compliance by the other party with
its obligations hereunder shall constitute a waiver of any party's right to
demand strict compliance with the terms of this Agreement.
38. COUNTERPARTS. This Agreement, and any document or instrument entered
into, given or made pursuant to this Agreement or authorized hereby, and
any amendment or supplement thereto may be executed in two or more
counterparts, and, when so executed, will have the same force and effect as
though all signatures appeared on a single document. Any signature page of
this Agreement or of such amendment, supplement, document or instrument may
be detached from any counterpart without impairing the legal effect of any
signatures thereon, and may be attached to another counterpart identical in
form thereto but having attached to it one or more additional signature
pages.
<PAGE>
39. FURTHER ASSURANCES. In addition to the foregoing, the parties
hereto, at the time and from time to time at or after the Closing, upon
request of Buyer or Seller, as the case may be, agree to do, execute,
acknowledge and deliver all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney and assurances, as may be
required for the better assigning, transferring, granting, conveying,
assuring and confirming unto the Buyer all of Seller's right, title and
interest in and to the Property and the more effective consummation of the
transactions contemplated by this Agreement. The terms of this Section
shall survive the Closing and delivery of the Deed.
40. RADON GAS. Radon is a naturally occurring radioactive gas that, when
it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon
that exceed federal and state guidelines have been found in buildings in
Florida. Additional information regarding radon and radon testing may be
obtained from the County health unit.
41. TAX DEFERRED EXCHANGE. Buyer and Seller agree that, at Buyer's sole
election, this transaction shall be structured as an exchange of like-kind
properties under Section 1031 of the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations and proposed regulations
thereunder. The parties agree that if Buyer wishes to make such election,
it must do so prior to the Closing Date. Buyer shall in all events be
responsible for all costs and expenses related to the Section 1031 exchange
and shall fully indemnify, defend and hold Seller harmless from and against
any and all liability, claims, damages, expenses (including reasonable
attorneys' and paralegal fees and reasonable attorneys' and paralegal fees
on appeal), proceedings and causes of action of any kind or nature
whatsoever arising out of, connected with or in any manner related to such
Section 1031 exchange that would not have been incurred by Seller if the
transaction were a purchase for cash. The provisions of the immediately
preceding sentence shall survive Closing and the transfer of title to the
Property to Buyer. Any such Section 1031 exchange shall be consummated on
behalf of Buyer through the use of a facilitator or intermediary which
shall acquire title to the Property. In no event shall the provisions of
this SECTION 41 be deemed to allow Buyer to extend the Closing Date. Buyer
acknowledges that Seller has agreed to the terms of this section as an
accommodation to Buyer and has not rendered any tax advice to Buyer with
respect to the compliance of any Section 1031 exchange with the Code or any
regulations promulgated thereunder and Buyer has obtained its own tax
advice with respect thereto.
[TEXT AND SIGNATURES FOLLOW]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives, the day and year
first above written.
SELLER
ARVIDA/LAKES PLAZA, L.P., a Delaware
limited partnership
By: ARVIDA/LAKES MANAGERS, INC., a
Delaware corporation, as general partner
By: JOHN BARIC
John Baric, Vice-President
THE INDIAN TRACE COMMUNITY DEVELOPMENT DISTRICT IMPOSES TAXES AND
ASSESSMENTS OR BOTH TAXES AND ASSESSMENTS ON THIS PROPERTY THROUGH A
SPECIAL TAXING DISTRICT. THESE TAXES AND ASSESSMENTS PAY THE CONSTRUCTION,
OPERATION AND MAINTENANCE COST OF CERTAIN PUBLIC FACILITIES OF THE DISTRICT
AND ARE SET ANNUALLY BY THE GOVERNING BOARD OF THE DISTRICT. THESE TAXES
AND ASSESSMENTS ARE IN ADDITION TO COUNTY AND ALL OTHER TAXES AND
ASSESSMENTS PROVIDED FOR BY LAW.
BUYER:
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
JOINDER
The undersigned agree to the terms and conditions stated in
SECTION 24 of the foregoing Agreement.
RICHARD ELLIS, LLC
By:
------------------------------
(Seal) Name:
------------------------------
Title:
------------------------------
MARCUS & MILLICHAP
By:
------------------------------
(Seal) Name:
------------------------------
Title:
------------------------------
[END OF AGREEMENT - EXHIBITS AND SCHEDULE FOLLOW]
<PAGE>
SCHEDULE OF EXHIBITS
--------------------
EXHIBITS DESCRIPTION
Exhibit 1.31 Leases
Exhibit 1.38 Real Property
Exhibit 1.42 Service Contracts
Exhibit 6.1.8 Lake Maintenance Easement
Exhibit 7.1.2 Deed
Exhibit 7.1.3 Bill of Sale
Exhibit 7.1.4 Assignment and Assumption of
Service Contracts
Exhibit 7.1.5 Assignment and Assumption of
Leases
Exhibit 7.1.13 No Lien Affidavit
Exhibit 9.1.7 Schedule of Threatened or Pending
Lawsuits
Exhibit 9.1.9 Schedule of Contracts and
Documents
Exhibit 13.5 Tenant Estoppel Certificates
EXHIBIT 10.8
- ------------
AGREEMENT FOR PURCHASE AND SALE
(Retail Shopping Center)
--------------------------------
This Agreement for Purchase and Sale is made and entered into as of
the 22nd day of August, 1997 ("Contract Date"), by and between COUNTRY
ISLES ASSOCIATES, an Illinois general partnership ("Seller"), and PRINCIPAL
MUTUAL LIFE INSURANCE COMPANY, an Iowa corporation ("Buyer").
RECITALS:
--------
WHEREAS, Seller is the owner of a certain parcel of real property
which is located in the City of Weston, Broward County, Florida, all as
hereinafter more particularly described; and
WHEREAS, Seller proposes to sell the Property (as hereinafter
defined) to Buyer and Buyer proposes to purchase the Property from Seller,
all for the Purchase Price (as hereinafter defined) and upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, and other good and valuable considerations,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby covenants and agree as follows:
TERMS AND CONDITIONS
I. DEFINITIONS. The following terms as used herein shall have the
following meanings:
A. "Adjustment Date" shall mean midnight of the day prior to the
Closing Date.
B. "Affidavit" shall have the meaning ascribed thereto in SECTION
7.1.13 hereof.
C. "Affiliate" shall have the meaning ascribed thereto in SECTION
28 hereof.
D. "Agreement" shall mean this instrument, together with all
exhibits, addenda and amendments hereto.
E. "Anchor Tenants" shall mean collectively, Publix Super Markets,
Inc., a Florida corporation, and Eckerd Drugs of Florida, Inc., a Florida
corporation.
F. "Approved Leases" shall mean collectively, the Leases and all
Proposed Leases which become Approved Leases in accordance with the terms
of SECTION 13.2 and 13.3 hereof.
G. "Assignment of Leases" shall have the meaning ascribed thereto
in SECTION 7.1.5 hereof.
H. "Assignment of Service Contracts" shall have the meaning
ascribed thereto in SECTION 7.1.4 hereof.
I. "Business Days" shall mean any day other than a Saturday,
Sunday or a day upon which banking institutions in the State are authorized
or required by law to close.
<PAGE>
J. "Buyer" shall have the meaning ascribed to the same in the
introductory paragraph.
K. "CAM Charges" shall have the meaning ascribed thereto in
SECTION 4.8.2 hereof.
L. "Claims" shall have the meaning ascribed thereto in SECTION
9.5.
M. "Closing" shall have the meaning ascribed thereto in SECTION
5.1 hereof.
N. "Closing Date" shall have the meaning ascribed thereto in
SECTION 5.1 hereof.
O. "Committee Approval" shall mean the approval of Buyer's
Business Investment Committee of the terms of this Agreement and the
transactions contemplated hereby.
P. "Committee Approval Period" shall mean that certain period of
time commencing on the thirty-first (31st) day after the Contract Date and
terminating at 5:00 p.m. (E.S.T.) on the fortieth (40th) day following the
Contract Date.
Q. "Contract Date" shall have the meaning ascribed to the same in
the introductory paragraph.
R. "County" shall mean Broward County, Florida.
S. "Current Funds" shall mean immediately available federal wired
funds.
T. "Deed" shall have the meaning ascribed in SECTION 7.1.2 hereof.
U. "Deposit" shall have the meaning ascribed thereto in SECTION
3.1.1 hereof.
V. "Escrow Agent" shall mean Chicago Title Insurance Company,
Attn: Paulette Stevenson, Piper Jaffrey Tower, 222 South Ninth Street,
Suite 3900, Minneapolis, Minnesota 55402.
W. "Estoppel Certificates" shall have the meaning ascribed thereto
in SECTION 13.5 hereof.
X "Existing Mortgage" shall mean that certain Mortgage dated
April 25, 1996 between the Existing Mortgagee and Seller, recorded in
Official Records Book 24803, Page 255 of the Public Records of the County,
Florida.
Y. "Existing Mortgagee" shall mean USG Annuity & Life Company, an
Oklahoma corporation.
Z. "FOUNDATION" shall have the meaning ascribed thereto in SECTION
18 hereof.
AA. "Improvements" shall mean any and all buildings, structures and
other improvements located on the Real Property.
AB. "Inspection Documents" shall have the meaning ascribed thereto
in SECTION 10 hereof.
AC. "Inspection Period" shall mean that certain period of time
commencing on the Contract Date and terminating at 5:00 p.m. (E.S.T.) the
thirtieth (30th) day after the Contract Date.
<PAGE>
AD. "Inspections" shall have the meaning ascribed thereto in
SECTION 10 hereof.
AE. "Intangible Property" shall mean collectively, the right to use
the name "Country Isles Plaza" or membership in any property owner's
association.
AF. "Leases" shall mean collectively, those certain leases of space
in the Improvements, as more particularly described in EXHIBIT 1.31
attached hereto and incorporated herein by this reference.
AG. "Management Agreement" shall mean that certain management
agreement between Seller and Urban Retail Properties Co.
AH. "Permitted Exceptions" shall have the meaning ascribed thereto
in SECTION 6.1 hereof.
AI. "Personal Property" shall mean collectively, all fixtures,
equipment and other items of personal property, if any, owned by Seller and
located on the Property and, to the extent transferable by Seller, all
licenses, permits, authorizations, warranties, telephone exchange numbers,
architectural or engineering plans and specifications, certificates of
occupancy and other approvals which are in Seller's possession and are in
effect and necessary for the current use and operation of the Real
Property.
AJ. "Property" shall mean collectively, all of the Real Property,
the Approved Leases, the Improvements, the Intangible Property and the
Personal Property.
AK. "Proposed Lease" shall have the meaning ascribed thereto in
SECTION 13.2 hereof.
AL. "Purchase Price" shall have the meaning ascribed thereto in
SECTION 3.2 hereof.
AM. "Real Property" shall mean that certain real property located
in Weston, Broward County, Florida, known as Country Isles Plaza, as
legally described in EXHIBIT 1.39 attached hereto and incorporated herein
by this reference, together with all rights, privileges, benefits and
easements appurtenant thereto.
AN. "Release Date" shall have the meaning ascribed thereto in
Section 9.5.
AO. "Scheduled Closing Date" shall have the meaning ascribed
thereto in SECTION 5.1 hereof.
AP. "Seller" shall have the meaning ascribed to the same in the
introductory paragraph.
AQ. "Service Contracts" shall mean collectively, those certain
service contracts and agreements relating to the operation of the Property,
as more particularly described in EXHIBIT 1.43 attached hereto and
incorporated herein by this reference.
AR. "Settlement Statement" shall have the meaning ascribed thereto
in SECTION 7.1.12 hereof.
AS. "State" shall mean the State of Florida.
AT. "Survey Defects" shall have the meaning ascribed thereto in
Section 6.3.2 hereof.
<PAGE>
AU. "Survey Notice" shall have the meaning ascribed thereto in
Section 6.3.2 hereof.
AV. "Termination Notice" shall have the meaning ascribed thereto in
Section 10 hereof.
AW. "Title Defects" shall have the meaning ascribed thereto in
Section 6.2 hereof.
AX. "Title Evidence" shall have the meaning ascribed thereto in
Section 6.1 hereof.
AY "Title Insurer" shall have the meaning ascribed thereto in
Section 6.1 hereof.
AZ. "Title Notice" shall have the meaning ascribed thereto in
Section 6.2 hereof.
BA. "Title Policy" shall have the meaning ascribed thereto in
SECTION 6.1 hereof.
II. PURCHASE AND SALE OF PROPERTY. Seller agrees to sell and convey to
Buyer and Buyer agrees to purchase from Seller, for the Purchase Price and
upon the terms and conditions herein set forth, the Property.
III. DEPOSIT, PURCHASE PRICE AND PAYMENT.
A. DEPOSIT.
1. Within three (3) Business Days after the Contract Date,
Buyer shall pay to the Escrow Agent the amount of ONE HUNDRED THIRTY-TWO
THOUSAND SEVEN HUNDRED AND NO/100 DOLLARS ($132,700.00) (the "Deposit") as
an earnest money deposit payment.
2. Escrow Agent shall hold the Deposit in accordance with
the escrow agreement in form and substance acceptable to the Escrow Agent,
Seller and Buyer, which the parties hereto shall execute on the Contract
Date. The Deposit, together with all accrued interest thereon, if any,
shall be a credit to the Buyer against the Purchase Price and applied as a
payment on account thereof at Closing. In the event the transaction
contemplated by this Agreement fails to close, Escrow Agent shall disburse
the Deposit together with all accrued interest thereon, if any, to the
party entitled to such Deposit in accordance with the terms of this
Agreement.
B. PURCHASE PRICE. The purchase price ("Purchase Price") to be
paid to Seller by Buyer for the Property shall be THIRTEEN MILLION TWO
HUNDRED SEVENTY THOUSAND AND NO/100 DOLLARS ($13,270,000.00).
C. ASSUMPTION OF EXISTING MORTGAGE. As part of the Purchase
Price, Buyer agrees, subject to Existing Mortgagee's prior approval, to
assume the Existing Mortgage upon the terms and conditions set forth
therein. Currently, the outstanding principal amount of the Existing
Mortgage is approximately $7,921,846.00 as of September 2, 1997. Subject
to Seller's payment of all third-party out-of-pocket fees and costs
associated with Buyer's application and assumption (excluding Buyer's
attorneys' fees but including Existing Mortgagee's attorney's fees, if any,
and in any event not to exceed any prepayment premiums or penalties due in
connection with such pay-off of the Existing Mortgage), Buyer shall make an
application and attempt to obtain the approval of the Existing Mortgagee to
the assumption of the Existing Mortgage during the Inspection Period on the
terms and conditions that are acceptable to Buyer. In the event that Buyer
does not obtain such approval or the terms and conditions thereof are not
acceptable to Buyer, then Buyer shall have the right to terminate this
Agreement during the Inspection Period as set forth in SECTION 10 hereof.
In the event that Buyer does not terminate this Agreement during the
Inspection Period as set forth in SECTION 10, then Buyer shall be deemed to
<PAGE>
have approved the terms of the assumption of the Existing Mortgage or Buyer
shall otherwise be obligated to pay off the Existing Mortgage at the
Closing, whereupon Buyer shall be responsible to pay any and all costs of
prepaying the Mortgage, including, without limitation, prepayment premiums
or penalties due in connection with such pay-off of the Existing Mortgage.
D. PAYMENT OF PURCHASE PRICE. The Purchase Price, less any
portion of the Deposit held in escrow and the then outstanding amount of
the Existing Mortgage, plus or minus prorations and other adjustments as
provided for hereinafter, shall be paid by Buyer by Current Funds before
1:00 p.m. (local time in the County) on the Closing Date, and the Escrow
Agent shall simultaneously disburse the Deposit at Closing to the Seller.
IV. APPORTIONMENTS, PRORATIONS AND ADJUSTMENTS.
A. APPORTIONMENTS. The following items shall be apportioned on
the Closing Date as of the close of business on the Adjustment Date:
1. RENT.
a. CURRENT RENT. Rents that are payable for the month
in which Closing occurs, and rents that are actually paid for the period
prior thereto. If at the time of the Closing Date there are past-due rents
owed by tenants for the month immediately prior to the month in which the
Closing occurs, then Buyer agrees that the first moneys received by Buyer
from any tenant or tenants for the month of the Closing and the month
immediately prior to the month of Closing, shall be received on account of
or in payment of such past-due rents and Seller's share will be remitted by
Buyer to Seller forthwith. The provisions of this paragraph shall survive
the Closing.
b. RENT ARREARS. With respect to any arrears for periods
of more than one (1) month (not including the month in which the Closing
occurs), Seller shall assign or transfer such arrears to Buyer against
Buyer's agreement to use reasonable diligence to collect such amounts on
behalf of Seller and to pay such arrears to Seller as and when collected,
less reasonable collection charges (including, without limitation,
reasonable attorneys' fees) not in excess of the local prevailing rates
(which collection charges shall be prorated against other amounts collected
by Buyer from such tenant). The provisions of this paragraph shall survive
the Closing.
c. PERCENTAGE RENT. As to the Leases which provide for the
payment of a so-called "percentage rent" based upon the amount of the
tenant's business during a specified annual or other period, if the Closing
Date shall occur on other than the last day of any such year or period, the
percentage rent for the year or period in which title shall close shall be
apportioned between the parties hereto, that is to say, Seller shall
receive the proportion of such percentage rent which the portion of such
year or other period during which Seller owned the Property bears to the
entire year or period, to be credited or payable as follows:
(1) If any percentage rent under a Lease shall become
due in respect of a percentage rent year or other period attributable to
the period prior to the Closing Date but which shall become payable or
shall be paid after the Closing Date, Buyer shall promptly pay to Seller
within five (5) days after receipt, the amount to which Seller may be
entitled as above provided. Buyer shall exercise reasonable diligence in
the collection of any such percentage rent when due. In the event of a
dispute with a tenant regarding the amount of percentage rent owed, Buyer
agrees not to compromise or settle with a tenant as to said amount without
the prior written consent of Seller. Buyer agrees to provide Seller with
copies of all correspondence with tenants regarding such percentage rent.
<PAGE>
(2) If, prior to the Closing Date, Seller shall have
collected any sums on account of percentage rent for a year or other period
beginning prior but ending subsequent to the Closing Date, Seller shall be
entitled to retain such sum until the balance of the percentage rent for
such year or other period shall be determined and collected and thereupon
Seller shall pay over to the Buyer, any excess of the amount so retained
over the amount to which Seller may be entitled upon the apportionment of
the percentage rent for the entire year or other period between Seller and
Buyer. Seller agrees to provide Buyer with copies of all sales figures and
all correspondence with tenants regarding such percentage rent for the past
two (2) years to the extent that the same are in Seller's possession.
B. REAL ESTATE AND PERSONAL PROPERTY TAXES. Real estate taxes,
personal property taxes, assessments, and sewer rents, if any, on the basis
of the fiscal year for which assessed, except that if the Closing Date
shall occur before the tax rate is fixed, then the apportionment of taxes
shall be upon the basis of the tax rate for the immediately preceding year
applied to the latest assessed valuation and when the tax rate is fixed
there shall be a recomputation and any additional payment or refund shall
be made accordingly. The provisions of this paragraph shall survive the
Closing. Any installment assessment shall be subject to apportionment as
herein provided.
C. WATER CHARGES. Unmetered sewer or similar charges on the basis
of the calendar year in which the Closing shall occur. If there are water
meters on the Property that are not the responsibility of a tenant in the
Property, then Seller shall furnish a reading as of a date not more than
thirty (30) days prior to the Closing Date to the extent the same is
obtainable. The unfixed water meter charges, if any, based thereon for the
intervening period shall be apportioned on the basis of such last reading,
and, upon the taking of a subsequent actual reading, the apportionment will
be readjusted and Seller or Buyer, as the case may be, will promptly
deliver to the other the amount determined to be so due upon the
readjustment. If Seller is unable to furnish the prior reading, any
reading subsequent to the Closing Date will be apportioned on a per diem
basis from the date of such reading and the reading immediately prior
thereto and the Seller shall pay the proportionate charge due up to the
Closing Date. Unpaid water meter bills which are the obligations of
tenants in possession in accordance with the terms of leases shall not be
deemed an objection to title and Buyer will take title subject thereto.
The amounts owing by tenant will be assigned by Seller to Buyer. The
provisions of this paragraph shall survive the Closing.
D. UTILITY CHARGES. Seller will use reasonable efforts to cause
all the utility meters to be read to and including the Adjustment Date and
will be responsible therefor. Seller shall be entitled to the refund of
any existing utility security deposits. To the extent Seller cannot obtain
the utility meter readings on the Adjustment Date, the parties shall adjust
the foregoing based upon estimates and final meter readings after the
Closing. The provisions of this paragraph shall survive the Closing.
E. SECURITY DEPOSITS AND OTHER PREPAYMENTS. All security deposits
and other prepayments of money as required by the Leases will be turned
over by Seller to Buyer on the Closing Date or, in the alternative, Buyer
shall receive a credit against the Purchase Price for the aggregate amount
of all security deposits and other prepayments. Buyer shall indemnify and
hold Seller harmless from and against any loss, damage, cost or expense
incurred by Seller as a result of any claims against Seller for the amount
so turned over or credited to Buyer in accordance herewith.
F. SERVICE CONTRACTS. All charges payable under the Service
Contracts that Buyer has elected to assume, it being agreed that Buyer must
provide Seller with written notice at least ten (10) business days prior to
the Closing of the Service Contracts that Buyer has elected to assume,
otherwise the Service Contracts shall be terminated on the Closing Date for
the Service Contracts as to which such 10-day notice was not so provided.
<PAGE>
G. OTHER INCOME AND EXPENSES. All other income and expenses
reasonably capable and, subject to the provisions of this Agreement,
properly the subject of adjustment in connection with the ownership,
operation and management of the Property of whatsoever nature.
H. OTHER ADJUSTMENTS ATTRIBUTABLE TO LEASES.
1. Buyer shall be responsible for all real estate
commissions, tenant allowances and tenants inducements (i) payable with
respect to Proposed Leases which become Approved Leases, and (ii) due for
any leases which Buyer enters into after the Closing Date which leases were
procured prior to the Closing Date. Buyer shall be responsible for and
shall receive no credit toward the Purchase Price with respect to any rent
abatements or other rent concessions which are applicable to that portion
of the term of any Lease or Approved Lease which follows the Closing Date.
This provision shall survive the Closing.
2. If any common area maintenance charges ("CAM Charges")
and/or other payments due from tenants for any period up to the Adjustment
Date: (a) have been billed as of the Adjustment Date based upon an
estimated budget (and are subject to recalculation and adjustment after the
Adjustment Date based upon actual CAM Charges); (b) have not been billed;
or (c) if billed, have not been collected by Seller as of the Closing Date,
then if applicable, Buyer promptly will adjust CAM charges to actual
expenses, and upon receiving such CAM Charges and/or other payments
(including such adjusted payments) from tenants shall pay over to Seller
the proportion of such CAM Charges and/or other payments from tenants which
are due Seller for the period of time up to Adjustment Date. Buyer shall
exercise reasonable diligence in the collection of any such amounts and
shall promptly pay to Seller within five (5) days after receipt, the amount
to which Seller may be entitled as above provided. Notwithstanding the
foregoing, the CAM Charges and/or other payments due from tenants shall, to
the extent ascertainable and payable, be credited and paid to Seller as if
the same were rents under SECTION 4.1.1(a) and (b). This provision shall
survive the Closing.
I. EXISTING MORTGAGE ESCROWS AND OTHER AMOUNTS. At the Closing,
Seller shall receive a credit for any amounts that are being held by the
mortgagee under the Existing Mortgage or that have otherwise been paid in
advance by Seller thereunder. In addition, interest to the extent accrued
prior to the Closing Date, but not paid, shall be credited to Buyer at the
Closing.
J. POST-CLOSING ADJUSTMENTS. Any matter specified in this Section
that cannot reasonably be determined and apportioned between Seller and
Buyer on the Closing Date shall be specified by Buyer and Seller in writing
at Closing, and shall be subject to final settlement at such time as such
matter is finally determined (but in no event later than one hundred eighty
(180) days after the Closing Date). Such apportionments shall be effective
as of the Adjustment Date. The provisions of this paragraph shall survive
the Closing.
V. CLOSING.
A. SCHEDULED CLOSING DATE. The consummation of the purchase and
sale of the Property as contemplated by this Agreement (the "Closing")
shall take place at the offices of Seller's attorney, Gunster, Yoakley,
Valdes-Fauli & Stewart, P.A., 500 East Broward Boulevard, Suite 1400, Fort
Lauderdale, Florida 33394, commencing at 10:00 A.M. (local time in the
County) on the date that is the earlier to occur of: (a) ten (10) days
after the Committee Approval has been issued or has been deemed to have
been issued; or (b) fifty (50) days after the Contract Date. The scheduled
date of Closing is herein referred to as the "Scheduled Closing Date" and
the actual date of Closing is herein referred to as the "Closing Date."
<PAGE>
B. EXTENSION OF SCHEDULED CLOSING DATE. Notwithstanding anything
contained herein to the contrary, upon written notice to Buyer, Seller
shall have, in its sole discretion, the right to extend the Scheduled
Closing Date, from time to time, for up to thirty (30) days in the
aggregate in order to cure any Title Defects or any misrepresentation or
breach of warranty of Seller which may exist on the Scheduled Closing Date,
or to satisfy any conditions precedent to Buyer's obligation to close under
this Agreement.
C. TIME OF THE ESSENCE. Time shall be of the essence with respect
to Seller's and Buyer's obligation to consummate the Closing on the
Scheduled Closing Date and perform their other respective obligations
hereunder.
VI. EVIDENCE OF AND ENCUMBRANCES UPON TITLE.
A. TITLE COMMITMENT. Buyer acknowledges that Seller has caused to
be prepared and delivered to Buyer prior to the Contract Date, at Seller's
expense, a commitment for a policy of owners' title insurance (the "Title
Evidence") covering the Real Property. The Title Evidence shall be written
by Gold Coast Title Company, 75 S.E. 3rd Street, Boca Raton, Florida 33432,
as authorized agent for Chicago Title Insurance Corporation ("Title
Insurer"). The Escrow Agent and Title Insurer shall cooperate on title
matters and in effecting the Closing. The Title Evidence shall bind the
Title Insurer to deliver to Buyer, at Seller's expense, a policy of owner's
title insurance (A.L.T.A. Owner's Policy (10-17-92) with Florida
Modifications) which shall insure Buyer's title to the Property in an
amount equal to the Purchase Price ("Title Policy"). The Title Evidence
shall show that Seller is vested with and can convey to Buyer good,
marketable and insurable fee simple title to the Property, free and clear
of all liens, encumbrances, objections, defects and exceptions, except the
following (herein called the "Permitted Exceptions"):
1. Real property taxes, assessments and special district
levies, for the year in which the Closing occurs, which shall be prorated
as provided for herein, and for subsequent years;
2. Zoning and other regulatory laws and ordinances affecting
the Property;
3. The restrictive covenants and conditions and other
matters described in the Deed;
4. Easements, reservations, restrictions, rights of way and
other matters of record, including, but not limited to, those certain
easements set forth in SECTION 14 hereof;
5. Liens, encumbrances, objections, defects and exceptions
which can be and are discharged by Seller out of the cash paid by Buyer at
Closing (in accordance with SECTION 3.3 hereof);
6. Amended and Restated Declaration of Town Foundation
Covenants, dated May 17, 1985 and recorded in Official Records Book 12546
at Page 921 of the Public Records of the County, as may be supplemented and
amended from time to time;
7. The Leases; and
All of the Permitted Exceptions are subject to the review and
approval of Buyer during the Inspection Period.
<PAGE>
B. TITLE DEFECTS. Prior to the expiration of the Inspection
Period, Buyer will cause the Title Evidence to be examined and will notify
Seller of any objections (including objections to the Permitted Exceptions)
to Seller's title reflected by the Title Evidence ("Title Defects").
Seller shall have no obligation to cure any Title Defects. Upon the
earlier to occur of, Seller's notification to Buyer (herein called the
"Title Notice") that: (i) Seller is unwilling to cure or remove the Title
Defects, or (ii) after due diligence, Seller fails or is unable to cure or
remove any Title Defects prior to the Scheduled Closing Date as extended,
pursuant to SECTION 5.2 hereof, Buyer, at Buyer's sole option, may:
A. agree to accept title to the Property in its then existing
condition, without reduction in the Purchase Price, whereupon Closing shall
occur upon the later to occur of (i) ten (10) days after Buyer's receipt of
the Title Notice or (ii) the Closing Date set forth in this Agreement; or
B. terminate this Agreement by written notice to Seller, at which
time the Agreement will be null and void and the parties hereto will have
no further rights or obligations hereunder as to any part of the Property.
Upon such termination and release of rights and obligations, the Deposit
(with accrued interest, if any) shall be returned to Buyer. Buyer's
failure to elect to terminate this Agreement within ten (10) days after
receipt of the Title Notice in accordance with this subparagraph (B) shall
be deemed to be a wavier of Buyer's right to terminate this Agreement under
this subparagraph (B).
Notwithstanding anything herein to the contrary, in no event shall Seller
be deemed to have any obligation to cure any Title Defects.
C. SURVEY.
1. Buyer acknowledges that Seller has caused to be prepared
and delivered to Buyer prior to the Contract Date an as-built survey of the
Real Property prepared by a duly licensed land surveyor in accordance with
the requirements of the State and will provide copies of same to the Title
Insurer. The cost of said survey shall be borne by Buyer unless this
Agreement is terminated through no fault of Buyer in which case the Seller
shall bear the expense of the survey. Buyer reserves the right to require
changes or modifications to the survey at Buyer's expense, including,
without limitation, revising the same to comply with ALTA standards and
Buyer is obligated to pay such expenses regardless of whether the Agreement
is terminated through no fault of Buyer.
2. Prior to the expiration of the Inspection Period: (a)
Buyer will cause the Survey be examined; and (b) will notify Seller of any
objections (other than Permitted Exceptions) to the Survey which, in
Buyer's sole discretion, adversely and materially affect the marketability
of title to the Property ("Survey Defects"). Upon the earlier to occur of,
Seller's notification to Buyer (herein called the "Survey Notice") that:
(i) Seller is unwilling to cure or remove the Survey Defects or, (ii)
after due diligence, Seller fails or is unable to cure or remove any Survey
Defects prior to the Scheduled Closing Date as extended, pursuant to
SECTION 5.2 hereof, Buyer, at Buyer's sole option, may:
A. agree to accept title to the Property in its then existing
condition, without reduction in the Purchase Price, whereupon, the Closing
shall occur upon the later to occur of (i) ten (10) days after Buyer's
receipt of the Survey Notice or (ii) the Closing Date set forth in this
Agreement; or
<PAGE>
B. terminate this Agreement by written notice to Seller, within
ten (10) days after receipt of the Survey Notice, at which time this
Agreement will be null and void and the parties hereto will have no further
rights or obligations hereunder as to any part of the Property. Upon such
termination and release of rights and obligations, the Deposit (with
accrued interest, if any) shall be returned to Buyer. Buyer's failure to
elect to terminate this Agreement within ten (10) days after receipt of the
Survey Notice in accordance with this subparagraph (B) shall be deemed to
be a wavier of Buyer's right to terminate this Agreement under this
subparagraph (B).
VII. CLOSING DELIVERIES.
A. SELLER'S DELIVERIES. At Closing, Seller shall deliver or cause
to be delivered to Buyer the following:
1. ASSIGNMENT OF INTANGIBLE PROPERTY - an assignment,
registration or other conveyance in form reasonably acceptable to Buyer and
Seller of Seller's interest in the Intangible Property.
2. DEED. A special warranty deed (the "Deed") in recordable
form conveying the Property to Buyer free and clear of all claims, liens,
encumbrances and other matters affecting title except for the Permitted
Exceptions, substantially in the form attached hereto as EXHIBIT 7.1.2.
3. BILL OF SALE - a quit-claim Bill of Sale conveying the
Personal Property without warranty of title, substantially in the form
attached hereto as EXHIBIT 7.1.3.
4. ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS - at
Buyer's election, an assignment by Seller, without warranty of title,
whereby Seller shall assign and Buyer shall assume, the Service Contracts,
substantially in the form attached hereto as EXHIBIT 7.1.4 (the "Assignment
of Service Contracts").
5. ASSIGNMENT AND ASSUMPTION OF LEASES - an assignment and
assumption of leases, whereby Seller shall assign, without warranty of
title, and Buyer shall assume all of Seller's right, title and interest and
obligations in and to the Leases, substantially in the form attached hereto
as EXHIBIT 7.1.5 (the "Assignment of Leases").
6. LEASES - originals of all of the Leases, to the extent in
Seller's possession.
7. ESTOPPEL CERTIFICATES - the Estoppel Certificates.
8. SERVICE CONTRACTS - to the extent in Seller's possession,
originals of all of the Service Contracts and any warranties or guaranties
received or held by Seller from any contractors, subcontractors, suppliers
or materialmen in connection with the Improvements and the Personal
Property.
9. NOTICE TO TENANTS - notice to all tenants executed by
Seller indicating the sale of the Property to Buyer.
10. TITLE POLICY. The Title Policy or a "marked-up" title
commitment therefor issued by the Title Insurer dated as of the Closing
Date in such amounts and containing the terms as are required pursuant to
SECTION 6 hereof, with all exceptions, other than Permitted Exceptions,
omitted or insured over.
<PAGE>
11. Resolutions. Certified resolutions and such other
instruments as may be required by the Title Insurer, evidencing the
authority of Seller to enter into and perform this Agreement and to perform
Seller's obligations hereunder.
12. SETTLEMENT STATEMENT. A counterpart, executed by Seller,
of a summary statement mutually agreed to by Buyer and Seller describing in
detail the consideration, prorations, adjustments, costs and expenses
associated with this transaction ("Settlement Statement").
13. NO LIEN AFFIDAVIT. A no-lien FIRPTA affidavit
("Affidavit"), substantially in the form attached hereto as EXHIBIT 7.1.13.
14. OTHER DOCUMENTS. Such other documents and instruments as
are contemplated hereunder or as may be reasonably required by Buyer, its
counsel or the Title Insurer and necessary to consummate this transaction
and to otherwise effectuate the agreements of the parties hereto.
B. BUYER'S DELIVERIES. At Closing, Buyer shall deliver to Seller
the following:
1. PURCHASE PRICE. The Purchase Price, less any portion of
the Deposit held in cash, plus or minus any other prorations and other
adjustments to be made in accordance with this Agreement.
2. SETTLEMENT STATEMENT. A counterpart, executed by Buyer,
of the Settlement Statement.
3. RESOLUTIONS. Certified resolutions and such other
instruments as may be required by Title Insurer, evidencing the authority
of Buyer to enter into and perform this Agreement and to perform Buyer's
obligations hereunder.
4. ASSIGNMENT OF SERVICE CONTRACTS - an executed counterpart
of the Assignment of Service Contracts.
5. ASSIGNMENT OF LEASES - an executed counterpart of the
Assignment of Leases.
6. OTHER DOCUMENTS. Such other documents and instruments as
are contemplated hereunder or as may be reasonably required by Seller, its
counsel or the Title Insurer and necessary to consummate this transaction
and to otherwise effectuate the agreements of the parties hereto and such
other payments as are contemplated hereunder.
VIII.CLOSING EXPENSES.
A. TITLE COSTS. All premiums and fees for the Title Evidence and
Title Policy obtained in connection with this Agreement shall be paid by
Seller or credited to Buyer against the Purchase Price at the Closing.
B. SURVEY. The cost of the Survey shall be borne by Buyer.
C. ESCROW COSTS. All charges imposed by the Escrow Agent or the
Title Agent, as applicable, for holding any documents in escrow, shall be
borne equally by Seller and Buyer.
D. DOCUMENTARY STAMPS. The cost of State documentary tax stamps
on the Deed shall be paid by Seller or credited to Buyer against the
Purchase Price at Closing.
E. RECORDING FEES. All recording fees shall be paid by Seller at
Closing.
<PAGE>
F. COSTS OF ASSUMING THE EXISTING MORTGAGE. Seller shall pay the
costs of any processing fees, assumption fees and other costs charged by
the Existing Mortgagee in connection with Buyer's assumption of the
Existing Mortgage and any recording costs incurred in connection with the
recordation of the assumption of the Existing Mortgage, provided, however,
that the foregoing shall not be deemed to include Buyer's attorney's fees
but shall be deemed to include attorneys' fees charged by the Existing
Mortgagee in negotiating the terms of the assumption or any documentary
stamp tax and/or intangible tax incurred as a result of any amendments or
modifications to the Existing Mortgage. Notwithstanding anything herein to
the contrary, in no event shall Seller be obligated to pay any costs or
expenses under this SECTION 8.6 that would obligate Seller to pay any
amounts in excess of the amounts, including, without limitation, prepayment
premiums or penalties, that would be due under the Existing Mortgage if the
same were paid-off in full at the Closing and Buyer shall be responsible to
pay any such excess amounts that may be charged by the Existing Mortgagee
on the Closing in connection with the assumption of the Existing Mortgage.
G. FEES AND EXPENSES. Seller and Buyer shall each bear the
professional fees and expenses of its attorneys, accountants, consultants,
and other professionals incurred in connection with the preparation of this
Agreement, the Closing pursuant hereto and the transactions contemplated
hereby. Except as otherwise provided herein, Seller and Buyer shall each
pay such other costs as are customarily paid by a seller and buyer,
respectively, of real property in the County.
IX. REPRESENTATIONS.
A. Seller represents to Buyer that:
1. LAWFUL EXISTENCE. Seller is a general partnership
organized under the laws of the State.
2. AUTHORIZATION. Seller's execution and delivery of this
Agreement to Buyer and the sale of the Property provided for in it have
been duly authorized by all necessary partnership action and in accordance
with Seller's partnership agreement.
3. OWNERSHIP. Seller is the lawful owner of the fee simple
title to the Property with full right and authority to convey the Property
without the consent or joinder of any party.
4. MANAGEMENT AGREEMENTS. There are no management
agreements or other such agreements affecting the Property other than the
Management Agreement. As of the Closing Date, the Management Agreement
will have been terminated in all respects, and no further rights shall
exist thereunder.
5. SERVICE CONTRACTS. There are no service, supply and
similar agreements affecting the Property other than the Service Contracts.
6. LEASES. There are no leases or tenancies on the Real
Property other than the Leases. To the best of Seller's knowledge, there
are no current defaults by Seller or the applicable tenants under the
Leases. Seller hereby advises Buyer that Publix Super Markets, Inc.
previously requested a consent to sublease a portion of its leased premises
to Barnett Bank; however, Seller is not aware of the status of the same as
it never received any final documentation thereon.
7. LAWSUITS. Except as set forth in EXHIBIT 9.1.7, to the
best of Seller's knowledge, there are no pending or threatened lawsuits
with respect to the Property.
8. ZONING VIOLATIONS. Seller has not received any written
notice that the Property is in violation of any zoning ordinances.
<PAGE>
9. DELIVERY OF DOCUMENTS, CONTRACTS. The survey,
mechanical, structural plans and specifications, soil reports, certificates
of occupancy, warranties, operating statements, rent roll and income and
expense reports delivered to Buyer pursuant to this Agreement or in
connection with the execution hereof are true and complete copies of each;
and, to the best of Seller's knowledge, the contracts and documents
delivered to Buyer and listed in Exhibit 9.1.9 attached hereto are true and
correct copies thereof and are in full force and effect, without default by
any party thereunder.
10. PROCEEDINGS. Except as disclosed to Buyer in writing,
Seller does not have any actual knowledge of any condemnation,
environmental, zoning or other land use regulation proceedings, either
instituted, or planned to be instituted, which would affect the use and
operation of the Property for its intended purpose or the value of the
Property, nor has Seller received notice of any special assessment
proceedings affecting the Property. Notwithstanding the foregoing, Seller
hereby advises the Buyer that the Property is in the recently incorporated
City of Weston and the City has been and will be conducting proceedings
listed above that may or may not pertain to the Property.
11. At the time of Closing, there will be no outstanding
contracts made by Seller for any improvements to the Property which have no
been fully paid for and Seller shall cause to be discharged all mechanics'
or materialmen's liens arising from any labor or materials furnished to the
Property prior to the time of Closing.
12. LEASING COMMISSIONS. There are no liabilities for
leasing commissions with respect to any tenants occupying the Property that
will not be paid on or before the Closing.
13. CONSUMMATION OF TRANSACTION. No injunctions, restraining
orders or court order of any nature have been issued which would in any way
affect the consummation of the transaction contemplated in this Agreement.
14. DRY CLEANING PLANT. There has never been a dry cleaning
plant on the Property.
B. Buyer represents to Seller that:
1. LAWFUL EXISTENCE. As of the Contract Date and Closing
Date, Buyer is an Iowa corporation validly existing and in good standing
under the laws of the State of Iowa.
2. AUTHORIZATION. Buyer's execution and delivery of this
Agreement to Seller and its purchase of the Property provided for herein
have been authorized by all necessary corporate action and all other
actions required to be taken to authorize execution of this Agreement and
Buyer's performance of all obligations undertaken by it hereunder have been
duly and regularly taken.
C. SPECIAL PROVISIONS REGARDING SELLER'S WARRANTIES AND
REPRESENTATIONS. All warranties and representations of Seller made herein
are made to "Seller's knowledge" as of the Contract Date. "Seller's
knowledge" shall be deemed to mean only the actual knowledge of Daniel
Brown or Donald Mears.
D. SPECIAL PROVISIONS REGARDING BUYER'S WARRANTIES AND
REPRESENTATIONS. All warranties and representations of Buyer made herein
are made to "Buyer's knowledge" as of the Contract Date. "Buyer's
knowledge" shall be deemed to mean only the actual knowledge of Buyer, and
no other person or entity.
<PAGE>
E. DISCLAIMERS AND LIMITATIONS. Buyer expressly acknowledges that
there exist no warranties or representations of Seller, expressed or
implied, other than those expressly set forth in SECTION 9.1 of this
Agreement, and Seller has no obligation to determine whether there are
material matters that should be disclosed to Buyer to the extent those
matters have not been expressly set forth herein. NOTWITHSTANDING ANYTHING
TO THE CONTRARY HEREIN CONTAINED (OTHER THAN AS EXPRESSLY SET FORTH IN
SECTION 9.1 OF THIS AGREEMENT, BUYER EXPRESSLY UNDERSTANDS, ACKNOWLEDGES
AND AGREES THAT THE CONVEYANCE OF THE PROPERTY SHALL BE MADE BY SELLER TO
BUYER ON AN "AS IS, WHERE IS" BASIS, AND "WITH ALL FAULTS," AND BUYER
ACKNOWLEDGES THAT BUYER HAS AGREED TO BUY THE PROPERTY IN ITS PRESENT
CONDITION (SUBJECT TO BUYER'S RIGHT OF INSPECTION AND REVIEW AS PROVIDED
HEREIN) AND THAT BUYER IS RELYING SOLELY ON ITS OWN EXAMINATION AND
INSPECTIONS OF THE PROPERTY AND NOT ON ANY STATEMENTS OR REPRESENTATIONS
MADE BY SELLER OR ANY AGENTS OR REPRESENTATIVES OF SELLER, EXCEPT AS
OTHERWISE SPECIFICALLY SET FORTH HEREIN. ADDITIONALLY, BUYER HEREBY
ACKNOWLEDGES THAT, EXCEPT AS OTHERWISE SPECIFIED HEREIN, SELLER MAKES NO
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF
LAW, INCLUDING BUT IN NO WAY LIMITED TO, ANY WARRANTY OF CONDITION,
HABITABILITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PROPERTY OR ANY PORTION THEREOF, OR WITH RESPECT TO THE ECONOMICAL,
FUNCTIONAL, ENVIRONMENTAL OR PHYSICAL CONDITION, OR ANY OTHER ASPECT, OF
THE PROPERTY. EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH HEREIN, SELLER
HEREBY SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR REPRESENTATION,
ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, OR CONCERNING:
(I) THE NATURE AND CONDITION OF THE PROPERTY OR ANY PART THEREOF,
INCLUDING BUT NOT LIMITED TO, ITS WATER, SOIL, OR GEOLOGY, OR THE
SUITABILITY THEREOF FOR ANY AND ALL ACTIVITIES AND USES WHICH BUYER MAY
ELECT TO CONDUCT THEREON, OR ANY IMPROVEMENTS BUYER MAY ELECT TO CONSTRUCT
THEREON OR THAT ARE ALREADY CONSTRUCTED THEREON, OR ANY INCOME TO BE
DERIVED THEREFROM, OR ANY EXPENSES TO BE INCURRED WITH RESPECT THERETO, OR
ANY OBLIGATIONS OR ANY OTHER MATTER OR THING RELATING TO OR AFFECTING THE
SAME; (II) THE ABSENCE OF ASBESTOS OR ANY ENVIRONMENTALLY HAZARDOUS
SUBSTANCES ON, IN OR UNDER THE PROPERTY OR ON, IN OR UNDER ANY PROPERTY
NEAR, ADJACENT TO OR ABUTTING THE PROPERTY; (III) THE MANNER OF
CONSTRUCTION OR CONDITION OR STATE OF REPAIR OR LACK OF REPAIR OF ANY OF
THE IMPROVEMENTS ON THE PROPERTY; (IV) THE NATURE, EXTENT OF OR STATUS OF
ANY EASEMENT, RESTRICTIVE COVENANT, RIGHT-OF-WAY, LEASE, POSSESSION, LIEN,
ENCUMBRANCE, LICENSE, RESERVATION, CONDITION OR OTHER SIMILAR MATTER
PERTAINING TO THE PROPERTY, OR PORTION THEREOF; AND (V) THE COMPLIANCE OF
THE PROPERTY OR THE OPERATION OF THE PROPERTY OR PORTION THEREOF WITH ANY
LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY GOVERNMENT OR OTHER BODY. THE
PROVISIONS OF THIS SECTION 9.5 SHALL SURVIVE THE EXECUTION AND DELIVERY OF
THE DEED BY SELLER AND THE CLOSING OF THE TRANSACTION CONTEMPLATED BY THIS
AGREEMENT.
Buyer hereby waives and releases Seller, Seller's Affiliates,
representatives, agents and employees from any present or future claims
(hereinafter referred to as the "Claims") arising from or relating to the
presence or alleged presence of hazardous substances in, on, under or about
the Property including, without limitation, any claims under or on account
of (i) the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as the same may have been or may be amended from time to time,
and similar federal, state or local statutes, and any regulations
promulgated thereunder, (ii) any other federal, state or local law,
ordinance, rule or regulation, now or hereafter in effect, that deals with
or otherwise in any manner relates to, environmental matters of any kind,
or (iii) this Agreement. For the purposes hereof the term "hazardous
substances" shall have the meaning given to such term or similar terms
under any applicable federal, state or local laws, rules or regulations.
The foregoing waiver set forth above shall not be deemed to be effective
until the second anniversary of the Closing Date (the second anniversary of
<PAGE>
the Closing Date is herein referred to as the "Release Date"), whereupon
such release shall automatically be in full force and effect from and after
the Release Date with respect to any claims for which Seller has not been
notified prior to the Release Date in writing. Notwithstanding anything
contained in this Agreement to the contrary, in the event that Buyer
notifies Seller of any any Claims against Seller prior to the Release
Date, Seller's liability with respect thereto shall in no event exceed
$500,000.
X. PROPERTY INSPECTION. Except as set forth herein, during the
Inspection Period, Buyer or Buyer's agents, employees and/or contractors,
shall have the right to conduct such investigations and inspections as to
the Property, the physical condition thereof, matters of zoning and all
other matters with respect to the Property (the "Inspections") which are in
Buyer's judgment relevant to Buyer's determination whether to purchase the
Property or to terminate this Agreement. Buyer hereby acknowledges that
Seller has provided Buyer with an environmental study by Dames & Moore
dated March 28, 1997 (the "Dames & Moore Study"), and further acknowledges
that although Buyer may confirm the results of the Dames & Moore Study, no
invasive environmental tests (such as drilling or soil or groundwater
testing) may be performed by Buyer unless Seller has provided its written
consent thereto. Buyer's Inspections shall be at Buyer's sole cost and
expense. Seller shall cooperate in good faith with Buyer in Buyer's
efforts to investigate the Property during the Inspection Period, provided,
however, prior to consultation with any third parties as to the Property,
Buyer shall first consult with Seller and provide Seller the opportunity,
at Seller's expense, to assist Buyer in such examination, including, at
Seller's option, the right to attend any discussions or meetings concerning
the Property with Buyer and such third parties. Buyer shall indemnify
Seller from and against any loss, damage, cost or expense incurred by
Seller as a result of Buyer's Inspections, and Buyer shall, following any
such Inspections, promptly restore the Property to the condition existing
immediately prior to such Inspections, it being understood and agreed that
Buyer shall have no right to perform any physically invasive Inspections of
the Improvements or any other tests that may damage the same, without
Seller's prior written consent, which may be withheld in Seller's sole and
absolute discretion. Notwithstanding the foregoing indemnification
agreement, Buyer shall not be responsible or liable for any environmental
conditions found on the Property as a result of the Inspections that are
conducted in accordance with the terms of this SECTION 10. If for any
reason whatsoever, in Buyer's sole discretion, Buyer determines during the
Inspection Period that it does not wish to purchase the Property and to
close the transaction contemplated hereby, Buyer shall have the absolute
right to terminate this Agreement by giving written notice of such
termination to Seller in the manner hereinafter provided for the giving of
notices (the "Termination Notice"), prior to the expiration of the
Inspection Period, and delivering to Seller all prepared materials procured
by Buyer in Buyer's inspection of the Property ("Inspection Documents").
Upon receipt of such notice, the Deposit (with accrued interest, if any)
shall be returned to Buyer and thereafter this Agreement shall be deemed
terminated and of no further force and effect and both parties shall be
released and relieved of any liability or obligations hereunder, except for
the provisions of this SECTION 10, SECTION 12.2 and SECTION 24. If Buyer
does not provide the Termination Notice prior to the expiration of the
Inspection Period as provided above, then it shall be conclusively presumed
that Buyer is satisfied with its Inspections, and thereafter Buyer shall
have no further right to terminate this Agreement in accordance with the
provisions of this SECTION 10, and, subject to the provisions of SECTION 17
hereof, shall be obligated to close the transaction contemplated herein on
the Closing Date, and shall be deemed to have accepted title to the
Property in accordance with SECTION 9.5 hereof.
<PAGE>
Notwithstanding anything contained herein to the contrary,
Buyer's Inspections shall be subject to the following terms and conditions:
A. COPIES TO SELLER; CONFIDENTIALITY. Buyer shall, promptly upon
receipt of any report or other information produced as a result of any
Inspections, provide Seller with a copy or detailed description thereof so
long as Seller pays for one-half (1/2) of the cost of such report. Buyer
and its agents, employees and contractors shall keep in strict confidence
all information obtained in the course of any such Inspections in
accordance with the provisions of SECTION 12.2 hereof; and this obligation
shall survive the termination of this Agreement.
B. RIGHT TO REPRESENTATIVE AT INSPECTIONS. Seller may have a
representative present at any Inspection, including, without limitation, an
environmental audit.
C. ADVANCE NOTICE. Buyer and its agents, employees and
contractors shall make any request to Seller to conduct an Inspection at
least 24 hours prior to the proposed time for the conduct thereof, which
notice shall specify the type of Inspection to be conducted by Buyer.
D. NO INTERFERENCE WITH BUSINESS. No Inspection shall interfere
with the operation of the Property or the conduct of business by Seller or
any tenants or other occupants of the Property.
E. EVIDENCE OF INSURANCE. Prior to any such Inspections,
including, without limitation, an environmental audit, Buyer or its
contractors shall obtain and provide Seller with evidence of comprehensive
general liability insurance coverage in an amount not less than $1,000,000
naming Seller as an insured and which policy shall be kept in force until
the Closing Date.
XI. COMMITTEE APPROVAL. In the event that Buyer has not provided
written notice to Seller in the manner hereinafter provided for the giving
of notices that Buyer has obtained the Committee Approval prior to the
expiration of the Committee Approval Period, then this Agreement shall be
deemed automatically terminated, whereupon the Deposit (with accrued
interest, if any) shall be returned to Buyer and thereafter this Agreement
shall be of no further force and effect and both parties shall be released
and relieved of any liability or obligations hereunder, except for the
provisions SECTION 10, SECTION 12.2, and SECTION 24 hereof.
XII. DOCUMENTS TO BE FURNISHED BY SELLER.
A. DOCUMENTS FURNISHED. Seller has furnished to Buyer copies of
all Leases and Service Contracts.
B. CONFIDENTIALITY. Buyer shall keep in strict confidence all
information obtained with respect to the Property pursuant to or in
connection with this Agreement (including, without limitation, all terms
and provisions of this Agreement including the Purchase Price, all
information obtained with respect to the tenants and other occupants of the
Property, and all information obtained in connection with any Inspections
until such time as the Closing is completed). Buyer agrees to instruct its
agents, employees, advisers and consultants to comply with the provisions
of this SECTION 12.2 and any confidentiality agreement executed in
connection with the Property. Notwithstanding the foregoing, Buyer may
disclose all information obtained with respect to the Property to its
directors, bankers and advisors as long as such parties agree to keep the
information confidential until such time as the Closing is completed.
Notwithstanding the foregoing, Buyer may disclose information obtained with
respect to the Property to governmental authorities as may be required by
any law, rule or regulation promulgated thereby. If the purchase and sale
of the Property contemplated hereby is not completed for any reason, Buyer
shall, upon request, promptly return to Seller all instruments and
materials or copies of instruments and materials delivered pursuant hereto
or obtained by Buyer, so long as Seller pays for one-half (1/2) of the cost
of such instruments and materials. The provisions of this Section shall
survive any termination of this Agreement.
<PAGE>
XIII.LEASES.
A. NO WARRANTIES REGARDING LEASES. Except as otherwise set forth
in SECTION 9.1.6 herein, Seller makes no representations to Buyer regarding
the Leases, including, without limitation, whether in fact the tenants
under the existing Leases will be in possession and/or not in default on
the Closing Date. Except as otherwise expressly set forth in SECTION 13.6
below, no lack of possession and/or default on the part of any tenant shall
affect Buyer's obligations hereunder. Notwithstanding anything that may be
contained herein to the contrary, in the event of a conflict between the
information set forth in this Agreement and the actual provisions of the
Leases, then the provisions of the Leases shall prevail.
B. LEASES. Prior to the Closing Date, Seller shall not:
(i) modify, amend, alter, cancel or accept a surrender or forfeiture of any
of the Leases; or (ii) enter into any bona fide lease, offer to lease,
expansion of lease or renewal of space in the Improvements (a "Proposed
Lease") without the prior written approval of Buyer, all of which consents
and approvals shall not be unreasonably withheld, conditioned or delayed in
accordance with SECTION 13.3 hereof. Any such Proposed Lease entered into
by Seller prior to the Closing Date that is approved or deemed approved by
Buyer in accordance with SECTION 13.3 hereof shall render such lease an
"Approved Lease".
C. APPROVAL PROCEDURE. Within five (5) Business Days after the
date of Buyer's receipt of a request from Seller for consent to, or
approval of: (i) any written amendment or modification, acceptance of a
surrender, cancellation or forfeiture of any of the Leases; or (ii) any
Proposed Lease, Buyer shall deliver to Seller its written approval, consent
or rejection (with reasons) of any such proposal, failing which Buyer shall
be deemed to have given its written consent or approval therein rendering,
as applicable, such Lease, as amended or modified, or Proposed Lease an
Approved Lease. Buyer shall only have the right to reject: (i) any written
amendment or modification, acceptance of a surrender, cancellation or
forfeiture of any of the Leases (herein collectively called "Revisions");
or (ii) any Proposed Lease, under this SECTION 13.3 if Buyer determines in
its reasonable opinion, with respect to clause (i), that such Revisions are
commercially unreasonable, considering the type of tenant and the terms of
the related lease and, with respect to clause (ii), that such Proposed
Lease is not commercially reasonable considering similar leases for similar
tenants in the Property.
D. LEASE DEFAULTS. Anything herein to the contrary
notwithstanding, Seller reserves the right at any time prior to the Closing
Date to terminate Leases for defaults by tenants and to institute and
prosecute available remedies for default thereunder, except that Seller
agrees before instituting any such proceedings to notify Buyer to that
effect and obtain the consent of Buyer thereto. The foregoing consent or
approval shall not be unreasonably withheld, conditioned or delayed and
shall be deemed to be given in the event that Buyer fails to deliver its
written consent, approval or rejection (with reasons) to Seller within five
(5) Business Days from Buyer's receipt of Seller's request therefor.
E. TENANT ESTOPPEL CERTIFICATES.
1. Seller agrees to deliver to each tenant an estoppel
certificate substantially in the form attached hereto as EXHIBIT 13.5, or
as set forth in the respective Lease(s) or attached thereto as an exhibit
(if different than EXHIBIT 13.5). Buyer agrees that in no event shall
Seller be responsible for the tenants' execution and delivery to Buyer of
such estoppel certificates; provided, however, that in the event that
Seller does not obtain executed tenant estoppel certificates prior to the
expiration of the Inspection Period from: (i) the Anchor Tenants; and
(ii) all other tenants leasing at least a combined seventy percent (70%) of
the occupied square footage of the Improvements other than the square
footage under lease to the Anchor Tenants (collectively, the "Estoppel
Certificates"), then Buyer may terminate this Agreement in accordance with
SECTION 10 hereof.
<PAGE>
2. Notwithstanding the foregoing, Seller shall have the
right to rescind any termination that is based solely upon Seller's lack of
receipt of sufficient Estoppel Certificates by electing to require the
delivery of such Estoppel Certificates as a condition of the Closing. In
such event, if Seller shall still not have received sufficient Estoppel
Certificates by the Closing Date, then Seller may elect, in its sole and
absolute discretion, to execute the required number of estoppel
certificates in substantially the same form as delivered to the tenants of
the Property and Buyer shall have no further right to terminate this
Agreement with respect thereto; provided, however, that, in the event that
Seller elects not to execute such an estoppel, Buyer may: (a) terminate
this Agreement by giving written notice thereof to Seller within five (5)
days after Buyer's receipt of notice that Seller has not received the
required number of Estoppel Certificates by the Closing Date, in which
event the Deposit (with accrued interest, if any) shall be immediately
refunded to Buyer, and this Agreement shall be deemed null and void and no
party shall have any further rights or obligations hereunder, except for
those rights and obligations that specifically survive the termination of
this Agreement, or (b) proceed to Closing with no reduction in the Purchase
Price. Except for those rights, obligations and remedies that specifically
survive the closing or termination of this Agreement, these are the sole
remedies of Buyer in the event Seller shall fail to receive sufficient
Estoppel Certificates as provided for herein. If applicable, in the event
that an estoppel certificate is received by Buyer, from a tenant, after the
Closing and such estoppel certificate does not conflict with the estoppel
certificate given by Seller at the Closing for such tenant, then Seller's
estoppel certificate given with respect to such tenant shall be null and
void. Seller does not warrant or guarantee any of the information
contained in tenant estoppel certificates that are actually executed by the
tenants.
F. MATERIAL ADVERSE CHANGE IN ANCHOR TENANTS. Notwithstanding
anything in this Agreement to the contrary, Buyer shall have the right to
terminate this Agreement in the event that any material adverse change, as
determined by Buyer in its reasonable opinion, shall occur in an Anchor
Tenant between the time that Committee Approval is obtained and the Closing
Date. For the purposes hereof, a material adverse change shall not be
deemed to occur in an Anchor Tenant merely due to such Anchor Tenant's
decision to operate its business differently than previous practice. Buyer
must elect to terminate this Agreement on the earlier to occur of five (5)
days after Buyer receives notice of such material adverse change or the
Closing Date by delivering written notice to Seller of such election to
terminate this Agreement together with an explanation of the material
adverse change in the applicable Anchor Tenant, otherwise Buyer shall be
deemed to have waived its right to so terminate this Agreement in
accordance with the provisions of this SECTION 13.6. In the event Buyer
terminates this Agreement in accordance with the provisions of this SECTION
13.6, then the Deposit (with accrued interest, if any) shall be returned to
Buyer and thereafter this Agreement shall be deemed terminated and of no
further force and effect and both parties shall be released and relieved of
any liability or obligations hereunder, except for the provisions of this
SECTION 10, SECTION 12.2 and SECTION 24.
XIV. EASEMENTS AND OTHER CONDITIONS. On or before the Closing Date,
Seller shall provide notice to Buyer of any easements which Seller will
reserve in the Deed, Buyer will grant to Seller or to which Buyer shall be
subject.
XV. SELLER'S OPERATION OF PROPERTY. Seller covenants and agrees that
between the date hereof and the Closing Date, Seller will keep and maintain
the Property in its present condition (ordinary wear and tear excepted),
will not violate or breach any zoning ordinance nor commit any waste or
nuisance, and will promptly advise Buyer of any litigation, arbitration or
administrative hearing before any governmental authorities concerning or
affecting the Property arising or threatened after the Contract Date.
<PAGE>
XVI. DAMAGE OR DESTRUCTION; CONDEMNATION.
A. DAMAGE OR DESTRUCTION: The risk of loss of or damage to the
Property by reason of any insured or uninsured casualty during the period
up to and including the Closing Date shall be borne by Seller. In the
event of any "material damage", as hereinafter defined, to or destruction
of the Property or any portion thereof, Buyer may, at its option, by notice
to Seller, given within ten (10) days after Buyer is notified of such
material damage or destruction (but before the Closing): (i) unilaterally
terminate this Agreement and the Deposit shall be immediately returned to
Buyer, together with all interest earned thereon; or (ii) proceed under
this Agreement with no reduction in the Purchase Price, receive any
insurance proceeds due Seller as a result of such damage or destruction and
assume responsibility for such repair. If the Property is not materially
damaged, then Buyer shall not have the right to terminate this Agreement,
but Seller shall, at its cost, repair the damage before the Closing in a
manner reasonably satisfactory to Buyer, or, credit Buyer at Closing for
the reasonable cost to complete the repair. (Seller and Buyer shall
mutually agree as to the reasonable cost to complete the repair in this
circumstance). For purposes of this SECTION 16.1, "material damage" and
"materially damaged" means damage reasonably exceeding $200,000 to repair,
as determined by an independent architect reasonably satisfactory to Seller
and Buyer.
B. CONDEMNATION. In the event of any threatened, contemplated,
commenced or consummated proceedings in eminent domain (notice of which
shall be given to Buyer by Seller immediately) respecting the Property
which are "material in nature" (as hereinafter defined), Buyer may, at its
option, by notice to Seller given within ten (10) days after Buyer is
notified of such actual or possible proceedings (but before the Closing);
(i) unilaterally terminate this Agreement and the Deposit and all interest
earned thereon shall be immediately returned to Buyer; or (ii) proceed
under this Agreement with no reduction in the Purchase Price, in which
event Seller shall, at the Closing, assign to Buyer, its entire right,
title and interest in and to any condemnation award. If Buyer does not
terminate this Agreement as set forth in clause (i) above, then Seller and
Buyer shall mutually negotiate and otherwise deal with the condemning
authority in respect of such matter. For purposes of this SECTION 16.2,
the phrase "material in nature" as it pertains to any threatened,
contemplated, commenced or consummated proceedings in eminent domain, shall
mean a taking of the Premises the value of which exceeds $200,000, as
determined by an independent appraiser doing business in the County, which
appraiser shall be reasonably satisfactory to Seller and Buyer. Seller
shall bear the entire risk of loss of the Property occurring prior to the
Closing.
XVII.REMEDIES FOR DEFAULT. If Buyer fails to perform any of the material
covenants, terms and conditions hereof and Seller has complied with the
material covenants, terms and conditions of this Agreement, Seller shall
receive the Deposit paid and agreed to be paid and all interest earned
thereon, together with the Inspection Documents, so long as Seller pays for
one-half (1/2) of the cost of such Inspection Documents, as liquidated
damages as and for its sole remedy hereunder and thereafter, this Agreement
shall be deemed to be terminated and of no force and effect, except for the
provisions of SECTION 12.2, SECTION 21, SECTION 24 and the indemnification
provisions of SECTION 10 hereof and any other provisions which expressly
survive termination. Seller waives all other remedies it may have against
Buyer at law or in equity. Buyer acknowledges that Seller will take
certain actions, forego opportunities and incur expenses related to and
arising out of Seller's obligations and duties as contained in this
Agreement. Buyer further acknowledges, having been carefully advised by
counsel at the time of the execution of this Agreement, that the Deposit
paid, and agreed to be paid, to Seller pursuant to the provisions hereof,
represents a reasonable endeavor by the parties to ascertain that said sums
would be the minimal damages suffered by Seller in the event of a default
or breach hereof by Buyer. If Seller fails to perform any of the covenants
<PAGE>
hereof prior to Closing, Buyer may, at its option, if it is not in default
hereunder, elect any one of the following as Buyer's sole and exclusive
remedy: (i) terminate this Agreement and receive the Deposit and all
interest earned thereon, if any; or (ii) pursue the remedy of specific
performance; and Buyer waives all other remedies it may have against Seller
at law or in equity in connection with the foregoing. If, after Closing,
Seller fails to perform any of the covenants hereof that specifically
survive Closing, then Buyer, as its sole and exclusive remedy, shall have
the right to seek damages from Seller for such failure, except that Buyer
hereby waives and shall have no right to seek indirect, consequential or
punitive damages against Seller.
XVIII. PROPERTY OWNER'S ASSOCIATIONS. Buyer acknowledges that if it
accepts the Deed at the Closing, Buyer shall become a member of The Town
Foundation, Inc. (the "Foundation"), the Declarations of which have been
recorded in the Public Records of the County. Buyer hereby acknowledges
and agrees that the Foundation is separate and distinct from Seller and
that Seller has in no manner contracted, guaranteed, represented or
warranted that the Foundation will take or forebear any action with regard
to Buyer, the Property or any of Buyer's activities thereon. Further,
Seller shall not, in any manner, be responsible to Buyer or any other
person or entity for any action taken or forborne by the Foundation. The
provisions of the Section shall survive Closing and delivery of the Deed.
XIX. TRADE NAMES AND SERVICE MARKS. The names "Arvida [servicemark]",
"JMB", "Weston [registered trademark]" and all similar names, along with
all logos associated therewith, are the proprietary TRADE NAMES and service
marks of Arvida/JMB Partners or its affiliates. Except as may be permitted
by a non-exclusive, non-transferable written license agreement for the use
of the name "Weston [registered trademark]" which is intended to protect
all rights of Arvida Company to the "Weston" mark, and shall be in form and
substance acceptable to Arvida/JMB Partners and Buyer, Buyer shall have no
rights to use the same for advertising or other purpose. . The provisions
of the Section shall survive Closing and delivery of the Deed.
XX. RECOURSE LIMITED TO PROCEEDS OF SALE; SURVIVAL.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE AGREEMENT, NEITHER
SELLER NOR ANY PRESENT OR FUTURE CONSTITUENT PARTNER IN OR AFFILIATE OF
SELLER, NOR ANY SHAREHOLDER, OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF ANY
CORPORATION THAT IS OR BECOMES A CONSTITUENT PARTNER IN SELLER, SHALL BE
PERSONALLY LIABLE, DIRECTLY OR INDIRECTLY, UNDER OR IN CONNECTION WITH THE
AGREEMENT, OR ANY DOCUMENT, INSTRUMENT OR CERTIFICATE SECURING OR OTHERWISE
EXECUTED IN CONNECTION WITH THE AGREEMENT, OR ANY AMENDMENTS OR
MODIFICATIONS TO ANY OF THE FOREGOING MADE AT ANY TIME OR TIMES, HERETOFORE
OR HEREAFTER, OR IN RESPECT OF ANY MATTER, CONDITION, INJURY OR LOSS
RELATED TO THE AGREEMENT OR THE PROPERTY, AND ONLY SELLER'S INTEREST IN
THE PROPERTY (OR PROCEEDS THEREOF) SHALL BE AVAILABLE TO SATISFY ANY
CLAIMS AGAINST SELLER; AND THE BUYER AND EACH OF ITS SUCCESSORS AND
ASSIGNEES WAIVES AND DOES HEREBY WAIVE ANY SUCH PERSONAL LIABILITY. For
purposes of the Agreement, and any such instruments and certificates, and
any such amendments or modifications, neither the negative capital account
of any Constituent Partner in Seller, nor any obligation of any Constituent
Partner in Seller to restore a negative capital account or to contribute
capital to Seller or to any other Constituent Partner in Seller, shall at
any time be deemed to be the property or an asset of Seller or any such
other Constituent Partner (and neither Buyer nor any of its successors or
assignees shall have any right to collect, enforce or proceed against or
with respect to any such negative capital account or a Constituent
Partner's obligation to restore or contribute). As used in this Paragraph,
a "Constituent Partner" in Seller shall mean any direct partner in Seller
and any person that is a partner in any partnership that, directly or
indirectly through one or more other partnerships, is a partner in Seller.
Unless otherwise noted herein, none of Seller's representations,
warranties, covenants or agreements shall survive Closing and all of the
same shall merge into the Deed to be given by Seller except as and to the
<PAGE>
extent expressly provided to the contrary herein; provided however, that
notwithstanding the foregoing, if Buyer learns of any breach or
non-performance of any representation, warranty, covenant or agreement
prior to Closing, Buyer shall promptly notify Seller thereof, and such
representation, warranty, covenant or agreement shall not survive Closing
(whether or not Buyer notifies Seller thereof) but, rather, shall merge
into the Deed to be given by Seller, it being the intention of the parties
that no breach or non-performance of which Buyer has knowledge prior to
Closing shall survive Closing should Buyer elect to close notwithstanding
knowledge of such breach or non-performance. Enforcement by Seller, its
successors and assignees, of each and every covenant and obligation
(including but not by way of limiting, obligations to indemnify and hold
harmless) of Buyer set forth herein, and exercised by Seller, its
successors and assignees, of all rights granted to any of them herein,
shall survive all closings and deliveries of deeds or termination of this
Agreement, notwithstanding anything set forth herein to the contrary.
XXI. ATTORNEYS' FEES. In the event of litigation between Buyer and Seller
concerning this Agreement or any documents related thereto, the prevailing
party shall be entitled to attorneys' fees and costs. The provisions of
the Section shall survive Closing, delivery of the Deed, and termination
under this Agreement.
XXII.ASSIGNMENTS. Buyer shall not assign this Agreement nor any interest
therein without obtaining the prior written consent of Seller, which
consent may be withheld in its sole and absolute discretion, provided,
however, that Buyer may assign this Agreement or any interest therein to an
Affiliate of Buyer. If Buyer or any permitted successor or assignee of
Buyer is a corporation, the transfer of any corporate shares therein shall
be deemed a prohibited assignment of the Agreement. If Buyer or any
permitted successor or assignee of Buyer is a partnership, the transfer of
any general partnership interest therein shall be deemed a prohibited
assignment of this Agreement. Seller may assign any of its rights
hereunder without the consent of Buyer, so long as Seller remains
responsible and liable for its obligations under this Agreement.
XXIII. THIRD-PARTY BENEFICIARY. The provisions of this Agreement are for
the exclusive benefit of the Seller and Buyer hereto, and their respective
successors and permitted assigns, and no other party shall have any right
or claim against the Seller and Buyer, or either of them, by reason of
those provisions or be entitled to enforce any of those provisions against
the Seller and Buyer hereto, or either of them. The provisions of this
Section shall survive the Closing and delivery of the Deed.
XXIV.BROKERS. Buyer and Seller represent and warrant to each other that
neither has dealt or negotiated in any manner with any real estate broker,
salesperson or agent concerning the purchase of the Property, except for
Richard Ellis, LLC, licensed real estate broker ("Ellis") and Marcus &
Millichap, licensed real estate broker ("Marcus"). Seller shall be
responsible for payment of any commission due to Ellis and Buyer shall be
responsible for payment of any commission due to Marcus upon consummation
of this transaction. Seller and Buyer shall not be obligated to pay any
commissions unless this transaction is fully consummated in accordance with
the terms of this Agreement. Each party agrees to indemnify and hold
harmless the other from and against any and all claims, damages, expenses
(including reasonable attorneys' fees and court costs) and liabilities of
any nature whatsoever asserted against or incurred by either party in
connection with: (a) claims of any entity (other than Ellis with respect to
Seller and Marcus with respect to Buyer) with whom such party may have
consulted, dealt or negotiated; or (b) the failure of Seller to pay Ellis
or Buyer to pay Marcus pursuant to the terms hereof or any separate
agreement between the respective parties.
<PAGE>
XXV. SIMULTANEOUS CLOSING. As a material inducement for Seller to enter
into this Agreement, Buyer acknowledges and agrees that Seller's obligation
to close hereunder is contingent upon the simultaneous closing of the
transaction contemplated by that certain Agreement for Purchase and Sale
(the "Lakes Plaza Agreement") of even date herewith between Arvida/Lakes
Plaza, L.P., as seller, and Buyer, as buyer, for real property known as
Weston Lakes Plaza located in Weston, Florida. In addition, a default by
Buyer under the Lakes Plaza Agreement shall also be deemed to be a default
by Buyer under this Agreement and, in such event, Seller shall have the
right to exercise any and all rights and/or remedies that are available to
Seller under this Agreement as a result of Buyer's default hereunder.
XXVI. NOTICES. All notices and communications required or allowed by this
Agreement shall be in writing and delivered as set forth in the immediately
succeeding paragraph, addressed to the party or person to whom the notice
is being given at the following addresses:
TO SELLER: COUNTRY ISLES ASSOCIATES
c/o Arvida Company
Attention: James Motta
7900 Glades Road, Suite 200
Post Office Box 100
Boca Raton, Florida 33434
Fax: (561) 479-1227
Confirmation: (561) 479-1144
and
ARVIDA COMPANY
Attention: General Counsel
7900 Glades Road, Suite 200
Post Office Box 100
Boca Raton, Florida 33434
Fax: (561) 479-1227
Confirmation: (561) 479-1144
COPY TO: Gunster, Yoakley, Valdes-Fauli & Stewart, P.A.
500 East Broward Boulevard, Suite 1400
Fort Lauderdale, Florida 33394
Attention: Daniel M. Mackler, Esq.
Fax: (954) 523-1722
Confirmation: (954) 462-2000
TO BUYER: PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
711 High Street
Des Moines, Iowa 50392-1370
Attention: Eric W. Johnson, Acquisitions Manager
Commercial Real Estate Asset Management
Fax: (515) 248-0484
Confirmation: (515) 248-0057
Notices are to be delivered by certified mail, postage prepaid,
return-receipt requested and shall be deemed to have been delivered three
(3) Business Days after mailing, or, if sooner, on the date the receipt for
certified mail is signed by the addressee or its authorized agent or
employee. Notices may also be made by couriers, telephone facsimile, hand
delivery, overnight delivery by a reputable overnight delivery service, or
telegram and shall be deemed to have been delivered on the date a receipt
or confirmation of receipt is (a) signed by the addressee or its authorized
agent or employee, or (b) received by the sender in the event a notice is
sent via facsimile. A notice delivered to Seller or Buyer shall not be
deemed effective unless it refers to all of the following: the parties to
this Agreement, the Contract Date and the name of the Project. Seller's
and Buyer's attorneys are hereby authorized to send and receive notices
hereunder on behalf of their respective clients.
<PAGE>
XXVII. BUSINESS DAY. If any date herein set forth for the performance of
any obligations by Seller or Buyer or for the delivery of any instrument or
notice as herein provided should be on a day other than a Business Day, the
compliance with such obligations or delivery shall be deemed acceptable on
the next occurring Business Day.
XXVIII. AFFILIATE. "Affiliate" means a person or entity which (either
directly or indirectly, through one or more intermediaries) controls, is in
common control with or is controlled by, another person or entity, and any
person or entity that is a director, trustee, officer, employee, agent,
partner, shareholder, subsidiary or attorney of any of the foregoing. For
the purposes of this definition, the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management or policies of a person or entity, whether through the
ownership of voting securities, by contract or otherwise.
XXIX. SEVERABILITY AND INVALIDITY. If any provision of this Agreement, or
the application of such provision to any person or circumstance, shall be
held invalid, the remainder of the Agreement, or the application of such
provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby. The provisions of this Section
shall survive the Closing and delivery of the Deed.
XXX. RECORDATION. Buyer agrees that disclosure of this Agreement would be
detrimental to Seller and hamper its future negotiations with third parties
and, therefore, it is agreed that no disclosure shall be made by Buyer
without the written approval of Seller and that this Agreement shall not be
recorded in any public records. Seller agrees that Buyer may disclose the
terms and provisions of this Agreement without prior approval to those
lending institutions of which it requests financing for the financing of
the Property, to prospective investors from whom it seeks capital for the
acquisition of the Property, as well as to such attorneys, accountants and
investment bankers as are engaged by Buyer to assist it with this
transaction. The provisions of this Section shall survive Closing and
delivery of the Deed.
XXXI.ENTIRE AGREEMENT. This Agreement sets forth the entire understanding
between Seller and Buyer and shall not be altered, modified or amended
unless such alteration, modification or amendment is set forth in writing
and signed by the party against whom he enforcement of any such alteration,
modification or amendment is sought.
XXXII. NUMBER AND GENDER. The terms "Seller" and "Buyer" shall include the
heirs, executors, administrators, personal representatives, successors and
assigns of the respective parties hereto. Whenever used the singular
number shall include the plural and the plural the singular, and the use of
any gender shall include all genders.
XXXIII. GOVERNING LAW AND VENUE. This Agreement shall be governed by a
construed in accordance with the laws of the State without reference to the
laws of any other jurisdiction. The parties agree that any litigation
arising from this Agreement shall be maintained in a court of competent
jurisdiction sitting in the County.
XXXIV. ADVICE OF COUNSEL. EACH PARTY ACKNOWLEDGES THAT IT HAS BEEN ADVISED
BY ITS OWN COUNSEL WITH RESPECT TO THE TRANSACTION GOVERNED BY THIS
AGREEMENT.
XXXV.CONSTRUCTION; CAPTIONS. The language in all parts of this Agreement
shall be in all cases construed simply according to its fair meaning and
not strictly for or against any of the parties hereto. The captions and
headings of various sections and paragraphs in this Agreement are for
convenience only and are not to be utilized in construing the content or
meaning of the provisions hereof and shall not be deemed to constitute a
part hereof. No reference or use shall be made of any previous draft of
this Agreement or of any negotiations with respect thereto in construing
this Agreement. As used herein, the word "including" shall be construed to
mean "including, without limitation."
<PAGE>
XXXVI. ANNOUNCEMENTS. Seller and Buyer shall consult with each other with
regard to all press releases and other announcements issued at or prior to
the Closing concerning this Agreement or the transactions contemplated
hereby and, except as may be required by applicable laws or the applicable
rules and regulations or any governmental agency or stock exchange, neither
Seller nor Buyer shall issue any such press release or other such publicity
prior to the Closing Date without the prior written consent of the other
party.
XXXVII. NO WAIVER. No failure of any party to exercise any power given
such party hereunder or to insist upon strict compliance by the other party
with its obligations hereunder shall constitute a waiver of any party's
right to demand strict compliance with the terms of this Agreement.
XXXVIII. COUNTERPARTS. This Agreement, and any document or instrument
entered into, given or made pursuant to this Agreement or authorized
hereby, and any amendment or supplement thereto may be executed in two or
more counterparts, and, when so executed, will have the same force and
effect as though all signatures appeared on a single document. Any
signature page of this Agreement or of such amendment, supplement, document
or instrument may be detached from any counterpart without impairing the
legal effect of any signatures thereon, and may be attached to another
counterpart identical in form thereto but having attached to it one or more
additional signature pages.
XXXIX. FURTHER ASSURANCES. In addition to the foregoing, the parties
hereto, at the time and from time to time at or after the Closing, upon
request of Buyer or Seller, as the case may be, agree to do, execute,
acknowledge and deliver all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney and assurances, as may be
required for the better assigning, transferring, granting, conveying,
assuring and confirming unto the Buyer all of Seller's right, title and
interest in and to the Property and the more effective consummation of the
transactions contemplated by this Agreement. The terms of this Section
shall survive the Closing and delivery of the Deed.
XI. RADON GAS. Radon is a naturally occurring radioactive gas that, when
it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon
that exceed federal and state guidelines have been found in buildings in
Florida. Additional information regarding radon and radon testing may be
obtained from the County health unit.
XII. TAX DEFERRED EXCHANGE. Buyer and Seller agree that, at Buyer's sole
election, this transaction shall be structured as an exchange of like-kind
properties under Section 1031 of the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations and proposed regulations
thereunder. The parties agree that if Buyer wishes to make such election,
it must do so prior to the Closing Date. Buyer shall in all events be
responsible for all costs and expenses related to the Section 1031 exchange
and shall fully indemnify, defend and hold Seller harmless from and against
any and all liability, claims, damages, expenses (including reasonable
attorneys' and paralegal fees and reasonable attorneys' and paralegal fees
on appeal), proceedings and causes of action of any kind or nature
whatsoever arising out of, connected with or in any manner related to such
Section 1031 exchange that would not have been incurred by Seller if the
transaction were a purchase for cash. The provisions of the immediately
preceding sentence shall survive Closing and the transfer of title to the
Property to Buyer. Any such Section 1031 exchange shall be consummated on
behalf of Buyer through the use of a facilitator or intermediary which
shall acquire title to the Property. In no event shall the provisions of
this SECTION 41 be deemed to allow Buyer to extend the Closing Date. Buyer
acknowledges that Seller has agreed to the terms of this section as an
accommodation to Buyer and has not rendered any tax advice to Buyer with
respect to the compliance of any Section 1031 exchange with the Code or any
regulations promulgated thereunder and Buyer has obtained its own tax
advice with respect thereto.
[SIGNATURES AND JOINDER FOLLOW]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives, the day and year
first above written.
SELLER
COUNTRY ISLES ASSOCIATES, an Illinois general
partnership
By: ARVIDA/JMB PARTNERS, a Florida general
partnership, its managing partner
By: ARVIDA/JMB MANAGERS, INC., a
Delaware corporation, as general partner
By: JOHN BARIC
John Baric, Vice President
THE INDIAN TRACE COMMUNITY DEVELOPMENT DISTRICT IMPOSES TAXES AND
ASSESSMENTS OR BOTH TAXES AND ASSESSMENTS ON THIS PROPERTY THROUGH A
SPECIAL TAXING DISTRICT. THESE TAXES AND ASSESSMENTS PAY THE CONSTRUCTION,
OPERATION AND MAINTENANCE COST OF CERTAIN PUBLIC FACILITIES OF THE DISTRICT
AND ARE SET ANNUALLY BY THE GOVERNING BOARD OF THE DISTRICT. THESE TAXES
AND ASSESSMENTS ARE IN ADDITION TO COUNTY AND ALL OTHER TAXES AND
ASSESSMENTS PROVIDED FOR BY LAW.
BUYER
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
JOINDER
The undersigned agree to the terms and conditions stated in SECTION
24 of the foregoing Agreement.
RICHARD ELLIS, LLC
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
MARCUS & MILLICHAP
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
[END OF AGREEMENT - EXHIBITS AND SCHEDULE FOLLOW]
<PAGE>
SCHEDULE OF EXHIBITS
--------------------
EXHIBITS DESCRIPTION
Exhibit 1.32 Leases
Exhibit 1.39 Real Property
Exhibit 1.43 Service Contracts
Exhibit 7.1.2 Deed
Exhibit 7.1.3 Quit-Claim Bill of Sale
Exhibit 7.1.4 Quit-Claim Assignment and
Assumption of Service Contracts
Exhibit 7.1.5 Assignment and Assumption of
Leases
Exhibit 7.1.13 No Lien Affidavit
Exhibit 9.1.7 Schedule of Threatened or Pending
Lawsuits
Exhibit 9.1.9 Schedule of Contracts and
Documents
Exhibit 13.5 Tenant Estoppel Certificates
EXHIBIT 10.9
- ------------
AGREEMENT OF PURCHASE AND SALE
BY AND BETWEEN
METRODRAMA JOINT VENTURE,
a Florida general partnership
AND
AUTONATION USA CORPORATION
<PAGE>
INDEX
-----
SECTION PAGE
- ------- ----
1. PURCHASE AND SALE. . . . . . . . . . . . . . . . . . . . 1
2. PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . 1
3. DEPOSIT. . . . . . . . . . . . . . . . . . . . . . . . . 1
4. TITLE AND SURVEY . . . . . . . . . . . . . . . . . . . . 2
5. INSPECTIONS. . . . . . . . . . . . . . . . . . . . . . . 3
6. SELLER'S REPRESENTATIONS . . . . . . . . . . . . . . . . 4
7. [INTENTIONALLY OMITTED.] . . . . . . . . . . . . . . . . 5
8. ESCROW CLOSING . . . . . . . . . . . . . . . . . . . . . 5
9. ARBITRATION; DISPUTES CONCERNING CONSUMMATION
OF THE CLOSING . . . . . . . . . . . . . . . . . . . . . 9
10. DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . 10
11. PRORATIONS . . . . . . . . . . . . . . . . . . . . . . . 11
12. CLOSING COSTS. . . . . . . . . . . . . . . . . . . . . . 11
13. BROKERS. . . . . . . . . . . . . . . . . . . . . . . . . 12
14. ASSIGNABILITY. . . . . . . . . . . . . . . . . . . . . . 12
15. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . 12
16. RISK OF LOSS . . . . . . . . . . . . . . . . . . . . . . 14
17. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . 14
18. DISCLAIMERS AND LIMITATIONS. . . . . . . . . . . . . . . 15
19. TRADE NAMES AND SERVICE MARKS. . . . . . . . . . . . . . 17
20. RECOURSE LIMITED TO PROCEEDS OF SALE; SURVIVAL . . . . . 17
<PAGE>
EXHIBITS:
- --------
Exhibit A - Realty, Legal Description of Metrodrama Lands
Exhibit B - Escrow Agreement
Exhibit C - Acceptable Exceptions
Exhibit D - Leases and Consulting Agreements
Exhibit E - Preliminary Site Plan
<PAGE>
AGREEMENT OF PURCHASE AND SALE
------------------------------
THIS AGREEMENT OF PURCHASE AND SALE ("Agreement") is made and entered
into this _______________ day of October, 1997, between METRODRAMA JOINT
VENTURE, a Florida general partnership ("Seller") and AUTONATION USA
CORPORATION, a Florida corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller is the owner of that certain parcel of real property
located in Palm Beach County ("County"), Florida, more particularly
described by sketch on EXHIBIT A attached hereto and incorporated hereto
("Realty"); and
WHEREAS, Seller desires to sell the Property to Purchaser, and
Purchaser desires to purchase the Property from Seller subject to the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants contained herein and the sum of TEN DOLLARS ($10) and other good
and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties, intending to be legally bound, do hereby agree
as follows:
1. PURCHASE AND SALE. Subject to the terms and conditions
hereinafter set forth, Seller agrees to sell to Purchaser and Purchaser
agrees to purchase from Seller the Realty, together with the following
property and rights (the Realty and such property and rights are referred
to collectively hereinafter as the "Property"):
(a) All surveys, plans, plats, soil tests, engineering
studies, environmental studies and all other documents, studies, title
policies, licenses, permits, authorizations, approvals and other
intangibles rights pertaining to the ownership and/or operation of the
Realty, if any, to the extent in Seller's possession or control
(collectively the "Documents");
(b) All strips and gores of land lying adjacent to the
Realty, together with all easements, privileges, riparian and other water
rights, lands underlying any adjacent streets or roads, improvements
located on the Realty and appurtenances pertaining to or accruing to the
benefit of the Realty; and
(c) All improvements thereon and all personal property
located at, on, upon, under or associated with the Realty, if any.
2. PURCHASE PRICE. The purchase price ("Purchase Price") to be
paid by Purchaser to Seller for the Property shall be Eight Million Dollars
($8,000,000), subject to prorations and adjustments as provided in this
Agreement..
At the "Escrow Closing" (as hereinafter defined), the Purchase
Price payable by Purchaser to Seller (subject to prorations and adjustments
as provided in this Agreement of which the "Deposit," as hereinafter
defined, shall be a part thereof) shall be paid by cash, "Letter of Credit"
(as hereinafter defined) or wire transfer to an account designated by
Escrow Agent in writing to Purchaser at least three (3) business days prior
to the Escrow Closing. At the "Consummation of the Closing" (as
hereinafter defined), the Deposit shall be delivered by "Escrow Agent"
(hereinafter defined) to Seller and shall be credited against the Purchase
Price.
3. DEPOSIT. To secure the performance by Purchaser of its
obligations under this Agreement simultaneous with the execution of this
Agreement by Purchaser, Purchaser has delivered to Gunster, Yoakley,
Valdes, Fauli & Stewart, P.A., 777 South Flagler Drive, Suite 500 East,
West Palm Beach, Florida as escrow agent (the "Escrow Agent"), the sum of
One Hundred Thousand Dollars ($100,000) ("Initial Deposit"). In the event
this Agreement has not been terminated prior to the end of the "Inspection
Completion Date" (as hereinafter defined), then on or before the expiration
of the Inspection Completion Date and each and every thirty (30) days
thereafter until the earlier to occur of Closing or any earlier termination
of this Agreement, the Purchaser shall deliver to Escrow Agent an
additional deposit of Fifty Thousand Dollars ($50,000) (each such $50,000
deposit is referred to as "Additional Deposit" and collectively referred to
as "Additional Deposits"). Additionally, in the event this Agreement is
not terminated on or before the expiration of the Inspection Completion
Date, then on or before the expiration of the Inspection Completion Date,
the Purchaser shall deliver to Escrow Agent an additional deposit of One
Million Dollars ($1,000,000) ("Second Deposit"). Upon receipt of a W-9
form, the Escrow Agent shall invest the Initial Deposit, Second Deposit and
each of the Additional Deposits delivered to Escrow Agent (such sums
together with all interest thereon is hereinafter collectively referred to
as "Deposit") in an interest bearing account maintained with or issued by a
commercial bank, savings bank or savings and loan association doing
business in Palm Beach County, Florida. The parties hereby agree that the
Escrow Agent shall hold each portion of the Deposit delivered to the Escrow
Agent in accordance with the Escrow Agreement attached hereto as EXHIBIT B
("Escrow Agreement"), which Escrow Agreement shall govern Escrow Agent's
responsibilities with respect to the Deposit pursuant to this Agreement.
4. TITLE AND SURVEY.
(a) Within five (5) business days of the Effective Date, as
hereinafter defined, Seller will provide Purchaser with copies of any
existing title policies, surveys and other documents pertaining to title to
the Property which Seller has in its possession. The Purchaser shall have
until the end of the Inspection Completion Date in which to obtain the
following "Title Evidence" (at Purchaser's expense), to-wit: (i) a title
report issued by Chicago Title Insurance Company or other title insurance
company acceptable to Purchaser ("Title Company") enabling a title agent
selected by Purchaser to issue an ALTA Form B title insurance commitment
("Commitment") covering the Realty, whereby the Title Company agrees to
issue an ALTA Form B owners policy of title insurance ("Title Policy") in
the amount of the Purchase Price at Closing, subject only to the matters
set forth on EXHIBIT C attached hereto and made a part hereof ("Acceptable
Exceptions"), (ii) hard copies of all exceptions to title set forth in the
Report, and (iii) an up to date survey of the Realty (certified to a date
after the Effective Date) prepared in accordance with the minimum technical
standards imposed by the Florida Board of Land Surveyors and minimum
standard detail requirements imposed by ALTA/ACSM certified to Purchaser
and the Title Company ("Survey").
(b) Purchaser shall review the Title Evidence and shall,
prior to the end of the Inspection Completion Date, notify Seller in
writing ("Title Objection Notice") of any matters in the Title Evidence
adversely affecting the marketability (as determined by the standards
adopted by the Florida Bar) of title to the Realty or affecting the ability
of Purchaser to utilize the Property and develop the "Proposed
Improvements" (as hereinafter defined) thereon other than the Acceptable
Exceptions ("Title Defects"). Upon receipt of the Title Objection Notice,
Seller shall use its good faith efforts to cure such Title Defects;
provided, however, that except as provided in this Agreement, the Seller
shall not be required to bring litigation or expend in excess of Twenty-
Five Thousand Dollars ($25,000) to cure Title Defects which exist prior to
the Effective Date or those which are not created by Seller. In the event
that Seller is unable to cure the Title Defects within ninety (90) days of
the Title Objection Notice ("Title Cure Period") after good faith efforts
to do so, Seller shall notify Purchaser in writing as to which Title
Defects remain uncured on or before the end of the Title Cure Period and
Purchaser, at Purchaser's option, may: (i) elect to accept title to the
Property subject to the Title Defects without any adjustment to the
Purchase Price (in which event the remaining Title Defects shall be deemed
Acceptable Exceptions); or (ii) terminate this Agreement by written notice
thereof to Seller, whereupon this Agreement shall be terminated, the
Deposit, together with interest thereon, shall be returned to Purchaser and
both parties shall thereafter be released from all further obligations
hereunder. At Closing, Seller shall provide Purchaser with a gap affidavit
in form reasonably acceptable to the Title Company to permit the Title
Company to insure against adverse matters first appearing in the Public
Records on a date subsequent to the Effective Date of the Commitment and
prior to the recording of a special warranty deed required by the terms of
this Agreement as permitted and in accordance with the requirements of
Section 627.7841 of the Florida Statutes. The Seller agrees that it will
not take any action after the Effective Date of the Commitment which shall
adversely affect the status of title to the Property. The Seller agrees to
cure any Title Defects and any encumbrance that can be cured by payment of
a liquidated amount created by, through or under Seller after the Effective
Date of this Agreement.
5. INSPECTIONS. Seller and Purchaser hereby acknowledge that as
of the date of the execution of this Agreement, Purchaser has not yet had
an opportunity to complete its required due diligence and fully review and
evaluate this transaction. If on or before 5:00 p.m. on a date which is
sixty (60) days after the Effective Date ("Inspection Completion Date"),
Purchaser determines, in its sole and absolute discretion, that Purchaser
does not desire to purchase the Property, then Purchaser shall have the
right to give written notice to Seller electing to terminate this
Agreement, provided such notice is delivered to Seller prior to 5:00 p.m.
on the Inspection Completion Date. In the event such notice of termination
is delivered on or before 5:00 p.m. on the Inspection Completion Date,
then, Escrow Agent will deliver to Purchaser the Deposit, and the parties
shall be released from all further obligations each to the other under this
Agreement. except for those which expressly survive termination of this
Agreement. In the event that the Purchaser does not terminate this
Agreement as set forth in this paragraph, then the contingency set forth in
this paragraph shall be deemed satisfied or waived by Purchaser.
Purchaser shall determine, to its reasonable satisfaction,
within ninety (90) days after the Effective Date, that all Governmental and
quasi-Governmental Approvals ("Governmental Approvals") may be obtained to
accommodate the approvals required to develop an automobile sales and
servicing center for new and/or used vehicle body shop, outdoor parking,
and other improvements, consistent with the site plan attached hereto as
EXHIBIT E from all Governmental and quasi-Government authorities having
jurisdiction over the Property and if Purchaser in its reasonable
discretion shall determine that the Governmental Approvals cannot be
obtained within ninety (90) days after the Effective Date, Purchaser may
terminate this Agreement by giving Seller written notice thereof of its
termination prior to ninety (90) days after the Effective Date, at which
time the Escrow Agent will deliver to Purchaser the Deposit and the parties
shall be released from all other obligations, each to the other under this
Agreement, except for those which expressly survive termination of this
Agreement. In the event that the Purchaser does not terminate this
Agreement as set forth in this paragraph, then the contingency set forth in
this paragraph shall be deemed satisfied or waived by Purchaser.
Purchaser, its agents, employees and representatives shall
have access to the Property at all times subsequent to the Effective Date
and prior to the Closing or earlier termination of this Agreement with full
right to: (a) inspect the Property; (b) to conduct, subject to the
provisions of this Agreement, reasonable tests thereon including, but not
limited to, soil borings (not associated with any ground water testing
without Seller's consent) and hazardous waste studies (limited to a Phase I
environmental audit unless Seller consents in writing to further testing),
and to make such other examinations with respect thereto as Purchaser, its
counsel, licensed engineers, surveyors or other representative may deem
reasonably necessary; and (c) to place after the Inspection Completion
Date, a marketing sign on the Property indicating that Purchaser is "coming
soon" or similar marketing signage ("Signage"). Any test, examinations or
inspections of the Property by Purchaser and all costs and expenses in
connection with Purchaser's inspection of the Property or placing
Purchaser's Signage on the Property shall be at the sole cost of Purchaser
and shall be performed in a manner not to unreasonably interfere with the
Seller's ownership of the Property. Purchaser shall remove or bond any
lien of any type which attaches to the Property by virtue of any of
Purchaser's inspections. Upon completion of any such inspection,
examination, or test, Purchaser shall restore any damage to the Property
caused by Purchaser's inspection. Upon any termination of this Agreement
prior to Closing, Purchaser shall remove its Signage and repair any damage
to the Property caused by the installation or removal of such Signage.
Purchaser hereby indemnifies and holds Seller harmless from all loss, cost
or expense, including, but not limited to, attorneys' fees and court costs
resulting from Purchaser's inspections in connection with the Property.
Purchaser hereby acknowledges that Seller has provided
Purchaser with an environmental study by Dames & Moore dated March 28, 1997
(the "Dames & Moore Study"), and further acknowledges that although
Purchaser may confirm the results of the Dames & Moore Study, no invasive
environmental tests (such as drilling or soil or groundwater testing) may
be performed by Purchaser unless Seller has provided its written consent
thereto.
Within five (5) business days after the Effective Date, Seller
shall deliver to Purchaser hard-copies of all Documents, if any, which
Seller or its agents have in their possession for Purchaser's review.
Additionally, Seller shall provide Purchaser such other documentation as
Purchaser may reasonably request with respect to the Property.
Notwithstanding anything contained herein to the contrary, the
Purchaser shall not indemnify or hold the Seller harmless with respect to
and the Purchaser shall not be required to remove, remediate, dispose or
otherwise deal with any "hazardous substance" (as hereinafter defined),
samplings derived from the Property or property containing hazardous
substances which it finds in connection with its investigation of the
Property. Purchaser shall advise Seller of any "hazardous substance"
samplings that it has derived from the Property, and Seller shall make the
determination whether or not it is required by any applicable law to
disclose the existence of any such hazardous substance to appropriate
governmental authorities.
In the event this Agreement is terminated for any reason,
Purchaser shall immediately deliver to Seller copies of any reports and
materials obtained by Purchaser in inspecting the Property.
The provisions of this Paragraph shall survive any termination
of this Agreement.
6. SELLER'S REPRESENTATIONS. Seller represents, warrants and
covenants unto Purchaser and agrees with Purchaser as follows, to wit:
(a) The Property is not subject to any leases, tenancies, or
other occupancy rights, recorded or unrecorded, written or oral, except for
those "Leases" and "Consulting Agreement" referred to on EXHIBIT D attached
hereto and made a part hereof. The Seller represents and warrants that the
Seller shall not amend, alter, extend or otherwise modify the terms and
provisions of the Leases or Consulting Agreements attached hereto as
EXHIBIT D and that with regard to the Leases referred to on EXHIBIT D, upon
the expiration of the term of such Leases, no new leases shall be entered
into unless such leases are unconditionally terminable upon ninety (90)
days' written notice and the Purchaser shall not incur any liability or
expense in connection with such leases from and after Closing and that with
respect to the Consulting Agreement referred to on EXHIBIT D (or any
renewal or substitution thereof), such agreement shall be terminated and be
void and of no further force and effect as of the Closing.
(b) The Seller has no notice or knowledge of any pending
lawsuits, any pending condemnation or eminent domain proceedings with
respect to the Property.
(c) The execution, delivery and performance of this Agreement
by Seller has been duly authorized and no consent of any other person or
entity to such execution, delivery and performance is required to render
this document a valid and binding instrument enforceable in accordance with
its terms.
(d) Seller is not a "foreign person" within the meaning of
the United States tax laws, to which reference is made in Internal Revenue
Code Section 1445(b)(2). At the Escrow Closing, Seller shall deliver to
Purchaser an affidavit to such effect, which shall also state Seller's
social security number and the state within the United States under which
Seller then exists. Seller acknowledges and agrees that Purchaser shall be
entitled to fully comply with Internal Revenue Code Section 1445 and all
related sections and regulations, as same may be modified and amended from
time to time, and Seller shall act in accordance with all reasonable
requirements of Purchaser to effect such full compliance by Purchaser.
(e) To Seller's knowledge (being defined for purposes of this
sub-paragraph as the knowledge of Ingrid Fulmer), the Dames & Moore Study
is accurate in all material respects and the Seller is not aware of any
hazardous substances which have been generated, recycled, reused, sold,
stored, handled, transported or disposed on the Property. Seller hereby
discloses to Purchaser that radon is a naturally occurring radioactive gas,
that, when it has accumulated in a building in sufficient quantities may
present health risks to persons who are exposed to it over time. Levels of
radon have been found in buildings in Florida. Additional information
regarding radon and radon testing may be obtained from your county public
health unit. Prior to the Consummation of the Closing, Seller shall remove
any trash, tires or other debris which may be located on the Property.
(f) Seller will execute such affidavits reasonably required
by the Title Company to issue an owner's policy of title insurance at the
Consummation of the Closing to Purchaser in the amount of the Purchase
Price, subject only to the Acceptable Exceptions.
(g) Seller shall not at any time while this Agreement is in
effect, make or permit any contract or agreement or impose or allow to
impose any new lien, encumbrance or other matter affecting title to the
Property or grant or allow to be granted any right in or on or to the
Property without the prior written consent of Purchaser, which consent may
be withheld by Purchaser in its sole discretion.
(h) The entering into this Agreement (and the sale of the
Property to Purchaser) shall not constitute a violation or breach by Seller
of: (i) any contract, agreement, understanding or instrument to which it
is a party or by which Seller or the Property is subject or bound; (ii) any
judgment, order, writ, injunction or decree issued against or imposed upon
them; or (iii) will result in the violation of any applicable law, order,
rule or regulation of any governmental or quasi-governmental authority.
The provisions of this Paragraph 6 shall survive the Closing or
the earlier termination of this Agreement.
7. [INTENTIONALLY OMITTED.]
8. ESCROW CLOSING.
(a) No later than ten (10) business days prior to the hearing
of the Board of Palm Beach County Commissioners ("BPBCC") for the
"Requested Use Approval," as hereinafter defined, the parties will deliver
all of the closing documents ("Closing Documents") described in Paragraphs
8(e) and 8(g), fully and properly executed, to Escrow Agent ("Escrow
Closing"). No later than two (2) business days prior to the hearing of the
BPBCC for the Requested Use Approval, Purchaser shall deliver to the Escrow
Agent the "Letter of Credit" or immediately available funds in the amount
of the Purchase Price, less applicable adjustments for the Deposit and
prorations ("Closing Proceeds"). Failure of Seller or Purchaser to comply
with any of the Escrow Closing requirements (not cured within the cure
period) shall be deemed a default against the party failing to comply.
Failure of Purchaser to deliver the Closing Proceeds to Escrow Agent (time
being of the essence and no cure period applicable) shall be deemed a
default by Purchaser. The Escrow Agent will hold the Closing Documents and
the Closing Proceeds in accordance with the terms of the Escrow Agreement,
and will disburse them in accordance with the terms of this Agreement. The
"Letter of Credit" shall be a clean, irrevocable, transferrable, stand by
letter of credit (with an expiration date no earlier than two hundred
twenty (220) days after the Effective Date, or, if later, sixty (60) days
after the creation of the Escrow Closing) in form reasonably acceptable to
Seller, in favor of Escrow Agent, issued by NationsBank or other national
bank reasonably acceptable to Seller in the amount of the Purchase Price,
less applicable adjustments for the Deposit and prorations, and requiring
only the presentation at the issuing bank for payment in full. Escrow
Agent shall draw on the Letter of Credit no later than thirty (30) days
prior to its expiration date (as such expiration date may be extended from
time to time) and hold the proceeds thereof as Closing Proceeds in escrow
in accordance with the terms of this Agreement.
(b) Purchaser shall promptly make and diligently pursue a
zoning application to the BPBCC to entitle the Property with the use
classification of vehicle sales and rentals pursuant to the Unified Land
Development Code of Palm Beach County, Florida and make application for
approval by the BPBCC of a site plan in substantial conformance with the
preliminary site plan set forth in Exhibit E, attached hereto and made a
part hereof. Substantial conformance shall mean that the site plan, which
the BPBCC will approve has no less than the square footage of the area in
the main display and office building, the gross square footage of the area
in the repair or service building(s) and all of the vehicle storage and
display parking spaces as shown on EXHIBIT E, and that the offsite costs to
the Purchaser for road improvements or other improvements or costs required
by Palm Beach County, over and above all county impact fees, will not
exceed Two Hundred Fifty Thousand and no/100 ($250,000.00) Dollars. (The
use classification and site plan approval must be heard and acted upon
concurrently by BPBCC, and together are hereinafter referred to as the
"Requested Use Approval"). If Purchaser does not terminate this Agreement
pursuant to the terms of Paragraphs 4, 5, 10 or 16 of this Agreement, then
Purchaser may terminate this Agreement only if the Requested Use Approval
is not finally issued, at which time the Escrow Agent shall return the
Deposit and all Closing Proceeds and the Letter of Credit, if applicable,
to the Purchaser, destroy the Closing Documents and thereafter this
Agreement shall be deemed canceled and terminated and the parties shall
have no further obligations, duties or liabilities to each other except for
those terms and conditions which expressly survive termination. The
Purchaser shall provide the Seller with copies of all applications filed
with all governmental agencies and all written comments, inquiries and
reports received from said agencies regarding such applications together
with a time schedule for the proposed Requested Use Approval. The Seller
shall be entitled to communicate freely with Purchaser's consultants to
determine the status of Purchaser's various approval applications. The
Purchaser shall provide Seller with copies of the documents required to be
provided to Seller under this subsection within five (5) business days of
receipt of such documents by the Purchaser. Seller agrees to cooperate
with Purchaser in seeking the Requested Use Approval including the
execution of consents to applications in connection with zoning, land use,
platting and other Requested Use Approval; provided, Seller shall not be
required thereto to expend any sums.
(c) The Closing Proceeds and Deposit will be transferred and
delivered by Escrow Agent to Seller, and the Closing Documents will be
delivered by Escrow Agent to the appropriate parties, when the escrow
closing conditions are considered satisfied as specified below in this
Paragraph 8(c):
(i) If Purchaser does not effectively withdraw its
application for the Requested Use Approval before it is issued by the
BPBCC, then upon final issuance of the Requested Use Approval (regardless
of the terms and conditions upon which it is finally issued) all escrow
closing conditions shall be considered satisfied in full and the Escrow
Agent may thereupon immediately, subject to the provisions of paragraph
8(d) disburse the Closing Documents and Closing Proceeds in accordance with
the instructions contained herein. "Final issuance" of the Requested Use
Approval shall be deemed to occur when the Requested Use Approval has been
granted by the appropriate officials of the applicable governmental
authority and any and all appeals periods as provided by law have expired
without an appeal or suit having been filed, or, if filed, when such suit
or appeal has been dismissed or resolved finally and conclusively in favor
of issuance of the Requested Use Approval regardless of whether the terms
and conditions of the Requested Use Approval shall have been further
changed by the appropriate officials of the applicable government
authority. Purchaser agrees to diligently oppose any such appeal or suit
at Purchaser's expense. Notwithstanding anything contained herein to the
contrary, prior to the issuance of the Requested Use Approval by the BPBCC,
if the requirements which may be imposed in connection with the issuance of
the use approval, prevent improvement of the Realty in Substantial
Conformance with the preliminary site plan attached as EXHIBIT E, or
require offsite costs other than county impact fees which exceed Two
Hundred Fifty Thousand and no/100 ($250,000.00) Dollars, the Purchaser may
withdraw its application for the Requested Use Approval before it is issued
by the BPBCC, whereupon this Agreement shall terminate, the Deposit and all
Closing Proceeds shall be returned to Purchaser, any Closing Documents
shall be returned to the party who delivered same in escrow and the parties
released of all further obligations each to the other under this Agreement
or the Purchaser shall have the right to defer consideration of such
Requested Use Approval, provided that the Purchaser shall not request
reconsideration without the consent of Seller if the hearing for such
reconsideration of the Requested Use Approval would occur later than two
hundred twenty (220) days from the Effective Date. Purchaser and Seller
agree that in the event of an appeal of the Requested Use Approval, the
escrow funds and documents shall remain in escrow for a period of six (6)
months after the appeal is filed. If the appeal is not resolved in favor
of issuance of the Requested Use Approval within the six (6) month period,
this Agreement may be terminated by Seller (if Purchaser is not willing to
waive the condition to obtain the Requested Use Approval, or Purchaser by
giving the other party written notice, at which time the Escrow Agent shall
return the Deposit and all Closing Proceeds and the Letter of Credit, if
applicable, to the Purchaser, destroy the Closing Documents and thereafter
this Agreement shall be deemed canceled and terminated and the parties
shall have no further obligations, duties or liabilities to each other,
except for those terms and conditions which expressly survive termination.
Seller and Purchaser reserve the right, and each may exercise this right by
giving the other party written notice, to withdraw the zoning application
for Requested Use Approval any time following two hundred twenty (220) days
after the Effective Date, if the Requested Use Approval has not been issued
and the applicable appeal period expired whether or not an appeal has been
filed. In the event Seller or Purchaser elects to withdraw the zoning
application or Requested Use Approval after two hundred twenty (220) days,
this Agreement shall be terminated, at which time the Escrow Agent shall
return the Deposit and all Closing Proceeds and the Letter of Credit, if
applicable, to the Purchaser, destroy the Closing Documents and thereafter
this Agreement shall be deemed canceled and terminated and the parties
shall have no further obligations, duties or liabilities to each other,
except for those terms and conditions which expressly survive termination.
Notwithstanding anything contained herein to the contrary, the Purchaser
shall have the right to negate Seller's election to withdraw the
application as provided in either of the preceding two sentences if
Purchaser is willing to waive the condition for the Requested Use Approval,
whereupon the Escrow Agent may thereupon disburse, subject to the
provisions of Paragraph 8(d), the Closing Documents to the party entitled
to same and the Closing Proceeds to the Seller.
(d) In the event that the Escrow Agent is to disburse the
Closing Proceeds to the Seller, the Escrow Agent shall provide two (2)
business days' written notice to the Purchaser to enable the Purchaser two
(2) business days after receipt of such written notice the ability to
substitute good federal funds in the amount of the Closing Proceeds and
Deposit in exchange for the Closing Proceeds and Deposit (if Closing
Proceeds were delivered in escrow) and the Letter of Credit and Deposit (if
the Letter of Credit and Deposit are being held in escrow), whereupon if
such monies are delivered, such monies (in an amount equal to the Closing
Proceeds, Deposit and any applicable "Seller Interest," as hereinafter
defined) shall be disbursed to Seller, or to the extent the Escrow Agent is
holding the Letter of Credit, the Escrow Agent shall draw on the Letter of
Credit and deliver the Closing Proceeds, Deposit and any applicable Seller
Interest to Seller. The parties agree that (i) all interest earned on the
monies to and through a date which is thirty (30) days after the date of
issuance of the Requested Use Approval shall be paid to Purchaser; and
(ii) the balance of any interest earned shall be paid to the party entitled
to such monies (i.e. in the event of the consummation of the Closing,
whereby the Purchase Price is disbursed to Seller, then the balance of the
interest, if any, shall be disbursed to Seller ("Seller Interest") and to
the extent that the consummation of the Closing does not occur, whereby the
Purchase Price is not disbursed to Seller, then the balance of the interest
shall be paid to Purchaser). The disbursal of the Closing Documents to
Purchaser and Closing Proceeds and Deposit to Seller as provided above is
the "Consummation of the Closing."
(e) Seller is authorized to cause the application for
Requested Use Approval to be withdrawn in Seller's sole and absolute
discretion, and Purchaser hereby appoints Seller as its attorney-in-fact to
do so without penalty or recourse, if (i) Purchaser does not timely deliver
the Letter of Credit or Closing Proceeds to Escrow Agent (time being of the
essence), or (ii) Escrow Agent fails to draw on the Letter of Credit as
required herein, or (iii) Seller terminates this Agreement due to
Purchaser's default, not cured within the Applicable Cure Period.
Notwithstanding anything stated herein to the contrary, upon Seller's
termination of the Requested Use Approval for the reason stated under
subparagraph (i) and (iii) of this paragraph, the Purchaser shall be deemed
to be in material breach of this Agreement, and Seller shall be entitled to
all remedies available to it in Paragraph 10 for a Purchaser default
without the necessity of giving to Purchaser additional notice of default
or the opportunity to cure the default. In the event for any reason the
Escrow Agent shall be other than Gunster, Yoakley, Valdes-Fauli & Stewart,
P.A. and the Escrow Agent fails to draw on the Letter of Credit as required
herein, the Purchaser shall be deemed to be in material breach of this
Agreement and Seller shall be entitled to all remedies available to it in
paragraph 10 for a Purchaser default without the necessity of giving to
Purchaser additional notice of default or the opportunity to cure the
default.
(f) On or before the Escrow Closing, Seller shall execute and
deliver to Escrow Agent the following documents with respect to the
Property:
(i) A special warranty deed ("Deed") subject only to
the Acceptable Exceptions;
(ii) An appropriate mechanic's lien affidavit;
(iii)An affidavit of exclusive possession of the
Property being conveyed;
(iv) A non-foreign affidavit in a form reasonably
acceptable to Purchaser;
(v) Appropriate assignments or bills of sale
transferring to Purchaser all personal property or property rights
(including, but not limited to the Documents) contemplated by this
Agreement or reasonably requested by Purchaser in forms reasonably
acceptable to Purchaser, free and clear of all liens, claims or
encumbrances. The Seller delivers a consent from the applicable utility
authority consenting to the transfer of the Property and developer
agreement regarding water and sewer service to Purchaser;
(vi) Appropriate evidence of Seller's formation,
existence and authority to sell and convey the Property; and
(vii)Such other documents that the Title Company may
reasonably require in connection with the issuance of the owner's policy to
Purchaser and the delivery of good and marketable title to the Property
from Seller to Purchaser as provided in this Agreement, including, but not
limited to, an appropriate "gap" affidavit in order to delete the "gap"
exception and such affidavits required for deletion of the matters of
survey, unrecorded easements, parties in possession and mechanics' lien
exceptions otherwise appearing on the Title Policy.
(g) On or before the Escrow Closing, Purchaser shall deliver
to Escrow Agent the Purchase Price (subject to prorations and adjustments,
including, but not limited to, a credit for the Deposit) or shall deliver
the Letter of Credit as provided in Section 8(b).
(h) Seller and Purchaser shall each execute counterpart
closing statements in a customary form together with such other documents
as are reasonably necessary to consummate the Closing.
(i) Both parties shall pay their respective costs by wire
transfer, or by cashier's check drawn on a bank reasonably acceptable to
Escrow Agent.
(j) In lieu of the Escrow Closing, Purchaser may at any time
elect to consummate the transactions described herein upon ten (10)
business days notice to Seller, at the offices of its attorneys in Broward
County, Florida ("Closing"). At the Closing, Purchaser shall deliver the
Purchase Price (subject to prorations and adjustments required by the terms
of this Agreement, including but not limited to a credit for the Deposit)
to Seller, Escrow Agent shall deliver the Deposit to Seller, Seller will
deliver to Purchaser the Closing Documents described in Paragraph 8(f), and
the Seller and Purchaser will exchange the counterpart closing statements
required by Paragraph 8(h).
9. ARBITRATION; DISPUTES CONCERNING CONSUMMATION OF THE CLOSING.
Any dispute as to whether the Purchaser has obtained the
Requested Use Approval, and any and all other claims for monetary damages
and disputes relating in any way to the performance, interpretation,
validity, or breach of this Agreement, shall be referred to final and
binding arbitration, before a panel of three (3) arbitrators ("AAA") in
Palm Beach County, Florida, except as those rules conflict with the
specific provisions set forth below.
(a) ARBITRATOR SELECTION. The arbitrator shall be selected
as follows: (i) each party shall select one arbitrator within five (5)
business days after filing and service of the demand from a party delivered
to the other party for arbitration, and shall give notice of the selection
to the arbitrator, the other party and the AAA; (ii) the arbitrators
selected by the parties shall select a third arbitrator within five (5)
business days thereafter; (iii) if either party fails to timely select an
arbitrator or the arbitrators selected by the parties cannot agree upon a
third arbitrator within the time specified, then the AAA shall select such
arbitrator or arbitrators as are necessary to comprise a panel of three
arbitrators.
(b) COUNTERCLAIMS; DOCUMENT EXCHANGE; CONFIDENTIALITY. Any
counterclaims shall be asserted no later than fifteen (15) days after the
service of the demand for arbitration. All documents, materials, and
information in the possession of a party to this Agreement and in any way
relevant to the claims or disputes shall be made available to the other
parties for review and copying not later than thirty (30) days after the
demand for arbitration is served. To the extent that a party would be
required to make confidential information available to any other, an
agreement or an order shall be entered in the proceeding protecting the
confidentiality of and limiting access to such information before a party
is required to produce such information. Information produced by a party
shall be used exclusively in the arbitration or litigation that may arise,
and shall not otherwise be disclosed.
(c) HEARING AND AWARD DEADLINES. The arbitration hearing
shall commence within sixty (60) days of the service of the demand for
arbitration. The arbitrators shall render a final award within fifteen
(15) days after the conclusion of the final session of the arbitration
hearing.
(d) CONFIRMATION; VENUE. Judgment upon the award rendered by
the arbitrators shall be final, binding and conclusive upon the parties and
their respective administrators, executors, legal representatives, heirs,
successors and permitted assigns. The parties hereby consent to the sole
and exclusive jurisdiction of venue of the circuit or county court (as
appropriate) in and for Palm Beach County, Florida (or other such court
located in Palm Beach County, Florida which has subject matter
jurisdiction) (hereafter the "Court"), for purposes of confirming the
arbitration award.
(e) RECOVERY OF ATTORNEYS' FEES AND COSTS. Pursuant to
Paragraph 17(c) of this Agreement, the prevailing party in any civil
action, arbitration or other legal proceeding shall be entitled to
reasonable attorneys' fees and all costs and expenses (including all costs
and expenses of arbitration and expert witness fees) incurred, including
through any confirmation proceedings and appeal. All costs and expenses of
the arbitration, including hearing and arbitrator fees, shall be initially
borne equally by the parties; however, the prevailing party shall be
entitled to recover all such costs and expenses paid by it from the other
party.
(f) LIMITED JURISDICTION OF ARBITRATORS; WAIVER OF PUNITIVE
DAMAGES. The arbitrators shall NOT have subject matter jurisdiction to
determine the issues of entitlement and amount of attorneys' fees. Such
determination shall be made by the Court. Further, in no event shall a
party be entitled to punitive damages in any arbitration or judicial
proceeding and all parties hereby waive their rights to any punitive
damages. In the event an arbitration panel or a court concludes that the
punitive damages waiver contained in the previous sentence is
unenforceable, then the court with subject matter jurisdiction over the
confirmation of the award shall have sole and exclusive jurisdiction to
determine issues of entitlement and amount of punitive damages.
10. DEFAULT. In the event of a default by Purchaser hereunder not
cured by Purchaser within five (5) days after written notice thereof to
Purchaser, Escrow Agent shall deliver to Seller the Deposit as agreed-upon
liquidated damages for such breach, as the sole and exclusive remedy for
default of Purchaser, whereupon the parties shall be relieved of all
further obligations hereunder. The Realty is unique and cannot be readily
purchased or sold on the open market. The Seller and Purchaser further
acknowledge that the Requested Use Approval, if granted, shall
substantially and materially decrease the value of the Realty to Seller.
For those reasons, among others, the Seller will be irreparably damaged
(and damages at law would be an inadequate remedy to Seller) if this
Agreement is not specifically enforced against Purchaser in the event and
only in the event that after the Escrow Closing, the Requested Use Approval
has been obtained. Therefore, in the event that after the Escrow Closing,
the Requested Use Approval has been obtained, then the Seller shall be
entitled to an arbitration award and/or judicial decree for specific
performance of this Agreement.
In the event of a default by Seller under this Agreement, which
default is not cured by Seller within five (5) days after written notice
thereof to Seller, Purchaser may, at its option, if it is not in default
hereunder, elect any one of the following as Purchaser's sole and exclusive
remedy: (i) terminate this Agreement and receive the Deposit and all other
sums held in escrow, if any; or (ii) pursue the remedy of specific
performance; and Purchaser waives all other remedies it may have against
Seller at law or in equity in connection with the foregoing. If, after the
Closing, Seller fails to perform any covenants contained herein that
specifically survive Closing, then Purchaser, as its sole and exclusive
remedy, shall have the right to seek equitable relief and/or damages from
Seller for such failure, except Purchaser hereby waives and shall have no
right to seek indirect, consequential or punitive damages against Seller.
11. PRORATIONS. Real estate taxes, personal property taxes,
assessments and all items of income and expense regarding the Property
shall be prorated as of the date of Consummation of the Closing; provided,
however, that assessment lien(s) which had been certified as of the date of
Closing shall be satisfied by Seller at the Consummation of the Closing.
In the event that the tax bill for the year of Closing is not
available, then taxes shall be prorated on an estimate based on the prior
year's tax and the parties shall reprorate such taxes upon receipt of the
actual tax bill. In the event any other expenses pertaining to the
Property are not known at the Consummation of the Closing, then such
expenses shall be prorated based on an estimate and the parties will
reprorate same upon receipt of the actual bill for such expenses. In the
event there is any recoupment or other consideration payable to applicable
governmental authorities as the result of any change of the use of the
Property, then the Seller shall satisfy such obligation at the Consummation
of the Closing.
The provisions of this Section 11 shall survive the
Consummation of the Closing.
12. CLOSING COSTS. The parties shall bear the following costs:
(a) Purchaser shall be responsible for (i) the recording cost
of the "Deed" (hereinafter defined), and (ii) the costs to obtain the Title
Evidence and the premium on the owner's coverage of the Title Policy issued
to Purchaser pursuant to the Commitment.
(b) Seller shall be responsible for payment of the
(i) documentary stamps taxes, surtaxes or other transfer charges in
connection with the transfer of the Property, (ii) costs of curing any
Title Defects and the recording costs in connection with any curative
instruments relating to same (subject to the limitations set forth in this
Agreement), and (iii) the "Commission" due to the "Authorized Brokers" (as
hereinafter defined).
(c) Each party shall be responsible for payment of its own
legal fees, except as provided in Section 17(c) hereof.
13. BROKERS. The parties each represent and warrant to the other
that there are no real estate brokers, salesman or finders involved in this
transaction other than Arvida Realty Sales, Ltd. and Staubach Retail
Services-Southeast, Inc. ("Authorized Brokers"). Seller hereby agrees that
it shall pay to the Authorized Brokers pursuant to a separate agreement
between Seller and the Authorized Brokers. If a claim for brokerage in
connection with this transaction is made by any broker, salesman or finder
claiming to have dealt by, through or on behalf of one of the parties
hereto ("Indemnitor"), Indemnitor shall indemnify, defend and hold harmless
the other party hereunder ("Indemnitee"), and Indemnitee's officers,
directors, agents and representatives, from and against any and all
liabilities, damages, claims, costs, fees and expenses whatsoever,
including reasonable attorneys' fees and court costs through all trial and
all appellate levels with respect to said claim for brokerage. The parties
acknowledge and agree that any brokerage charge or commission for the
Authorized Brokers shall be the exclusive responsibility of Seller.
The provisions of this paragraph shall survive the Closing and
any cancellation or earlier termination of this Agreement.
14. ASSIGNABILITY. Purchaser may assign its rights hereunder with
Seller's consent (which shall not be unreasonably withheld or delayed),
provided, however, that upon any such assignment, the Purchaser shall not
be released of its obligations, if any, under this Agreement and any such
assignee shall agree to be bound by the terms and conditions set forth in
this Agreement. Purchaser shall have the absolute right to (a) assign or
otherwise transfer its interest in this Agreement at Closing, or (b) assign
this Agreement at any time (i) to any parent, subsidiary or affiliate of
Purchaser or Republic Industries, Inc. ("Republic"), (ii) to a corporation
or other business entity with which Purchaser or Republic may merge,
amalgamate or consolidate, or (iii) to an entity in which the Property is
intended to be leased back by such assignee to Purchaser, Republic, or any
entity in which Purchaser, Republic or their affiliates have a controlling
interest, without Seller's approval, written or otherwise; provided,
however, upon any such assignment, the Purchaser shall not be released of
its obligations, if any, under this Agreement and any such assignee shall
agree to be bound by the terms and conditions set forth in this Agreement.
This Agreement shall contain no provision restricting, purporting to
restrict or referring in any manner to a change in control or change in
shareholders, directors, management or organization of Republic or
Purchaser, or any subsidiary, affiliate or parent of Republic or Purchaser,
or to the issuance, sale, purchase, public offering, disposition or
recapitalization of the capital stock of Republic or Purchaser, or any
subsidiary, affiliate or parent of Republic or Purchaser.
15. NOTICES. Any notices required or permitted to be given under
this Agreement shall be in writing and shall be deemed given if delivered
by hand, sent by recognized overnight courier (such as Federal Express),
transmitted via facsimile transmission or mailed by certified or
registered mail, return receipt requested, in a postage pre-paid envelope,
and addressed as follows:
If to Seller at: Metrodrama Joint Venture
c/o Arvida Realty Sales, Ltd.
7900 Glades Road
Boca Raton, FL 33434
Attn:Ingrid A. Fulmer, V.P.
Commercial Leasing and Sales
Telefax: (561) 479-1229
With a copy to: Metrodrama Joint Venture
c/o Arvida JMB Partners
7900 Glades Road
Boca Raton, FL 33434
Attn:John Baric, General Counsel
Telefax: (561) 479-1226
With a copy to: Gunster, Yoakley, Valdes-Fauli
& Stewart, P.A.
Phillips Point, Suite 500 East
777 South Flagler Drive
West Palm Beach, FL 33401
Attn:Richard D. Holt, Esq.
Telefax: (561) 655-5677
If to Purchaser: AutoNation USA Corporation
110 S.E. 6th Street
Fort Lauderdale, FL 33301
Attn:Real Estate/Legal
Telefax: (954) 713-8941
With a copy to: Ruden, McClosky, Smith,
Schuster & Russell, P.A.
200 East Broward Boulevard
15th Floor
Fort Lauderdale, Florida 33301
Attn:Barry E. Somerstein, Esq.
Telefax: (954) 764-4996
If to Escrow Agent:
Gunster, Yoakley, Valdes-Fauli
& Stewart, P.A.
Phillips Point, Suite 500 East
777 South Flagler Drive
West Palm Beach, FL 33401
Attn:Richard D. Holt, Esq.
Telefax: (561) 655-5677
Notices personally delivered or sent by overnight courier shall be deemed
given on the date of receipt, notices sent via facsimile transmission shall
be deemed given upon transmission if given between the hours of 9:00 a.m.
and 5:00 p.m. on such date and if given outside of such hours, then such
facsimile transmission shall be deemed given on the next business day
thereafter occurring and notices sent via certified mail in accordance
with the foregoing shall be deemed given when received or receipt refused.
16. RISK OF LOSS. If, prior to Closing, the Property or any
material portion thereof is destroyed or damaged or taken by eminent
domain, Seller shall promptly notify Purchaser and Purchaser shall have the
option of either: (i) canceling this Agreement by delivery of written
notice to Seller, whereupon Escrow Agent shall return to Purchaser the
Deposit and both parties shall be relieved of all further obligations under
this Agreement; or (ii) Purchaser may proceed with the Closing, whereupon
Purchaser shall be entitled to (and Seller shall assign to Purchaser all of
Seller's interest in) all insurance and/or condemnation payments, awards
and settlements applicable to the Property. Taking for expansion of
Okeechobee Boulevard shall not be deemed to be a material taking of the
Property unless such taking materially affects the ability of the Purchaser
to develop the Proposed Improvements upon the Property, whereupon such
taking would be deemed to be a material taking. In the event of an
immaterial taking, the Purchaser shall proceed to Closing in accordance
with the terms of this Agreement and, at the Escrow Closing, the Seller
shall assign and transfer to the Purchaser all condemnation proceeds.
17. MISCELLANEOUS.
(a) This Agreement shall be construed and governed in
accordance with laws of the State of Florida and in the event of any
litigation hereunder, the venue for any such litigation, shall be in the
Palm Beach County, Florida. All of the parties to this Agreement have
participated fully in the negotiation and preparation hereof and,
accordingly, this Agreement shall not be more strictly construed against
any one of the parties hereto.
(b) In the event any provision of this Agreement is
determined by appropriate judicial authority to be illegal or otherwise
invalid, such provision shall be given its nearest legal meaning or
reconstrued as such authority determines, and the remainder of this
Agreement shall be construed to be in full force and effect.
(c) In the event of any civil action, arbitration or other
proceeding is brought for the enforcement of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees and court costs and
expenses (including all costs and expenses of arbitration and expert
witness fees) through trial and appellate levels, and any arbitration,
bankruptcy and post-judgment proceedings. The provisions of this
subparagraph shall survive the Closing and any termination or cancellation
of this Agreement.
(d) In construing this Agreement, the singular shall be
deemed to include the plural, the plural shall be deemed to include the
singular and the use of any gender shall include every other gender and all
captions and paragraph headings shall be discarded.
(e) All of the Exhibits to this Agreement are incorporated in
and made a part of this Agreement.
(f) This Agreement constitutes the entire agreement between
the parties for the sale and purchase of the Property, and supersedes any
other agreement or understanding of the parties with respect to the matters
herein contained. This Agreement may not be changed, altered or modified
except in writing signed by the party against whom enforcement of such a
change would be sought. This Agreement shall be binding upon the parties
hereto and their respective permitted successors and assigns.
(g) The term "Effective Date" or such other similar term,
shall mean the date upon which this Agreement has been fully executed by
Purchaser and Seller and such fully executed Agreement delivered to
Purchaser.
(h) Once this Agreement has been executed by Purchaser, this
will constitute an offer to purchase the Property upon the terms and
conditions set forth herein. Should this offer not be accepted (by full
execution hereby by Seller and delivery of an executed copy to Purchaser)
on or before October _____, 1997, at 5:00 p.m., this offer may, in the sole
and absolute discretion of Purchaser, be revoked by delivery of written
notice to Seller, whereupon the Deposit (if previously delivered to Escrow
Agent), together with interest thereon, shall be returned to Purchaser, and
this Agreement, and such offer shall be of no further force and effect.
(i) The parties hereby agree that time is of the essence with
respect to performance of each of the parties' obligations under this
Agreement. The parties agree that in the event that any date on which
performance is to occur falls on a Saturday, Sunday or state or national
holiday, then the time for such performance shall be extended until the
next business day thereafter occurring.
(j) This Agreement and any subsequent amendments hereto may
be executed in any number of counterparts, each of which, when executed,
shall be deemed to be an original, and all of which shall be deemed to be
one and the same instrument. Facsimile transmission signatures shall be
deemed original signatures.
(k) The Seller agrees that the terms set forth in this
Agreement shall remain totally and completely confidential and shall not be
revealed or disclosed to any person or party whatsoever, except: (i) with
the consent of Purchaser; (ii) as may be disclosed to Seller's attorneys,
accountants and other representatives that are involved in connection with
the consummation of this transaction; (iii) Seller's investors and/or
lenders; (iv) as may be required by applicable law; (v) as may be necessary
in connection with assisting Purchaser in obtaining necessary governmental
approvals; and (vi) in connection with any litigation between the parties.
18. DISCLAIMERS AND LIMITATIONS. Purchaser expressly acknowledges
that there exist no warranties or representations of Seller, expressed or
implied, other than those expressly set forth in the Closing Documents or
in this Agreement, and Seller has no obligation to determine whether there
are any material matters that should be disclosed to Purchaser to the
extent those matters have not been expressly set forth herein.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN CONTAINED (OTHER THAN AS
EXPRESSLY SET FORTH IN THE CLOSING DOCUMENTS OR IN THIS AGREEMENT), THE
PURCHASER EXPRESSLY UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT THE
CONVEYANCE OF THE PROPERTY SHALL BE MADE BY SELLER TO PURCHASER ON AN "AS
IS" BASIS, AND "WITH ALL FAULTS," AND PURCHASER ACKNOWLEDGES THAT PURCHASER
HAS AGREED TO BUY THE PROPERTY IN ITS PRESENT CONDITION (SUBJECT TO
PURCHASER'S RIGHT OF INSPECTION AND REVIEW AS PROVIDED HEREIN) AND THAT
PURCHASER IS RELYING SOLELY ON ITS OWN EXAMINATION AND INSPECTIONS OF THE
PROPERTY AND NOT ON ANY STATEMENTS OR REPRESENTATIONS MADE BY SELLER OR ANY
AGENTS OR REPRESENTATIVES OF SELLER, EXCEPT AS OTHERWISE SPECIFICALLY SET
FORTH HEREIN OR IN THE CLOSING DOCUMENTS, ADDITIONALLY, PURCHASER HEREBY
ACKNOWLEDGES THAT, EXCEPT AS OTHERWISE SPECIFIED HEREIN OR IN THE CLOSING
DOCUMENTS, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED,
OR ARISING BY OPERATION OF LAW, INCLUDING BUT IN NO WAY LIMITED TO, ANY
WARRANTY OF CONDITION, HABITABILITY, MERCHANTABILITY, OR FITNESS FOR A
PARTICULAR PURPOSE OF THE PROPERTY OR ANY PORTION THEREOF, OR WITH RESPECT
TO THE ECONOMICAL, FUNCTIONAL, ENVIRONMENTAL OR PHYSICAL CONDITION, OR ANY
OTHER ASPECT, OF THE PROPERTY. EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH
HEREIN OR IN THE CLOSING DOCUMENTS, SELLER HEREBY SPECIFICALLY DISCLAIMS
ANY WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR WRITTEN, PAST, PRESENT OR
FUTURE, OF, AS TO, OR CONCERNING: (1) THE NATURE AND CONDITION OF THE
PROPERTY OR ANY PART THEREOF, INCLUDING BUT NOT LIMITED TO, ITS WATER,
SOIL, OR GEOLOGY, OR THE SUITABILITY THEREOF FOR ANY AND ALL ACTIVITIES AND
USES WHICH PURCHASER MAY ELECT TO CONDUCT THEREON, OR ANY IMPROVEMENTS
PURCHASER MAY ELECT TO CONSTRUCT THEREON OR THAT ARE ALREADY CONSTRUCTED
THEREON, OR ANY INCOME TO BE DERIVED THEREFROM, OR ANY EXPENSES TO BE
INCURRED WITH RESPECT THERETO, OR ANY OBLIGATIONS OR ANY OTHER MATTER OR
THING RELATING TO OR AFFECTING THE SAME; (2) THE ABSENCE OF ASBESTOS OR ANY
ENVIRONMENTALLY HAZARDOUS SUBSTANCES ON, IN OR UNDER THE PROPERTY OR ON, IN
OR UNDER ANY PROPERTY NEAR, ADJACENT TO OR ABUTTING THE PROPERTY; (3) THE
MANNER OF CONSTRUCTION OR CONDITION OR STATE OF REPAIR OR LACK OF REPAIR OF
ANY OF THE IMPROVEMENTS ON THE PROPERTY; (4) THE NATURE, EXTENT OF OR
STATUS OF ANY EASEMENT, RESTRICTIVE COVENANT, RIGHT-OF-WAY, LEASE,
POSSESSION, LIEN, ENCUMBRANCES, LICENSE, RESERVATION, CONDITION OR OTHER
SIMILAR MATTER PERTAINING TO THE PROPERTY, OR PORTION THEREOF; AND (5) THE
COMPLIANCE OF THE PROPERTY OR THE OPERATION OF THE PROPERTY OR PORTION
THEREOF WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY GOVERNMENT
OR OTHER BODY. THE PROVISIONS OF THIS PARAGRAPH 18 SHALL SURVIVE THE
EXECUTION AND DELIVER OF THE DEED BY SELLER AND THE CLOSING OF THE
TRANSACTION CONTEMPLATED BY THIS AGREEMENT.
Purchaser hereby waives and releases Seller, Seller's
Affiliates, representatives, agents and employees from any present or
future claims (hereinafter referred to as the "Claims") arising from or
relating to the presence or alleged presence of hazardous substances in,
on, under or about the Property, including, without limitation, any claims
under or on account of (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as the same may have been or may be
amended from time to time, and similar federal, state or local law,
ordinance, rule or regulation, now or hereafter in effect, that deals with
or otherwise in any manner relates to, environmental matters of any kind,
or (ii) this Agreement. For the purposes hereof the term "hazardous
substances" shall have the meaning given to such term or similar terms
under any applicable federal, state or local laws, rules or regulations.
19. TRADE NAMES AND SERVICE MARKS. The names "Arvida [service-
mark]" and "JMB," and all similar names, along with all logos associated
therewith, are the proprietary trade names and service marks of Seller's
affiliates. Purchaser shall have no rights to use the same for advertising
or other purpose. The provisions of this Section 19 shall survive
Consummation of the Closing and delivery of the Deed.
20. RECOURSE LIMITED TO PROCEEDS OF SALE; SURVIVAL.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE AGREEMENT, NEITHER SELLER
NOR ANY PRESENT OR FUTURE CONSTITUENT PARTNER IN OR ANY SHAREHOLDER,
OFFICER, DIRECTOR, EMPLOYEE, TRUSTEE, BENEFICIARY OR AGENT OF ANY
CORPORATION OR TRUSTEE THAT IS OR BECOMES A CONSTITUENT PARTNER IN SELLER,
SHALL BE PERSONALLY LIABLE, DIRECTLY OR INDIRECTLY, UNDER OR IN CONNECTION
WITH THE AGREEMENT, OR ANY DOCUMENT, INSTRUMENT OR CERTIFICATE SECURING OR
OTHERWISE EXECUTED IN CONNECTION WITH THE AGREEMENT, OR ANY AMENDMENTS OR
MODIFICATIONS TO ANY OF THE FOREGOING MADE AT ANY TIME OR TIMES, HERETOFORE
OR HEREAFTER, OR IN RESPECT OF ANY MATTER, CONDITION, INJURY OR LOSS
RELATED TO THE AGREEMENT OR THE PROPERTY, AND ONLY SELLER'S INTEREST IN THE
PROPERTY (OR PURCHASE PRICE) SHALL BE AVAILABLE TO SATISFY ANY CLAIMS
AGAINST SELLER; AND THE PURCHASER AND EACH OF ITS SUCCESSORS AND ASSIGNEES
WAIVES AND DOES HEREBY WAIVE ANY SUCH PERSONAL LIABILITY. For purposes of
the Agreement, and any such instruments and certificates, and any such
amendments or modifications, neither the negative capital account of any
Constituent Partner in Seller to restore a negative capital account or to
contribute capital to Seller or to any other Constituent Partner in Seller,
shall at any time be deemed to be the property or an asset of Seller or any
such other Constituent Partner (and neither Purchaser nor any of its
successors or assignees shall have any right to collect, enforce or proceed
against or with respect to any such negative capital account or a
Constituent Partner's obligation to restore or contribute other than to the
extent of the Purchase Price paid pursuant to this Agreement). As used in
this Paragraph, a "Constituent Partner" in Seller shall mean any direct
partner in Seller and any person that is a partner that is a partner in any
partnership that, directly or indirectly through one or more other
partnerships, is a partner in Seller. Unless otherwise noted in this
Agreement, none of Seller's representations, warranties, covenants or
agreements shall survive Closing and all of the same shall merge into the
Deed to be given by Seller except as and to the extent expressly provided
to the contrary herein. Furthermore, if Purchaser learns prior to Closing
of any breach or non-performance of any covenant contained in this
Agreement, Purchaser shall promptly notify Seller thereof, and such
covenant shall not survive Closing (whether or not Purchaser notifies
Seller thereof) but, rather, shall merge into the Deed to be given by
Seller, it being the intention of the parties that no breach or non-
performance of which Purchaser has knowledge prior to Closing shall survive
Closing should Purchaser elect to close notwithstanding knowledge of such
breach or non-performance.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first set forth above.
Signed, sealed and delivered SELLER:
in the presence of:
METRODRAMA JOINT VENTURE, a Florida
general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
managing general partner
By: ARVIDA/JMB MANAGERS, INC.,
general partner
____________________ By:___________________________
Name:_________________________
____________________ Title:________________________
Date:_________________________
By: ARVIDA/JMB PARTNERS, non-managing
general partner
By: ARVIDA/JMB MANAGERS, INC.,
general partner
____________________ By:________________________
Name:______________________
____________________ Title:_____________________
Date:______________________
PURCHASER:
AUTONATION USA CORPORATION, a Florida
corporation
____________________ By:_______________________
Name:_____________________
____________________ Title:____________________
Date:_____________________
The undersigned joins in this Agreement as Escrow Agent for the
purpose of agreeing to its obligations hereunder as Escrow Agent and
acknowledging receipt of the Initial Deposit, if by check, subject to
collection.
GUNSTER, YOAKLEY, VALDES-FAULI &
STEWART, P.A.
____________________ By:_________________________
Name:_______________________
____________________ Title:______________________
Date:_______________________
<PAGE>
EXHIBIT A
---------
REALTY
LEGAL DESCRIPTION OF
METRODRAMA LANDS
THE RESERVATION OF THE RIGHT OF INGRESS AND EGRESS CONTAINED IN THAT
CERTAIN QUIT CLAIM DEED DATED MARCH 11, 1974 AND RECORDED ON MARCH 12, 1974
IN OFFICIAL RECORD BOOK 2279, PAGE 1407 OF THE PUBLIC RECORDS OF PALM BEACH
COUNTY, FLORIDA; AND
PARCEL 1:
THE WEST one-half OF TRACT 28, BLOCK 1, THE PALM BEACH FARMS CO. PLAT
NO. 9, ACCORDING TO THE PLAT THEREOF ON FILE IN THE OFFICE OF THE CLERK OF
THE CIRCUIT COURT IN AND FOR PALM BEACH COUNTY, FLORIDA, RECORDED IN PLAT
BOOK 5, PAGE 58.
LESS, HOWEVER, THE FOLLOWING DESCRIBED PARCEL:
THAT PARCEL OF LAND CONVEYED TO THE LAKE WORTH DRAINAGE DISTRICT BY
INSTRUMENT RECORDED IN OFFICIAL RECORD BOOK 2279, PAGE 1407, MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
THE NORTH 75 FEET OF THE WEST one-half OF TRACT 28, BLOCK 1, THE PALM
BEACH FARMS CO. PLAT NO. 9, ACCORDING TO THE PLAT THEREOF, ON FILE IN THE
OFFICE OF THE CLERK OF THE CIRCUIT COURT IN AND FOR PALM BEACH COUNTY,
FLORIDA, RECORDED IN PLAT BOOK 5, PAGE 58.
PARCEL 2:
THE WEST ONE-HALF OF THE EAST ONE-HALF OF TRACT 1, BLOCK 4, THE PALM BEACH
FARMS CO. PLAT NO. 3, ACCORDING TO THE PLAT THEREOF ON FILE IN THE OFFICE
OF THE CLERK OF THE CIRCUIT COURT IN AND FOR PALM BEACH COUNTY, FLORIDA,
RECORDED IN PLAT BOOK 2, PAGES 45 THROUGH 54.
LESS, HOWEVER, THE FOLLOWING DESCRIBED PARCEL:
THAT PARCEL CONVEYED TO THE STATE TURNPIKE AUTHORITY BY INSTRUMENT
RECORDED IN OFFICIAL RECORD BOOK 1118, PAGE 62, MORE PARTICULARLY DESCRIBED
AS FOLLOWS:
BEGINNING AT A POINT IN THE SOUTH LINE OF TRACT 1, BLOCK 4, THE PALM
BEACH FARMS CO. PLAT NO. 3, IN PLAT BOOK 2, PAGES 45 THROUGH 54, PALM BEACH
COUNTY, FLORIDA, SAID POINT LINE SOUTH 89 Degree 26 Feet 14 Inches WEST, A
DISTANCE OF 408.83 FEET FROM THE SOUTHEAST CORNER OF SAID TRACT 1;
THENCE CONTINUING SOUTH 89 Degree 26 Feet 14 Inches WEST, ALONG THE
SOUTH LINE OF SAID TRACT 1, A DISTANCE OF 118.34 FEET TO A POINT, THENCE,
NORTH 41 Degree 02 Feet 16 Inches EAST, A DISTANCE OF 184.64 FEET; THENCE,
SOUTH 01 Degree 12 Feet 16 Inches WEST, A DISTANCE OF 138.15 FEET TO THE
POINT OF BEGINNING.
PARCEL 3:
THE FOLLOWING DESCRIBED PARCEL OF LAND WHICH HAS BEEN ABANDONED BY THE
BOARD OF COUNTY COMMISSIONERS OF PALM BEACH COUNTY, FLORIDA BY RESOLUTION
NO. B-74-352, RECORDED IN OFFICIAL RECORD BOOK 2308, PAGE 478, MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
"BEGIN AT THE NORTHWEST CORNER OF THE WEST ONE-HALF OF THE EAST ONE-HALF OF
TRACT 1, BLOCK 4, THE PALM BEACH FARMS CO. PLAT NO. 3, ACCORDING TO THE
PLAT THEREOF ON FILE IN THE OFFICE OF THE CLERK OF THE CIRCUIT COURT IN AND
FOR PALM BEACH COUNTY, FLORIDA, RECORDED IN PLAT BOOK 2, PAGE 46; THENCE
NORTH 15 FEET, THENCE EAST 68.67 FEET; THENCE NORTH 15 FEET TO THE
SOUTHWEST CORNER OF THE WEST ONE-HALF OF TRACT 28, BLOCK 1, THE PALM BEACH
FARMS CO. PLAT NO. 9, ACCORDING TO THE PLAT THEREOF, AS RECORDED IN PLAT
BOOK 5, PAGE 58; THENCE, ALONG THE SOUTHERN BOUNDARY OF SAID TRACT TO THE
SOUTHEAST CORNER OF SAID TRACT, THENCE SOUTH 15 FEET, THENCE WEST 87.01
FEET, THENCE, SOUTH 15 FEET, TO THE NORTHEAST CORNER OF THE WEST ONE-HALF
OF THE EAST ONE-HALF OF TRACT 1, BLOCK 4, THE PALM BEACH FARMS CO. PLAT NO.
3, ACCORDING TO THE PLAT THEREOF, AS RECORDED IN PLAT BOOK 2, PAGE 46,
THENCE ALONG THE NORTHERN BOUNDARY OF SAID TRACT TO THE NORTHWEST CORNER
AND POINT OF BEGINNING."
PARCEL 4:
THAT PART OF THE EAST ONE-HALF OF SECTION 27, TOWNSHIP 43 SOUTH, RANGE 42
EAST, LYING NORTH AND WEST OF THE FLORIDA STATE TURNPIKE AND SUBJECT TO
RIGHTS-OF-WAY OF OKEECHOBEE ROAD (SR 704) AND LAKE WORTH DRAINAGE DISTRICT
LATERAL CANAL NO. 1.
PARCEL 5:
THAT PART OF THE EAST ONE-HALF OF TRACT 28, BLOCK 1, PALM BEACH FARMS CO.
PLAT NO. 9, A SUBDIVISION IN PALM BEACH COUNTY, FLORIDA, ACCORDING TO THE
PLAT THEREOF ON FILE IN THE OFFICE OF THE CLERK OF THE CIRCUIT COURT IN AND
FOR PALM BEACH COUNTY, FLORIDA, RECORDED IN PLAT BOOK 5, PAGE 58, LYING
NORTHWEST OF THE RIGHT-OF-WAY OF THE SUNSHINE PARKWAY.
THAT PART OF THE EAST 1/4 OF TRACT 1, BLOCK 4, PALM BEACH FARMS CO. PLAT
NO. 3, A SUBDIVISION IN PALM BEACH COUNTY, FLORIDA, ACCORDING TO THE PLAT
THEREOF ON FILE IN THE OFFICE OF THE CLERK OF THE CIRCUIT COURT IN AND FOR
PALM BEACH COUNTY, FLORIDA, RECORDED IN PLAT BOOK 2, PAGES 45 THROUGH 54,
LYING NORTHWEST OF THE RIGHT-OF-WAY OF THE SUNSHINE PARKWAY.
TOGETHER WITH ROADS ADJACENT TO SAID EAST ONE-HALF OF LOT 28 AND SAID EAST
1/4 OF TRACT 1, AND
TOGETHER WITH THE HIATUS LYING BETWEEN THE WEST LINE OF THE EAST ONE-HALF
OF SECTION 27, TOWNSHIP 43 SOUTH, RANGE 42 EAST, AND THE EAST LINE OF THE
PLATS OF PALM BEACH FARMS CO. PLAT NO. 9 AND PALM BEACH FARMS CO. PLAT NO.
3, LYING NORTH OF THE FLORIDA STATE TURNPIKE.
<PAGE>
EXHIBIT B
---------
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Escrow Agreement") is made and entered into
between AUTONATION USA CORPORATION, a Florida corporation, METRODRAMA JOINT
VENTURE, a Florida general partnership (hereinafter referred to as
"Principal(s)") and GUNSTER, YOAKLEY, VALDES-FAULI & STEWART, P.A., whose
address is 777 South Flagler Drive, Suite 500 East, West Palm Beach,
Florida 33401 (hereinafter referred to as "Escrow Agent").
WHEREAS, Principal(s) desire that Escrow Agent hold certain property
as described on ADDENDUM 1 hereto ("Escrowed Property") pursuant to certain
documents described on ADDENDUM 2 hereto, if any ("Documents"); and
WHEREAS, Escrow Agent has agreed to act as escrow agent for the
Escrowed Property on the terms and conditions now about to be set forth.
NOW, THEREFORE, in consideration of the covenants and agreements
herein set forth and other good and lawful consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending
to be legally bound, agree as follows:
I. ESCROW
A. Escrow Agent agrees to hold all of the Escrowed Property
in escrow subject to the terms and conditions contained in this Escrow
Agreement and the Documents, if any. The provisions of this Escrow
Agreement shall control in the event of any conflict between the provisions
hereof and the provisions of the Documents, if any.
B. Unless otherwise provided for in this Escrow Agreement or
any addendum hereto, Escrow Agent shall disburse the Escrowed Property
without interest or other accumulation in value.
C. Escrow Agent shall not be deemed to have knowledge of any
matter or thing unless and until Escrow Agent has actually received written
notice of such matter or thing and Escrow Agent shall not be charged with
any constructive notice whatsoever.
D. In the event the Escrowed Property consists in whole or
in part of stocks, bonds or certificates of deposit (or any other property
which may fluctuate in value) Escrow Agent shall hold in escrow, pursuant
to this Escrow Agreement, any proceeds of the Escrowed Property actually
delivered to Escrow Agent and realized as a result of splits, calls,
redemptions or otherwise, but shall not be obligated to ascertain the
existence of (or initiate recovery of) such proceeds or to become or remain
informed with respect to the possibility or probability of such proceeds
being realized at any time in the future, or to inform any Principal(s) or
any third party with respect to the nature and extent of any proceeds
realized, except upon the written request of such party, or to monitor
current market values of the Escrowed Property. Further, Escrow Agent shall
not be obligated to proceed with any action or inaction based on
information with respect to market values of the Escrowed Property which
Escrow Agent may in any manner learn, nor shall Escrow Agent be obligated
to inform Principal(s) or any third party with respect to market values of
any one or more of the Escrowed Property at any time, Escrow Agent having
no duties with respect to investment management or information, all
Principal(s) understanding and intending that Escrow Agent's
responsibilities are purely ministerial in nature. Any reduction in the
market value or other value of the Escrowed Property while deposited with
Escrow Agent shall be at the sole risk of Principal(s).
E. In the event instructions from Principal(s) would require
Escrow Agent to expend any monies or to incur any cost, Escrow Agent shall
be entitled to refrain from taking any action until it receives payment for
such costs.
F. Principal(s) acknowledge and agree that nothing in this
Escrow Agreement shall prohibit Escrow Agent from (1) serving in a similar
capacity on behalf of others or (2) acting in the capacity of attorneys for
one or more Principal(s) in connection with any matter except as limited by
prior written agreements with the Principal(s) with respect to conflict
waivers on the matters set forth in ADDENDUM 2 hereto.
II. RELEASE OF ESCROWED PROPERTY
A. Escrow Agent agrees to release the Escrowed Property in
accordance with the terms and conditions set forth in the Documents, if
any, and this Escrow Agreement.
B. In the event Escrow Agent shall be uncertain as to its
duties or rights hereunder or shall receive instructions, claims or demands
from any Principal(s) or from third persons with respect to the Escrowed
Property or any other sums or things which may be held hereunder, which, in
its sole opinion, are in conflict with any provision of this Escrow
Agreement and/or the Documents, if any, Escrow Agent shall be entitled to
refrain from taking any action until it shall be directed otherwise in
writing by all Principal(s) and said third persons, if any, or by a final
order or judgment of a court of competent jurisdiction.
C. If all or any portion of the Escrowed Property delivered
to Escrow Agent is in the form of a check or in any other form other than
cash, Escrow Agent shall deposit same as required but shall not be liable
for the nonpayment thereof nor responsible to enforce collection thereof.
If such check or other instrument other than cash representing the Escrowed
Property is returned to Escrow Agent unpaid, Escrow Agent shall notify the
applicable Principal(s) for further instructions.
III. LIABILITY OF ESCROW AGENT
A. It is agreed that the duties of Escrow Agent are purely
ministerial in nature and shall be expressly limited to the safekeeping of
the Escrowed Property and for the disposition of same in accordance with
the Documents, if any, and this Escrow Agreement. The Escrow Agent shall
have no liability with regard to any duty under the Escrow Agreement, nor
be responsible for the loss of any monies held by it except in the event of
wilful and intentional misconduct on the part of the Escrow Agent. Each
Principal hereby indemnifies Escrow Agent and holds it harmless from and
against any and all claims, liabilities, damages, costs, penalties, losses,
actions, suits or proceedings at law or in equity, or any other expenses,
fees or charges of any character or nature, which it may incur or with
which it may be threatened directly or indirectly arising from or in any
way connected with this Escrow Agreement or which may result from Escrow
Agent's following of instructions from Principal(s), and in connection
therewith, indemnifies Escrow Agent against any and all expenses, including
attorneys' fees and the cost of defending any action, suit, or proceeding
or resisting any claim, whether or not litigation is instituted. Escrow
Agent shall be vested with a lien on all Escrowed Property held hereunder
which is deliverable to Principal(s) under the terms of this Escrow
Agreement, for indemnification, attorneys' fees, court costs arising from
any suit, interpleader or otherwise, or other expenses, fees or charges of
any character or nature, which may be incurred by Escrow Agent by reason of
disputes arising between Principal(s) and/or any third party as to the
correct interpretation of this Escrow Agreement and/or the Documents, if
any, and instructions given to Escrow Agent hereunder, or otherwise, with
the right of Escrow Agent, regardless of the instruments aforesaid and
without the necessity of instituting any action, suit, or proceeding, to
hold the Escrowed Property until and unless said additional expenses, fees
and charges shall be fully paid.
B. It is further agreed that Escrow Agent shall have the
right to utilize the services of Gunster, Yoakley, Valdes-Fauli & Stewart,
P.A., as its attorneys, and same shall not affect or in any way prejudice
or limit Escrow Agent's entitlement to reasonable attorney's fees for the
services of such attorneys as set forth in this Escrow Agreement.
IV. DISPUTES
A. In the event Escrow Agent is joined as a party to a
lawsuit by virtue of the fact that it is holding the Escrowed Property,
Escrow Agent shall, at its option, either (1) tender the Escrowed Property
to the registry of the appropriate court or (2) disburse the Escrowed
Property in accordance with the court's ultimate disposition of the case,
and Principal(s) hereby, jointly and severally, indemnify and hold Escrow
Agent harmless from and against any damages or losses in connection
therewith including, but not limited to, reasonable attorneys' fees and
court costs at all trial and appellate levels.
B. In the event Escrow Agent tenders the Escrowed Property
to the registry of the appropriate court and files an action of
interpleader naming the Principal(s) and any affected third parties of whom
Escrow Agent has received actual notice, Escrow Agent shall be released and
relieved from any and all further obligation and liability hereunder or in
connection herewith and Principal(s) hereby, jointly and severally,
indemnify and hold Escrow Agent harmless from and against any damages or
losses arising in connection therewith including, but not limited to, all
costs and expenses incurred by Escrow Agent in connection with the filing
of such action including, but not limited to, reasonable attorneys' fees
and court costs at all trial and appellate levels.
V. TERM OF AGREEMENT
A. This Escrow Agreement shall remain in effect unless and
until it is canceled in any of the following manners:
1. Upon written notice given by all Principal(s) of
cancellation of designation of Escrow Agent to act and serve in said
capacity, in which event, cancellation shall take effect no earlier than
twenty (20) days after notice to Escrow Agent of such cancellation; or
2. Escrow Agent may resign as escrow agent at any time
upon giving notice to Principal(s) of its desire to so resign; provided,
however, that resignation of Escrow Agent shall take effect no earlier than
ten (10) days after the giving of notice of resignation; or
3. Upon compliance with all escrow provisions as set
forth in this Escrow Agreement and in the Documents, if any.
B. In the event Principal(s) fail to agree to a successor
escrow agent within the period described hereinabove, Escrow Agent shall
have the right to deposit all of the Escrowed Property held hereunder into
the registry of an appropriate court and request judicial determination of
the rights between Principal(s), by interpleader or other appropriate
action, and Principal(s) hereby, jointly and severally, indemnify and hold
Escrow Agent harmless from and against any damages or losses in connection
therewith including, but not limited to, reasonable attorneys' fees and
court costs at all trial and appellate levels.
C. Upon termination of the duties of Escrow Agent in either
manner set forth in subparagraphs 1 or 2 of Paragraph A of this Article V,
Escrow Agent shall deliver all of the Escrowed Property to the newly
appointed escrow agent designated by the Principal(s), and, except for
rights of Escrow Agent specified in Paragraph A. of Article III. of this
Escrow Agreement, Escrow Agent shall not otherwise have the right to
withhold Escrowed Property from said newly appointed escrow agent.
D. Escrow Agent shall not be bound by any modification,
cancellation or rescission of this Escrow Agreement unless in writing and
signed by all Principal(s) and Escrow Agent. In no event shall any
modification of this Escrow Agreement, which shall affect the rights or
duties of Escrow Agent, be binding on Escrow Agent unless it shall have
given its prior written consent.
VI. NOTICES
All notices, certificates, requests, demands, materials and
other communications hereunder shall be in writing and deemed to have been
duly given (1) upon delivery by hand to the appropriate address of each
Principal or Escrow Agent as set forth in this Escrow Agreement or in the
Documents, if any, or (2) on the third business day after mailing by United
States registered or certified mail, return receipt requested, postage
prepaid to such address. All notices to Escrow Agent shall be addressed to
the attorney signing on behalf of Escrow Agent at the following address:
Gunster, Yoakley, Valdes-Fauli & Stewart, P.A.
Attention: Richard D. Holt, Esq.
777 South Flagler Drive, Suite 500 East
West Palm Beach, Florida 33401
VII. CHOICE OF LAW AND VENUE
This Escrow Agreement shall be governed by and construed in
accordance with the laws of the State of Florida. In the event any action,
suit or proceeding is instituted as a result of any matter or thing
affecting this Escrow Agreement, the parties hereto hereby designate Palm
Beach County, Florida, as the proper jurisdiction and the venue in which
same is to be instituted.
VIII. CUMULATIVE RIGHTS
No right, power or remedy conferred upon Escrow Agent by this
Escrow Agreement is exclusive of any other right, power or remedy, but each
and every such right, power or remedy shall be cumulative and concurrent
and shall be in addition to any other right, power or remedy Escrow Agent
may have under the Escrow Agreement or now or hereafter existing at law, in
equity or by statute, and the exercise of one right, power or remedy by
Escrow Agent shall not be construed or considered as a waiver of any other
right, power or remedy.
IX. BINDING AGREEMENT
This Escrow Agreement shall be binding upon the Principal(s)
and Escrow Agent and their respective successors and assigns.
X. ESCROW AGENT FEES
Escrow Agent shall receive for its services in accepting this
escrow the sum of $00.00 per hour of time involved with respect to this
escrow, plus reimbursement of all costs, which fees and costs the
Principal(s) hereby, jointly and severally, agree to pay and it is hereby
understood and agreed that all such fees and costs shall constitute a first
lien of the Escrowed Property hereunder.
IN WITNESS WHEREOF, the parties hereto have caused these presents to
be executed
this ____ day of October, 1997.
Signed, Sealed and Delivered
in the Presence of: ESCROW AGENT:
GUNSTER, YOAKLEY, VALDES-FAULI &
STEWART, P.A.
____________________ By:_________________________
Name:_______________________
____________________ Title:______________________
Date:_______________________
PRINCIPAL(S):
AUTONATION USA CORPORATION, a Florida
corporation
____________________ By:_________________________
Name:_______________________
____________________ Title:______________________
__________________________________
social security or corporate
identification number
Date:_______________________
METRODRAMA JOINT VENTURE, a Florida
general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
managing general partner
By: ARVIDA/JMB MANAGERS, INC.,
general partner
____________________ By:_________________________
Name:_______________________
____________________ Title:______________________
Date:_______________________
By: ARVIDA/JMB PARTNERS, non-managing
general partner
By: ARVIDA/JMB MANAGERS, INC.,
general partner
____________________ By:_________________________
Name:_______________________
____________________ Title:______________________
Date:_______________________
<PAGE>
ADDENDUM 1 TO ESCROW AGREEMENT
------------------------------
The Deposit as and when delivered to Escrow Agent pursuant to the
Agreement of Purchase and Sale ("Agreement") to which this Escrow Agreement
is attached as Exhibit "A."
<PAGE>
ADDENDUM 2 TO ESCROW AGREEMENT
------------------------------
The Agreement for Purchase and Sale between METRODRAMA JOINT VENTURE,
a Florida general partnership and AUTONATION USA CORPORATION to which this
Escrow Agreement is attached as Exhibit "A."
<PAGE>
EXHIBIT C
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ACCEPTABLE EXCEPTIONS
1. Taxes and assessments for the year 1997 and subsequent years,
which are not yet due and payable.
2. Dedications as set forth on the Plat of Palm Beach Farms Co.,
Plat No. 9, in parts of Sections 27, 28, 29, and 30, Township 43 South,
Range 42 East, according to the Plat thereof on file in the Office of the
Clerk of the Circuit Court in and for Palm Beach County, recorded in Plat
Book 5, Page 58.
3. Dedications as set forth on the Plat of Palm Beach Farms, Co.
Plat No. 3, according to the Plat thereof on file in the Office of the
Clerk of the Circuit Court in and for Palm Beach County, Florida, recorded
in Plat Book 2, Pages 45 through 54, inclusive and specifically to Page 46,
Block 4, of the Palm Beach Farms Co. No. 3, except as abandoned by
Resolution to Abandon by the Palm Beach County Commissioners recorded in
Official Record Book 2308, Page 478.
4. Easement in favor of Southern Bell Telephone and Telegraph,
dated May 5, 1972 and filed of record June 2, 1972, in Official Record Book
2019, Page 1379, of the Public Records of Palm Beach County, Florida.
5. Reservation in favor of the Lake Worth Drainage District as set
forth in that certain instrument dated October 15, 1942 and filed of record
October 20, 1942, in Deed Book 655, Page 365, of the Public Records of Palm
Beach County, Florida.
6. Reservation in favor of the Board of Commissioners of
Everglades Drainage District as set forth in that certain instrument dated
November 16, 1944, and filed of record December 15, 1944, in Deed Book 703,
Page 198 and Modified by that certain instrument filed of record June 23,
1947, in Deed Book 813, page 498; filed of record December 9, 1947 in Deed
Book 829, Page 533; and further Modified by Release of Reservation filed of
record June 25, 1957, in Official Record Book 71, Page 55, all of the
Public Record of Palm Beach County, Florida.
7. Standard Developer's Agreement from Metrodrama to Palm Beach
County dated February 28, 1996, recorded March 4, 1996, in Official Record
Book 9146, Page 1434, Public Records of Palm Beach County, Florida.
8. Grant of Easement from Metrodrama to Florida Power & Light
Company dated December 7, 1989, recorded December 19, 1989 in Official
Record Book 6297, Page 927, Public Records of Palm Beach County, Florida.
9. Easement Deed from Metrodrama to Lake Worth Drainage District
dated March 18, 1996, recorded April 15, 1996 in Official Record Book 9212,
Page 1278, Public Records of Palm Beach County, Florida.
10. Declaration of Protective Covenants, Conditions and
Restrictions of the Metrodrama Property dated May 29, 1997, recorded June
3, 1997, in Official Record Book 9823, Page 1434, Public Records of Palm
Beach County, Florida, which Declaration provides that the Declarant may
withdraw lands from the terms of the Declaration, subject only to prior
written approval of the County Attorney's Office. Declaration further
provides that the rights, powers, obligations, easements and estates rights
and obligations may be assigned by Declarant.
<PAGE>
EXHIBIT D
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LEASES AND CONSULTING AGREEMENTS
1. Property Management Agreement dated January 1, 1997 between
Metrodrama Joint Venture and Touchstone Realty Company, Inc.
2. Billboard Lease between Metrodrama Joint Venture and National
Advertising Company dated November 1, 1988, as amended by Letter Agreements
dated October 30, 1995, November 8, 1995, and December 6, 1996.
3. Cash rental lease agreement dated December 30, 1996 between
Metrodrama Joint Venture and T & D Cattle Company, Inc.
4. Consultant Agreement dated December 30, 1996 between Metrodrama Joint
Venture and Brothers 2, a Florida general partnership.
<PAGE>
EXHIBIT E
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PRELIMINARY SITE PLAN
EXHIBIT 10.10
- -------------
AGREEMENT
FOR
SALE AND PURCHASE
Seller: ARVIDA/JMB PARTNERS
Purchaser: PV RESORT, INC.
Property: CABANA CLUB
ST. JOHNS COUNTY, FLORIDA
Contract Date: _______________, 1997
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS, ETC.. . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . 1
2. PURCHASE AND SALE. . . . . . . . . . . . . . . . . . . . 4
2.1 Sale and Purchase. . . . . . . . . . . . . . . . . 4
2.2 Purchase Price . . . . . . . . . . . . . . . . . . 4
2.3 Payment of the Purchase Price. . . . . . . . . . . 5
3. TITLE AND SURVEY . . . . . . . . . . . . . . . . . . . . 5
3.1 Title Commitment . . . . . . . . . . . . . . . . . 5
3.2 Permitted Exceptions . . . . . . . . . . . . . . . 5
3.3 Title Defects. . . . . . . . . . . . . . . . . . . 5
3.4 Cure of Title Defects. . . . . . . . . . . . . . . 5
3.5 Survey . . . . . . . . . . . . . . . . . . . . . . 6
3.6 Objections to Survey . . . . . . . . . . . . . . . 6
3.7 Cure of Survey Defects . . . . . . . . . . . . . . 6
4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . 7
4.1 Conditions Precedent to Closing Applicable
to Both Seller and Purchaser . . . . . . . . . . . 7
4.2 Condition Precedent to Closing Applicable
to Purchaser Only. . . . . . . . . . . . . . . . . 7
5. INSPECTIONS. . . . . . . . . . . . . . . . . . . . . . . 7
5.1 Purchaser Feasibility Study. . . . . . . . . . . . 7
6. FURTHER AGREEMENTS . . . . . . . . . . . . . . . . . . . 9
6.1 Seller's Designees . . . . . . . . . . . . . . . . 9
6.2 Room Nights. . . . . . . . . . . . . . . . . . . . 9
6.3 Current Members/Membership Program . . . . . . . . 10
6.4 Operational Standards. . . . . . . . . . . . . . . 12
6.5 Arbitration. . . . . . . . . . . . . . . . . . . . 12
6.6 Zoning Changes . . . . . . . . . . . . . . . . . . 14
6.7 Approval Rights -
Subsequent Owners and Managers . . . . . . . . . . 14
6.8 Seller's Rights Upon Resale. . . . . . . . . . . . 15
6.9 Discounts. . . . . . . . . . . . . . . . . . . . . 15
6.10 Memorandum of Agreement. . . . . . . . . . . . . . 15
6.11 Retention of Name/License. . . . . . . . . . . . . 16
6.12 Confidentiality. . . . . . . . . . . . . . . . . . 16
(a) Confidential Information. . . . . . . . . . . 16
(b) Confidential Information Recipient. . . . . . 16
(c) Nondisclosure Obligations . . . . . . . . . . 16
6.13 Permits and Licenses . . . . . . . . . . . . . . . 17
6.14 Books and Records. . . . . . . . . . . . . . . . . 17
6.15 Assumed Obligations. . . . . . . . . . . . . . . . 17
6.16 Conduct of Business; Maintenance
of Club Facilities . . . . . . . . . . . . . . . . 18
6.17 Condition of the Property;
Disclaimer of Representations. . . . . . . . . . . 18
6.18 Extension of Lease with
Arvida Realty Sales, Ltd.. . . . . . . . . . . . . 19
6.19 License Agreement. . . . . . . . . . . . . . . . . 19
7. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . 19
7.1 Representations and Warranties of
Purchaser and RHI. . . . . . . . . . . . . . . . . 19
(a) Authority . . . . . . . . . . . . . . . . . . 20
(b) No Defaults . . . . . . . . . . . . . . . . . 20
(c) Litigation. . . . . . . . . . . . . . . . . . 20
(d) Material Misstatements or Omissions . . . . . 20
7.2 Representations and Warranties of Seller . . . . . 20
(a) Authority . . . . . . . . . . . . . . . . . . 20
(b) No Defaults . . . . . . . . . . . . . . . . . 21
(c) Assumed Obligations . . . . . . . . . . . . . 21
(d) Fees and Assessments. . . . . . . . . . . . . 21
(e) Litigation. . . . . . . . . . . . . . . . . . 21
(f) Mechanic's Liens. . . . . . . . . . . . . . . 21
(g) Seller's Licenses and Permits . . . . . . . . 21
8. MISCELLANEOUS CLOSING MATTERS. . . . . . . . . . . . . . 22
8.1 Prorations at Closing. . . . . . . . . . . . . . . 22
8.2 Prorations Post Closing. . . . . . . . . . . . . . 22
8.3 Accounts Payable and Receivable. . . . . . . . . . 22
8.4 Purchaser's Closing Costs. . . . . . . . . . . . . 23
8.5 Seller's Closing Costs . . . . . . . . . . . . . . 23
8.6 Cost of Transfer of Permits,
Licenses and Assumed Obligations . . . . . . . . . 23
8.7 Termination of Employees of Seller.. . . . . . . . 23
8.8 Extension of Closing Date. . . . . . . . . . . . . 23
9. CLOSING DOCUMENTS. . . . . . . . . . . . . . . . . . . . 23
9.1 Documents to be Delivered by Seller. . . . . . . . 23
9.2 Documents to be Delivered by Purchaser . . . . . . 24
9.3 Mutual Obligations . . . . . . . . . . . . . . . . 24
9.4 Items to be Delivered by Escrow Agent. . . . . . . 24
10. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . 24
10.1 Notices. . . . . . . . . . . . . . . . . . . . . . 24
10.2 Default: Remedies. . . . . . . . . . . . . . . . . 26
(a) Purchaser Default . . . . . . . . . . . . . . 26
(b) Seller Default. . . . . . . . . . . . . . . . 26
(c) Default After Closing . . . . . . . . . . . . 27
(d) Attorneys' Fees . . . . . . . . . . . . . . . 27
(e) Nonrecourse/Survival. . . . . . . . . . . . . 27
10.3 Real Estate Brokers. . . . . . . . . . . . . . . . 28
10.4 Eminent Domain . . . . . . . . . . . . . . . . . . 28
10.5 Casualty Damage. . . . . . . . . . . . . . . . . . 28
10.6 Interpretation Presumption . . . . . . . . . . . . 29
10.7 Partial Invalidity . . . . . . . . . . . . . . . . 29
10.8 Applicable Law . . . . . . . . . . . . . . . . . . 29
10.9 Entire Agreement . . . . . . . . . . . . . . . . . 29
10.10 Remedies . . . . . . . . . . . . . . . . . . . . . 29
10.11 Captions/Headings. . . . . . . . . . . . . . . . . 29
10.12 Modifications. . . . . . . . . . . . . . . . . . . 29
10.13 Recording. . . . . . . . . . . . . . . . . . . . . 29
10.14 Assignment . . . . . . . . . . . . . . . . . . . . 30
10.15 Successors and Assigns . . . . . . . . . . . . . . 30
10.16 Time of Essence. . . . . . . . . . . . . . . . . . 30
10.17 No Publication or Disclosure . . . . . . . . . . . 30
10.18 Time for Acceptance. . . . . . . . . . . . . . . . 31
10.19 Counterparts . . . . . . . . . . . . . . . . . . . 31
10.20 No Third Party Beneficiaries . . . . . . . . . . . 31
10.21 Radon Disclosure . . . . . . . . . . . . . . . . . 31
10.22 Notice to Third Party Purchasers . . . . . . . . . 31
10.23 Joinder and Consent. . . . . . . . . . . . . . . . 32
<PAGE>
INDEX OF EXHIBITS
-----------------
A. Membership Roster
A. Legal Description of Real Property
B. Membership Plan Requirements
C. Operational Standards
D. List of Assumed Obligations
E-1 Lot/Unit/Builder Contracts/Paragraphs Assumed
E-2 List of Seller's Reservation Obligations
E. License Agreement
F. List of Purchaser's Litigation
G. List of Seller's Litigation
H. Bill of Sale for All Tangible Assets
I. Assignment of Licenses and Permits and Warranties
J. Assignment of Assumed Obligations
K. Tangible Assets (to be attached prior to
expiration of the Feasibility Period)
<PAGE>
AGREEMENT FOR SALE AND PURCHASE
-------------------------------
THIS AGREEMENT FOR SALE AND PURCHASE ("Agreement"), dated as of
____________________, 1997, is entered into by and between ARVIDA/JMB
PARTNERS, a Florida general partnership (hereinafter referred to as
"Seller") and PV RESORT, INC., a Delaware corporation, (hereinafter
referred to as "Purchaser"), joined by RESORT HOLDINGS I, LTD., a Georgia
limited partnership ("RHI") for the limited purposes set forth in Section
10.22 hereof.
W I T N E S S E T H:
-------------------
WHEREAS, Seller is the owner of a "Club Facility" located in Ponte
Vedra Beach, St. Johns County, Florida, which is commonly known as the
"Cabana Club"; and
WHEREAS, the various covenants and agreements of the parties hereto
are subject to each and every term, condition and provision of this
Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally
bound hereby, the parties hereby agree as follows:
1. DEFINITIONS, ETC.
1.1 DEFINITIONS. For all purposes of this Agreement, the following
terms shall have the respective meanings as set forth in this Section.
(a) "Affiliate" of a specified person or entity - means a
director, trustee, officer, employee, agent, shareholder, subsidiary,
attorney of or partner in the specified person or entity or a person or
entity which (either directly or indirectly, through one or more
intermediaries) controls, is in common control with or is controlled by the
specified person or entity or any person or entity that is a director,
trustee, officer, employee, agent, shareholder, subsidiary, attorney of or
partner in any of the foregoing. For the purposes of this definition, the
term "control" means (a) legal or beneficial ownership of ten percent (10%)
or more of the voting interests of an entity, or (b) the possession,
directly or indirectly, of the power to direct or cause the direction of
the management or policies of a person or entity, whether through the
ownership of voting securities, by contract or otherwise.
(b) "Assumed Obligations" - the meaning ascribed thereto in
Section 6.15 hereof.
(c) "Broker" - the meaning ascribed thereto in Section 10.3
hereof.
(d) "Closing" means the consummation of the sale and purchase
as provided herein.
(e) "Closing Date" means October 31, 1997, or (i) such
earlier date as may be mutually agreed upon by the parties hereto, or (ii)
as may be extended pursuant to Section 8.8 below.
(f) "Closing Location" means (i) the offices of Pappas
Metcalf & Jenks, P.A., 200 West Forsyth Street, Suite 1400, Jacksonville,
Florida 32202, or (ii) the office of lender's counsel providing financing
to Purchaser located in Jacksonville, Florida, or (iii) such other place as
shall be mutually agreed upon by the parties hereto.
(g) "Club" means the ownership and operation of the "Club
Facilities" as the Cabana Club, a beach and dining club operated for the
recreational and social enjoyment of the Club's members and other persons
accorded privileges of use thereof and access thereto.
(h) "Club Facility or Facilities" means, collectively, the
restaurant, beach cabana, swimming pool, parking lot and related buildings
and the other improvements and amenities located on the "Real Property".
(i) "Communities" means the master planned communities owned
and/or initially developed by Seller located in St. Johns County and Duval
County, Florida and known as the Sawgrass Country Club, the Sawgrass
Players Club, Jacksonville Golf & Country Club, Sawmill Lakes, and any
other similar residential communities within such counties and Clay County
and Nassau County, Florida which may hereafter be developed by Seller or
its Affiliates, or permitted assignees as set forth in Section 10.14(b)
hereof.
(j) "Confidential Information" - the meaning ascribed thereto
in Section 6.12 hereof.
(k) "Contracts" means all of the Club membership agreements,
leases or any other contracts or agreements affecting or relating to the
ownership or operation of the Property, the Club or the Club Facilities,
which are to be listed and made available for Purchaser's review pursuant
to Section 5.1 hereof.
(l) "Deposit" - the meaning ascribed thereto in Section 2.3
hereof.
(m) "Effective Date" means the effective date of this
Agreement, which shall be the date upon which a copy of this Agreement,
fully and duly executed by Seller, Purchaser and Escrow Agent, is received
by Seller.
(n) "Escrow Agent" means Brant, Moore, MacDonald & Wells.
(o) "Feasibility Period" means the period of time which ends
at 5:00 P.M. on October 10, 1997, as more particularly described in Section
5 hereof.
(p) "IBJ" shall mean International Bank of Japan.
(q) "Indemnity Period" means the period of time which begins
on the Closing Date and ends on the fourth anniversary date of the Closing
Date.
(r) "Intangible Personal Property" means all contract and
other rights (including membership contracts), all governmental permits
and approvals including, without limitation, building and other permits,
liquor licenses, and other operating permits or approvals and any and all
plans, drawings and specifications regarding any improvements to the Real
Property and/or the Club Facilities and any warranties as to equipment or
facilities presently held by Seller and related to the operation of the
Club.
(s) "Inventory" means all consumable personal property
associated with the maintenance and operation of the Club Facilities or
Club on hand at the date of Closing, including supplies, food and beverage
inventory, packaging and serving inventory as contemplated in Section 6.16
hereof.
(t) "Marriott" - the meaning ascribed thereto in Section 6.2
hereof.
(u) "Member(s)" means all persons holding memberships in the
Club giving such Member the right to the use of or access to any of the
Club Facilities from time to time. A roster of current Members, together
with the amounts of the initiation deposits, initiation fees or membership
fees paid by each is attached hereto as Exhibit A.
(v) "Membership Plan Documents" - the Cabana Club Rules and
Regulations dated January 1, 1997.
(w) "Membership Plan Requirements" - the meaning ascribed
thereto in Section 6.3(a) hereof.
(x) "Memorandum of Agreement" - the meaning ascribed thereto
in Section 6.10 hereof.
(y) "Name" - the name "Cabana Club."
(z) "Person" means a natural person, corporation,
partnership, trust or other entity.
(aa) "Permitted Exceptions" - the meaning ascribed thereto in
Section 3.2 hereof.
(ab) "Property" means the Real Property, the Club Facilities,
the Inventory, the Tangible Assets, Intangible Personal Property and the
Purchased Accounts Receivable.
(ac) "Purchase Price" - the meaning ascribed thereto in
Section 2.2 hereof.
(ad) "Purchased Accounts Receivable" - the meaning ascribed
thereto in Section 8.3 hereof.
(ae) "Real Property" means the real property on which the Club
Facilities are located and from which the Club is operated, as more
particularly described on Exhibit B attached hereto as such legal
description shall be modified pursuant to Section 3.5 hereof, together with
such easements, riparian and littoral rights and accretions thereunto
belonging or anywise appertaining.
(af) "Resort Guests" - the meaning ascribed thereto in Section
6.4 hereof.
(ag) "Recipient" - the meaning ascribed thereto in Section
6.12(b) hereof.
(ah) "Tangible Assets" means all furniture, fixtures and
equipment, dining room and kitchen equipment (including silverware,
flatware, dishes, pots, pans and glasses), office equipment (excluding
computer software), point of sale computer hardware, supplies and other
fixed and movable tangible assets owned by Seller and used in connection of
the operation and maintenance of the Club Facilities and located at the
Club Facility on the date of Closing, all of which shall be included on a
list of Tangible Assets to be included as part of the Bill of Sale
referenced in Section 9.1 hereof and to be delivered to Purchaser prior to
expiration of the Feasibility Period and attached as an Exhibit to this
Agreement.
(ai) "UAO Agreement" means Use, Access and Operating Agreement
between Arvida Corporation and Purchaser dated September 3, 1985, as
amended by First Modification dated August 9, 1989.
2. PURCHASE AND SALE
2.1 SALE AND PURCHASE. On the Closing Date, Seller shall sell,
transfer, assign and convey all right, title and interest in and to the
Property to Purchaser, subject to the Memorandum of Agreement and Permitted
Exceptions, and Purchaser shall purchase and accept the transfer,
assignment and conveyance of the Property from Seller for the Purchase
Price as provided below.
2.2 PURCHASE PRICE.
(a) The total purchase price for the Property is THREE
MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($3,500,000.00), plus the
purchase price of the Purchased Accounts Receivable as provided for in
Section 8.3 hereof.
(b) ALLOCATION OF PURCHASE PRICE. At least fifteen (15) days
prior to the Closing Date, Purchaser and Seller shall agree to an
allocation of the Purchase Price among the assets being purchased under
this Agreement. Such allocation shall be binding upon the parties for
purposes of: (1) determination of any sales tax, documentary or transfer
tax liabilities in connection with the closing; (2) Purchaser's and
Seller's filing of IRS Form 8594 allocating the Purchase Price for income
tax purposes; and (3) all other purposes related to this transaction.
2.3 PAYMENT OF THE PURCHASE PRICE. The Purchase Price shall be
paid as follows:
(a) Simultaneous with its execution of this Agreement,
Purchaser has delivered to the Escrow Agent an earnest money deposit in the
amount of ONE HUNDRED THOUSAND AND 00/100 DOLLARS ($100,000.00). Prior to
the expiration of the Feasibility Period, Purchaser will deliver to the
Escrow Agent, an additional earnest money deposit of TWO HUNDRED FIFTY
THOUSAND AND 00/100 DOLLARS ($250,000.00). Both of the deposits shall be
held in an interest bearing account by Escrow Agent. Both of the earnest
money deposits and interest earned thereon, together with the Extension
Payment as provided for in Section 8.8 hereof, are herein referred to as
the "Deposit". Interest on the Deposit through the date of delivery to
Seller under Section 8.8 hereof, shall be a credit to Purchaser against the
Purchase Price and applied as a payment to Seller on account thereof at
Closing.
(b) Purchaser shall pay the balance of the Purchase Price,
being the sum of THREE MILLION ONE HUNDRED FIFTY THOUSAND AND 00/100
DOLLARS ($3,150,000.00), together with the payment for the Purchased
Accounts Receivable as provided for in Section 2.2, (increased or decreased
to reflect the adjustments and prorations to be made at Closing) to Seller
at Closing by wire transfer of good funds to an account designated by
Seller with receipt of wire transfer confirmed.
3. TITLE AND SURVEY
3.1 TITLE COMMITMENT. On or before ten (10) days from the
Effective Date, Seller, at its expense, will deliver to Purchaser a title
insurance commitment together with legible copies of Schedule B-2
exceptions ("Commitment") for the issuance of an ALTA Owner's Policy from
Chicago Title Insurance Company (the "Title Company") in the amount of
THREE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($3,500,000.00)
("Title Policy") covering that portion of the Real Property as described on
Exhibit B. At Closing, the Title Policy issued in accordance with the
Commitment will be issued in the amount of the Purchase Price attributable
to the Real Property.
3.2 PERMITTED EXCEPTIONS. The "Permitted Exceptions" as to which
title to the Real Property shall be subject at the time of conveyance to
Purchaser shall consist of those matters set forth on the Commitment or
described by the Survey that are not objected to by Purchaser pursuant to
Section 3.3 or Section 3.6 hereof.
3.3 TITLE DEFECTS. If Purchaser shall have any objections as to
liens, encumbrances or title matters shown as exceptions in the Commitment,
Purchaser shall notify Seller in writing of such objections within ten (10)
days of receiving the Commitment.
3.4 CURE OF TITLE DEFECTS. Seller shall be obligated to remedy any
objection to the status of title timely made by Purchaser pursuant to
Section 3.3 which are (i) consensual monetary liens made by Seller
encumbering the Real Property or (ii) nonconsensual liens or other
encumbrances which are liquidated in amount and which do not to exceed
FIFTY THOUSAND AND 00/100 DOLLARS ($50,000.00) in the aggregate when
combined with any funds expended by Seller for cure of any matters
constituting survey defects as contemplated under Section 3.7 hereof, and
provided Seller shall have no duty to undertake litigation to cure such
objections. Seller shall have a period of forty-five (45) days from
receipt of Purchaser's objections to effect such cure and the Closing Date
shall be extended for such cure period. Also, Purchaser shall have the
right, but not the obligation during such forty-five (45) day period at
Purchaser's expense to attempt to cure any defects in title objected to by
Purchaser pursuant to Section 3.3 above, which Seller has no duty to cure,
and Seller agrees to cooperate with Purchaser in connection with
Purchaser's efforts. If, after the expiration of said forty-five (45) day
period, the title defect or defects which Seller has no duty to cure are
not corrected by either Seller or Purchaser, then, and in such event, the
Deposit shall be forthwith returned by Escrow Agent to Purchaser, and all
parties hereto shall be released and relieved of any and all further
obligations hereunder or in connection herewith or, Purchaser may, at
Purchaser's option, require Seller to deliver title to the Property in its
then existing condition with no diminution of the Purchase Price thereby
waiving such objections to title.
3.5 SURVEY. On or before twenty (20) days from the Effective Date,
Seller shall provide to Purchaser at Purchaser's expense, an "as built"
survey of the Real Property showing improvements located thereon prepared
by a licensed Florida land surveyor showing the correct legal metes and
bounds description of the Property and its dimensions (the "Survey"). The
Survey legal description of the real property shall be substituted as
Exhibit B to this Agreement; provided that such legal description is
substantially the same as such Exhibit B. The Survey shall be certified to
Purchaser, Purchaser's lender, and the Title Company and shall meet the
minimum technical standards of Chapter 61G17, FLORIDA ADMINISTRATIVE CODE,
and minimum technical standards for ALTA/ACSM Survey.
3.6 OBJECTIONS TO SURVEY. If Purchaser shall have any objections
with respect to encroachments, conflict in boundary or other matters as
shown on the Survey which constitute title defects or title exceptions
(other than existing encroachment of asphalt paving onto adjacent lands as
contemplated in Reciprocal Easement Agreement recorded in Official Records
Book 795, page 0172, public records of St. Johns County, Florida)("Survey
Defects"), Purchaser shall notify Seller in writing of such objections
within ten (10) business days of receiving the Survey.
3.7 CURE OF SURVEY DEFECTS. Seller shall be obligated to remedy
Survey Defects which render title to the Property unmarketable or
uninsurable, notice of which is timely provided by Purchaser pursuant to
Section 3.6, which can be eliminated by the payment of money in an amount
not to exceed FIFTY THOUSAND AND 00/100 DOLLARS ($50,000.00) in the
aggregate when combined with any funds expended by Seller for cure of any
matters constituting title defects as contemplated under Section 3.4
hereof, and provided Seller shall have no duty to undertake litigation to
cure such defects. Seller shall have a period of forty-five (45) days from
receipt of Purchaser's notice to effect such cure and the Closing Date
shall be extended for such cure period. Also, Purchaser shall have the
right, but not the obligation, during such forty-five (45) day period at
Purchaser's expense, to attempt to cure any defects as shown on the Survey
objected to by Purchaser pursuant to Section 3.6 above, which Seller has no
duty to cure, and Seller agrees to cooperate with Purchaser in connection
with Purchaser's efforts. If, after the expiration of said forty-five (45)
day period, the defects as shown on the Survey which Seller has no duty to
cure are not corrected by Purchaser, then, in such event, the Deposit shall
be forthwith returned by Escrow Agent to Purchaser, and all parties hereto
shall be released and relieved of any and all further obligations hereunder
or in connection herewith or, Purchaser may, at Purchaser's option, require
Seller to deliver title to the Property in its then existing condition with
no diminution of the Purchase Price, thereby waiving such objections to any
matters as shown on the Survey.
4. CONDITIONS PRECEDENT
4.1 CONDITIONS PRECEDENT TO CLOSING APPLICABLE TO BOTH SELLER AND
PURCHASER. The duty of each of Seller and Purchaser to effect the sale and
purchase at Closing is subject to the condition precedent that on or before
the Closing Date, the following conditions shall be satisfied by the other
party; provided, however, that the failure of either party to comply with
the conditions precedent applicable to it set forth in this Section 4.1
shall constitute a default hereunder entitling the other party to exercise
the rights and remedies afforded to it in Section 10.2 below.
(a) All representations and warranties of each such party in
this Agreement or in any document delivered by each such party pursuant to
the provisions hereof or in connection with the transactions contemplated
hereby, shall be true and correct in all material respects on the Closing
Date.
(b) The execution and delivery of the documents and materials
to be executed and delivered at Closing, as provided herein.
(c) Each party shall have performed and complied with all
obligations contained in this Agreement to be performed by it.
(d) Each party shall have delivered documentation appropriate
to evidence its due authorization of this Agreement and the performance of
its duties hereunder by all such partnership/corporate actions as may be
necessary.
4.2 CONDITION PRECEDENT TO CLOSING APPLICABLE TO PURCHASER ONLY.
The duty of Purchaser to effect the sale and purchase at Closing is subject
to the condition precedent that on or before 5:00 p.m., EST, on October 16,
1997 (the "Consent Date"), Purchaser shall have negotiated the consent of
IBJ, upon such terms as shall be acceptable to Purchaser in its sole
discretion. If Purchaser fails to notify Seller in writing of the
termination of this Agreement on or before the Consent Date, then Purchaser
shall be deemed to have waived such condition to Closing. If Purchaser
provides written notice of termination on or before the Consent Date, the
Deposit shall be refunded to Purchaser and this Agreement shall be
terminated.
5. INSPECTIONS
5.1 PURCHASER FEASIBILITY STUDY.
(a) During the Feasibility Period, Seller shall cooperate
with Purchaser and Purchaser's designated agents and, to the extent
reasonable, provide Purchaser with such documents and information as
Purchaser may request concerning the Property, the Club and/or the Club
Facilities and Assumed Obligations. Such information and documents may
include but are not limited to: (i) any existing title information for the
Real Property; (ii) any existing UCC searches; (iii) any and all Contracts;
(iv) documents pertaining to any and all proceedings (judicial or
administrative) involving either Seller or its Affiliates which may
(directly or indirectly) affect the Property, the Club or the Club
Facilities; (v) copies of all permits and approvals obtained for the
construction and operation of the Club, the Club Facilities and the Real
Property; (vi) copies of Seller's current books and records concerning the
operation of the Property, the Club or the Club Facilities (including
without limitation, restaurant and membership operations) and copies of
financial statements for the Club's operations as of the end of the last
fiscal year and for the three prior years updated as of the most recent
fiscal quarter; (vii) a copy of any existing survey of the Real Property;
and (viii) such other information as Purchaser may reasonably request.
(b) During the Feasibility Period, Purchaser or its designees
shall, at Purchaser's expense, inspect the Property, the Contracts and
other items mentioned above. If at or before the end of the Feasibility
Period, Purchaser is not satisfied with the Property, then Purchaser shall
be entitled to provide written notice to Seller of such fact, electing to
terminate this Agreement; by notice delivered to Seller on or before 5:00
P.M. on the last day of the Feasibility Period and the parties hereto shall
be relieved of all further liability hereunder, or Purchaser may elect to
maintain this Agreement in effect by delivery of the second Deposit
installment to Seller or Escrow Agent, as set forth in Section 2.3 hereof,
on or before 5:00 P.M. on the last day of the Feasibility Period. Failure by
Purchaser to provide notice of its intent to terminate or to deliver the
Deposit by 5:00 P.M. on the last day of the Feasibility Period shall be
deemed automatic termination of this Agreement and the parties shall be
relieved of any further liability hereunder.
(c) During such period of time as Purchaser shall be current
and in good standing of its obligations under this Agreement, Purchaser and
its engineers, surveyors, agents and representatives shall be permitted to
come upon the Property to perform inspections at times to be mutually agreed
upon between Purchaser and Seller. All such inspections shall be conducted
only at the time specified by the Seller, conducted by licensed or certified
persons or firms dealing with the respective areas or matters surveyed,
tested or inspected, conducted in the least intrusive manner possible, and
not to materially interfere with any Member or other person's use of the
recreational amenities at the Club. Notwithstanding any provision of this
Section 5.1 to the contrary, no destructive or invasive testing will be done
without Seller's prior written consent. Subsequent to any such inspection,
the Property shall be immediately restored to its pre-existing condition by
Purchaser, at Purchaser's expense. Notwithstanding the foregoing Seller and
Purchaser have agreed they will share equally the cost of termite testing and
demolition and repair provided both parties shall approve the company
performing such testing and the total cost.
(d) Purchaser hereby indemnifies and holds Seller forever
harmless from and against any and all loss, damage, judgments, claims and
threats of claims, including all reasonable attorneys' fees and court costs
through all trial and appellate levels, in connection with any injury to
persons or property, in connection with any liens or claims of lien against
the Property or otherwise arising out of Purchaser's inspections or tests of
the Property. In the event Purchaser terminates this Agreement or otherwise
does not close the transaction herein contemplated, Purchaser agrees to
return to Seller, at no cost to Seller any documents and other materials
provided to Purchaser by Seller with respect to the Property or this
transaction and neither Purchaser or any of its Affiliates nor any Person
employed or retained by Purchaser shall retain any copies thereof. This
provision shall survive termination of this Agreement and Closing.
6. FURTHER AGREEMENTS
6.1 SELLER'S DESIGNEES. Through December 31, 2007, Purchaser agrees
to issue to Seller, for the benefit of up to fifteen (15) Persons designated
by Seller from time to time ("Designees"), memberships to the Club at no cost
other than charges incurred by the Designees for the purchase of consumables.
Corporate Designees shall identify an individual entitled to use of the
membership in accordance with customary procedures established by the Club.
All of such memberships shall be consistent with the highest category of
memberships made available from time to time by Purchaser to unrelated third
parties in arms length transactions. Fees and charges paid by such Designees
shall not exceed the most advantageous rates charged to Members of the same
category or (if there are no members) at the most favorable rate available to
members of the public (excluding only Marriott employee discounts). Each
Designee shall have full charge privileges to all Club Facilities (on the
most favorable basis as such privileges are offered to other Members) which
shall be an individual account and liability of each Designee and which will
be billed by the Club to such Designee. Seller shall not be a guarantor of
any such charges. Purchaser shall have the right to suspend or terminate the
right of use by any Designee for nonpayment or other violation of the
Membership Plan Documents on the same terms as generally applied by the Club;
provided, however, if the rights of any Designee are terminated by the Club
for nonpayment, such termination shall not affect Seller's right to appoint
another Designee in its place. All such Designees shall be subject to normal
application procedures including credit references. The rights of Designees
established in this Section 6.1 shall supersede any rights of Seller or its
nominees to any complimentary memberships in the Club as of the date of
Closing.
6.2 ROOM NIGHTS. Upon Closing, RHI, an Affiliate of Purchaser, shall
enter into an agreement in form and content reasonably satisfactory to Seller
under which terms through December 31, 2007, RHI agrees to make available to
Seller, and persons designated by Seller, up to one hundred fifty (150) room
nights per calendar year at the Hotel facility now owned by RHI located in
St. Johns County, Florida, and known as the Marriott at Sawgrass (the
"Marriott") at no cost other than charges incurred for purchases of
consumables; provided, however, the availability for use of such room nights
shall be subject to general availability of vacancies and the following
specific limitations:
(a) Room nights not used by Seller, or persons designated by
Seller, during any calendar year will not be carried forward and will be
forfeited by the Seller.
(b) Seller shall not be entitled to any room nights during the
week of the Players Championship golf tournament, or the weeks of the
Florida-Georgia or Gator Bowl football games.
(c) Seller shall not be entitled to any room nights during
other special events designated by RHI in writing to Seller from time to
time, provided that the total number of special events shall not exceed
twenty (20) special events per calendar year and no block out period for any
such special event shall exceed greater than five (5) consecutive nights.
(d) Seller shall not be entitled to any room nights where the
Marriott is requiring of the general public minimum stays of two (2) or more
nights.
(e) No such complimentary room nights shall be booked by Seller
or its designees greater than thirty (30) days in advance.
(f) The number of room nights available to Seller shall be
prorated in the year of Closing.
The agreements set forth in this Section 6.2 shall supersede the UAO
Agreement and any provisions in the UAO Agreement providing for complimentary
room nights shall be deleted therefrom by an amendment to the UAO Agreement.
6.3 CURRENT MEMBERS/MEMBERSHIP PROGRAM.
(a) For a period of one (1) year from the Closing Date,
Purchaser will operate the Club Facilities as a private membership Club in
accordance with the Membership Plan Documents. For a period of five (5)
years thereafter, Purchaser will operate the Club Facilities as provided in
the Membership Plan Requirements to the extent set forth on Exhibit C
attached hereto and made a part hereof (the "Membership Plan Requirements").
Purchaser shall have the right to modify the initiation fees, periodic dues
structure and user fees from and after the expiration of the current
membership year. In the event that Purchaser makes any substantive change in
the Membership Plan Documents or in the Membership Plan Requirements as
provided for herein, or fails to recognize the rights of any current Member
as provided in the Membership Plan Documents or Membership Plan Requirements
as provided for herein, Purchaser and RHI will indemnify and hold Seller
harmless from and against any and all loss, damage, judgment, claims and
threats of claims, including all reasonable attorneys' fees and court costs
through all trial and appellate levels, in connection with or arising out of
any claim by any Member or other Person that such change in the Membership
Plan Documents within the initial one year period or such change in the
Membership Plan Requirements in the following five year period has damaged
such Member or Person and which claim arises prior to expiration of the
Indemnity Period.
(b) For a period of ten (10) years from the Closing Date,
Purchaser will continue to accept applications for memberships in the Club
from property owners of the Communities at an initiation fee charge which
shall not exceed forty percent (40%) of the initiation fee then charged by
Purchaser to other purchasers of the same category of Membership up to a
total number of activated memberships not to exceed 150 in any calendar year
or 640 in the aggregate (the "Discounted Memberships"). The Discounted
Memberships shall be offered until the first to occur of ten (10) years from
the Closing Date or the activation of 640 Discounted Memberships at the most
favorable cost and most favorable terms as such memberships are made
available to other purchasers of membership in the Club who are eligible for
membership based upon property ownership in any particular location, it being
intended that property owners within the Communities shall have membership
rights and privileges equal to or greater than those membership privileges
offered by Purchaser to property owners within any other residential
community. Seller agrees that memberships offered to property owners of the
Communities as provided herein (i) shall be limited to first purchasers of
lots or dwellings from Seller or from builders purchasing from Seller,
(ii) must be applied for by such owner within six (6) months after closing on
the lot or dwelling by such owner (with any memberships not activated by an
owner by application within the time period remaining in the pool of
memberships available to Seller for other residents of the Communities), and
(iii) all such owners shall be subject to normal and customary application
procedures including credit references. Property owners within the
Communities may make application for membership after the maximum number of
memberships available to such owners at the applicable discount have been
activated and will be considered by the Club on the same and no less
favorable basis as all other applicants for membership in the Club.
(c) All indemnifications provided for herein and in the
Memorandum of Agreement shall include the following provisions. Both RHI and
Purchaser shall be primary obligors under any such indemnification, jointly
and severally liable thereunder. The maximum liability of Purchaser under
any such indemnification (exclusive of attorneys' fees and costs of
litigation at the trial level or on appeal) shall not exceed $1,000,000 in
the aggregate and shall be limited to claims arising during the Indemnity
Period. In the event of any facts giving rise to an indemnification provided
for herein, the Purchaser shall be entitled, upon its election, by written
notice given to the Seller within fifteen (15) days after the date on which
notice of the claim or demand is given to the Purchaser (without prejudice to
the right of Seller to participate at its expense through counsel of its own
choosing without claim for reimbursement from Purchaser with respect thereto)
to assume and control the defense of such claim and any litigation resulting
therefrom at its expense and through counsel of its choosing, subject to the
reasonable approval of Seller. If the Purchaser assumes the defense of any
such claim or litigation, it shall take all prudent steps reasonably
necessary in the defense or settlement of such claim or litigation and shall
hold the Seller harmless from and against all losses caused by or arising out
of any settlement thereof approved by Purchaser or any judgment in connection
therewith (other than the costs of Seller's expenses for participating in any
such defense or settlement at its own election). The Purchaser shall not in
the defense of such claim or litigation, except with the written consent of
Seller, consent to the entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving to Seller
by a claimant of a release from all liability regarding such claim or
litigation. The Seller shall cooperate in the defense of any claim or
litigation.
If the Purchaser shall not assume the defense of any such claim or
litigation, the Seller may defend against such claim or litigation in such
manner as it may deem appropriate and may settle such claim or litigation,
after giving written notice thereof to Purchaser on such terms as Seller may
deem appropriate, and Purchaser will promptly reimburse Seller for any claim,
damage, and reasonable cost or expenses incurred as a result of such
settlement or any judgment entered in connection therewith together with the
amount of all legal and other expenses incurred by Seller in connection with
the defense or settlement of any such claim or litigation including, but not
limited to, any and all reasonable costs associated with any appeals of such
action. Notwithstanding the foregoing, Seller may, at any time, enter into
any settlement of any such claim or litigation affecting Seller, provided,
however, if such settlement is not approved by Purchaser, Purchaser shall be
relieved of its indemnification obligations set forth herein. If Purchaser's
approval of a settlement is requested and refused in writing and Seller
elects not to settle, all expenses, fees, losses, damage and liability
thereafter incurred or suffered by Seller shall be the sole responsibility of
Purchaser in the event of later settlement or adjudication against Seller
with respect to any such claim or litigation the settlement of which
Purchaser initially refused to defend.
Seller shall give Purchaser written notice within thirty (30) days of
its receipt of any written notice of a claim or demand for which
indemnification may be provided herein. Failure of Seller to give such
notice shall not relieve Purchaser of its obligations herein, except to the
extent, if at all, that Purchaser shall have been materially prejudiced
thereby. In the event Seller takes any action which admits liability or
materially impairs the rights of Purchaser to settle or negotiate such claim
or other matter indemnified against, then Purchaser shall have no further
obligation to Seller pursuant to the indemnification provisions herein.
6.4 OPERATIONAL STANDARDS. Purchaser acknowledges that the Club and
Club Facilities are important amenities to the development and marketing of
the Communities both in terms of the quality of the operations and the rights
and privileges afforded to Club Members in relationship to resort guests
accommodated at the Marriott ("Resort Guests"). Purchaser acknowledges and
agrees that the private membership aspects of the Club will be preserved by
Purchaser not only by adherence to the Membership Plan Requirements but also
by continuation of those operational standards set forth on Exhibit D,
attached hereto and made a part hereof (the "Operational Standards"). The
provisions of this Section 6.4 shall survive for a period of six (6) years
from the Closing Date and Purchaser shall indemnify and hold harmless Seller
from any claims arising out of or in connection with a violation of the
provisions of this Section 6.4 in accordance with the indemnification
provisions set forth in Section 6.3 hereof.
6.5 ARBITRATION. Any dispute arising between Seller and Purchaser in
respect of either party's rights or obligations arising subsequent to the
Closing under Sections 6.1 through 6.4 of this Agreement (excluding those
resulting from or arising out of or related to litigation instituted against
Seller or Purchaser by third parties) shall be submitted to binding
arbitration in accordance with the procedures set forth in this Section 6.5
as follows:
(a) The arbitration shall be initiated by either party
delivering to the other a Notice of Intention to Arbitrate as provided for in
the Commercial Arbitration Rules of the American Arbitration Association (the
"AAA"), as amended from time to time (the "AAA Rules").
(b) The arbitration shall be conducted at such location within
St. Johns County or Duval County, Florida as shall be determined by Seller in
accordance with the AAA Rules. In the event of a conflict between the AAA
Rules and this Section 6.5, the provisions of this Section 6.5 shall govern.
(c) The parties shall appoint a single arbitrator by mutual
agreement. If the parties have not agreed within ten (10) days of the date
of the Notice of Intention to Arbitrate on the selection of an arbitrator
willing to serve, the AAA shall appoint a qualified Arbitrator to serve (any
arbitrator chosen in accordance with this Subsection 6.5(c) is referred to
herein as the "Arbitrator"). The Arbitrator shall have substantial
experience in the operation of private membership club facilities. No
Arbitrator may serve if such person has a conflict of interest involving the
subject matter of the Arbitration.
v The Arbitrator shall be fully compensated for all time
spent in connection with the arbitration proceedings in accordance with the
Arbitrator's hourly rate not to exceed three hundred dollars ($300.00) per
hour, unless otherwise agreed to by the parties, for all time spent by the
Arbitrator in connection with the arbitration proceeding. Pending the
Arbitrator's final award, the Arbitrator's compensation and expenses shall be
advanced equally by the parties.
(e) Within thirty (30) days after the Arbitrator has been
appointed, a preliminary hearing among the Arbitrator and counsel for the
parties shall be held for the purpose of developing a plan for the management
of the arbitration, which shall then be memorialized in an appropriate order.
The matters which may be addressed include, in addition to those set forth in
the AAA Rules, the following: (i) definition of issues; (ii) scope, timing
and types of discovery, if any; (iii) schedule and place(s) of hearings; (iv)
setting of other timetables; (v) submission of motions and briefs; (vi)
whether and to what extent expert testimony will be required, whether the
Arbitrator should engage one or more neutral experts, and whether, if this is
done, engagement of experts by the parties can be obviated or minimized;
(vii) whether and to what extent the direct testimony of witnesses will be
received by affidavit or written witness statement; and (viii) any other
matter which may promote the efficient, expeditious, and cost-effective
conduct of the proceeding.
(f) The Arbitrator shall permit and facilitate such discovery
as he or she shall determine is appropriate in the circumstances, taking into
account the needs of the parties and the desirability of making discovery
expeditious and cost-effective.
(g) Papers, documents, and written communications shall be
served by the parties directly upon each other and the Arbitrator.
(h) The Arbitrator shall promptly (within sixty (60) days of
the conclusion of the proceedings or such longer period as the parties
mutually agree) determine the claims of the parties and render a final award
in writing. The Arbitrator shall provide a concise statement of the general
basis for his or her conclusions. The award rendered by the Arbitrator may
be converted to a judgment and enforced in any court having jurisdiction to
do so and may only be appealed pursuant to subsection 6.5(j) hereof. If
applicable law allows pre-award interest, the Arbitrator may, in his or her
discretion, grant pre-award interest and, if so, such interest shall be at
the legal rate provided under Florida law. The Arbitrator shall award all of
a party's reasonable attorneys fees and costs of arbitration, taking into
account the final result of arbitration, the conduct of the parties and their
counsel in the course of the arbitration, and other relevant factors.
(i) Within thirty (30) days after delivery of a final award to
the parties, the Arbitrator may make corrections on his or her own
initiative, and corrections requested by a party, provided all such
corrections are requested and made in writing.
(j) A party may seek judicial review of the Arbitrator's award
solely and exclusively upon the grounds that it was obtained through fraud,
material misrepresentation, corruption or misconduct. Any suit, action or
proceeding whether at law or in equity, including any declaratory judgment or
similar suit or action, constituting or pertaining to such judicial review,
shall be instituted in the Circuit Court, Eleventh Judicial Circuit, St.
Johns County, Florida. Each party waives any objection which it may now or
hereafter have to the venue in any such suit, action or proceeding and
irrevocably submits itself to the jurisdiction of such court in any such
suit, action or proceeding. Each party agrees that a remedy at law for a
violation of this subsection 6.5(j) may not be adequate and therefore agree
that the remedies of specific performance and injunctive relief shall be
available in the event of such violation, in addition to any other right or
remedy at law or in equity to which any party may be entitled. If an award
is reviewed and the party seeking the review prevails, all costs and
reasonable attorneys' fees incurred by the parties in the review proceedings
shall be borne by the party initiating same. If the party seeking the review
does not prevail, it shall pay all costs and reasonable attorneys' fees
incurred by both parties in the review proceedings.
6.6 ZONING CHANGES. Seller shall not, prior to Closing, and
Purchaser shall not, for a period of five (5) years subsequent to Closing,
seek any zoning changes to the Property or changes to the applicable
development approvals pertaining to the Real Property which directly affect
the Real Property without the express written consent of the other party.
Further, at no time shall Purchaser take any action which in the reasonable
opinion of Seller would modify or violate, or might be construed to violate,
the terms of the Development of Regional Impact Order dated July 8, 1975,
issued by the St. Johns County Board of County Commissioners, as amended from
time to time (the "DRI") or Planned Unit Development Ordinance No. 75-15,
dated August 15, 1975, issued by the St. Johns County Board of County
Commissioners, as amended from time to time (the "PUD") and Purchaser and RHI
shall indemnify and hold harmless Seller from any claims arising out of or in
connection with a violation of the provisions of this Section 6.6 in
accordance with the indemnification provisions set forth in Section 6.3
hereof. During the Feasibility Period, Purchaser shall satisfy itself that
the zoning and DRI approvals that affect the Real Property will permit
Purchaser to operate the Club and the Club Facilities in the manner desired
by Purchaser. Seller and Purchaser will cooperate in order to obtain
documentation approved by Seller and Purchaser in order to fulfill this
requirement. Prior to Closing, Purchaser will not contact any governmental
authorities in connection with the above without affording Seller or its
counsel, by five (5) days prior written notice, an opportunity to participate
in any such discussion or correspondence.
6.7 APPROVAL RIGHTS - SUBSEQUENT OWNERS AND MANAGERS. For a period
of one (1) year from the Closing Date, Seller shall have the right to approve
any future owner of the Real Property and shall have the right to approve any
manager or management company (other than Interstate Hotels, Inc. or its
Affiliates) responsible for the management of the Real Property, the Club or
the Club Facilities, and such approval will not be unreasonably withheld.
Seller's approval rights as aforesaid will not apply in the case of a
transfer or lease to or management by an Affiliate of Purchaser. In the case
of any contemplated transfer, lease, or change of manager or management
company, Purchaser or the then owner of the Real Property shall notify Seller
of the name of the contemplated transferee, lessee, manager or management
company at least thirty days prior to the time of the contemplated transfer,
lease or change in manager or management company, and shall provide to Seller
such information in connection therewith as Seller may reasonably require,
and Seller shall notify Purchaser or the subsequent owner of Seller's
approval or disapproval within ten days of receipt of such information.
6.8 SELLER'S RIGHTS UPON RESALE. For a period of one (1) year from
the date of Closing, if Purchaser or any of its Affiliates shall convey the
Real Property or the issued and outstanding shares of Purchaser to a third
party purchaser (exclusive of (i) Affiliates, and (ii) conveyances arising
out of condemnation), for a purchase price in excess of THREE MILLION SEVEN
HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($3,750,000.00), then Seller shall
be entitled to receive, coincident with the conveyance of the Real Property
or stock to such purchaser, an amount equal to fifty percent (50%) of the
Profit, as defined below, realized by Purchaser upon such resale. For
purposes of this Section 6.8, the term Profit shall mean the difference
(stated as a positive integer) between (a) the purchase price paid by the
third party purchaser for the Real Property or stock as reduced by the direct
normal and customary transactional costs and expenses paid to unrelated third
parties, and (b) $3,750,000.00, as increased by (i) capital expenditures made
by Purchaser to improve the Club Facilities from and after the Closing Date,
and (ii) all direct normal and customary transactional costs and expenses
attributable to this purchase and sale transaction paid to unrelated third
parties. Seller and Purchaser acknowledge and agree that the rights of
Seller provided for in Sections 6.3, 6.4, 6.7 and 6.8 hereof regarding
Sellers operation, ownership and resale of the Property have been entered
into in specific reliance upon Purchaser's representations as to its intent
to participate directly or through its Affiliates in the operations of the
Club Facilities for a period of time subsequent to Closing. As a result, the
foregoing constitute reasonable restrictions upon Purchaser's ownership and
operations of the Property for the periods stated.
6.9 DISCOUNTS. Until such time as property owners within the
Communities shall have activated the 640 memberships in the Club provided for
under Section 6.3(b) above, Purchaser shall not offer to any other
residential real estate communities within Clay, Nassau, Duval or St. Johns
Counties membership discounts or membership incentive programs in the nature
of discounts, other than the Communities. This provision shall not be
construed to prevent the offering of memberships at full published rates to
residential property owners or to any residential community, it being
intended that the Communities shall be the only residential real estate
communities afforded membership discounts or incentives in the nature of
discounts in the Club Facilities.
6.10 MEMORANDUM OF AGREEMENT. The covenants and agreements mentioned
in Sections 6.1, 6.2, 6.3(b), 6.7, 6.8 and 6.9, inclusive, shall be covenants
running with the Real Property (such covenants to be perpetual unless
otherwise specified in the applicable section mentioned above) and shall run
with the Real Property and be binding upon and enforceable against the
Purchaser and its successors and assigns, and all owners of any portion of
the Real Property and shall run to Seller, its successors and assigns, and
shall be memorialized into and included in a Memorandum of Agreement to be
executed by Seller and Purchaser at Closing and recorded in the public
records of St. Johns County, Florida, at the time of recording of the deed
conveying the Real Property to the Purchaser.
6.11 RETENTION OF NAME/LICENSE. At Closing Seller shall transfer to
Purchaser the name "Cabana Club" (the "Name"). Purchaser acknowledges that
it shall acquire no interest in, nor the right to use, any other name,
service mark, trademark, or trade name of Seller or its Affiliates, including
without limitation, the names "Arvida [copyright]" or "Sawgrass [copyright]",
except pursuant to the License Agreement referenced in Section 6.19 hereof.
6.12 CONFIDENTIALITY.
(a) CONFIDENTIAL INFORMATION. Seller has or will furnish to
Purchaser for the purpose of Purchaser's review, the financial and other
materials and information mentioned herein and/or provided to Purchaser in
connection with the transaction contemplated by this Agreement. The
existence of the transaction described herein and in the Letter of Intent,
the existence of this Agreement and the Letter of Intent, and any of the
terms of this Agreement or the Letter of Intent, together with all of the
materials and information mentioned in the previous sentence, is hereinafter
collectively referred to as "Confidential Information," exclusive of any
information which (i) at the time of disclosure or thereafter (other than as
a result of such disclosure) is generally available to and known by the
public, or (ii) has been independently acquired or developed by Purchaser
without violating any of its obligations under this Section 6.12. In
addition to the agreements contained in the Confidentiality Agreement, Seller
and Purchaser agree as follows:
(b) CONFIDENTIAL INFORMATION RECIPIENT. In the course of
Purchaser's review, the Confidential Information may be used by Purchaser or
communicated by Purchaser in whole or in part, orally or in writing, to
Purchaser's employees, agents, contractors and attorneys, or any prospective
lender providing financing to the Purchaser for the acquisition of the
Property (Purchaser and such employees, agents, contractors, attorneys and
any entity providing such financing, being collectively referred to as the
"Recipient"), provided that such Recipient shall agree to maintain the
confidentiality of the Confidential Information as provided herein. Prior to
communicating any Confidential Information to any Recipient, Purchaser shall
provide Seller with written evidence of such Recipient's agreement to
maintain the confidentiality of such information.
(c) NONDISCLOSURE OBLIGATIONS. Because of the great loss and
damage that would be suffered by Seller if any Recipient were to divulge any
Confidential Information at any time outside the scope of its review and
purposes for which the Confidential Information and been provided to
Recipient, Purchaser for itself and each Recipient agrees that:
(i) Each Recipient shall at all items receive and
maintain all Confidential Information in confidence, and Recipient shall not,
in any manner, directly or indirectly, disclose or divulge any Confidential
Information to any Person whomsoever, nor use such information for its
benefit or for the benefit of any other Person. Furthermore, Recipient shall
not use Confidential Information for any purpose whatsoever, other than for
the review process of Recipient or for purposes expressly authorized by
Seller.
(ii) Purchaser represents and warrants for itself and all
Recipients that all right, title and interest in and to all Confidential
Information (excluding the prior letter of intent between Seller and
Purchaser and this Agreement) up to the date of Closing is the exclusive
property of Seller, and Purchaser and each Recipient shall make no claim for
proprietary interests therein.
(iii) If this Agreement shall be terminated for any
reason, each Recipient shall promptly return to Seller all such Confidential
Information, including all copies thereof as may have been provided by Seller
or may have been made by any Recipient in spite of the prohibition against
such copying, as are or may come into such Recipient's possession or control.
(iv) Prior to the Closing Date, in addition to and not in
limitation of the above, no Recipient shall communicate with any Member or
employee of the Club except as may be approved in writing by Seller, which
may be granted or withheld by Seller in its sole discretion.
(d) This Section 6.12 shall survive termination of this
Agreement and Closing.
6.13 PERMITS AND LICENSES. At Closing, Seller shall assign to
Purchaser in whole or in part, as applicable, and to the extent permitted,
all transferable permits and governmental licenses issued to Seller and used
solely in connection with the conduct of business at the Club Facilities.
Seller hereby agrees to operate, manage and maintain the Property, the Club
and the Club Facilities in accordance with the provisions, requirements and
restrictions set forth in the aforementioned permits and licenses until
Closing.
6.14 BOOKS AND RECORDS. At Closing, Seller shall deliver to Purchaser
such extracts from its books and records pertaining to the operation of the
Club Facilities as Purchaser may reasonably request, and at Purchaser's
expense.
6.15 ASSUMED OBLIGATIONS. At Closing, Seller will assign to Purchaser
and Purchaser will assume Seller's obligations under the "Assumed
Obligations" listed in Exhibit E attached hereto and made a part hereof, but
only to the extent any of such Assumed Obligations continues to be a viable
contractual obligation of Seller in force and effect at the date of Closing.
The reference to such Assumed Obligations herein, or the act of Purchaser's
assumption of such Assumed Obligations, shall not be deemed to be (i) an
extension, expansion, modification, renewal, or novation of any Assumed
Obligation; (ii) be deemed to recreate, reimpose, revise, or restate any such
Assumed Obligation; or (iii) be deemed to be an admission that any such
Assumed Obligation is an enforceable contractual obligation, in any case in
favor of any Member, Person, or other party not a signatory to this
Agreement, and shall create no third party beneficiaries hereof. Purchaser's
assumptions of those obligations under Contracts constituting part of the
Assumed Obligations shall be limited to those provisions thereof, if any,
which relate to the ownership use and operation of the Club. Further, with
respect to the Assumed Obligations identified as "Lot/Unit or Builder
Contracts" on Exhibit E, the scope of the Assumed Obligation of Purchaser
with respect thereto shall be limited only to those specific provisions of
such Contracts included as part of Exhibit E-1. Purchaser will cooperate
with Seller and will provide all information reasonably necessary and will
execute required documentation reasonably necessary to seek the release of
Seller from liability under any of the service contracts or equipment leases
constituting part of the Assumed Obligations, if requested by Seller. In the
event that the obligee under any such Assumed Obligation requires any payment
in order to procure such release, such payment will be the obligation of
Seller. The assignment and assumption agreement that will be executed by
Seller and Purchaser in connection with the Assumed Obligations will contain
a provision whereby the Purchaser and RHI will indemnify and hold the Seller
harmless from and against any and all loss, damage, judgments, claims and
threats of claims, including all reasonable attorneys' fees and court costs
through all trial and appellate levels, in connection with or arising out of
Purchaser's actual or alleged failure to fulfill its obligations under or in
connection with the Assumed Obligations.
6.16 CONDUCT OF BUSINESS; MAINTENANCE OF CLUB FACILITIES. Until the
Closing, Seller will manage and operate the Club and existing Club Facilities
as same were being managed and operated as of the Effective Date, and will
use its best efforts to preserve a good relationship with all persons having
relations with Seller with respect to the Property, the Club and/or existing
Club Facilities. Seller will not enter into any contract or commitment or
engage in any transaction which materially affects the Property and which
does not by its terms terminate at Closing, or which materially affects the
Property, the Club or the existing Club Facilities or which materially and
adversely affects any representation or warranty of Seller in this Agreement
without the prior written consent of Purchaser, except for contracts,
agreements, purchase orders and undertakings occurring in the ordinary course
of business which are reasonable and necessary to the continued operation of
the Property, the Club and/or existing Club Facilities. After the execution
of this Agreement, Seller will not rent or lease the Property, the Club
and/or existing Club Facilities or any portion thereof, or extend or
otherwise materially amend any material lease or other material agreement
relating to the Property without the prior written consent of Purchaser.
Seller will deliver to Purchaser at Closing the Tangible Assets, subject to
normal wear and tear between the date hereof and Closing. Purchaser shall
take a closing inventory of tangible assets not later than three (3) business
days prior to the Closing Date. If any item or items of Tangible Assets
shall be missing, damaged or destroyed having an aggregate value in excess of
THREE THOUSAND FIVE HUNDRED AND 00/100 DOLLARS ($3,500.00) ("Reduced
Assets"), Seller agrees at its election, to replace such item or items at
Closing with items of equal value or to provide Purchaser a credit at Closing
in amount equal to the value of the Reduced Assets. Seller shall also
maintain Inventory levels at normal and customary levels between the date
hereof and the Closing Date, it being intended that the Club Facilities be
operational at normal operational standards as of the Closing Date.
6.17 CONDITION OF THE PROPERTY; DISCLAIMER OF REPRESENTATIONS.
Purchaser has had the right to continuous access to the Club Facilities under
the UAO Agreement and as such is familiar with the operation of Club
Facilities. Purchaser hereby expressly acknowledges and agrees that except
as and to the extent expressly provided to the contrary in this Agreement:
(a) this sale is made "as is" and Seller makes and has made no warranty or
representation whatsoever as to the condition or suitability of any portion
of the Property for Purchaser's purposes, (b) Seller and its Affiliates
warrant only that, to their actual knowledge, any information furnished to
Purchaser by Seller is true and correct as of the date delivered, and Seller
shall not be bound by any oral statement of any broker, employee, agent or
other representative or Affiliate of Seller, (c) Purchaser has made a
complete and thorough examination and inspection of all portions of the
Property and, on the basis of its inspection, Purchaser is thoroughly
familiar with all portions of the Property (including without limitation,
whether or not hazardous or toxic materials are or have heretofore been
located on or under or generated from any portion of the Property), and
including, without limitation, zoning, land use restrictions, compliance with
applicable laws and regulations, utility availability and hook-up costs
(including, without limitation, whether or not septic tanks are permitted or
prohibited) the financial condition of the Property, and all other matters
relevant to Purchaser, (d) if Purchaser elects to close this transaction,
Purchaser shall have determined that the condition of all portions of the
Property is satisfactory to Purchaser, (e) notwithstanding the nature or
extent of the inspections Purchaser has made, Purchaser shall purchase and
accept every portion of the Property in its "as is" condition without
requiring any action, expense or other thing or matter on the part of the
Seller to be paid or performed and, upon acceptance of the deed of conveyance
to the Real Property, Purchaser shall be conclusively deemed to have accepted
the Property in its "as is" condition, (f) shall hold Seller and its
Affiliates harmless from all damages and consequences arising from any
adverse conditions (including without limitation, the existence of any
hazardous or toxic substances) on such Property which are created after the
Closing Date, and (g) Seller and its Affiliates make and have made no
representation or warranty, express or implied, concerning any portion of the
Property, its condition, the use to which it may be put, any environmental
matters, or any other thing or matter directly or indirectly related thereto
or hereto (including, without limitation, NO WARRANTY OF MERCHANTABILITY, OR
FITNESS FOR ANY PARTICULAR PURPOSE OR RELATING TO THE ABSENCE OF LATENT OR
OTHER DEFECTS, except as may be specifically included in any closing
documents executed by Seller in connection herewith). The provisions of this
Section shall survive Closing and delivery of the deed of conveyance.
6.18 EXTENSION OF LEASE WITH ARVIDA REALTY SALES, LTD. At Closing,
RHI shall enter into an extension of the current lease between Purchaser and
Arvida Realty Sales, Ltd. for the space presently occupied by Arvida Realty
Sales, Ltd. and located on the first floor of the Marriott at Sawgrass. The
term of the lease shall be extended through December 31, 2007 in accordance
with its current terms and conditions except that (i) the extension shall
allow for annual rent increases based upon increases in the Consumer Price
Index (All Cities Average) from and after expiration of the existing term on
a noncumulative basis and (ii) the extension shall contain an option
exercisable solely by Arvida Realty Sales, Ltd., to renew the lease for one
(1) renewal term of five (5) years upon the same terms and conditions set
forth in the lease as amended by the extension.
LICENSE AGREEMENT. At Closing, Seller shall grant to Purchaser
a royalty free license to the tradename "Sawgrass" in the form of Exhibit F
attached hereto (the "License Agreement").
7. REPRESENTATIONS AND WARRANTIES
7.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER AND RHI. In order to
induce Seller to enter into this Agreement, Purchaser represents and warrants
as follows, up to and including the Closing Date:
(a) AUTHORITY. Purchaser and RHI are each entities in good
standing in their state of organization and have all requisite power and
authority as is necessary or desirable to permit them to enter into and
perform their duties hereunder. No consent by or authorization of any
governmental agency, authority or other person is required to permit each of
them fully to perform their duties under this Agreement, except the consent
of IBJ which consent RHI shall diligently pursue; and provided such consent
shall not constitute a condition to Purchaser's obligation to close this
transaction after expiration of the Consent Period. Upon the execution and
delivery of this Agreement by the parties hereto, this Agreement will
constitute a legal, valid and binding obligation of Purchaser and RHI
enforceable in accordance with its terms.
(b) NO DEFAULTS. Neither the execution of this Agreement nor
the consummation of the transactions contemplated herein will (except to the
extent consent of IBJ is required): (i) conflict with, or result in a breach
of, the terms, conditions or provisions of, or constitute a default under,
any partnership agreement of Purchaser or RHI or agreement or instrument to
which Purchaser or RHI is a party, (ii) violate any restriction to which
Purchaser or RHI is subject, (iii) constitute a violation of any applicable
code, resolution, law, statute, regulation, ordinance, rule, judgment, decree
or order to which Purchaser or RHI is subject or by which either is bound, or
(iv) result in the creation of any lien, charge or encumbrance upon any
property to be acquired by Purchaser hereunder or any portion thereof, except
as specifically permitted hereunder.
(c) LITIGATION. Except as set forth on Exhibit G hereto,
neither Purchaser nor RHI has actual knowledge of any actions, suits or
proceedings pending or threatened against them by any party before any court,
agency, governmental authority or arbitrator related to the business of
Purchaser or RHI, which could, if successful, have an adverse effect on their
ability to consummate the transactions contemplated hereby and fulfill its
obligations hereunder. All such actions, suits or proceedings shall be
continued diligently by Purchaser and RHI at their sole expense.
(d) MATERIAL MISSTATEMENTS OR OMISSIONS. None of the
representations or warranties of Purchaser or RHI contained in this
Agreement, or in the exhibits attached hereto, and no document furnished in
connection herewith or in connection with the transactions contemplated
hereby contains, or at the Closing will contain, any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements of fact herein and therein not misleading.
7.2 REPRESENTATIONS AND WARRANTIES OF SELLER. In order to induce
Purchaser to enter into this Agreement, Seller represents and warrants as
follows, up to and including the Closing Date:
(a) AUTHORITY. Seller is a legally constituted general
partnership under the laws of the State of Florida. Seller has all requisite
power and has taken all such actions as are necessary or desirable to permit
it to enter into and perform its duties hereunder. No consent by or
authorization of any other person is required to permit Seller fully to
perform its duties under this Agreement, except with respect to the release
of the existing mortgage lien which Seller is obligated to release at
Closing. Upon the execution and delivery of this Agreement by all parties,
this Agreement will constitute a legal, valid and binding obligation of
Seller enforceable against Seller in accordance with its terms.
(b) NO DEFAULTS. To the best of Seller's actual knowledge,
subject to Seller's obtaining requisite consent of its lenders, neither the
execution of this Agreement nor the consummation of the transactions
contemplated herein will: (i) conflict with, or result in a breach of, the
terms, conditions or provisions of, or constitute a default under, any
agreement or instrument to which Seller is a party, (ii) violate any
restriction to which Seller is subject, (iii) constitute a violation of any
applicable code, resolution, law, statute, regulation, ordinance, rule,
judgment, decree or order to which Seller is subject or by which it is bound,
(iv) result in the creation of any lien, charge or encumbrance upon the
Property or any portion thereof.
(c) ASSUMED OBLIGATIONS. The copies of the Contracts provided
to Purchaser are complete and constitute the entire agreement with the Person
with which or whom each such agreement was made; the Contracts are in full
force and effect; to the best of Seller's actual knowledge there has been no
material default under any Contract except as otherwise disclosed in writing
to Purchaser; to the best of Seller's knowledge there are no commitments for
access to or use of the Club Facilities by third parties except as set forth
in Exhibit E; and the Rules and Regulations dated January 1, 1997 as
delivered to Purchaser constitute a true and correct copy of the current
operating regulations for the Club Facilities.
(d) FEES AND ASSESSMENTS. Seller has no actual knowledge of
any governmental assessments concerning the Property which are due and
unpaid. Seller has no actual knowledge of any outstanding impact fees or
other fees due and owing to or pending claims of any municipality or
governmental authority with respect to the Property, the Club or existing
Club Facilities.
(e) LITIGATION. Except as set forth on Exhibit H attached
hereto, Seller has no actual knowledge of any actions, suits or proceedings
pending or threatened by any party before any court, agency, governmental
authority or arbitrator related to the Property, the Club and the Club
Facilities.
(f) MECHANIC'S LIENS. That on the Closing Date there will be
no outstanding contracts made by Seller for any improvements to the Property
which have not been fully paid for, and Seller shall cause to be discharged
all construction, mechanics' or materialmen's liens arising from any labor or
materials furnished to the Property prior to the Closing Date.
(g) SELLER'S LICENSES AND PERMITS. During or prior to the
Feasibility Period, Seller has provided Purchaser with copies of all licenses
and permits held by Seller pertaining to the ownership and operation of the
Property, the Club and/or the Club Facilities. To Seller's knowledge, the
copy of each such license or permit, with any amendments applicable thereto,
is complete and such licenses and permits are in full force and effect and
are satisfactory for the operation of the Club as it is currently operated by
Seller. Seller has not received any written notice of noncompliance with any
such license or permit, nor has Seller received notice of any zoning
violation applicable to the Club Facility.
8. MISCELLANEOUS CLOSING MATTERS
8.1 PRORATIONS AT CLOSING. All real estate taxes, personal property
taxes, rents, membership dues and periodic fees (but not initiation fees) and
items of income and expense or accounts payable to the extent of available
information, shall be prorated through the day before Closing. Cash at
Closing shall be increased or decreased as may be required by the prorations.
Taxes shall be prorated based on the current year's tax with due allowance
made for the allowable discount and any other applicable exemptions as shall
be available at Closing. If Closing occurs on a date when the current year's
tax statement is not available, taxes will be estimated and prorated based
upon the prior year's tax statement. Any tax proration based on an estimate
may at the request of either Purchaser or Seller be subsequently readjusted
upon receipt of the actual tax statement, and a statement to that effect will
be set forth in the closing statement.
8.2 PRORATIONS POST CLOSING. Seller and Purchaser acknowledge that
it will not be possible to make all necessary adjustments in items of
proration at Closing. As a result, all utility charges, accounts payable and
receivable and other items of income and expense as to which information is
not available prior to Closing shall be subject to a post closing adjustment
procedure set forth in this Section 8.2. Accounts payable and receivable
shall be adjusted as set forth in Section 8.3 below. Other items of income
or expense shall be prorated as to Seller for the period up to and including
the day before Closing and as to Purchaser for the period of the day of
Closing and thereafter. Purchaser shall receive a credit for any reservation
deposits paid to Seller prior to Closing. Seller and Purchaser agree that
their respective designated accounting personnel shall diligently proceed to
make such adjustments promptly following the date of Closing in order to
finalize all such adjustments within the earlier of (i) thirty (30) days from
Closing or (ii) thirty (30) days from the date all information necessary to
make such adjustments is available to both parties. Each party agrees to
promptly pay, within ten (10) days of such final adjustment determination,
over to the other party any amounts due and owing to such party. The
provisions of this Section 8.2 shall survive the Closing until all such
adjustment amounts are paid. Any amounts not paid when due shall bear
interest at the rate of eight percent (8.0%) per annum from the due date
until paid.
8.3 ACCOUNTS PAYABLE AND RECEIVABLE. All accounts payable that are
attributable to operations of the Property, the Club or the Club Facilities
for the period through the day before Closing will be paid by Seller. To the
extent such accounts payable are attributable to periods from the date of
Closing and thereafter, the same shall be prorated as provided in Section
8.1, and paid by Purchaser. The accounts receivable attributable to
operations of the Property, the Club or the Club Facilities that as of the
day prior to Closing are less than ninety (90) days outstanding, and all
unbilled accounts, excluding such accounts receivable or unbilled accounts
owed by RHI (the "Purchased Accounts Receivable") shall be transferred to
Purchaser at Closing at a purchase price of (i) ninety percent (90%) of gross
as to receivables equal to or less than thirty (30) days outstanding or
unbilled accounts, (ii) eighty percent (80%) of gross as to receivables equal
to or less than sixty (60) days but more than thirty (30) days outstanding,
and (iii) sixty percent (60%) of gross as to receivables which are equal to
or less than ninety (90) days but more than sixty (60) days outstanding. All
other accounts receivable shall be retained and collected by Seller (other
than those of RHI), provided Purchaser shall include such amounts in its
statement of club accounts to each Member, and shall cooperate with Seller in
an effort to bring such accounts receivable current. Any payments made on
Member accounts which Members constitute part of the Purchased Accounts
Receivable, shall be applied first to the Purchased Accounts Receivable
balance. Purchaser shall pay or cause RHI to pay to Seller, at Closing, all
accounts receivable of RHI or unbilled accounts of RHI in favor of Seller
related to the Club.
8.4 PURCHASER'S CLOSING COSTS. At Closing, Purchaser shall pay for
inspections (if any), all recording fees, all costs of Purchaser financing,
Purchaser's attorneys' fees and the cost of the Survey.
8.5 SELLER'S CLOSING COSTS. At Closing, Seller shall pay for its
attorney's fees, documentary stamp taxes on the deed to the Real Property,
the title insurance premium and any costs of lien releases of Seller's
financing.
8.6 COST OF TRANSFER OF PERMITS, LICENSES AND ASSUMED OBLIGATIONS.
Purchaser shall pay any fee charged to the permittee or licensee in
connection with the transfer of any license or permit to Purchaser (or adding
Purchaser to any license or permit) as provided herein. Seller shall pay the
amounts required by any obligee under an Assumed Obligation to procure the
release of Seller under such Assumed Obligation. Purchaser shall pay all
costs of obtaining all required liquor licenses.
8.7 TERMINATION OF EMPLOYEES OF SELLER. All employees of Seller (as
to the Club Facilities) shall be terminated by Seller as of the Closing Date,
at Seller's expense.
8.8 EXTENSION OF CLOSING DATE. Purchaser may, at its option, extend
the Closing Date up to December 1, 1997 by providing (i) written notice of
such extension request to Seller not later than 5:00 p.m. EST on October 21,
1997, (ii) wire transfer of the amount of ONE HUNDRED THOUSAND AND 00/100
DOLLARS ($100,000.00) to Seller's account (the "Extension Payment"), and
(iii) delivery of the Deposit by wire transfer from Escrow Agent to Seller's
account. The Extension Payment shall constitute part of the Deposit and
shall be credited against the Purchase Price at Closing.
9. CLOSING DOCUMENTS
9.1 DOCUMENTS TO BE DELIVERED BY SELLER. At the Closing, Seller
shall deliver or cause to be delivered to Purchaser the following:
(a) A Special Warranty Deed from Seller conveying fee simple
title to the Real Property, subject to the Permitted Exceptions, the
Declaration of Restrictions, and the Memorandum of Agreement and the rights
of Members, in proper statutory form for recording;
(b) A standard No-Lien Affidavit as to the Property, executed
by Seller, which shall be satisfactory to the Title Company in order to
delete all standard printed exceptions in the Title Policy other than taxes
for the year of conveyance and matters as shown on the Survey;
(c) A Non-Foreign Person Affidavit;
(d) Bill of Sale for all Tangible Assets which shall include
warranties of titles in form attached as Exhibit I;
(e) An assignment of Seller's rights, title and interest in the
Permits and Licenses mentioned in Section 7.2(g), and any guaranties or
warranties relating to any of the Property, in form attached as Exhibit J;
(f) An Assignment of the Assumed Obligations, in form attached
as Exhibit K.
9.2 DOCUMENTS TO BE DELIVERED BY PURCHASER. At the Closing, the
Purchaser shall deliver or caused to be delivered to Seller at Closing the
following:
(a) The Purchase Price (of which the Deposit shall be a part,
unless previously delivered to Seller);
(b) An assumption of the Assumed Obligations in the form
attached as Exhibit K;
(c) Consent of IBJ to the provisions of Sections 6.2 and 6.18
hereof.
9.3 MUTUAL OBLIGATIONS. At the Closing, Seller and Purchaser shall
mutually execute and deliver to each other:
(a) A Closing Statement in customary form;
(b) The Memorandum of Agreement;
(c) License Agreement; and
(d) Such other documents as may be reasonably necessary to
effectuate the closing of the transaction contemplated by this Agreement.
9.4 ITEMS TO BE DELIVERED BY ESCROW AGENT. At Closing, Escrow Agent
shall deliver the Deposit to Seller.
10. MISCELLANEOUS
10.1 NOTICES. All notices, requests, consents, instructions and
communications required or permitted under this Agreement shall be in writing
(including telex, telecopy and telegraphic communication) and shall be (as
elected by the person giving such notice) hand-delivered by messenger or
overnight courier service, telecommunicated, telecopied or mailed (air mail
if international) by registered or certified mail (postage prepaid), return
receipt requested, and addressed to each party at their respective addresses
as set forth below or to such other addresses any party may designate by
notice complying with the terms of this Section:
If to Seller: Mark Ambach
Arvida/JMB Partners
Jacksonville Golf & Country Club
3995 Hunt Club Road
Jacksonville, Florida 32224
Telephone: 904-223-5000
Telecopy: 904-223-0641
Copy to: John Baric, Esq.
Arvida Company
7900 Glades Road
P. O. Box 100
Boca Raton, Florida 33429
Telephone: 561-479-1100
Telecopy: 561-479-1227
And to: M. Lynn Pappas, Esq.
Pappas Metcalf & Jenks, P.A.
200 West Forsyth Street, Suite 1400
Jacksonville, Florida 32202
Telephone: 904-353-1980
Telecopy: 904-353-5217
If to PV Resort, Inc.
Purchaser C/O General Manager
or RHI: Marriott at Sawgrass
1000 TPC Boulevard
Ponte Vedra Beach, Florida 32082
Telephone: 904-285-7777
Telecopy: 904-280-7003
Copy to: Walter Driver
King and Spalding
191 Peachtree Road, N.E.
Atlanta, Georgia 30303
Telephone: 404-572-4600
Telecopy: 404-572-5149
And to: Terry A. Moore, Esq.
Brant, Moore, MacDonald & Wells
3100 Barnett Center
Jacksonville, Florida 32202
Telephone: 904-353-3100
Telecopy: 904-353-1166
Each such notice, request or other communication shall be considered
given and shall be deemed delivered: (a) on the date delivered if by
personal delivery or courier service, (b) on the date of transmission with
confirmed answer back if by telex or telegraph or telecopier if the
confirmation shows that the communication was received prior to 5:00 P.M. on
a business day, and on the next business day if the confirmation shows that
the communication was not received until after 5:00 P.M. or on a nonbusiness
day; or (c) on the date upon which the return receipt is signed or delivery
is refused or the notice is designated by the postal authorities as not
deliverable, as the case may be, if mailed. Rejection, refusal to accept or
inability to deliver of which no notice was given shall be deemed to be
receipt of such notice, request or other communication.
10.2 DEFAULT: REMEDIES.
(a) PURCHASER DEFAULT. In the event Purchaser shall default in
any of the terms, covenants and/or provisions of this Agreement on the part
of Purchaser to be performed prior to or at Closing, then Escrow Agent shall
deliver to Seller the Deposit, unless previously delivered to Seller, and
Seller shall be entitled to retain all of such monies as full and agreed upon
liquidated damages in full settlement of any and all claims against Purchaser
for damages or otherwise, whereupon this Agreement shall be null, void and of
no further force and effect and neither party shall have any further
liability or obligation to the other hereunder. The parties hereby
acknowledge that this provision for liquidated damages is a fair and
reasonable measure of the damages to be suffered by Seller in the event of
Purchaser's default, because the exact amount of such damages are incapable
of ascertainment.
(b) SELLER DEFAULT. If Seller shall be in default of any of
the terms, covenants and/or provisions of this Agreement on the part of
Seller to be performed prior to or at Closing, and such default is not cured
prior to Closing, as may be extended for any cure period provided for
hereunder, Purchaser shall have the right (a) to cancel this Agreement by
giving written notice to Seller and this Agreement shall be deemed to be
terminated as of the date of such notice, in which event Purchaser shall be
entitled to an immediate return of the Deposit, or (b) to an action for
specific performance in the event of and as the remedy for a wrongful refusal
or failure by Seller to convey or transfer any of the Property. Seller shall
not be liable to Purchaser for any damages, direct, consequential or
otherwise and the provisions of this Section 10.2(b) are the sole and only
remedies of Purchaser against Seller. In no event shall Seller be liable to
Purchaser for any loss of profits or any other indirect, special,
consequential or any other similar damages, arising out of any breach of this
Agreement or of Seller's obligations under this Agreement and Purchaser
expressly waives its rights to any such remedies.
(c) DEFAULT AFTER CLOSING. If Purchaser or Seller fails to
perform any of the covenants of this Agreement to be performed after Closing,
or if Seller shall violate any representation or warranty contained herein,
and such default is not cured within thirty days after written notice, the
other party shall have all remedies at law or in equity, subject, in the case
of the Seller, to the limitations set forth in Section 10.2(e) below.
(d) ATTORNEYS' FEES. The parties further agree that in the
event it becomes necessary for either party to litigate in order to enforce
its rights under the terms of this Agreement, then in that event the
prevailing party shall be entitled to recover reasonable attorneys' fees and
court costs through all trial and appellate levels.
(e) NONRECOURSE/SURVIVAL. Notwithstanding anything to the
contrary in this Agreement or in any certificate executed by Seller in
connection with this transaction, it is understood and agreed that Seller's
liability with respect to any agreement, covenant or obligation contained
herein, in any documents executed in connection with this transaction, or in
any respect of any matter or condition related to this transaction or the
Property shall be limited to the amount of the Purchase Price. No present or
future direct or indirect partner in Seller, or any Affiliate of Seller,
shall have any personal liability, directly or indirectly, under or in
connection with this Agreement or any other agreement, instrument or
certificate made or entered into or delivered under or in connection with the
provisions of this Agreement, or any amendments or modifications to any of
the foregoing made at any time or times, heretofore or hereafter, and
Purchaser and its successors and assigns and, without limitation, all other
persons or entities, shall look solely to Seller's assets (limited to the
amount of the Purchase Price) for the payment of any claim or for any
performance, and Purchaser, for itself and its successors and assigns, hereby
waives any and all such personal liability. Neither a negative capital
account of any direct or indirect partner in Seller, nor any obligation of
any such partner to restore a negative capital account or to contribute
capital to Seller or any direct or indirect partner in Seller, shall be
deemed an asset of Seller for purposes of this paragraph. Purchaser's rights
to make any claim for breach of Seller's representations, warranties,
covenants or agreements as to the Property shall be limited to one (1) year
after the date of Closing; provided however, that notwithstanding the
foregoing, if Purchaser learns of any breach or non-performance of any
representation, warranty, covenant or agreement prior to the Closing,
Purchaser shall promptly notify Seller thereof, and no claim for breach of
such representation, warranty, covenant or agreement shall survive Closing
(whether or not Purchaser notifies Seller thereof) but, rather, shall merge
into the Deed to be given by Seller, it being the intention of the parties
that claim for breach or non-performance of which Purchaser has knowledge
prior to the Closing shall survive the Closing should Purchaser elect to
close notwithstanding knowledge of such breach or non-performance.
Enforcement by Seller, its successors and assignees, of each and every
covenant and obligation (including but not by way of limiting, obligations to
indemnify and hold harmless for the Indemnity Period) of Purchaser set forth
herein, and exercised by Seller, its successors and assignees, of all rights
granted to any of them herein, shall survive the Closing and delivery of the
deed of conveyance, notwithstanding anything set forth herein to the
contrary. The provisions of this Section shall survive the Closing and
deliveries of the deed of conveyance.
10.3 REAL ESTATE BROKERS. Seller and Purchaser each represent and
warrant to the other that it has not dealt with any real estate agent, broker
or finder in connection with the transaction contemplated by this Agreement.
Each party hereby agrees to indemnify, defend and save the other harmless
from the claims and demands of any real estate agent, broker or finder
claiming to have dealt with the indemnifying party in connection herewith.
Each indemnity shall include all costs and expenses incurred by the
indemnified party in enforcing this indemnity, including without limitation
all attorneys' fees and other professional charges. This Section 10.3 shall
survive termination of this Agreement and Closing.
10.4 EMINENT DOMAIN. If, prior to the Closing Date, the Property or
any portion thereof shall be taken by any governmental authority under its
power of eminent domain, then Purchaser shall have the option, upon notice
given to Seller not later than ten (10) business days following such taking:
(i) to take title to such Property on the Closing Date, in which event
Seller shall assign its rights in the condemnation award to Purchaser (or
Purchaser shall receive the condemnation award from Seller if Seller has been
paid before the Closing Date); or (ii) to terminate this Agreement and
receive a return of the Deposit, and this Agreement shall immediately be null
and void, and neither party have any further obligations hereunder.
10.5 CASUALTY DAMAGE. If prior to the Closing Date, the Real Property
or Tangible Assets are damaged by fire, vandalism, acts of God or other
casualty or cause, Seller shall promptly (and in any event prior to the
Closing) give Purchaser written notice of any such damage, together with
Seller's good faith estimate of the cost of repair and restoration. In the
event there is damage and destruction to any improvements constituting part
of the Real Property or the Tangible Assets and the cost of repair and
restoration of such improvements is estimated by Seller, in good faith, to be
less than ONE HUNDRED THOUSAND AND 00/100 DOLLARS ($100,000.00), the Closing
shall proceed as originally scheduled without diminution in the Purchase
Price and Seller shall assign to Purchaser any and all right, title and
interest Seller may have in insurance proceeds and the right to receive the
same with regard to such damage or destruction with a credit against the
Purchase Price for any deductible or self-insured amount under such policy.
In the event the cost of repair and restoration of such damaged improvements
constituting such part of the Real Property or the Tangible Assets is
estimated by Seller, in good faith, to equal or exceed ONE HUNDRED THOUSAND
AND 00/100 DOLLARS ($100,000.00), Purchaser shall have the option, by written
notice to Seller within ten (10) days of written notice of such damage or
destruction from Seller, of (a) taking the Real Property as it then is
without abatement of the Purchase Price together with the insurance proceeds,
if any, or the right to receive the same and the right to any other claims
arising as a result of the damage, in which event the Closing shall proceed,
or (b) cancelling this Agreement and receiving a refund of the Deposit in
which event neither party shall have any further obligations hereunder. If
Purchaser shall be obligated or shall elect to close this transaction
subsequent to any casualty damage as provided for in this Section 10.5,
Seller agrees to cooperate with Purchaser in any loss adjustment
negotiations, legal actions and agreements with the insurance company, and to
assign to Purchaser at Closing its right to such insurance proceeds and will
not settle any insurance claims or legal actions relating thereto without
Purchaser's prior written consent.
10.6 INTERPRETATION PRESUMPTION. This Agreement has been negotiated
by the parties hereto and by the respective attorneys for each party. The
parties represent and warrant to one another that each has, by counsel or
otherwise, actively participated in the finalization of this Agreement, and
in the event of a dispute concerning the interpretation of this Agreement,
each party hereby waives the doctrine that an ambiguity should be interpreted
against the party which has drafted the document.
10.7 PARTIAL INVALIDITY. If any term or provision of this Agreement
shall to any extent be held by a court of competent jurisdiction to be
invalid or unenforceable, the remainder of this Agreement or the application
of such invalid term or provision to other Persons or circumstances shall not
be affected thereby.
10.8 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
10.9 ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the parties hereto, and neither Seller nor Purchaser, nor any agent
representing either, has made any statement, promise or agreement, orally or
otherwise, in addition to or in conflict with the terms of this Agreement.
Any representation or agreement made during the negotiations is hereby merged
into this Agreement and if not set forth herein, is hereby waived.
10.10 REMEDIES. Except as otherwise provided herein, the remedies set
forth herein in all instances are exclusive.
10.11 CAPTIONS/HEADINGS. The section captions of this Agreement have
been inserted only as a matter of convenience and for reference and in no way
define, limit or describe the scope or intent of this Agreement. "Exhibit"
or "exhibits" means the specific exhibit or group of exhibits referred to
herein and attached hereto and made a part of this Agreement by the reference
thereto made. The words "hereof," "herein" and words of like import refer to
this Agreement as a whole and not to the section or paragraph in which they
appear, unless the contrary is clearly indicated by the context.
10.12 MODIFICATIONS. This Agreement may be modified only by an
agreement in writing and signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
10.13 RECORDING. Other than the Memorandum of Agreement, neither
Seller nor Purchaser shall record this Agreement, nor any memorandum of its
terms. The parties recognize that the recording of this Agreement or any
other memorandum of its terms by Purchaser (except for the Memorandum of
Agreement) shall constitute a default by Purchaser under this Agreement.
Additionally, the recording of this Agreement or any memorandum (except for
the Memorandum of Agreement) of its terms may create a cloud on the title of
the Property and will cause irreparable harm to Seller, entitling Seller to
enforce its obligations by an action for specific performance and/or any
other right or remedy provided at law and/or in equity. Purchaser hereby
indemnifies and holds harmless Seller for any loss, cost or expense incurred
by Seller, including but not limited to attorneys' fees and court costs
through all negotiations, trial and appellate levels resulting from
Purchaser's recordation of this Agreement or any memorandum of its terms
(except for the Memorandum of Agreement). The provisions of this Section
shall survive any termination of this Agreement and Closing.
10.14 ASSIGNMENT.
(a) Purchaser may not assign any of its rights and obligations
hereunder to any party, other than an entity assuming all obligations of
Purchaser hereunder and as to which Purchaser or its existing general partner
own fifty-one percent (51.0%) or more of the equitable ownership interests,
without the prior written consent of Seller and if Purchaser does so, Seller
will not be bound to honor any rights under this Agreement of a successor to
Purchaser or assignee of Purchaser, although any assignment by Purchaser
without Seller's prior written consent or any merger or consolidation of
Purchaser with another entity, shall cause Purchaser's assignee or successor
to be liable hereunder together with Purchaser. Purchaser and RHI shall
remain primary obligors of the indemnification obligations of Purchaser set
forth under this Agreement in the event of any assignment.
(b) Seller shall have the right to assign this Agreement and
any or all of its rights hereunder; (i) to any entity (or its Affiliates) to
whom the right to the tradename and trademarks "Arvida" have been assigned
and (ii) as to the rights set forth in Section 6.3(b), to any successor
developer of Arvida or its permitted assignee. Such assignee shall be
entitled to all the rights and powers of and limitations on claims and
remedies against Seller as its successor hereunder, but without releasing
Seller to the extent of its liability under Section 10.2(e) above. Seller
shall not otherwise assign its rights under this Agreement.
10.15 SUCCESSORS AND ASSIGNS. This Agreement is binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
10.16 TIME OF ESSENCE. Time is of the essence of this Agreement. If
the day for performance of any obligation under this Agreement falls on a
Saturday, Sunday or recognized holiday, the time for such performance shall
be extended to the next business day.
10.17 NO PUBLICATION OR DISCLOSURE. Each party hereto covenants and
agrees that it shall not make or cause or permit to be made prior to
Closing, any public announcement of the transaction hereby contemplated or
any terms hereof or, after Closing, any public announcement of the
transaction hereby contemplated which discloses the financial terms hereof,
without the prior written consent of the other party hereto; provided,
however, that nothing herein shall prevent the limited disclosure or use by
either party of this Agreement or any of the terms hereof that is (i) made in
one or more reports prepared to be sent to investors by either party hereto
or their Affiliates, (ii) required by law to be disclosed to governmental
agencies in connection with (a) the approval or reporting of the transaction
contemplated herein, (b) financial or tax reporting requirements, or (c) any
administrative, legislative or judicial proceeding or pursuant to any decree
or judgment of any administrative agency or tribunal or any court of
competent jurisdiction, or (iii) already known by the Persons to whom such
disclosure or publication is made by such party. Any breach of this covenant
not to disclose shall, at the election of the party not giving such consent
to disclosure, constitute a material default by the party making such
disclosure under this Agreement. This Section 10.17 shall survive
termination of this Agreement and Closing.
10.18 TIME FOR ACCEPTANCE. Until executed by both Purchaser and Seller
this Agreement shall be deemed an offer to purchase the Property in
accordance with the terms and provisions herein contained. If this Agreement
is not executed by and delivered to all parties or on or before October 3,
1997, this offer to purchase shall be withdrawn.
COUNTERPARTS. This Agreement and any amendments may be executed
in one or more counterparts, each of which shall be deemed an original and
all of which together will constitute one and the same instrument.
10.20 NO THIRD PARTY BENEFICIARIES. This Agreement is for the sole
benefit of the parties hereto, their respective successors and permitted
assigns, and no other party or entity shall be entitled to rely upon or
receive any benefit from this Agreement or to constitute a third party
beneficiary hereunder.
10.21 RADON DISCLOSURE. Under the laws of the State of Florida, Seller
is required to provide the following notice to Purchaser:
RADON GAS: Radon is a naturally occurring radioactive gas that,
when it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon
that exceed federal and state guidelines have been found in buildings in
Florida. Additional information regarding radon and radon testing may be
obtained from your county public health unit.
Seller does not conduct radon testing with respect to the Property
being sold to the Purchaser. Further, Seller disclaims any and all
representations and warranties as to the absence of radon gas or radon gas
producing conditions within the Property.
10.22 NOTICE TO THIRD PARTY PURCHASERS. In that certain of the
obligations of Purchaser and RHI as contained in this Agreement will not be
made a matter of public record under the Memorandum of Agreement referenced
in Section 6.10, Purchaser agrees that it will put third party purchasers,
lessees or managers of the Property on notice of this Agreement and the
obligations of Purchaser contained herein by providing written copies of this
Agreement to such parties prior to consummation of any transactions
pertaining to the Property with such parties. RHI shall provide written
notice of its obligations under this Agreement to any third party purchaser,
lessee, manager or franchisor of the Marriott by providing written copies of
this Agreement to such parties prior to consummation of any transactions
pertaining to the Marriott with such parties. Purchaser and RHI acknowledge
and agree that Seller or its permitted Assignees may provide notice of this
Agreement to such parties if Purchaser or RHI shall fail to do so.
10.23 JOINDER AND CONSENT. RHI joins and consents in this Agreement
for the purpose of evidencing its agreement to the terms and provisions of
Sections 6.2, 6.3, 6.6, 6.12, the indemnity provisions contained in the final
sentence of 6.15, 6.18, 7.1, 10.1, 10.2(c), 10.2(d), 10.6-10.13, 10.14(a),
10.15-10.20, and 10.22 hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first written above.
Signed, sealed and delivered
in the presence of: SELLER:
_____________________________ARVIDA/JMB PARTNERS, a Florida
general partnership
_____________________________By: ARVIDA/JMB MANAGERS, INC.,
a Delaware
corporation
By: _________________________
_________________________
(Print or Type Name)
Its: _________________________
(Title)
<PAGE>
PURCHASER:
PV RESORT, INC., a Delaware corporation
______________________________ By: _________________________
______________________________ (Print or Type Name)
Its: _________________________
(Title)
RESORT HOLDINGS I, LTD., a limited
partnership
_________________________ By: _________________________
_________________________ its General Partner
By: ___________________
(Print or Type Name)
its: ___________________
(Title)
ESCROW AGENT:
BRANT, MOORE, MACDONALD & WELLS
_________________________ By: _________________________
______________________________ (Print Name)
Its: ________________________
(Title)
<PAGE>
EXHIBIT A
TO
AGREEMENT FOR SALE AND PURCHASE (CABANA CLUB)
Membership Roster
<PAGE>
EXHIBIT B
TO
AGREEMENT FOR SALE AND PURCHASE (CABANA CLUB)
Legal Description
PARCEL 1
A PART OF SECTION 27, AND A PART OF THE PHILLIP SOLANA GRANT, SECTION 43,
TOWNSHIP 3 SOUTH, RANGE 29 EAST, ST. JOHNS COUNTY, FLORIDA MORE PARTICULARLY
DESCRIBED AS FOLLOWS: FOR A POINT OF REFERENCE COMMENCE AT THE INTERSECTION
OF THE NORTHERLY LINE OF SAID SOLANA GRANT, WITH THE EASTERLY RIGHT OF WAY
LINE OF PONTE VEDRA BOULEVARD (STATE ROAD 203, A 66 FOOT RIGHT OF WAY AS NOW
ESTABLISHED); THENCE S. 13 Degree 30'16"E., ALONG SAID EASTERLY RIGHT OF WAY
LINE, A DISTANCE OF 111.20 FEET TO THE POINT OF BEGINNING; THENCE S.13 Degree
30'16"E., CONTINUING ALONG SAID RIGHT OF WAY LINE, A DISTANCE OF 300.00 FEET;
THENCE N.76 Degree 29'44"E. A DISTANCE OF 255 FEET MORE OR LESS TO THE MEAN
HIGH WATER LINE OF THE ATLANTIC OCEAN; THENCE NORTHERLY ALONG SAID MEAN HIGH
WATER LINE OF THE ATLANTIC OCEAN, AS IT MEANDERS, A DISTANCE OF 300 FEET MORE
OR LESS TO A POINT THAT BEARS N.76 Degree 29'44"E. FROM THE POINT OF
BEGINNING; THENCE S.76 Degree 29'44"W. A DISTANCE OF 256.8 FEET MORE OR LESS
TO THE POINT OF BEGINNING.
TOGETHER WITH
PARCEL 2
A PORTION OF THE SOLANA GRANT, SECTION 43, TOWNSHIP 3 SOUTH, RANGE 29 EAST,
ST. JOHNS COUNTY, FLORIDA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCE AT THE INTERSECTION OF THE NORTHERLY LINE OF SAID SECTION 43, WITH
THE WESTERLY RIGHT-OF-WAY LINE OF PONTE VEDRA BOULEVARD (STATE ROAD NO. 203);
THENCE SOUTH 13 Degree 58'20" EAST ALONG SAID WESTERLY RIGHT-OF-WAY LINE
194.12 FEET TO THE POINT OF BEGINNING; THENCE CONTINUE SOUTH 13 Degree 58'20"
EAST ALONG SAID RIGHT-OF-WAY LINE 415.32 FEET; THENCE SOUTH 76 Degree 01'40"
WEST, 208.00 FEET; THENCE NORTH 13 Degree 58'20" WEST, 53.00 FEET; THENCE
NORTH 76 Degree 01'40" EAST, 14.00 FEET; THENCE NORTH 13 Degree 58'20" WEST,
179.62 FEET; THENCE NORTH 43 Degree 46'58" EAST, 21.01 FEET; THENCE NORTH 46
Degree 13'02" WEST, 12.00 FEET; THENCE NORTH 43 Degree 46'58" EAST, 64.00
FEET; THENCE SOUTH 46 Degree 13'02" EAST, 16.50 FEET; THENCE NORTH 44 Degree
46'26" EAST, 50.15 FEET; THENCE NORTH 05 Degree 44'17" EAST, 121.78 FEET;
THENCE NORTH 76 Degree 01'40" EAST, 35.00 FEET TO THE POINT OF BEGINNING.
TOGETHER WITH
RIGHTS AND INTERESTS IN AND TO GRANT OF EASEMENT RECORDED IN OFFICIAL RECORDS
BOOK 870, PAGE 1132 OF THE PUBLIC RECORDS OF ST. JOHNS COUNTY, FLORIDA.
TOGETHER WITH
RIGHTS AND INTERESTS IN AND TO RECIPROCAL EASEMENT AGREEMENT RECORDED IN
OFFICIAL RECORDS BOOK 795, AT PAGE 172 OF THE PUBLIC RECORDS OF ST. JOHNS
COUNTY, FLORIDA.
TOGETHER WITH
EASEMENT RIGHTS RESERVED IN SPECIAL WARRANTY DEED RECORDED IN OFFICIAL
RECORDS BOOK 600, PAGE 432 OF THE PUBLIC RECORDS OF ST. JOHNS COUNTY,
FLORIDA.
<PAGE>
EXHIBIT C
TO
AGREEMENT FOR SALE AND PURCHASE (CABANA CLUB)
Membership Plan Requirements
For purposes of this Exhibit C, Existing Members shall mean and refer
to those members identified on Exhibit A to the Agreement for Sale and
Purchase. All other terms shall have the meaning set forth in the Agreement
for Sale and Purchase.
1. Access to and membership in the Cabana Club shall be made
available to all Existing Members on the same and no less favorable basis as
the highest category of membership made available in the Cabana Club from
time to time, to unrelated third parties in arms length transactions.
2. Existing Members shall not be required to pay additional
initiation fees or payments in the nature of initiation fees as a
prerequisite to continued membership.
3. The Club Facilities will include a swimming pool, dining
facilities, changing rooms and beach access.
4. Corporate membership will be retained pursuant to paragraph 6 of
the Rules and Regulations.
5. Access to the Club Facilities will continue to be made available
primarily through a private membership program, provided the Club may
continue to allow for reservation of the Club Facilities by Resort guests and
for group functions by nonmembers so long as such use does not unreasonably
interfere with use and enjoyment of the Club by members.
6. In the event Purchaser shall terminate memberships in the Club,
notwithstanding the provisions of these Membership Plan Requirements, it
hereby assumes all obligations as contained in paragraphs 13 and 22 of the
Membership Plan Documents and hereby agrees to hold harmless and indemnify
Seller from any liability arising out of, or in connection with such
membership "recall" or termination pursuant to the provisions of Section 6.3
of the Agreement for Sale and Purchase.
<PAGE>
EXHIBIT D
TO
AGREEMENT FOR SALE AND PURCHASE (CABANA CLUB)
Operational Standards
Purchaser will operate the club in a manner which reasonably
accommodates access by Members to a private membership club facility and
access by Resort Guests on an equal and nondiscriminatory basis. Purchaser
will make all facilities generally available to both Members and Resort
Guests during normal business hours of the Club. Certain components of the
facilities may be reserved for private functions or Resort Guest functions to
the exclusion of Members provided that Members may not be excluded entirely
from access to any individual component (i.e. dining, pool, outdoor bars,
beach access) of the Club Facilities, nor from access to the Club Facilities
as a whole, in excess of twenty-five (25) such functions in any annual
period.
<PAGE>
EXHIBIT E
TO
AGREEMENT FOR SALE AND PURCHASE (CABANA CLUB)
List of Assumed Obligations
1. All obligations of Arvida/JMB Partners under the terms of the
Cabana Club Rules and Regulations as amended through January 1, 1997.
2. All obligations of the "developer" with respect to the Real
Property, Club or Club Facility under the terms of the DRI or PUD, applicable
zoning and variance granted by Ponte Vedra Board of Adjustment, as amended
from time to time.
3. All obligations of Arvida Corporation or Arvida/JMB Partners
under the terms of membership applications as to all members identified in
Exhibit A to the Agreement for Sale and Purchase.
4. All obligations of Fletcher Land Corporation, Arvida Corporation
or Arvida/JMB Partners under the following membership obligations generally
referred to as the "Outside Commitments":
(a) Amended and Restated Marketing Agreement dated January 19,
1988, between Fletcher Land Corporation, Seller, and M.L. Partnership.
(b) Cabana Club Use Agreement dated August 23, 1983, by Arvida
Corporation.
(c) Players Club South Agreement between Seller and PGA Tour,
Inc. dated February 23, 1989, as amended. (No rights of Seller to memberships
in the Tournament Players Club shall be transferred to Purchaser, but shall
be retained as the exclusive right of Seller.)
(d) Inventory Marketing Agreement dated May 2, 1980, between
Arvida Corporation and Fletcher Land Corporation.
(e) Settlement Agreement dated February 28, 1980, between
Fletcher Properties, Inc., Fletcher Land Corporation and Guardian Mortgage
Investors, and Letter Agreement dated July 31, 1980, and April 13, 1984.
(f) Agreement dated December 5, 1977, between Sarel Investors
Florida, Inc. and Fletcher Land Corporation.
(g) Lot/Unit/Builder Contracts [to include specific paragraphs
as Exhibit E-1]
(i) Lakeside
(ii) Cypress Creek Phase I
(iii) Cypress Creek Phase II
(iv) Cypress Creek Phase III and Phase IV
(v) Water Oak
(vi) Turtleback Crossing Phase One
(vii) The Arbor at Marsh Landing
(viii) Innlet Beach, Units One and Five
(Part V of the Property Report) and
Innlet Beach, Units Two,
Three and Four
(Part V of the Property Report)
(ix) Salt Creek Phases I, II, III
(x) Salt Creek Island
(xi) Salt Creek Point
(xii) Cypress Bridge
(xiii) Bridgewater
(xiv) North Cove
(xv) Water's Edge
(xvi) Sawgrass Island
(xvii) Sawgrass Pointe
(xviii) Players Club Villas
(xix) Jacksonville Golf & Country Club
(xx) Sawmill Lakes
(h) Agreement for Sale and Purchase (Players Club/Harbour
Development Company) dated December 15, 1986 between Arvida Corporation and
Harbour Development Company.
(i) Rental Access (letters dated October 16, 1984 and October
17, 1984 from Arvida Realty Sales, Inc., to Long Term Rental Program Owners).
(j) Park Place (unnumbered paragraph in sales literature and
membership commitment).
(k) Sawgrass Village (letter dated February 27, 1984, from John
C. Yelverton to Mrs. Joyce Mixson).
(l) Frank J. Kelly, III (first paragraph of letter dated June
23, 1982 from Peter S. Rummell to F.J. Kelly, III), (paragraph 3 of letter
dated March 23, 1982 from Frank J. Kelly, III to Peter S. Rummell), second
full paragraph on page 2 of letter dated January 22, 1982 from Frank J.
Kelly, III to Peter S. Rummell), (letter dated May 4, 1981 from Land
Corporation of America, Inc. to Peter S. Rummell), (paragraph 45 of Extension
and Modification Agreement dated September 24, 1973 between Land Corporation
of America, Inc., Fletcher Properties, Inc., and Fletcher Land Corporation),
(first paragraph of Agreement as to Use of Recreational Facilities dated
September 20, 1983 by Fletcher Properties, Inc. and Fletcher Land
Corporation), (lines 5 through 9 of the fourth full paragraph of page 5 of
Deposit Receipt dated July 11, 1972 between J.S. Development Corporation and
LCA Development Corporation), and (paragraph 5 of Agreement Surviving Closing
of Sale dated September 1, 1972 between LCA Development Corporation and J.S.
Development Corporation).
5. All obligations of Arvida/JMB Partners under the following
service contracts and agreements:
(a) Landscape Maintenance Agreement with Anthony M. Constantino
dated September 4, 1996.
(b) Equipment Service Agreement with AT&T dated May 16, 1996.
(c) Sound Equipment Service Agreement with Florida Sound
Engineering Company dated June 1, 1995.
(d) System Installation Agreement with Western Natural Gas Co.
dated January 31, 1995.
(e) Hardware Purchase/Software License Agreement between
Country Club Systems, Inc. and Arvida JMB/Partners for Cabana Club dated
April 21, 1992.
6. All obligations as the owner of the Real Property, the Club and
Club Facilities under those title matters affecting the Real Property as set
forth in the Title Policy.
7. All obligations of Seller under those reservation contracts as
described on Exhibit E-2 attached hereto, and such additional reservation
contracts as may be entered into by Seller in the ordinary course of business
up to and including the Closing Date.
<PAGE>
EXHIBIT E-1
TO
AGREEMENT FOR SALE AND PURCHASE (CABANA CLUB)
Lot/Unit/Builder Contracts
Paragraphs Assumed
<PAGE>
EXHIBIT E-2
TO
AGREEMENT FOR SALE AND PURCHASE (CABANA CLUB)
List of Seller's Reservation Contract Obligations
<PAGE>
EXHIBIT F
TO
AGREEMENT FOR SALE AND PURCHASE (CABANA CLUB)
License Agreement
<PAGE>
EXHIBIT G
TO
AGREEMENT FOR SALE AND PURCHASE (CABANA CLUB)
List of Purchaser's Litigation
NONE
<PAGE>
EXHIBIT H
TO
AGREEMENT FOR SALE AND PURCHASE (CABANA CLUB)
List of Seller's Litigation
NONE.
<PAGE>
EXHIBIT I
TO
AGREEMENT FOR SALE AND PURCHASE (CABANA CLUB)
Bill of Sale for All Tangible Assets
<PAGE>
EXHIBIT J
TO
AGREEMENT FOR SALE AND PURCHASE (CABANA CLUB)
Assignment of Licenses and Permits and Warranties
<PAGE>
EXHIBIT K
TO
AGREEMENT FOR SALE AND PURCHASE (CABANA CLUB)
Assignment and Assumption of Assumed Obligations
<PAGE>
EXHIBIT L
TO
AGREEMENT FOR SALE AND PURCHASE (CABANA CLUB)
Tangible Assets
EXHIBIT 10.11
- -------------
AMENDMENT TO AGREEMENT FOR SALE AND PURCHASE
--------------------------------------------
THIS AMENDMENT TO AGREEMENT FOR SALE AND PURCHASE (this "Amendment")
made this _____ day of August, 1997, modifies and amends the Agreement for
Sale and Purchase (the "Agreement"; capitalized terms used but not
otherwise defined herein have the same definitions as set forth in the
Agreement) dated July 25th, 1997 by and between STANFORD HOTELS CORPORATION
("Purchaser") and CENTER RETAIL PARTNERS, a Florida general partnership,
CENTER HOTEL LIMITED PARTNERSHIP, a Delaware limited partnership, CENTER
OFFICE PARTNERS, a Florida general partnership and ARVIDA/JMB PARTNERS,
L.P., a Delaware limited partnership (collectively, the "Sellers") for the
purchase of the property (the "Property") described in the Agreement.
Purchaser and Sellers hereby agree as follows:
1. The Inspection Period provided in Section 7.1 of the Agreement
is hereby extended to 5:00 P.M., eastern time, on August 29th, 1997.
2. The Closing Date provided in Section 9.1 of the Agreement is
hereby extended to 10:00 A.M. on September 12th, 1997.
3. To the extent that the terms of the this Amendment are in
conflict with the Agreement, the terms of the Amendment will govern. All
other provisions of the Agreement shall remain in full force and effect and
are incorporated herein by reference.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date first above written.
CENTER RETAIL PARTNERS,
a Florida general partnership
By: Arvida/JMB Managers, Inc.,
a Florida corporation,
its general partner
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
CENTER HOTEL LIMITED PARTNERSHIP,
a Delaware limited partnership
By: JMB/PCH Corporation,
an Illinois corporation,
its general partner
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
<PAGE>
CENTER OFFICE PARTNERS,
a Florida general partnership
By: Arvida/JMB Managers, Inc.,
a Delaware corporation,
its general partner
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: Arvida/JMB Managers, Inc.,
a Delaware corporation
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
STANFORD HOTELS CORPORATION,
a California corporation
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
EXHIBIT 10.12
- -------------
REINSTATEMENT AND SECOND AMENDMENT TO AGREEMENT
FOR SALE AND PURCHASE OF REAL PROPERTY
THIS REINSTATEMENT AND SECOND AMENDMENT TO AGREEMENT FOR SALE
AND PURCHASE OF REAL PROPERTY (this "Second Amendment") is made and entered
into as of _____ day of _______, 1997, by and between CENTER RETAIL
PARTNERS, a Florida general partnership (the "Center Retail"), CENTER
OFFICE PARTNERS, a Florida general partnership ("Center Office"), CENTER
HOTEL LIMITED PARTNERSHIP, a Delaware limited partnership ("Center Hotel"),
and ARVIDA/JMB PARTNERS, L.P., a Delaware limited partnership ("Arvida,"
and collectively with Center Retail, Center Office and Center Hotel, the
"Seller") and STANFORD HOTELS CORPORATION, a California corporation
("Buyer").
RECITALS:
--------
WHEREAS, Seller and Buyer entered into that certain Agreement
for Sale and Purchase of Real Property dated July 25, 1997, as amended by
that certain Amendment to Agreement for Sale and Purchase dated August 22,
1997 between Buyer and Seller (collectively, the "Agreement") (unless
otherwise defined herein, all capitalized terms used but not defined herein
shall have the meanings assigned to the same in the Agreement), pursuant to
which Buyer has agreed to purchase and Seller has agreed to sell the
Property;
WHEREAS, Buyer terminated the Agreement on August 29, 1997 and
Seller and Buyer now desire to reinstate the Agreement, as amended hereby;
WHEREAS, Buyer now desires to partially assign this Agreement
to: (i) Stanford Lake Hotel, Inc., a Florida corporation (the "Hotel
Buyer"), with respect to the purchase of the Hotel Site (as defined in the
Declaration), together with the parcel of land upon which the restaurant
and conference center known as Pete's Cafe & Catering is presently located
(collectively, the "Hotel Property"); (ii) Boca Lake Office, Inc., a
Florida corporation (the "Office Buyer"), with respect to the purchase of
the Office Site (as defined in the Declaration) (the "Office Property");
and (iii) Boca Lake Retail, Inc., a Florida corporation (the "Retail
Buyer"), with respect to the purchase of the remainder of the Property
(i.e., the Property less the Hotel Property and Office Property) (the
"Retail Property") (the Hotel Buyer, the Office Buyer and the Retail Buyer
are collectively referred to herein as the "Affiliated Buyers"); and
WHEREAS, Seller and Buyer have agreed to enter into this Second
Amendment to reinstate the Agreement, to provide for the foregoing
assignment and to otherwise modify certain terms and conditions of the
Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants contained herein and the sum of TEN AND NO/100 DOLLARS
($10.00) and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Buyer agree as
follows:
<PAGE>
1. RECITALS. The above recitals are true and correct and
hereby incorporated herein by reference. In the event of any conflict
between the terms of the Agreement and the terms of this Second Amendment,
the terms of this Second Amendment shall control.
2. REINSTATEMENT. The Agreement is hereby reinstated and
shall be in full force and effect, as amended hereby.
3. ASSIGNMENT.
3.1 Buyer hereby assigns all of its right, title and
interest in and to the agreement to: (i) the Hotel Buyer with respect to
the purchase of the Hotel Property; (ii) the Office Buyer with respect to
the purchase of the Office Property; and (iii) the Retail Buyer with
respect to the purchase of the Retail Property; provided, however, that
Buyer shall in no event be released from liability for any of its
obligations under the Agreement, including, without limitation, those that
specifically survive Closing. All references herein and in the Agreement
to "Buyer" shall be deemed to mean the Hotel Buyer, the Office Buyer and
the Retail Buyer, with respect to each applicable property.
3.2 On the Closing Date, Seller shall directly convey:
(i) the Hotel Property to the Hotel Buyer; (ii) the Office Property to the
Office Buyer; and (iii) the Retail Property to the Retail Buyer, pursuant
to separate closing documents therefor.
By execution of this Second Amendment, the Affiliated
Buyers hereby assume (but without releasing Buyer from) all of the
obligations of the Buyer under the Agreement with respect to each
applicable property.
4. PURCHASE PRICE. SECTION 2.1 of the Agreement is hereby
amended and restated in its entirety to read as follows:
"The purchase price for the Property (the "Purchase Price")
will be the amount of Thirty-Eight Million Five Hundred Thousand and No/100
Dollars ($38,500,000.00). Buyer and Seller hereby acknowledge and agree
that the Purchase Price of the Property shall be allocated as follows:
4.1 The portion of the Purchase Price allocated to the
Hotel Property shall be Twenty-One Million and No/100 Dollars
($21,000,000.00), it being understood that, at Buyer's sole option, Buyer
may elect at the Closing to allocate $3,000,000.00 to the personalty
included in the Hotel Property, whereupon Buyer shall deliver an indemnity
in favor of Seller with respect to any sales tax liability that may be
incurred with respect to the sale of such personalty, which indemnity shall
be in form and substance reasonably acceptable to Seller; and otherwise the
parties shall not be deemed to have agreed upon an allocation of the value
of the personalty in the Hotel Property being conveyed by Seller to Buyer;
<PAGE>
4.2 The portion of the Purchase Price allocated to the
Office Property shall be Fourteen Million and No/100 Dollars
($14,000,000.00); and
4.3 The portion of the Purchase Price allocated to the
Retail Property shall be Three Million Five Hundred Thousand and No/100
Dollars ($3,500,000.00).
5. SELLER'S REPRESENTATIONS AND WARRANTIES. SECTION 4 of
the Agreement is hereby amended to insert the following provisions:
4.11 RESTAURANT ASSOCIATES LEASE.
(a) All amounts currently due and payable to
Restaurant Associates, Ltd., a Florida limited partnership ("Restaurant
Associates"), under that certain Amended and Restated Lease (the
"Restaurant Associates Lease") dated November 21, 1996, between Center
Hotel, as lessor ("Lessor"), and Restaurant Associates, as lessee, and
Certain Office and Center Retail, as other obligated parties, have been
paid in full to Restaurant Associates by Lessor, including, without
limitation, the following amounts: (i) $555,000.00 for tenant improvements
pursuant to Section 60 of the Restaurant Associates Lease; (ii) $20,000.00
for the extension of a sewer pipe to the Leased Premises pursuant to
Section 45 of the Restaurant Associates Lease; and (iii) $1,000.00 for the
1997 lease year for the planting of annuals and flowers around the archway
sign at the southeast end of the leased premises pursuant to Section 7 of
the Restaurant Associates Lease, but not including: (x) amounts owed to
Restaurant Associates under that certain Promissory Note dated November 21,
1996 between Center Retail, Center Office and Center Hotel (collectively,
the "Borrowers") in favor of Restaurant Associates, in the original
principal amount of $141,666.70 (the "Restaurant Associates Note"); and (y)
the amount of $47,073.75 owed to Restaurant Associates in connection with
the landscape work referenced in Section 1 of the Restaurant Associates
Lease (the "Landscape Obligation").
(b) All obligations required to be performed by
Lessor prior to the Closing Date under the Restaurant Associates Lease have
been performed, including, without limitation: (i) the installation of a
sidewalk of consistent quality with other sidewalks located at the Property
pursuant to Section 7 of the Restaurant Associates Lease; and (ii) the
installation of a direct telephone connection from the Hotel for the
benefit of the leased premises pursuant to Section 52 of the Restaurant
Associates Lease, and none of such obligations have been waived or modified
by Restaurant Associates. In addition, Restaurant Associates has received
all rent credits and abatements provided for in the Restaurant Associates
Lease, including, without limitation, rent credits in the amount of: (i)
$83,333.30 pursuant to Section 4(A) of the Restaurant Associates Lease; and
(ii) $91,666.65 pursuant to Section 4(G) of the Restaurant Associates
Lease.
(c) As of the date hereof, Seller has not received
any written notice from Restaurant Associates under Section 58 of the
Restaurant Associates Lease.
(d) Notwithstanding anything contained in the
Restaurant Associates Lease to the contrary, Exhibit "A" to the Restaurant
Associates Lease is that certain Site Plan Prepared for Settlement
Agreement for Arvida Parkway Center ("Settlement Agreement Site Plan")
prepared by Unruh, Smith & Associates dated October 22, 1996, last revised
on February 14, 1997 and initialed by Pete Boinis and John Baric, a copy of
which is attached hereto as EXHIBIT 4.11(d).
<PAGE>
(e) Restaurant Associates has not submitted an
offer to Center Hotel for the space in the Retail Property occupied as an
Indian restaurant as of the date of the Restaurant Associates Lease
pursuant to Section 56 of the Restaurant Associates Lease and therefore
Restaurant Associates' right of first offer has been waived with respect
thereto.
4.12 PETE'S CAFE LEASE.
(a) All amounts currently due and payable to
Pete's Cafe' and Catering, Inc., a Florida corporation ("PETE'S CAFE"),
under that certain Lease dated July 17, 1985 between Seller, as successor
in interest from Arvida Corporation, as lessor, and Pete's Cafe, as
successor by assignment from TGI Friday's, Inc. ("TGIF"), as lessee, as
amended (the "Pete's Cafe Lease") (the Restaurant Associates Lease and
Pete's Cafe Lease are collectively referred to herein as "Pete's Leases"),
have been paid in full to or for the benefit of Pete's Cafe, including,
without limitation: (i) $25,000.00 for the replacement of the roof of the
leased premises pursuant to Section 9 of the Fourth Amendment to the Pete's
Cafe Lease; and (ii) $2,930.00 for landscaping of the leased premises
pursuant to Section 6 of the Fourth Amendment to the Pete's Cafe Lease, but
not including amounts owed to Pete's Cafe under that certain Promissory
Note dated November 21, 1996 between Borrowers and Pete's Cafe, in the
original principal amount of $130,000.00 (the "Pete's Cafe Note") (the
Restaurant Associates Note and the Pete's Cafe Note are collectively
referred to herein as the "Notes").
(b) All obligations required to be performed by
Lessor prior to the Closing Date under the Pete's Cafe Lease have been
performed, and none of such obligations have been waived or modified by
Pete's Cafe. In addition, Pete's Cafe has received all rent credits and
abatements provided for in the Pete's Cafe Lease, including, without
limitation, rent credits in the amounts of $40,000.00 and $8,333.33,
pursuant to Section 1 of the Fourth Amendment to the Pete's Cafe Lease.
4.13 ASSESSMENTS. As of the date hereof, all
assessments under the Declaration have been paid and shall be paid in full
through the Closing Date.
4.14 DECLARATION. To the best of Seller's knowledge,
none of the Occupants (as defined in the Declaration) are in default under
the Declaration and Seller has not received any written notice that any of
the Occupants has claimed that the Seller, the Developer (as defined in the
Declaration), and/or another Occupant is in default thereunder.
4.15 COUNTY SETTLEMENT AGREEMENT. The litigation
referenced in that certain Settlement Agreement dated January 28, 1997,
between Palm Beach County ("County"), Seller and Restaurant Associates (the
"County Settlement Agreement") has been voluntarily dismissed with
prejudice. A true and correct copy of the: (i) Stipulation of Settlement
and for Dismissal of Claims with Prejudice; and (ii) Order of Dismissal
with Prejudice, which were entered into by the parties to the County
Settlement Agreement and filed with respect thereto has been delivered to
Buyer by Seller.
<PAGE>
4.16 PETE'S SETTLEMENT AGREEMENT. There are no defaults
or claims of default under that certain Settlement Agreement dated November
21, 1996, between Seller, Restaurant Associates and Pete's Cafe (the
"Pete's Settlement Agreement"), no event has occurred which, with notice,
lapse of time, or both, would constitute a default under the Settlement
Agreement, all documents and amounts due under the Settlement Agreement
have been paid and delivered to Restaurant Associates and Pete's Cafe, as
applicable, and the litigation referenced in the Settlement Agreement has
been voluntarily dismissed with prejudice. A true and correct copy of the
Order of Dismissal with Prejudice, which was entered into by the parties to
the Pete's Settlement Agreement and filed with respect thereto has been
delivered to Buyer by Seller.
4.17 SCHEDULE 1 OF PETE'S SETTLEMENT AGREEMENT. Seller
hereby represents to Buyer that that certain "EXHIBIT "C" - CERTAIN
EXISTING CIRCUMSTANCES" attached to the Pete's Settlement Agreement and
attached hereto as EXHIBIT 4.17 is a true and correct copy of SCHEDULE 1 to
the Pete's Settlement Agreement.
4.18 PARKING PLAN. The parking areas designated as
"Areas A, B and H on EXHIBIT "A" in Section 7 of the Restaurant Associates
Lease are Areas A, B and H on Settlement Agreement Site Plan.
4.19 SHARED PARKING STUDY. Seller is currently in
compliance with the terms of that certain Shared Parking Study prepared by
Walker Consulting/Engineers dated April 23, 1996 and updated by Kimley-Horn
and Associates, Inc. dated January 17, 1997, pursuant to the terms of that
certain Agreement for Shared Parking Plan dated January 17, 1997 between
Center Hotel, Center Office, Center Retail and the Association, and
recorded on January 30, 1997 in Official Records Book 9634, Page 1472 of
the Public Records of the County.
4.20 ASSOCIATION LIABILITIES. The Association has no
liabilities or obligations other than as set forth in the Declaration or
the Schedule of Contracts attached hereto as EXHIBIT 4.20. To the best of
Seller's knowledge, there are no defaults by either party under any of the
aforesaid Contracts.
4.21 TERMINATION OF TEXACO GROUND LEASE. That certain
Ground Lease between Arvida Corporation, as lessee, and Texaco, Inc., as
lessor, dated June 1, 1981 has been terminated and is of no further force
or effect.
4.22 SANITARY SEWER SYSTEM. The County owns and
maintains the sanitary sewer system installed within the Property and
servicing the improvements thereon.
4.23 YOSHINO LEASE. Seller shall continue to take the
steps contemplated by that certain letter from Donald Yoshino to Heitman
Florida Management, Inc. dated October 2, 1997 and that certain Proposal
from Integrated Building Technologies, Inc., dated October 1, 1997 (copies
of which are attached hereto as EXHIBIT 4.23) in order to timely resolve
the claims of Yoshino Berenbaum Architects, AIA, P.A. ("Yoshino") with
respect to grease and odor allegedly emanating from adjacent tenant space.
<PAGE>
6. BUYER'S CONDITIONS TO PRECEDENT TO CLOSING. SECTION 8.1
of the Agreement is hereby amended to insert the following provisions:
(e) SATISFACTION OF NOTES. Seller shall cause
any and all amounts due and payable under the Restaurant Associates Note
and the Pete's Cafe Note, including, without limitation, any and all
outstanding principal and accrued interest thereon, to be paid in full to
Restaurant Associates and Pete's Cafe, respectively, on or before Closing,
and Seller shall certify to Buyer at the Closing that the Notes have been
paid in full.
(f) SATISFACTION OF BROKER'S COMMISSIONS. Seller
shall cause the following to be paid in full on or before Closing: (i)
$1,239.62 with respect to the broker's commission owed in connection with
the renewal of that certain Lease dated May 20, 1994 between Center Office
and AGX of Florida, Inc.; and (ii) $8,962.51 with respect to the broker's
commission owed in connection with that certain Lease dated March 21, 1997
("Almand Lease") between Center Retail and Almand & Katz, DMD, P.A.
("Almand") (collectively, the "Broker's Commissions"), and Seller shall
certify to Buyer at the Closing that the Broker's Commissions have been
paid in full. In the event that the Broker's Commissions are not paid in
full on or before Closing, then Buyer shall receive a credit at Closing
against the Purchase Price for such amounts."
7. CLOSING.
7.1 Notwithstanding anything contained to the contrary
in SECTION 9.1 of the Agreement, the "Closing Date" shall be deemed to be
October 17, 1997, as to which time is of the essence.
7.2 Notwithstanding anything contained to the contrary
in SECTION 1(d) of the Agreement, the term "Adjustment Date" in SECTION
1(d) of the Agreement shall be deemed to mean 12:01 a.m. on October 17,
1997.
8. SECTION 9.3 of the Agreement is hereby amended to insert
the following provisions:
(q) written certification to Buyer from Seller
that the Notes have been paid in full;
(r) an estoppel certificate from the Parkway
Center Maintenance Association, Inc., a Florida corporation not for profit
(the "Association") with respect to the Declaration, which shall be
mutually acceptable to the parties;
(s) a certified resignation from all of the
current members of the Board of Directors and officers of the Association;
(t) an amendment to that certain Lease dated
January 1, 1997 between Center Office and Arvida (the "Arvida Lease"), in
form attached hereto as EXHIBIT 9.3(t), which amendment shall: (i) cancel
and terminate the exclusive right of Arvida, pursuant to Article 36 of the
Arvida Lease, to place Arvida's company signage, identification and/or logo
on the facade of the Building (as such term is defined in the Arvida
Lease), provided, that the landlord will continue to maintain Arvida's name
on the tenant roster in the Building's lobby and on the monument signs
located outside the Building; and (ii) provide for an acknowledgment by
Arvida, as tenant, that Arvida has no right to name the Building under the
Arvida Lease;
<PAGE>
(u) an estoppel certificate from TGIF certifying
that the Guaranty made by TGIF in accordance with the terms of the Pete's
Cafe Lease is in full force and effect and shall inure to the benefit of
the Buyer;
(v) an estoppel certificate from Seller with
respect to the "gap" period between the date of the tenant estoppel
statements being delivered in accordance with Section 9.3(i) of the
Agreement and the Closing Date;
(w) a temporary irrevocable license agreement
between Seller and Buyer, in form attached hereto as EXHIBIT 9.3(w), to use
the name "Arvida Parkway Center" with respect to the Property for ninety
(90) days after the Closing Date."
9. PRORATIONS. Notwithstanding anything contained in the
Agreement to the contrary, Buyer shall receive a credit against the
Purchase Price at Closing for the following amounts:
9.1 the total amount of all security deposits provided
for in the Leases, together with interest thereon in the amounts set forth
in or as required to be accrued, as applicable, under the Leases,
regardless of whether the tenants under such Leases actually paid such
security deposits or interest was actually earned thereon; provided,
however, that Buyer shall not be entitled to receive a credit against the
Purchase Price for any security deposits that are provided for in any Lease
which have not been collected by Seller but as to which Seller has provided
Buyer a release from such tenant thereunder, in form and substance
acceptable to Buyer, with respect to such security deposit;
9.2 any prepaid rents and/or free rental periods under
the Leases attributable to the period after the Closing, including, without
limitation: (i) rent prepaid by E. Seiler & Associates, Inc. ("Seiler")
under the certain Lease dated August 4, 1997 between Center Office and
Seiler for the period from the Closing Date through February 15, 1997; and
(ii) rent prepaid by JPR Capital Corp. ("JPR") under that certain Lease
dated December 12, 1996 between Center Office and JPR for the months of
December, 1997 and December 1998;
9.3 $48,420.00 with respect to Center Retail's
obligation under the Almand Lease to reimburse Almand for tenant
improvements currently under construction, which reimbursement has not been
paid by Center Retail as of the Closing Date;
9.4 $27,702.00 with respect to Center Office's
obligation under EXHIBIT D of the Dialysis Centers Lease to reimburse
Dialysis Centers for tenant improvements, which reimbursement has not been
paid by Center Office as of the Closing Date;
9.5 $47,073.75 with respect to the Landscape
Obligation; and
9.6 $300,000.00 with respect to payment of the "Product
Improvement Plan" imposed by Radisson Hotels International Inc. in
connection with the Assignment and Assumption of License Agreement for
Radisson Suite Hotel Boca Raton.
The credits for which provision is made in the foregoing
SUBPARAGRAPHS 9.1 through 9.6 constitute full settlement of all obligations
of Seller to Buyer with respect to the matters set forth therein.
10. ASSUMPTION OF CONTRACTS. Attached hereto as EXHIBIT 10
is a list of those certain Contracts which Buyer has elected to assume at
Closing. Seller acknowledges that all other Contracts not listed on
EXHIBIT 10 attached hereto shall be terminated by Seller effective as of
the Closing Date and Buyer shall have no liability thereunder.
<PAGE>
11. COMMISSIONS. Seller acknowledges and agrees that the
only real estate commissions, tenant improvement allowances or tenant
inducements that Buyer shall be responsible for pursuant to the provisions
of SECTION 9.5 and SECTION 9.5(a)(iii) of the Agreement is the commission
owed in the amount of $2,681.08 with respect to the renewal of the lease
for Ivan & Company Jewelers. The provisions of this paragraph shall
survive Closing.
12. MUTUAL INDEMNITY. The first (1st) paragraph of SECTION
12.3 of the Agreement is hereby deleted in its entirety and replaced with
the following:
"Seller (in such capacity, an "Indemnitor") agrees to indemnify
and hold Buyer (in such capacity, an "Indemnitee") harmless from and
against any loss, cost, liability, damage or expense including, without
limitation, reasonable attorneys' fees and costs in all trial and appellate
proceedings ("Losses") incurred in connection with any legal claim by a
third party (a "Claim") originating prior to the Closing Date and arising
out of the ownership and/or operation of the Property, including, without
limitation: (a) any claims for unpaid sales tax or other use or occupancy
taxes; (b) any employment related claims; and (c) any tenant related
claims, including, without limitation; (i) any claims of Yoshino with
respect to grease and odor allegedly emanating from adjacent tenant space;
(ii) any claims of SunBank/South Florida, N.A. ("SunBank") with respect to
SunBank's alleged inability to maintain reserved parking and reserved
parking signs for its leased premises as provided under that certain Lease
dated January 11, 1998 between Center Retail and SunBank; and (iii) any
claims of Unique Mexican Restaurant of Boca, Inc. ("Cafe Ole") with respect
to Center Retail's alleged failure to provide adequate parking in
accordance with that certain Lease dated December 3, 1990 between Center
Retail and Cafe Ole, as amended, and in accordance with applicable
ordinances and regulations; and Buyer (in such capacity, an "Indemnitor")
agrees to indemnify and hold Seller (in such capacity, an "Indemnitee")
harmless from and against any Losses incurred in connection with a Claim
originating from and after the Closing Date and arising out of the
ownership and/or operation of the Property, including, without limitation,
any claims for unpaid sales tax or other use or occupancy taxes and any
employment related claims."
13. PETE'S RELEASE. Seller hereby acknowledges and agrees
that, to the extent possible without affecting Seller's rights therein, the
benefit of those certain releases given by Restaurant Associates and Pete's
Cafe to Seller under the Pete's Settlement Agreement shall inure to the
benefit of Buyer and Seller shall execute any documentation reasonably
requested by Buyer in order to effectuate the same. The provisions of this
paragraph shall survive Closing.
<PAGE>
14. INDEMNIFICATION OF BUYER. To the fullest extent
permitted by law, Buyer and its directors, officers, partners, employees
and agents of Buyer or its affiliates (collectively, the "Indemnitees")
shall be indemnified and held harmless by Seller from and against any and
all losses, claims, damages, liabilities, expenses (including legal fees
and expenses, even if incident to appeals or bankruptcy proceedings),
judgments, fines, settlements and other amounts arising from any and all
claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, in which an Indemnitee may be involved, or
threatened to be involved, as a party or otherwise, with respect to or in
any way related to: (i) that certain pending litigation styled ROYAL BOMBAY
CLUB, INC. V. CENTER RETAIL PARTNERS, et al., 15th Judicial Circuit for
Palm Beach County, Florida, Case No. CL95-3863 AN; (ii) any claims with
respect to that certain writ of possession issued to Center Retail pursuant
to a Final Judgment for Removal of Tenant, in Palm Beach County Court Case
No. 97-5411, on June 16, 1997, with respect to the space leased to Cafe Ole
(the "Writ of Possession"), and that certain Suggestion of Bankruptcy filed
on June 20, 1997, IN RE UNIQUE MEXICAN RESTAURANT OF BOCA, INC., A FLORIDA
CORPORATION, D/B/A CAFE OLE, with the U.S. Bankruptcy Court Southern
District of Florida, Case No. 97-32998-B.C.-P.H.; (iii) the threatened
claim by Quaker Oats for the loss suffered by it when a number of its
laptop computers were stolen during a conference in one of the Hotel's
meeting rooms; (iv) the Pete's Settlement Agreement; and (v) any breaches
by Seller of the County Settlement Agreement prior to the Closing. The
provisions of this paragraph shall survive Closing.
15. ASSIGNMENT OF WRIT OF POSSESSION. Seller hereby assigns
to Buyer all of its right, title and interest in and to the Writ of
Possession. Seller hereby agrees to execute such other documents that may
be necessary in order to effectuate the same. The provisions of this
paragraph shall survive Closing.
16. RECOURSE LIMITED; SURVIVAL. Notwithstanding anything
that may be contained in the Agreement, including Section 13.12(b), to the
contrary:
(a) The representations, warranties and covenants set forth in
this Second Amendment (excluding the representations, warranties and
covenants set forth in SECTIONS 4.11 through 4.19 of SECTION 5 and SECTION
14 hereof and the mutual indemnity for which provision is made in Section
12.3 of the Agreement as amended by Section 12 hereof) will remain in
effect for one (1) year after the Closing Date and all claims made by Buyer
against Seller after Closing related to or arising out of a breach of the
foregoing representations, warranties or covenants (excluding the
representations, warranties and covenants set forth in SECTIONS 4.11
through 4.19 and SECTION 14 hereof and the mutual indemnity for which
provision is made in SECTION 12.3 of the Agreement as amended by SECTION 12
hereof) must be delivered to Seller in writing not later than the first
(1st) anniversary of the Closing Date.
(b) The representations, warranties and covenants set forth in
SECTIONS 4.11 through 4.19 of Section 5 and Section 14 of this Second
Amendment and Section 12.3 of the Agreement as amended by Section 12 hereof
will remain in effect for three (3) years after the Closing Date and all
claims made by Buyer against Seller after Closing related to or arising out
of a breach of the foregoing representations, warranties or covenants must
be delivered to Seller in writing not later than the third (3rd)
anniversary of the Closing Date;
<PAGE>
16.3 Buyer's total recovery(ies) with respect to any and all
breaches of Seller's representations, warranties and covenants in the
Agreement, as amended by this Second Amendment, shall in no event exceed
$3,000,000.00 in the aggregate.
17. EMPLOYEES. Seller hereby acknowledges that, in
accordance with SECTION 6.3 of the Agreement, Buyer hereby advises Seller
that Buyer does not intend to rehire the general manager of the Hotel
Property, Sherry Smith, after the Closing Date, and intends to rehire the
other employees of the Hotel Property.
18. ADDITIONAL ADJUSTMENT. In the event that Buyer does not
indemnify Seller as set forth in SECTION 4.1 hereof, then Buyer shall pay
to Seller at Closing, in addition to the Purchase Price, an additional
$21,000.00 in reimbursement of documentary tax stamps on the deed conveying
the Hotel Property.
19. MISCELLANEOUS. This Second Amendment may be executed in
one or more counterparts, each of which shall constitute an original but
all of which together shall constitute one and the same instrument. A
facsimile copy of this Second Amendment and any signatures hereon shall be
considered for all purposes as originals. Except as expressly modified by
this Second Amendment, the terms and provisions of the Agreement remain
unmodified and are in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by the duly authorized representatives the day and
year first above written.
SELLER:
CENTER RETAIL PARTNERS, a Florida general
partnership
By: Arvida/JMB Managers, Inc.,
a Florida corporation,
its General Partner
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
CENTER OFFICE PARTNERS,
a Florida general partnership
By: JMB/PCH Corporation,
an Illinois corporation,
its General Partner
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
<PAGE>
CENTER HOTEL LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Arvida/JMB Managers, Inc.,
a Florida corporation,
its General Partner
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: Arvida/JMB Managers, Inc.,
a Florida corporation,
its General Partner
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
BUYER:
STANFORD HOTELS CORPORATION,
a California corporation
By:
------------------------------
Name:
------------------------------
Title
------------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 31,130,922
<SECURITIES> 0
<RECEIVABLES> 9,622,115
<ALLOWANCES> (254,732)
<INVENTORY> 183,919,038
<CURRENT-ASSETS> 0
<PP&E> 79,632,146
<DEPRECIATION> 0
<TOTAL-ASSETS> 322,931,005
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 163,435,297
<TOTAL-LIABILITY-AND-EQUITY>322,931,005
<SALES> 196,560,363
<TOTAL-REVENUES> 196,560,363
<CGS> 164,554,879
<TOTAL-COSTS> 164,554,879
<OTHER-EXPENSES> 18,893,048
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 357,541
<INCOME-PRETAX> 12,754,895
<INCOME-TAX> 0
<INCOME-CONTINUING> 12,754,895
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,754,895
<EPS-PRIMARY> 21.63
<EPS-DILUTED> 21.63
</TABLE>
