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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 2, 1997
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: NOVEMBER 18, 1997
(DATE OF EARLIEST EVENT REPORTED)
LEGEND PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-9885 36-3465359
(STATE OR OTHER JURISDICTION (COMMISSION FILE NO.) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
13662 OFFICE PLACE, SUITE 201, WOODBRIDGE, VA 22192
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(703) 680-2226
(REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 18, 1997, Legend Properties, Inc.'s ("Legend") wholly owned
subsidiary, American Properties Investments, Inc. (API) sold the land , related
improvements, and personal property of the Lynnwood Center ("Center") located in
Lynnwood, Washington. The purchaser is Lynnwood Center Holdings, L.L.C. a
Washington limited liability company (assignee from Parkway Capital, Inc.). The
Center primarily consists of a 164,000 square foot shopping center.
The sale price of the Center was $20,175,000 (before selling costs, broker
commissions, excise tax and prorations of approximately $950,000) all of which
was paid in cash at closing. Legend used a substantial portion of the proceeds
to repay the existing mortgage note of approximately $14,343,000. The sale is
expected to result in a gain of approximately $195,000 for financial reporting
purposes and result in a loss of approximately $780,000 for Federal income tax
purposes.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements. Not Applicable.
(b) Proforma Financial Information - Narrative.
As a result of the sale of the Center, after November 18, 1997, there
will be no further rental income, rental operating expenses, depreciation or
amortization of deferred expenses, mortgage interest and other expense recorded
for the Center in the consolidated financial statements of Legend. For the year
ended December 31, 1996, the Center's financial statements reflected rental
income, rental operating expenses, provision for loss on assets held for sale,
selling, general and administrative expense, depreciation and amortization,
interest income, and mortgage interest of approximately $2,481,000, $397,000,
$1,000,000, $359,000, $30,000, $16,000, and $1,253,000 respectively. Rental
income, rental operating expenses, selling, general and administrative expense,
depreciation and amortization, interest income, and mortgage interest relating
to the Center included for the nine months ended September 30, 1997, in
Legend's consolidated financial statements were approximately $1,877,000,
$300,000, $60,000, $41,000, $2,000, and $1,002,000, respectively. Such
operating results reflected the classification of the Center as held for sale
or disposition as of June 30,1997, and therefore, not subject to continued
depreciation as of such date. Also, as a result of the sale of the Center,
there are no further assets and liabilities (other than miscellaneous
immaterial trade receivables and trade liabilities) related to the Center,
which at September 30, 1997, consisted of land, buildings and improvements
(net of accumulated depreciation) of approximately $17,460,000; deferred
expenses of approximately $1,781,000 (net of accumulated amortization) and
current debt and accrued interest of approximately $14,405,000.
(c) EXHIBITS
10.1 Real Estate Purchase and Sale Agreement and Joint Escrow Instructions
between American Properties Investments, Inc. and Parkway Capital, Inc. or
assigns dated August 5, 1997.
10.2 Amendment No.1 to the Purchase and Sale Agreement between American
Properties Investments, Inc. and Parkway Capital, Inc. or assigns dated August
18, 1997.
10.3 Amendment No.2 to the Purchase and Sale Agreement between American
Properties Investments, Inc. and Parkway Capital, Inc. or assigns dated
September 30, 1997.
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10.4 Amendment No.3 to the Purchase and Sale Agreement between American
Properties Investments, Inc. and Parkway Capital, Inc. or assigns dated October
16, 1997.
10.5 Amendment No.4 to the Purchase and Sale Agreement between American
Properties Investments, Inc. and Parkway Capital, Inc. or assigns dated October
23, 1997.
10.6 Amendment No.5 to the Purchase and Sale Agreement between American
Properties Investments, Inc. and Parkway Capital, Inc. or assigns dated October
28, 1997.
10.7 Amendment No.6 to the Purchase and Sale Agreement between American
Properties Investments, Inc. and Parkway Capital, Inc. or assigns dated November
4, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: December 2, 1997
LEGEND PROPERTIES, INC.
(Registrant)
By: /s/ EDWARD F. PODBOY
--------------------------
Edward F. Podboy
President, Chief Executive Officer
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REAL ESTATE PURCHASE AND SALE AGREEMENT
AND
JOINT ESCROW INSTRUCTIONS
THIS REAL ESTATE PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS ("AGREEMENT"), dated as of August 5, 1997, by and between PARKWAY
CAPITAL, INC., a Washington corporation, or assigns ("Buyer"), and AMERICAN
PROPERTIES INVESTMENTS, INC., a Washington corporation ("Seller"), constitutes
(1) an agreement of purchase and sale between the parties and (2) joint escrow
instructions to the Escrow Agent identified herein.
A G R E E M E N T
In consideration of the mutual covenants hereafter set forth, and other
good and valuable consideration, the receipt and sufficiency of which are
mutually acknowledged, the parties agree as follows.
1. Basic Terms of Purchase. The basic terms of this Agreement (the
"Basic Terms") set forth in this Article 1 shall be read in conjunction with the
other Articles of this Agreement, which implement, explain, and make reference
to the Basic Terms.
Center: Lynnwood Center
Purchase Price: Twenty Million One Hundred Seventy Five Thousand
Dollars ($20,175,000)
Deposit: Two Hundred Thousand Dollars ($200,000)
Review Period: A period of forty-five (45) days after the
Execution Date
Title Review Period A period of fifty-one (51) days after the Execution
Date
Closing Date: The date occurring thirty (30) days after the end
of the Review Period.
Anchor Tenant(s): Safeway, PayLess Drugs, Sports Authority
Escrow Agent: Transnation Title Insurance Company
Title Insurer: Transnation Title Insurance Company
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2. Purchase and Sale of Property; Purchase Price; Deposit.
2.1 The Property. Seller owns certain real property (the "Land")
located in the City of Lynnwood, County of Snohomish (the "County"), Washington,
more particularly described on the attached Exhibit A. The Land is improved with
a neighborhood shopping center named in the Basic Terms (the "Center"), and is
anchored by the Anchor Tenants described in the Basic Terms. As used herein, the
term "Property" means collectively the Land and Seller's right, title and
interest in all of the following:
(a) All easements, agreements, benefits, privileges, permits,
tenements, hereditaments, licenses and rights appurtenant to the Land; the use
of and rights in any streets and rights-of-way, if any, abutting, adjacent,
contiguous or adjoining the Land; and all strips and gores that are a part of or
appurtenant to the Land;
(b) Such portion of the Land, if any, lying in the bed of any
street, road, or avenue, open or proposed, at the foot of, adjoining or below
the Land that is a part of or appurtenant to the Land;
(c) The buildings, parking lots, curbs and gutters, utility
installations and all other improvements and fixtures located on the Land or any
of the real property described in subsections (a) or (b) above (collectively,
the "Improvements");
(d) All personal property (if any), tangible and intangible,
not constituting part of the Land or Improvements that is located on and used in
connection with the Land, the Improvements or the Center, and consisting of
furniture, fixtures, heating, ventilating and air conditioning fixtures and
equipment, incinerating, lighting, electrical and plumbing fixtures and
equipment, trade fixtures, plans and specifications, warranties (including,
without limitation, any and all roof warranties), guaranties, licenses, permits,
approvals, copies (but not the originals) of books and records, and trade names
and trademarks related to the name of the Center (collectively, the "Personal
Property");
(e) Except as expressly provided in Section 10.5, all leases
and other occupancy agreements affecting the Land, all guaranties of any of such
leases, and all amendments thereto (collectively, the "Leases"); and
(f) To the extent assumed by Buyer, as set forth in Section
7.5(b) below, all management, maintenance, service, supply, equipment rental and
other contracts affecting the Land or used or useful in the operation and/or
maintenance of the Center (collectively, the "Contracts").
2.2 Sale and Conveyance. Seller agrees to sell the Property to
Buyer, and Buyer agrees to buy the Property from Seller, upon the terms and
conditions of this Agreement.
2.3 Deposit. Within three (3) business days after the date that
the last of Seller and Buyer have executed this Agreement as indicated on the
signature page (the "Execution Date"), Buyer will deposit in Escrow the Deposit
of $200,000 in the form of cash or other immediately available
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funds. Such Deposit and any and all future deposits made by Buyer and all
interest earned thereon, shall be collectively referred to herein as the
"Deposit." At the Closing (as defined below), the Deposit shall be released to
the account of Seller and Buyer shall receive a credit against the Purchase
Price for the full amount of the Deposit released to Seller. Escrow Agent shall
invest and reinvest the Deposit prior to the expiration of the Review Period as
instructed by Buyer in accounts or instruments that are federally insured. In
the event Buyer does not terminate this Agreement on or before expiration of the
Review Period, Seller may thereafter direct the investment of the Deposit.
2.4 Purchase Price; Payment at Closing. The Purchase Price for
the Property shall be Twenty Million One Hundred Seventy Five Thousand Dollars
($20,175,000). The Purchase Price, plus or minus prorations and adjustments as
provided for herein, shall he paid by Buyer to Seller by wire transfer through
Escrow at the Closing.
2.5 Closing Date. The Closing Date shall be as set forth in the
Basic Terms (as may be extended pursuant to the terms of Section 7.3), and the
Closing shall occur through Escrow upon the conditions and in accordance with
the provisions of Section 7 hereof.
3. Title.
3.1 Title Report. Within five (5) business days after the
Execution Date, Seller shall deliver to Buyer, at Seller's sole cost, a
preliminary title report ("PR") from the Title Insurer for an owner's standard
coverage title insurance policy, together with a copy of all recorded exceptions
disclosed therein.
3.2 Survey. Seller has delivered to Buyer that certain Building
and Easement Plan of the Property dated April 9, 1996 and revised April 16,
1996, prepared by David Evans & Associates. If Buyer wishes to obtain a new or
updated survey of the Property, Buyer shall be responsible for obtaining such a
new or updated survey to its specifications (together with the Building and
Easement Plan, the "Survey") and shall use its best efforts to obtain such
Survey within the Review Period. Seller agrees to pay Buyer promptly upon
receipt of an invoice up to $3,500 to cover one-half of the actual costs paid by
Buyer to the surveyor for such new or updated Survey. Buyer shall be responsible
for all other costs and expenses associated with obtaining a Survey. Buyer will
provide Seller with a copy of the Survey, which shall be certified to Seller in
addition to the Buyer, the Title Company and Buyer's lender.
3.3 UCC Searches. Within five (5) business days after the
Execution Date, Seller shall deliver to Buyer, at Seller's sole cost, search
results for the State of Washington UCC Division and Snohomish County,
Washington, covering UCC and federal tax liens filed against the Seller
(collectively, the "UCC Searches"). The UCC Searches shall include copies of
each filing referred to therein.
3.4 Review of PR, Survey and UCC Searches; Objection; Approval or
Termination.
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Buyer shall be entitled to object to any matters shown on the PR,
Survey or UCC Searches, in its sole discretion, by a written notice of
objections delivered to Seller within fifty-one (51) days of the Execution Date
(the "Title Review Period"). Buyer's failure to do so shall be deemed to
constitute Buyer's approval of all matters disclosed in the PR, Survey and UCC
Searches. Seller shall have ten (10) days from the date of any written notice of
objection from Buyer to deliver written notice to Buyer stating which of the
objected to encumbrances Seller will remove on or before Closing. If Seller
fails to agree to remove one or more objected to encumbrances, then Buyer must
elect to (i) terminate this Agreement by delivering written notice to Seller
within ten (10) days following receipt of Seller's notice, or (ii) agree within
such ten (10) day period to take title subject to the encumbrances that Seller
has declined to remove. If Buyer elects to terminate this Agreement or fails to
deliver the notice, this Agreement shall automatically terminate and the
provisions of Section 4.6 shall apply. If Buyer elects to take title subject to
encumbrances and proceed with Closing, the Deposit shall become nonrefundable to
Buyer, except as otherwise expressly set forth in this Agreement.
3.5 Review of Updates to PR, Survey and/or UCC Searches. If any
amendment or update of the PR, or UCC Searches issued subsequent to the date of
the Title Review Period contains encumbrances against the Property other than
those in the initial PR Survey or UCC Searches or any previous amendment or
update thereto, Buyer shall be entitled to object to any matter, in its sole
discretion, by a written notice of objections delivered to Seller within 5
business days of Buyer's receipt of the amended or updated PR or UCC Searches.
Buyer's failure to do so shall be deemed to constitute Buyer's approval of all
matters disclosed in such amended or updated PR or UCC Searches. If Buyer timely
objects, the provisions of Section 3.4 above shall apply to said amended or
updated PR or UCC Searches except that Seller shall have only 5 business days to
deliver its notice to Buyer and Buyer shall have 5 business days following
receipt of Seller's notice to make its election. Upon delivery of any
termination notice by Buyer hereunder, this Agreement shall automatically
terminate and the provisions of Section 4.6 shall apply. Buyer shall be
responsible for timely updating the Survey or obtaining a new survey and
obtaining the Title Company's review of the Property, the Survey and any new or
updated survey as may be necessary for Buyer's due diligence or any extended
coverage policies of title insurance desired by Buyer or its lender, all prior
to the expiration of Buyer's Title Review Period. After the expiration of the
Title Review Period, Buyer is not entitled to make any objection to new
exceptions shown on an amended or updated PR, which new exceptions are shown
after the Title Review Period because of Buyer's failure to obtain the Survey
during the Title Review Period.
3.6 Permitted Exceptions. Title to the Property shall be conveyed
to Buyer at Closing subject to the following matters ("Permitted Exceptions"):
(a) current, non-delinquent real estate taxes and assessments; (b) the lien of
supplemental taxes, if any, not yet due and payable; (c) the matters set forth
in the PR, Survey and UCC Searches to which Buyer has not objected, or which are
approved by Buyer pursuant to the procedures in this Section 3; (d) the Leases
reflected on the Rent Roll; and (e) any other matters approved in writing by
Buyer.
3.7 Title Insurance. As a condition to Close of Escrow, Title
Insurer shall be committed to issue an owner's standard coverage title insurance
policy dated the day of Closing, in the full amount of the Purchase Price, the
form of which shall be American Land Title Association ("ALTA") Owner's Policy
Form (1970), subject only to the standard exclusions from coverage
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contained in the ALTA standard coverage owner's policy and the Permitted
Exceptions (the "Title Policy"). If Buyer desires an extended coverage policy of
title insurance, Buyer shall satisfy itself prior to expiration of the Title
Review Period that Title Insurer is prepared to issue an extended coverage
policy in a form acceptable to Buyer.
4. Buyer's Review Period.
4.1 Property Information. Within five (5) business days after the
Execution Date, Seller shall deliver to Buyer the property information described
on the attached Exhibit B to the extent same is in Seller's possession (such
information and the property information described in Section 4.1(a) through (1)
below, to be known collectively as the "Property Information"). The term "in
Seller's possession" when used in this Agreement means in the possession of
Seller or its property manager, Shelter Bay Retail Group. To facilitate Buyer's
evaluation, Seller shall give Buyer and its counsel, accountants, and
representatives full access at the offices of Seller or its property manager at
all reasonable times, to all of its books and records with respect to ownership,
construction and operation of the Property, and the right to copy the same, and
shall make available to Buyer all such documents and information concerning the
same as Buyer may reasonably request and that are in the possession of Seller
including, without limitation, the following information to the extent it is in
Seller's possession:
a. Tenant Information. To the extent provided by tenants,
copies of financial statements of all tenants under Leases covering the two
years preceding the Execution Date; information relative to tenant payment
history; CAM, real estate taxes and insurance reconciliations by tenant for the
three (3) full calendar years preceding the date of the Agreement; tenants'
allocation of CAM, real estate taxes and insurance reimbursements; and gross
sales reports for each tenant reporting sales and all tenant correspondence
related thereto).
b. Maintenance Records. All maintenance work orders for the
12 months preceding the Execution Date.
c. List of Capital Improvements. A list of all capital
improvements performed on the Property within 24 months preceding the Execution
Date.
d. Reports. Any environmental, soil, structural engineering
and drainage reports, assessments, audits and surveys related to the Property.
e. Site Plans. The most recent site plans relating to the
Property.
f. As-Built Plans and Specifications. Any as-built
construction, architectural, mechanical, electrical, plumbing, landscaping and
grading plans and specifications relating to the Property and any major capital
repair, or tenant improvements (including bay depths and free protection
specifications).
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g. Permits and Warranties. Copies of all warranties and
guaranties, permits, licenses and other approvals relating to the Property
(including, without limitation, any and all roof warranties), and all
certificates of occupancy pertaining to the Property.
h. Operating Information. Copies of (a) all utilities bills
payable by Seller relating to the Property for the 12 calendar months preceding
the Execution Date and a list of any utility company deposit; (b) all service
contract billings; (c) all certificates of insurance of each tenant to the
extent provided by tenants; (d) details of any reserves and the back-up of for
any projections upon which the reserves are based; (e) year-to-date general
ledger; (f) accounts receivable aging report, (g) all tax returns relating to
the Property for the past calendar year; (h) any Tenant letters and back-up
materials in Seller's possession; and (i) current delinquency lists.
i. Management Reports. Copies of monthly management reports
for the Property for two (2) full calendar years preceding the date of the
Agreement together with the current year's monthly reports.
j. Budget. Seller's most recent budget for the Property,
including the budget for the forthcoming year, if applicable.
k. Insurance. Copies of Seller's insurance policies, a loss
history and any current claims relating to the Property, certificate of
insurance for the Property and any notices received by insurance carriers.
1. General. Any other material documents or information
pertaining to the Property in Seller's possession.
The parties acknowledge that the above-listed documents or those listed
on Exhibit B may be over-inclusive and include information that is not in
Seller's possession, as "Seller's possession" is defined in this Agreement.
Seller is not responsible for generating any documents or reports for the
purpose of Buyer's investigation of the Property. Buyer is responsible for
conducting its own due diligence and obtaining any additional information and
conducting such inspections and analyses as it deems necessary during the Review
Period.
4.2 Buyer's Property Review. From and after the Execution Date
through the Close of Escrow, Buyer and its employees, agents, contractors,
attorneys and consultants may, at reasonable times and with advance notice to
Seller, inspect any Property Information not delivered pursuant to Exhibit B
attached hereto and the Property and perform tests thereto at Buyer's expense.
(a) Buyer's Inspection. Buyer and its agents and employees
shall use reasonable care in conducting any inspections or tests to prevent any
damage to the Property, and shall conduct any such inspections or tests in a
manner which will not unreasonably interfere with the tenants or operations of
the Property, or violate the terms of any Leases. Buyer and Seller agree to
cooperate and, to the extent possible, schedule inspections or tests at times
mutually agreeable with tenants. Upon the completion of any inspection or test,
Buyer shall restore the Property to its condition prior to such inspection or
test, Buyer shall keep the Property free and clear of any liens and will
indemnify, defend,
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and hold Seller harmless from all claims and liabilities asserted against Seller
or the Property as a result of any entry onto the Property by Buyer, its agents,
employees or representatives. The indemnification obligations of Buyer in this
Section shall survive Closing or the earlier termination of this Agreement.
(b) Communications With Third Parties. In the course of its
investigations Buyer may make inquiries to third parties including, without
limitation, tenants, lenders, contractors, property managers, parties to
contracts, and municipal, local, and other government officials and
representatives. Any inquiries or other communications by Buyer to tenants of
the Property shall be made only through or in the presence of Seller's property
manager, unless otherwise consented to by Seller in advance. Any inquiries or
other communications by Buyer with Seller's lender, contractors or other third
parties engaged or employed by Seller (other than Seller's property manager)
shall be made through Seller or in the presence of a designated representative
of Seller, unless otherwise agreed to by Seller in advance. Notwithstanding the
foregoing, in the event Seller fails to respond to Buyer's inquiries (which
inquiries must be made to Seller's property manager) regarding tenants or third
parties within two (2) days from such inquiry, such failure shall be deemed to
be Seller's approval for Buyer to proceed directly to the tenants, or third
party(ies) with such inquiry.
4.3 Assumption of Operating Contracts. Prior to the expiration of
the Review Period, Buyer shall deliver to Seller a notice setting forth which
Contracts (as defined on Exhibit B) Buyer will assume and which Contracts are to
be terminated by Seller at Closing. Buyer will assume the obligations arising
from and after Closing under those Contracts that Buyer has agreed will not be
terminated, or that are not terminable by their terms or under applicable law as
of or before the Close of Escrow (the "Assumed Contracts"). For each Contract
identified by Buyer, Seller shall deliver to Escrow a notice of termination to
terminate effective as of Closing (or as of the earliest date permitted under
the Contract) all Contracts that Buyer elects not to assume. Buyer's failure to
timely provide such notice shall be deemed to constitute an election of Buyer to
assume all Contracts.
4.4 Confidentiality and Return of Information. Buyer agrees to
keep confidential all information and documents provided to Buyer in connection
with its review of the Property, and Buyer agrees not to disclose same to any
third parties other than employees, agents, partners, contractors, attorneys and
consultants of the Buyer who are assisting in Buyer's evaluation of the
Property, all who have been instructed and have agreed to preserve the
confidentiality of the information and documents. If Buyer or Seller terminates
this Agreement prior to the removal of contingencies, or if for any reason
thereafter the sale of the Property fails to close, Buyer shall return to Seller
all of the documents and written information provided (and all copies thereof),
and shall provide to Seller copies of any additional reports, studies and/or
investigations, if any, obtained by Buyer which relate to the condition of the
Property. Buyer's obligations contained in this paragraph shall survive the
termination of this Agreement.
4.5 Buyer's Possible Early Termination. On or before the
expiration of the Review Period, Buyer shall deliver to Seller written notice
(the "Contingency Notice") that (A) Buyer elects to terminate this Agreement, or
(B) Buyer has completed its inspection and review of the Property (except as to
survey and title matters which may be objected to at a later date in accordance
with Section 3.4), and that Buyer is fully satisfied with the Property and has
waived all contingencies, except (i) matters disclosed in the PR, Survey or UCC
Search; and
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(ii) the right to terminate this Agreement under Section 10.1 of this Agreement
because of a failure of one of the Major Tenants to deliver an Estoppel
Certificate on or before Closing. Buyer may terminate this Agreement upon
written notice given to Escrow Agent and Seller delivered on or before the last
day of the Review Period if Buyer shall not be satisfied in Buyer's sole and
absolute discretion with the Property, the Property Information, the PR, the
Survey, the UCC Searches, or any other matter whatsoever regarding the Property.
Upon delivery of such termination notice by Buyer or upon failure of Buyer to
deliver a Contingency Notice, this Agreement shall automatically terminate and
the provisions of Section 4.6 shall apply.
4.6 Consequences of Buyer's Early Termination. Any notice of
termination given by Buyer shall be delivered to Seller and Escrow Agent. Upon
the giving of notice of termination on or before the last day of the Review
Period or under Section 3.5, this Agreement shall immediately terminate, the
parties shall be released from all further obligations under and shall have no
liability arising out of this Agreement (except with respect to any provisions
that by their terms survive a termination of this Agreement). Escrow Agent shall
immediately pay the entire Deposit plus any accrued interest to Buyer.
5. Representations and Warranties.
5.1 Representations and Warranties of Seller.
(a) Seller hereby makes the following representations and
warranties to Buyer, which representations and warranties shall continue to be
true at Closing, unless Buyer is otherwise notified by Seller pursuant to
Section 5.1(n) below, and shall survive the Closing and the delivery of the
"Deed," as that term is defined in Section 7.5(a) below, for a period of twelve
(12) months after Closing. Within 5 business days after the Execution Date,
Seller shall deliver to Buyer Exhibits F, G, H, I and L of this Agreement. Upon
delivery to Buyer, such exhibits shall be deemed to be incorporated into this
Agreement and references in this Agreement to one or more such exhibits shall be
references to the form of such exhibit or exhibits delivered to Buyer.
(b) "To the best of Seller's knowledge" or other references
herein to Seller's knowledge shall mean that neither Kenneth L. Uptain nor Penny
Gordon has actual knowledge of facts or circumstances which would make the
statements or assertions in any representation or warranty inaccurate or
misleading, without such persons having made any special inquiry or
investigation with respect to the matters contained in such provisions and
without such persons having undertaken a special review of Seller's files and
documents in connection with the sale of the Property to Buyer. Kenneth L.
Uptain is the individual within Seller's organization who is most familiar with
the Property. Penny Gordon is the individual within the organization of Seller's
property manager who is most familiar with the Property.
(c) Organization; Authority. Seller has the full legal power,
right and authority to enter into this Agreement and the instruments referenced
herein, and to consummate the transaction contemplated hereby. All requisite
action (corporate, trust, partnership or otherwise) has been taken by Seller and
all required consents obtained in connection with entering into this Agreement
and the instruments referenced herein, and by the Close of Escrow all such
necessary action will have
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been taken to authorize the consummation of the transaction contemplated hereby.
This Agreement and the instruments referenced herein have been and will be duly
authorized and properly executed and will constitute the valid and binding
obligations of Seller, enforceable against Seller in accordance with their
respective terms. Seller has made, obtained, or given (or by the Close of Escrow
will have made, obtained, or given) all consents, waivers, approvals and/or
authorizations of or filing, registration, or qualification with, or notice to,
any governmental instrumentality or any other entity or person which, to the
best of Seller's knowledge, are required to be made, obtained, or given by
Seller in connection with the execution, delivery, and performance of this
Agreement and the instruments referenced herein. The individual(s) executing
this Agreement and the instruments referenced herein on behalf of Seller have
the full legal power, right and authority to bind Seller thereto.
(d) No Conflict. To the best of Seller's knowledge, neither
the execution and delivery of this Agreement and the instruments referenced
herein, nor the incurring of the obligations set forth herein, nor the
consummation of the transaction contemplated herein, nor compliance with the
terms of this Agreement and the instruments referenced herein conflict with or
result in the "material breach" of any term, condition or provision of, or
constitute a "default" under, any bond, note, or other evidence of indebtedness
or any contract, indenture, mortgage, deed of trust, loan, lease, or other
agreement or instrument to which Seller is a party or by which Seller or the
Property may be bound. The terms "material breach" and "default" as used in this
subparagraph means a breach or de fault which would make this Agreement
unenforceable against Seller in accordance with its terms or which would result
in a lien or encumbrance against the Property which would survive the Closing.
(e) No Bankruptcy. Seller has not (i) made a general
assignment for the benefit of creditors, (ii) filed any voluntary petition in
bankruptcy or suffered the filing of an involuntary petition by Seller's
creditors, (iii) suffered the appointment of a receiver to take possession of
all or substantially all of the Seller's assets, (iv) suffered the attachment or
other judicial seizure of all, or substantially all, of Seller's assets, (v)
admitted in writing its inability to pay its debts as they come due, or (vi)
made an offer of settlement, extension or composition to its creditors
generally.
(f) Property Information. Seller has made (or will make,
under the terms set forth in this Agreement) available to Buyer for its review
all material documents, files, written information, books and records in
Seller's possession relating to the Property, including without limitation any
and all roof warranties. To the best of Seller's knowledge: there are no
material structural, electrical, mechanical, plumbing, roof, paving or other
defects in the Improvements; the roofs are free of leaks and in sound structural
condition; the Personal Property is in good working order in all material
respects; and the Property Information is true and correct in all material
respects. Seller has not failed to disclose or make available to Buyer any
materially adverse facts actually known by Seller (without investigation)
respecting the Property.
(g) Leases; Rent Roll. To the best of Seller's knowledge and
except as set forth on Exhibit F attached hereto (i) each tenant shown on the
Rent Roll is in possession of its respective space, and (ii) the Lease related
to such space is in full force and effect and has not been amended, assigned or
modified except pursuant to any amendment, assignment or modification delivered
to Buyer as part of the Property Information. Except as set forth in Exhibit F
attached
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hereto, (i) no tenant has asserted to Seller, or to the best of Seller's
knowledge has, any defense to its Lease nor any claim against the landlord with
respect to or arising out of the tenancy; (ii) to the best of Seller's
knowledge, no tenant is in default under its Lease; (iii) with the exception of
on-going maintenance work which is the obligation of Seller as landlord under
any Lease, all work required to be done by Seller, as landlord, has been or by
the Closing will be done or furnished; (iv) no tenant has any option or other
right to purchase the Property or any part thereof or interest therein; (v) to
the best of Seller's knowledge, there are no adverse or other parties in
possession of the Property or any part thereof except Seller and tenants under
the written Leases set forth in the Rent Roll, (vi) to the best of Seller's
knowledge, no tenant has initiated or had initiated against it any insolvency,
bankruptcy, receivership or other similar proceeding; (vii) except as disclosed
in the Property Information, no tenant has paid any rent in advance except for
the current month, (viii) no tenant is currently entitled to receive any
improvement or work allowance or take a rental reduction to pay for tenant
improvements; (ix) there are no leasing or other commissions due, nor will any
become due, in connection with any Lease, any renewal, extension, or expansion
of any Lease and no understanding or agreement with any party exists as to a
payment of any leasing commissions or fees regarding future Leases or as to
procuring of tenants; and (x) none of the Leases and none of the rents or other
amounts payable under the Leases has been assigned, pledged or encumbered by
Seller except pursuant to a mortgage loan to be satisfied at Closing. There are
no oral or other terms or agreements between Seller and any of the tenants
except as set forth in the Leases or delivered to Buyer as part of the Property
Information.
(h) Contracts. Except as set forth in Exhibit G. Seller is
not a party to any service agreements, management agreements or other contracts
with respect to the Property or any part thereof. To Seller's best knowledge,
neither party is in default thereunder and each Contract is in full force and
effect.
(i) Governmental Actions. Seller has received no written
notice from any governmental authority or other person of, and has no actual
knowledge (without investigation) of: (i) any current violation of zoning,
building, fire, health, or environmental laws with respect to the Property or
operation of the Property by Seller, or (ii) any imposition of any special tax
or assessment against the Property not otherwise shown on the PR, the property
tax bills or other information to be provided to Buyer as part of the Property
Information.
(j) Zoning and Other Governmental Information. Seller has
made no request or application for and knows of no proceeding to alter or
restrict the current zoning or other use restrictions applicable to the
Property. To the best of Seller's knowledge and except as disclosed to Buyer:
there is no pending or threatened action or governmental proceeding in eminent
domain, zoning change, rent control or otherwise that would directly affect the
Property; and the present use of the Property does not violate any restrictive
covenants affecting the Property.
(k) Permits. To Seller's best knowledge, Seller (i) has
obtained all certificates of occupancy, licenses, and permits that are required
for Seller's (but not any tenant's) operation of the Property and all of such
certificates of occupancy, licenses, and permits are in full force and effect,
and (ii) has not received any written notice from the applicable issuing agency
or authority of such agency's or authority's intention to revoke any certificate
of occupancy, license, or permit required for Seller's operation the Property.
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(l) Insurance Requirements. The Property is insured at its
full replacement value and rents for all tenants other than Safeway and PayLess
are insured in an amount not less than ninety percent (90%) of the annual rental
amount shown on the Rent Roll. Safeway and PayLess obtain their own rent
insurance and Seller has not received evidence from these tenants of the amount
of such coverage. Seller has requested this information from Safeway and
PayLess, but cannot warrant when a response will be provided. Seller shall add
to the form of Estoppel Certificate (as defined in Section 10.1) provided to
Safeway and PayLess a warranty regarding the percentage of annual rents
currently insured by such tenant. Seller has not received any written notice
from any insurance company or board of fire underwriters requesting the
performance of any work or alteration with respect to the Property, or requiring
an increase in the insurance rates applicable to the Property due to any
requested work or alteration, or adverse condition on, the Property, or that the
Property does not comply with the requirements of any insurance carriers
providing insurance therefor.
(m) Utilities. To the best of Seller's knowledge, all water,
sewer, gas, electric, telephone, and drainage facilities, and other utilities
required for the normal and proper operation of the Property are installed to
the property line.
(n) Litigation. To Seller's best knowledge and except as set
forth in Exhibit H attached hereto, there is no pending or threatened,
litigation, condemnation proceeding, governmental investigation or like
proceeding before any court, tribunal, or other governmental agency against
Seller respecting the Property or the operation of the Property by Seller, or
that challenges or impairs Seller's ability to execute or perform its
obligations under this Agreement. Seller has not received notice of any
attachments or executions pending against or threatened against Seller or the
Property, and Seller is not aware of any facts which might result in any such
litigation, investigation or proceeding.
(o) Employees. Seller has no employees.
(p) General Representation. No representation, warranty or
statement of Seller in this Agreement or, to the best of Seller's knowledge, in
any document, certificate or schedule furnished to Buyer pursuant to this
Agreement, contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements or facts contained therein not
misleading. Seller shall promptly inform Buyer, as further set forth below, in
writing of any material adverse change in the condition, financial or otherwise,
of the Property or the operation thereof that occurs at any time prior to Close
of Escrow, and of any facts or circumstances which would materially change any
exhibit attached hereto, or any of the representations or warranties of Seller
contained herein (collectively, a "Material Change"). Seller shall issue a
certificate at Closing stating that all of Seller's representations and
warranties are true and correct as of said date, except as to facts, if any,
concerning which Buyer was notified in writing. In any event, if Seller shall
give notice to Buyer of a Material Change prior to Close of Escrow, thereafter,
Buyer shall have the option to (i) terminate this Agreement and have the Deposit
returned to Buyer in accordance with Section 4.6, or (ii) close this transaction
as provided herein, in which event Seller shall cure or remove any such Material
Change prior to Closing, but only to the extent such Material Change was caused
by events directly within
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Seller's control (the "Curable Material Change"). Failure of Seller to cure or
remove a Curable Material Change will be deemed a default hereunder, subject to
all rights and remedies of Buyer provided in such event. If Seller gives notice
to Buyer of a Material Change prior to Close of Escrow, which Material Change is
not a Curable Material Change, then Buyer must elect to (i) terminate this
Agreement and have the Deposit returned by Buyer in accordance with Section 4.6,
or (ii) accept the changed fact or circumstance and close this transaction as
provided herein. To the extent that Buyer has actual knowledge at or prior to
the Close of Escrow of facts contrary to any representations or warranties made
herein or in Section 6.1, and Buyer elects to close this transaction
nevertheless, Buyer shall not be entitled to rely on any such representation or
warranty to the extent of such knowledge and shall be entitled to no remedy
against the Seller for the failure of any such representation or warranty,
except the remedies set forth in this paragraph above with respect to a Curable
Material Change. Seller makes no representations or warranties regarding Seller,
the condition of the Property or the suitability of the Property for Buyer's
uses except as expressly set forth in this Agreement.
5.2 Buyer's Representations and Warranties. Buyer hereby makes
the following representations and warranties to Seller, which representations
and warranties are being relied upon by Seller, shall continue to be true at
Closing, and shall survive the Closing and the delivery of the Deed.
(a) Organization; Authority. Buyer has the full legal power,
right and authority to enter into this Agreement and the instruments referenced
herein, and to consummate the transaction contemplated hereby. All requisite
action (corporate, trust, partnership or otherwise) has been taken by Buyer and
all required consents have been obtained by Buyer in connection with entering
into this Agreement and the instruments referenced herein, and by the Close of
Escrow all such necessary action will have been taken to authorize the
consummation of the transaction contemplated hereby. This Agreement and the
instruments referenced herein have been and will be duly authorized and properly
executed and will constitute the valid and binding obligations of Buyer,
enforceable in accordance with their respective terms. Buyer has made, obtained,
or given (or by the Close of Escrow will have made, obtained, or given) all
consents, waivers, approvals and/or authorizations of, or filing, registration,
or qualification with, or notice to, any governmental instrumentality or any
other entity or person required to be made, obtained, or given by Buyer in
connection with the execution, delivery, and performance of this Agreement and
the instruments referenced herein. The individual(s) executing this Agreement
and the instruments referenced herein on behalf of Buyer have the full legal
power, right and actual authority to bind Buyer
(b) No Conflict. Neither the execution and delivery of this
Agreement and the instruments referenced herein, nor the incurring of the
obligations set forth herein, nor the consummation of the transaction
contemplated herein, nor compliance with the terms of this Agreement and the
instruments referenced herein conflict with or result in the material breach of
any term, condition or provision of, or constitute a default under, any bond,
note, or other evidence of indebtedness or any contract, indenture, mortgage,
deed of trust, loan, lease or other agreement or instrument to which Buyer is a
party.
(c) Litigation. Except as disclosed to Seller, there is no
pending or, to Buyer's best knowledge threatened, litigation, proceeding,
governmental investigation or like
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proceeding before any court, tribunal, or other governmental agency that
challenges or impairs Buyer's ability to execute or perform its obligations
under this Agreement.
(d) No Bankruptcy. Buyer has not (i) made a general
assignment for the benefit of creditors, (ii) filed any voluntary petition in
bankruptcy or suffered the filing of an involuntary petition by Buyer's
creditors, (iii) suffered the appointment of a receiver to take possession of
all or substantially all of the Buyer's assets, (iv) suffered the attachment or
other judicial seizure of all, or substantially all, of Buyer's assets, (v)
admitted in writing its inability to pay its debts as they come due, or (vi)
made an offer of settlement, extension or composition to its creditors
generally.
6. Hazardous Materials.
6.1 Representations and Warranties Regarding Hazardous Materials.
Seller hereby makes the following representations and warranties to Buyer, which
representations and warranties shall survive the Closing and the delivery of the
Deed for a period of twelve (12) months after the Close of Escrow. To the extent
there is any Material Change to any of the following representations, warranties
and covenants, such Material Change shall be governed by the terms and
conditions of Section 5.1(n) of this Agreement:
(a) Except as disclosed on Exhibit I, to Seller's best
knowledge, (i) neither Seller nor any third party has used, generated, treated,
manufactured, produced, introduced, stored, discharged, disposed of or released
on, under or about the Property or transported to or from the Property, any
Hazardous Materials (as defined below); (ii) no Hazardous Materials exist on,
under or in the Property; (iii) no Hazardous Materials are located on or below
the surface of the Property; (iv) no portion of the Property has ever been used
as a storage or disposal site for Hazardous Materials; (v) no asbestos or
asbestos containing materials are now or have been in the past located on or
incorporated into the Property; and (vi) there are not now nor have there ever
been any underground tanks located on the Property.
(b) To the best of Seller's knowledge, there is no proceeding
or inquiry by any governmental authority (including, without limitation, the
United States Environmental Protection Agency or the Washington State Department
of Health) with respect to the presence of any Hazardous Materials on the
Property or the migration thereof from or to other property.
6.2 Indemnification of Buyer Regarding Hazardous Materials.
Seller shall indemnify, protect, defend and hold Buyer harmless from and against
any and all claims, costs, expense, suits, judgments, actions, investigations,
proceedings and liability arising out of or in connection with any breach of the
representations and warranties set forth in Section 6.1. Regardless of the
extent of Buyer's claims, costs or losses in connection with the representations
or warranties set forth in Section 6.1 above, Seller's indemnification
obligations shall not exceed Three Million Dollars ($3,000,000.00) in the
aggregate.
6.3 Definitions. "Hazardous Materials Laws" means any and all
federal, state or local laws, ordinances, rules, decrees, orders, regulations or
court decisions (including the so-called "common law") relating to Hazardous
Materials, environmental conditions on, under or about the
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Property, soil and ground water conditions or other similar substances or
conditions, including without limitation the Comprehensive Environmental
Response Compensation and Liability Act of 1980, the Resource Conservation and
Recovery Act, the Hazardous Materials Transportation Act, the Washington Model
Toxic Control Act, any amendments to any of the foregoing, and all rules,
decrees, orders and regulations promulgated thereunder, and any similar federal,
state or local laws, ordinances, rules, decrees, orders or regulations.
"Hazardous Materials" means any chemical, compound, material, substance or other
matter that: (a) is defined as a hazardous substance, hazardous material,
hazardous waste or toxic substance under any Hazardous Materials Law, (b) is
controlled or governed by any Hazardous Materials Law or gives rise to any
reporting, notice or publication requirements thereunder, or gives rise to any
liability, responsibility or duty thereunder on the part of Seller, or (c) is
asbestos or an asbestos-containing material.
7. Escrow; Closing.
7.1 Escrow Agent. The Closing ("Closing") shall occur through an
escrow (the "Escrow") opened at the Escrow Agent named in the Basic Terms.
Escrow Agent is designated, authorized and instructed to act as Escrow Agent
pursuant to the terms of this Agreement.
7.2 Escrow Instructions; Opening of Escrow. This Agreement shall
constitute initial escrow instructions to Escrow Agent. The parties shall
execute any additional escrow instructions reasonably required by Escrow Agent
to consummate the transaction provided for herein; provided, however, such
additional escrow instructions shall not modify the provisions of this Agreement
unless such instructions are signed by both parties. Within three (3) business
days after the Execution Date, the parties shall deliver a fully executed copy
of this Agreement to Escrow Agent and Buyer shall deliver the Deposit to Escrow
Agent.
7.3 Closing. "Close of Escrow" or "Closing" means the date Escrow
Agent records the Deed in favor of Buyer and delivers the Purchase Price to
Seller. The Closing shall take place on the Closing Date set forth in the Basic
Terms, or if such date does not fall on a business day, on the next succeeding
business day.
7.4 Conditions to Closing.
(a) Buyer's Conditions. Buyer shall not be obligated to
proceed with the Closing unless each of the following conditions has been either
fulfilled or waived by Buyer on or before the Closing:
(i) There shall have been no uncured material breach of
any representation or warranty given by Seller herein;
(ii) Escrow Agent or Seller shall have delivered or shall
be prepared to deliver to Buyer all instruments and documents to
be delivered by Seller at the Closing pursuant to any provision
of this Agreement;
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(iii) Title Insurer shall have delivered or shall be
prepared to deliver to Buyer the Title Policy; and
(iv) Buyer shall have received for each Lease an "Estoppel
Certificate," each of which shall be: (i) in the form described
in Section 10.1 and unmodified from that form except as expressly
approved by Seller, (ii) consistent in all material respects with
the Rent Roll and the representations and warranties of Seller,
and (iii) dated no earlier than sixty (60) days before the date
of Closing (collectively, the "Tenant Estoppel Certificates")
(unless Buyer requests on or before August 11, 1997 that one or
more Estoppel Certificates be dated no earlier than thirty (30)
days before the date of Closing).
In the event that any of the foregoing conditions shall not have been fulfilled
on or before the Closing Date and Buyer is not in default under this Agreement
and is otherwise prepared to close, Buyer shall elect, by notice to Seller (i)
to terminate this Agreement upon notice to Seller, whereupon this Agreement
shall automatically terminate and the provisions of Section 4.6 shall apply,
(ii) extend the Closing Date for a period of no more than ten (10) business days
to allow for satisfaction of the foregoing conditions, or (iii) proceed with
Closing and waive such conditions, provided that such waiver shall not affect
Buyer's rights under Section 5.1(n) of this Agreement.
(b) Seller's Conditions. Seller shall not be obligated to
proceed with the Closing unless each of the following conditions has been
fulfilled or waived by Seller on or before the Closing Date:
(i) Escrow Agent shall be prepared to pay to Seller
all amounts to be paid to it at the Closing pursuant to the
provisions of this Agreement;
(ii) Escrow Agent or Buyer shall be prepared to
deliver to Seller all instruments and documents to be delivered
by Buyer at the Closing pursuant to any provision of this
Agreement; and
(iii) Buyer has delivered all funds and documents
to escrow as required by the terms of this Agreement and Buyer
has not defaulted or breached any of the terms of this Agreement.
In the event that any of the foregoing conditions shall not have been fulfilled
on or before the Closing Date, then Seller shall elect, by notice to Buyer, to
(i) terminate this Agreement, in which event this Agreement shall automatically
terminate and the provisions of Section 9.1 shall apply, (ii) extend the Closing
Date for no more than ten (10) business days to allow for satisfaction of such
conditions, or (iii) waive such conditions and proceed with Closing.
7.5 Seller's Closing Deliveries. At or prior to Closing, Seller
shall deliver or cause to be delivered to Buyer through Escrow or otherwise,
each of the following instruments and documents:
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(a) Deed. A Statutory Warranty Deed, in the form attached
hereto as Exhibit C executed and acknowledged by Seller, conveying to Buyer
good, indefeasible and marketable fee simple title to the Property (the "Deed")
subject to the Permitted Exceptions;
(b) Bill of Sale. A Bill of Sale, Assignment and Assumption
of Leases, Contracts and Personal Property in the form of the attached Exhibit
D, executed by Seller, conveying, assigning and transferring to Buyer all of the
Personal Property, Leases, Assumed Contracts and Warranties (the "Bill of
Sale").
(c) Tenant Notices. A notice to each tenant in substantially
the form and content of Exhibit J attached hereto setting forth the fact that
the Property has been sold to Buyer, the address of Buyer, and instructions as
to the payment of rent and other charges under the Leases after the Closing;
(d) Seller's Certificate. A certificate of Seller that all
representations and warranties made by Seller in this Agreement are true as of
Closing, with the exception of any Material Changes, if any, which have been
disclosed to Buyer as provided in Section 5.1(n) of this Agreement;
(e) FIRPTA Affidavit. An affidavit stating Seller's U.S.
taxpayer identification number and that Seller is a "United States person," as
defined by Internal Revenue Code Section 1445(f)(3) and Section 7701(b);
(f) Original Property Documents. To the extent in Seller's
possession, all original Leases and Contracts assumed by Buyer, the certificate
of occupancy for the Property and all assignable licenses and permits relating
to the use, occupancy or operation of the Property, copies of correspondence
with tenants and suppliers, receipts for deposits, unpaid bills and other papers
or documents that pertain to the Property, together with all advertising
materials, booklets, keys and other items, if any, used in the operation of the
Property, and the original "as-built" plans and specifications and all other
available plans and specifications;
(g) Current Rent Roll. A Rent Roll dated not more than five
(5) days prior to the Closing certified by Seller as true and complete showing
no adverse changes from the Rent Roll delivered as part of the Property
Information, other than Material Changes, if any, disclosed to Buyer pursuant to
Section 5.1(n) of this Agreement;
(h) Tenant Estoppel Certificates. Originals of all Estoppel
Certificates to the extent not theretofore delivered;
(i) Other Documents. Such other documents and instruments as
may be required by any other provision of this Agreement or as may reasonably be
required by Escrow Agent, Title Insurer or otherwise to carry out the terms and
intent of this Agreement.
7.6 Buyer's Closing Deliveries. At or prior to Closing, Buyer
shall deliver or cause to be delivered to Seller through Escrow the following:
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(a) Purchase Price. The balance of the Purchase Price, plus
or minus prorations and adjustments as provided for herein;
(b) Bill of Sale. The Bill of Sale, executed by Buyer; and
(c) Other Documents. Such other documents and instruments as
may be required by any other provision of this Agreement or as may reasonably be
required by Escrow Agent, Title Insurer or otherwise to carry out the terms and
intent of this Agreement.
7.7 Prorations and Adjustments. The following shall be prorated
and adjusted between Seller and Buyer as of midnight of the day preceding the
Closing, except as otherwise specified.
(a) Current Rents. Tenant rents (including payments for
taxes, utilities, common area maintenance, insurance and other operating costs),
based on a rental statement prepared by Seller and approved by Buyer (which
statement must be consistent with the final Rent Roll).
(b) Past Due Rents. Delinquent tenant rentals shall not be
prorated at Closing. Delinquent tenant rentals (including payments for taxes,
utilities, common area maintenance, insurance and other operating costs) due for
the month of Closing shall be collected by Buyer using commercially reasonable
efforts. If collected by Buyer, delinquent rents for the month of Closing shall
be applied first to pay Seller its pro-rata portion of such rents for the month
of Closing (after deduction pro-rata of all collection costs including
attorneys' fees). Seller shall have the right to seek collection from any
tenants who are more than thirty (30) days in arrears, which tenants will be
identified by Seller prior to Closing; provided that Seller shall have no right
to bring any collection actions or proceedings against any delinquent tenant so
long as such tenant remains in possession of its leased premises on the
Property; and provided further that Seller shall not commence any unlawful
detainer or other forfeiture or eviction proceeding without Buyer's prior
written consent, which Buyer may condition or deny in its discretion.
(c) Percentage Rents. Percentage rents shall be separately
prorated under each Lease on the basis of the Lease year or other accounting
period set forth in such Lease for the payment of percentage rents. All
percentage rent payments for the accounting period including Closing made prior
to Closing shall be credited to Seller. All payments of percentage rent for the
accounting period including Closing received by either party on or after Closing
shall be retained by, or remitted to, Buyer, as the case may be, until
determination of Seller's allocable share thereof in each instance. Upon final
determination of percentage rents owed by a tenant under its Lease for the
accounting period under such Lease in which Closing occurs, Seller and Buyer
shall adjust between themselves amounts owed for such accounting period on
account of percentage rents, and Seller's allocable share of such percentage
rents shall be an amount equal to the amount of percentage rent owed by such
tenant for the accounting period multiplied by a fraction, the numerator of
which is the tenant's gross revenues prior to Closing, and the denominator of
which is the tenant's total gross revenues during such accounting period.
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(d) Security Deposits and Other Tenant Credits. The amount of
all unapplied tenant security deposits and any accrued interest due tenants
thereon shall be credited to Buyer based on a rental statement prepared by
Seller and approved by Buyer (which statement must be consistent with the final
Rent Roll).
(e) Contracts. Prepaid charges in connection with any
Contracts that Buyer elects to assume, or licenses or permits, shall be credited
to Seller. Accrued and unpaid charges in connection with such Contracts, or
licenses or permits, shall be credited to Buyer.
(f) Taxes. All real property taxes for the year immediately
preceding the year of Closing that are payable in the year of Closing, and for
years prior thereto, shall be paid by Seller on or before the Closing. Real
property taxes for the . year of Closing shall be prorated on the basis of the
most recent assessment and levy. Any and all claims or rights to appeal the
amount of any real property taxes or other taxes charged in connection with the
Property for any period, shall belong to Buyer following the Closing.
(g) Private Assessments. Payments due under any assessment
imposed by private covenant shall be prorated as of the Closing.
(h) Utilities. Except to the extent such items are the
responsibility of tenants, prepaid water, sewer, and other utility charges shall
be credited to Seller, and accrued and unpaid water, sewer, and other utility
charges shall be credited to Buyer.
(i) Leasing Commissions. On or before the Closing Date,
Seller shall pay in full all leasing commissions due to leasing or other agents
for the current remaining term of each Lease (determined without regard to any
unexercised termination or cancellation right).
(j) Other Items. All other items customarily prorated or
required by any other provision of this Agreement to be prorated or adjusted.
(k) Re-prorations. At Closing, the amount of prorations and
adjustments as aforesaid shall be determined or estimated to the extent
practicable, and monetary adjustment shall be made between Seller and Buyer. As
the amounts of the respective items become finally ascertained, further
adjustment shall be promptly made between the parties in cash.
7.8 Expenses.
(a) Seller's Payments. Seller will pay: (1) any state, city
or county excise tax or documentary transfer tax, in the amount Escrow Agent
determines to be required by law, (2) the cost of the Title Policy and sales tax
thereon, but only up to the amount of the undiscounted premium that would be
charged on a an owner's standard coverage form of policy and sales tax thereon,
(3) all recording fees, (4) one-half of Escrow Agent's Escrow fee or Escrow
termination charge, and (5) other Seller's charges and expenses, in accordance
with the customary practices of Escrow Agent.
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(b) Buyer's Payments. Buyer will pay: (1) the cost of the
Title Policy in excess of the amount of the undiscounted premium that would be
charged on an owner's standard coverage form of policy including sales tax
thereon and any endorsements requested by Buyer, (2) one-half of Escrow Agent's
Escrow fee or Escrow termination charge, and (3) other Buyer's charges and
expenses, in accordance with the customary practices of Escrow Agent.
7.9 Distribution of Funds and Documents. At the Close of Escrow,
Escrow Agent shall do each of the following:
(a) Payment of Encumbrances. Pay the amount of those monetary
liens that are not Permitted Exceptions utilizing funds to which Seller shall be
entitled upon Close of Escrow and funds (if any) deposited in Escrow by Seller.
(b) Recordation of Documents. Submit to the County Recorder
of the County in which the Property is located the Deed and each other document
to be recorded under the terms of this Agreement or by general usage, and, after
recordation, cause the County Recorder to mail the Deed to Buyer and each other
such document to the grantee, beneficiary or person acquiring rights thereunder
or for whose benefit said document was recorded.
(c) Non-Recorded Documents. Deliver by United States mail (or
for personal pickup, if requested): (1) the Title Policy to Buyer; and (2) each
other non-recorded document received hereunder to the payee or person acquiring
rights thereunder or for whose benefit said document was acquired.
(d) Distribution of Funds. Deliver (1) to Seller, or order,
subject to the provisions of this Section, the cash portion of the Purchase
Price, adjusted for prorations, charges and other credits and debits provided
for herein; and (2) to Buyer, or order, any excess funds delivered to Escrow
Agent by Buyer. Such funds shall be by delivered by wire transfer or cashier's
check in accordance with instructions for Seller and Buyer; if no instructions
are given, Escrow Agent shall deliver such funds by Escrow Agent's check via
United States mail to the appropriate party at the address set forth for notice
in this Agreement.
7.10 Reporting Person. Seller and Buyer hereby designate the
Escrow Agent to act as and perform the duties and obligations of the "reporting
person" with respect to the transaction contemplated by this Agreement for
purposes of 26 C.F.R. Paragraph 1.6045-4(e)(5).
7.11 Completion of Documents. Escrow Agent is authorized to
insert the date of Closing and otherwise to complete the documents deposited in
Escrow, where appropriate and consistent with this Agreement.
8. Indemnification.
8.1 Seller's Indemnity. Seller agrees to indemnify, protect,
defend and hold Buyer and its officers, directors, partners, agents, employees,
affiliates, heirs, and successors and assigns harmless from and against any and
all liabilities, liens, claims, damages, costs, expenses, suits or
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judgments incurred by Buyer (except for claims arising out of or in connection
with acts or omissions of Buyer) and all reasonable expenses related thereto,
including, without limitation, court costs and reasonable attorneys' fees,
arising out of (i) claims by third parties arising out of Seller's ownership,
maintenance, or operation of the Property and accruing prior to Closing, except
such indemnification obligations shall be limited to $2,000,000 in the
aggregate, or (ii) a default of Seller or breach of any representation or
warranty of Seller contained in this Agreement (except those contained in
Section 6.1, for which Seller's obligations are separately addressed in Section
6.2). The indemnities set forth in this Section shall not apply to the extent of
any item that by this Agreement specifically becomes the obligation of Buyer.
8.2 Buyer's Indemnity. Buyer agrees to indemnify, protect, defend
and hold Seller and its officers, directors, partners, agents, employees,
affiliates, heirs, successors and assigns harmless from and against any and all
liabilities, liens, claims, damages, costs, expenses, suits or judgments
incurred by Seller (except for claims arising out of or in connection with acts
or omissions of Seller), and all reasonable expenses relating thereto,
including, without limitation, court costs and reasonable attorney's fees,
arising out of (i) claims by third parties made in connection with Buyer's
ownership, maintenance, or operation of the Property accruing after Closing,
except such indemnification obligations shall be limited to $2,000,000.00 in the
aggregate, or (ii) a default of Buyer or breach of any representation or
warranty of Buyer contained in this Agreement. The indemnity set forth in this
Section shall not apply to the extent of any item that by the terms of this
Agreement specifically does not become an obligation of Buyer.
9. Default.
9.1 Buyer Default. In the event the Buyer fails, without legal
excuse, to complete the purchase of the property, the earnest money deposit made
by the Buyer shall be forfeited to Seller as the sole and exclusive remedy to
the Seller for such failure. In such event, this Agreement shall terminate
hereunder (except with respect to provisions that by their terms survive a
termination of this Agreement).
9.2 The Sellers Default. In the event this transaction fails to
close due to a default by Seller, Buyer shall be entitled to all of its
out-of-pocket expenses incurred in connection with this transaction, including
the Deposit and any interest accrued thereon, and shall have the right to pursue
any other remedy available to it at law or equity, including the specific
performance of this Agreement.
10. Certain Additional Agreements.
10.1 Tenant Estoppel Certificates. Seller shall use commercially
reasonable efforts to obtain from each of the tenants of the Property during
Buyer's Review Period an executed Estoppel Certificate, in substantially the
form attached hereto as Exhibit E ("Estoppel Certificate), provided however,
that if the terms of any Lease specify a different form of estoppel, or any
tenant refuses to execute an Estoppel in the form of Exhibit E, a form of
estoppel in the form so specified by a particular Lease or such other form as
may reasonably be agreed to by Buyer shall be acceptable to Buyer in lieu
thereof. As to any tenants, other than the Major Tenants listed on attached
Exhibit K, for which Seller
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is not able to obtain an Estoppel Certificate, Seller shall execute an Estoppel
Certificate concerning the matters contained in Exhibit E (or such alternate
form of certificate as may be required by the terms a Lease) and deliver same to
Buyer on or before Closing (provided, however, that representations concerning
claims or actions of the tenant in such Certificate shall be made to the best of
Seller's knowledge only). Buyer shall not be required to accept a
Seller-executed Estoppel Certificate with respect to a Major Tenant, and the
failure of a Major Tenant to execute an Estoppel Certificate on or before
Closing shall entitle Buyer to elect not to close this transaction, in which
event the provisions of Section 4.6 regarding termination of this Agreement
shall apply. The failure of any tenant to execute an Estoppel Certificate and
deliver the same on or before the Closing Date shall not be a default by Seller
hereunder if Seller delivers a Seller-executed Estoppel Certificate on behalf of
such tenant at Closing.
10.2 Brokers. Buyer and Seller acknowledge and agree that
Colliers MacAulay Nicolls have acted as Seller's brokers in connection with this
transaction. Seller agrees to pay a commission to Colliers MacAulay Nicolls in
accordance with such separate agreement(s) as Seller may have with such party.
Each party represents and warrants to the other party that no other brokers or
finders have been employed or are entitled to a commission or compensation in
connection with this transaction. Each party hereto agrees to indemnify and hold
harmless the other party from and against any and all losses, liens, claims,
judgments, liabilities, costs, expenses or damages (including reasonable
attorneys' fees and court costs) of any kind of character arising out of or
resulting from any agreement, arrangement or understanding (except as set forth
above with respect to Colliers MacAulay Nicolls) alleged to have been made by
such party or on its behalf with any broker or finder in connection with this
Agreement or transaction contemplated hereby. The foregoing indemnity shall
survive the Closing or the earlier termination of this Agreement and shall not
be limited by any provision of this Agreement.
10.3 Operations During Pendency of Agreement. Except as otherwise
required or permitted by the terms of this Agreement between the Execution Date
and the earlier of the termination of this Agreement and Closing:
(a) Maintenance. Seller will continue to operate and maintain
the Property in good condition and repair (reasonable wear and tear, casualty
and condemnation excepted) in accordance with past practices. After expiration
of the Review Period, provided Buyer is not in default under this Agreement,
Seller will not make any material removals, alterations or changes to the
Property except as expressly approved in writing in advance by Buyer (which
approval shall not be unreasonably withheld if any such improvement is required
by law, any of the Leases or prudent management practices);
(b) No Transfers. Seller will not sell, transfer, convey or
encumber, or cause to be sold, transferred, conveyed or encumbered, the
Property, or any part thereof or interest therein, or alter the zoning
classification of the Property, or otherwise perform or permit any act that will
materially diminish, encumber or affect Seller's rights in and to the Property
or prevent it from performing fully its obligations hereunder, except as Seller
may be required to so do by law;
(c) Leases and Contracts. After the Execution Date, provided
Buyer is not in default under this Agreement, Seller will not amend or cancel
any Lease or Contract, will not renew
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or extend any Lease or Contract, and, will not enter into any new Lease for all
or any part of the Property or any contract that will be an obligation affecting
the Property after Closing, without in each case first obtaining the consent of
Buyer (all obligations of Landlord under any new Lease or any Lease amendments,
or any Contract, approved by Buyer shall be assumed by Buyer at Closing).
Notwithstanding the foregoing, Seller may take actions in the customary and
usual course of operations of the Property as may be necessary or appropriate to
protect or enforce Seller's rights or interests under any Lease, Contract or
insurance policy and under the terms of any loans or other indebtedness secured
by the Property. Seller shall promptly inform Buyer of any such actions taken by
Seller. Wherever Buyer's prior consent is required in this Section 10.3, Buyer
agrees that such consent shall not be unreasonably withheld. Buyer hereby agrees
that the tenancy with Little Caesar's may be terminated and the premises vacated
prior to Closing due to Little Caesar's failure to pay rents or other charges
due under its lease.
(d) Insurance. Seller will maintain all existing fire and
extended coverage casualty insurance in force with respect to the Property;
(e) Seller's Obligations. Seller shall pay as and when due on
or before the Closing Date all debts and liabilities which, if unpaid, could
result in a lien or encumbrance against the Property.
10.4 Destruction of Improvements; Condemnation.
(a) Condemnation. If, prior to the Closing Date, any material
portion of the Land (meaning a portion of the Land having fair market value of
$200,000.00 or more) or any of the rentable square footage of the Improvements
is taken, by eminent domain or otherwise (or is the subject of a pending,
threatened or contemplated taking which has not been consummated), or if the
access thereto or available parking area therefor is reduced or restricted so
that the Property as it is currently used is no longer usable or is not in
compliance with zoning requirements, Seller shall immediately notify Buyer in
writing of such fact. In such event, Buyer shall have the option in its sole
discretion, to terminate this Agreement upon written notice to Seller given not
later than ten (10) days after receipt of Seller's notice. If Buyer does not
exercise this option to terminate this Agreement, or if there has not been a
material taking by eminent domain or otherwise to give rise to such option,
neither party shall have the right to terminate this Agreement, but the Seller
shall assign and turn over, and the Buyer shall be entitled to receive and keep,
all rewards for the taking by eminent domain which accrue to Seller and the
parties shall proceed to consummate the transaction contemplated by this
Agreement pursuant to the terms hereof, without modification of the terms of
this Agreement and without any reduction in the Purchase Price.
(b) Damage or Destruction. Prior to Closing and
notwithstanding the pendency of this Agreement, the entire risk of loss or
damage by earthquake, flood, landslide, fire or other casualty shall be borne
and assumed by Seller, except as otherwise provided in this Section. If, prior
to Closing any part of the Property is damaged or destroyed by earthquake,
flood, landslide, fire or other casualty, Seller shall immediately notify Buyer
in writing of such fact. If such damage or destruction is "material", Buyer
shall have the option to terminate this Agreement upon written notice to the
Seller given not later than ten (10) days after receipt of Seller's notice. For
purposes hereof,
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"material" shall be deemed to be (i) any uninsured damage or destruction to the
Property or (ii) any insured damage or destruction where the cost of repair or
replacement is estimated to be Two Hundred Thousand Dollars ($200,000.00) or
more. If Buyer does not exercise this option to terminate this Agreement, or if
the casualty is not material and provided Buyer receives reasonable assurance
that insurance proceeds are available and collectible without any enforcement
action, neither party shall have the right to terminate this Agreement and
Seller shall assign and turn over and Buyer shall be entitled to receive and
keep, all insurance proceeds payable to it with respect to such destruction
(which shall then be repaired or not at Buyer's option and cost), including any
rent loss insurance, plus Seller shall pay over to Buyer an amount equal to the
deductible amount with respect to the insurance and contemplated by this
Agreement pursuant to the terms hereof without modification of the terms of this
Agreement and without any reduction in the Purchase Price. If Buyer does not
elect to terminate this Agreement by reason of any casualty, Buyer shall have
the right to participate in any adjustment of the insurance claim.
10.5 Receivables Retained by Seller. Under the terms of the
applicable Leases, Seller is entitled to payments from the tenants listed on
Exhibit L in connection with tenant improvements costs already incurred by
Seller. These payment rights will be retained by Seller after Closing and will
not be assigned or transferred to Buyer. Seller retains all rights to collect
amounts due thereunder and to enforce Seller's rights against the makers and
guarantors of such amounts; provided that Seller shall have no right to bring
any collection actions or proceedings against any tenant, or maker or guarantor
of such tenant so long as such tenant remains in possession.
11. General Provisions.
11.1 Assignment. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, and their respective heirs,
executors, personal representatives, successors, and assigns. This Agreement may
be assigned by Buyer, with prior notice to Seller, to an affiliate entity in
which Buyer's principal is manager without the consent of Seller. Except as
provided in this Section, this Agreement may not be assigned without Seller's
prior written consent.
11.2 Attorneys' Fees. If any action shall be instituted between
Seller and Buyer in connection with this Agreement or in connection with the
enforcement of any indemnity under this Agreement (including appeals), the party
prevailing in such action shall be entitled to recover from the other party all
of its costs of action, including reasonable consultants' and attorneys' fees
and costs. For purposes of this Agreement, the terms "attorneys' fees" and
"attorneys' costs" shall include the fees and expenses of counsel to the
prevailing party, which may include printing, photocopying, duplicating and
other expenses, air freight charges and fees billed for law clerks, paralegals
and other persons not admitted to the bar but performing services under the
supervision of an attorney.
11.3 Construction. All words herein that are expressed in the
neuter gender shall be, deemed to include the masculine, feminine and neuter
genders and any word herein that is expressed in the singular or plural shall be
deemed, whenever appropriate in the context, to include the plural and the
singular. The obligations of each Seller under this Agreement are joint and
several.
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11.4 Counterparts. This Agreement may be executed in any number
of identical counterparts, any or all of which may contain the signatures of
less than all of the parties, and all of which shall be construed together as a
single instrument.
11.5 Entire Agreement. This Agreement, including all exhibits
attached hereto and documents to be delivered pursuant hereto, shall constitute
the entire agreement and understanding of the parties, and there are no other
prior or contemporaneous written or oral agreements, undertakings, promises,
warranties, or covenants not contained herein. This Agreement may be amended
only by a written memorandum executed by both of the parties hereto. All
exhibits and schedules attached to this Agreement are incorporated herein by
reference.
11.6 Further Assurances. In addition to the acts and deeds
recited herein and contemplated to be performed, executed and/or delivered by
Seller to Buyer at Closing, Seller and Buyer each agree to perform, execute and
deliver on Closing, any further deliveries and assurances as may be reasonably
necessary to consummate the transactions contemplated hereby or to further
perfect the conveyance, transfer and assignment of the Property to Buyer, and
the assumption of obligations respecting the Property by Buyer, that are
otherwise consistent with the provisions of this Agreement.
11.7 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of Washington, without regard to conflict of
law principles. Buyer and Seller hereby consent to and subject themselves to the
jurisdiction of the courts of competent jurisdiction of the State of Washington
with respect to any claim or proceeding relating to this Agreement and further
agree that the venue of any action or proceeding relating to this Agreement
shall lie in the State or Federal courts located in Snohomish County,
Washington.
11.8 Headings. Headings of Sections are for convenience of
reference only, and shall not be construed as a part of this Agreement.
11.9 No Third Party Beneficiary. This Agreement is solely for the
benefit of the parties hereto and, to the extent provided herein, their
respective partners, directors, officers, employees, agents and representatives,
and no provision of this Agreement shall be deemed to confer upon other third
parties any remedy, claim, liability, reimbursement, cause of action or other
right.
11.10 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed, hand delivered,
sent by Federal Express or other recognized overnight courier service, or sent
by facsimile transmission, to the parties as follows:
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If to Buyer:
Parkway Capital, Inc.
800 Fifth Avenue, Suite 3700
Seattle, WA 98104
Attn: Michael Sandorffy
Telephone: 206-682-6868
Facsimile: 206-682-1040
With a copy at the same time to:
Michael L. Cohen, Esq.
Lane Powell Spears Lubersky LLP
1420 5th Avenue, Suite 4100
Seattle, WA 98101-2338
Telephone: 206-223-7000
Facsimile: 206-223-7107
If to Seller or to Legend Properties, Inc.:
American Properties Investments, Inc.
Legend Properties, Inc.
1420 Fifth Avenue, 42nd Floor
Seattle, Washington 98101-2333
Attention: Kenneth L. Uptain
Telephone: 206-464-0200
Facsimile: 206-448-0404
With a copy at the same time to:
Lisa Riveland, Esq.
Mundt, MacGregor, Happel, Falconer, Zulauf & Hall
4200 First Interstate Center
999 Third Avenue
Seattle, Washington 98104-4082
Telephone: 206-624-5950
Facsimile: 206-624-5469
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If to Title Insurer:
Transnation Title Insurance Company
2939 Colby Avenue
Everett, Washington 98201
Attn: Kerry Wise
Telephone: 206-252-1156
Facsimile: 206-259-0526
If to Escrow Agent:
Transnation Title Insurance Company
1200 Sixth Avenue
Seattle, Washington 98101
Telephone: 206-28-322
Facsimile: 206-628-0631
Any party may from time to time, by written notice to the others, designate a
different address or additional persons that shall be substituted for and/or
added to the address(es) above specified. Notices by mail shall be sent by
United States certified or registered mail, return receipt requested, postage
prepaid, and shall be deemed given and effective three (3) business days
following posting in the United States mails. Notices by hand delivery shall be
deemed given and effective upon the delivery thereof. Notices by overnight
courier shall be deemed given and effective on the date delivery is confirmed by
the recognized overnight courier service. Notices by facsimile shall be deemed
given upon sender's receipt of confirmation of transmission.
11.11 Partial Invalidity. In the event that any provision of this
Agreement shall be unenforceable in whole or in part, such provision shall be
limited to the extent necessary to render the same valid, or shall be excised
from this Agreement, as circumstances require, and this Agreement shall be
construed as if said provision had been incorporated herein as so limited, or as
if said provision has not been included herein, as the case my be.
11.12 Time; Calculation of Time Periods. Time is of the essence
of this Agreement. The term "business days" when used in this Agreement means
all days excluding Saturdays, Sundays and Washington state and United States
federal holidays. All periods of time referred to in this Agreement shall
include all Saturdays, Sundays and state and national holidays unless the period
of time specifies business days. In the computation of any period of time
provided for in this Agreement or by law, the day of the act or event from which
said period of time runs shall be excluded, and the last day of such period
shall be included, unless it is not a business day, in which case the period
shall be deemed to run until the end of the next business day.
11.13 Waiver. No waiver of any provision or condition of this
Agreement by any party shall be valid unless in writing signed by such party. No
such waiver shall be taken as a waiver of any other or similar provision or of
any future event, act or default.
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11.14 WAIVER OF JURY TRIAL. SELLER AND BUYER, TO THE EXTENT THEY
MAY LEGALLY DO SO, HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING UNDER OR WITH
RESPECT TO THIS AGREEMENT, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR
INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE, TO THE EXTENT THEY MAY LEGALLY DO SO, SELLER AND BUYER HEREBY AGREE
THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING SHALL BE
DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR PARTIES HERETO TO WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
11.15 ARBITRATION OF DISPUTES.
11.15.1 SUBMISSION TO ARBITRATION. THE PARTIES HEREBY AGREE TO
SUBMIT ALL CONTROVERSIES, CLAIMS AND MATTERS OF DIFFERENCE ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY TO BINDING
ARBITRATION IN THE COUNTY OF KING, STATE OF WASHINGTON. THIS SUBMISSION AND
AGREEMENT TO ARBITRATE SHALL BE MANDATORY, EXCLUSIVE AND SPECIFICALLY
ENFORCEABLE FOR ALL CLAIMS RELATING TO DAMAGES ALLEGEDLY SUFFERED BY THE
AGGRIEVED PARTY. ALL REFERENCES IN THIS AGREEMENT TO LITIGATION BETWEEN PURCHASE
AND SELLER, SHALL BE GOVERNED BY THE PROVISION OF SECTION 11.15. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, THE FOLLOWING SHALL BE CONSIDERED
CONTROVERSIES FOR THIS PURPOSE.
(I) ALL QUESTIONS RELATING TO THE BREACH OF ANY OBLIGATION,
WARRANTY, REPRESENTATION, COVENANT OR AGREEMENT HEREUNDER OR UNDER ANY EXHIBIT
HERETO AND ALL QUESTIONS RELATING TO THE CONSTRUCTION AND INTERPRETATION
THEREOF;
(II) ALL QUESTIONS RELATING TO REPRESENTATIONS, NEGOTIATIONS
AND OTHER PROCEEDINGS LEADING TO THE EXECUTION HEREOF AND ALL MODIFICATIONS OF
THIS AGREEMENT OF EVERY NATURE AND DESCRIPTION;
(III) FAILURE OF ANY PARTY TO DENY OR REJECT A CLAIM OR
DEMAND OF ANOTHER PARTY;
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(IV) ALL QUESTIONS AS TO WHETHER THE RIGHT TO ARBITRATE ANY
QUESTIONS EXISTS OR AS TO THE EXISTENCE OF ANY AGREEMENT TO ARBITRATE; AND
(V) ALL ISSUES RAISED BY ANY SUBSEQUENT ALLEGED AMENDMENT
HERETO, WHETHER WRITTEN OR ORAL, UNLESS SUCH AMENDMENT EXPRESSLY CANCELS THIS
ARBITRATION PROVISION IN WRITING SIGNED BY ALL AFFECTED PARTIES HERETO.
11.15.2 JAMS. ANY DISPUTE TO BE ARBITRATED PURSUANT TO THIS
PROVISIONS OF THIS SECTION 11.15. SHALL BE DETERMINATE BY BINDING ARBITRATION
BEFORE A RETIRED JUDGE OF THE SUPERIOR COURT OF THE STATE OF WASHINGTON (THE
"ARBITRATOR") UNDER THE AUSPICES OF JUDICIAL ARBITRATION & MEDIATION SERVICES,
INC. ("JAMS"). SUCH ARBITRATION SHALL BE INITIATED BY THE PARTIES, OR EITHER OF
THEM, WITHIN TEN (10) DAYS AFTER EITHER PARTY SENDS WRITTEN NOTICE (THE
"ARBITRATION NOTICE") OF A DEMAND TO ARBITRATE BY REGISTERED OR CERTIFIED MAIL
TO THE OTHER PARTY AND TO JAMS. THE ARBITRATION NOTICE SHALL CONTAIN A
DESCRIPTION OF THE SUBJECT MATTER OF THE ARBITRATION, THE DISPUTE WITH RESPECT
THERETO, THE AMOUNT INVOLVED, IF ANY, AND THE REMEDY OR DETERMINATION SOUGHT.
THE PARTIES MAY AGREE ON A RETIRED JUDGE FROM THE JAMS PANEL. IF THEY ARE UNABLE
TO PROMPTLY AGREE, JAMS WILL PROVIDE A LIST OF THREE AVAILABLE JUDGES AND EACH
PARTY MAY STRIKE ONE. THE REMAINING JUDGE (OR IF THERE ARE TWO, THE ONE SELECTED
BY JAMS) WILL SERVE AS THE ARBITRATOR, IN THE EVENT THAT JAMS SHALL NO LONGER
EXIST OR IF JAMS FAILS OR REFUSES TO ACCEPT SUBMISSION OF SUCH DISPUTE, THEN THE
DISPUTE SHALL BE RESOLVED BY BINDING ARBITRATION BEFORE THE AMERICAN ARBITRATION
ASSOCIATION ("AAA") UNDER THE AAA'S COMMERCIAL ARBITRATION RULE THEN IN EFFECT.
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11.15.3 ARBITRATION PROCEDURE.
11.15.3.1 PRE-DECISION ACTIONS. THE ARBITRATOR SHALL
SCHEDULE A PREHEARING CONFERENCE TO RESOLVE PROCEDURAL MATTERS, ARRANGE FOR THE
EXCHANGE OF INFORMATION, OBTAIN STIPULATIONS, AND NARROW THE ISSUES. THE PARTIES
WILL SUBMIT PROPOSED DISCOVERY SCHEDULES TO THE ARBITRATOR AT THE PREHEARING
CONFERENCE. THE SCOPE AND DURATION OF DISCOVERY WILL BE WITHIN THE SOLE
DISCRETION OF THE ARBITRATOR. THE ARBITRATOR SHALL HAVE THE DISCRETION TO ORDER
A PREHEARING EXCHANGE OF INFORMATION BY THE PARTIES, INCLUDING, WITHOUT
LIMITATION, PRODUCTION OF REQUESTED DOCUMENTS, EXCHANGE OF SUMMARIES OF
TESTIMONY OF PROPOSED WITNESSES, AND EXAMINATION BY DEPOSITION OF PARTIES AND
THIRD-PARTY WITNESSES. THIS DISCRETION SHALL BE EXERCISED IN FAVOR OF DISCOVERY
REASONABLE UNDER THE CIRCUMSTANCES.
11.15.3.2 THE DECISION. THE ARBITRATION SHALL BE
CONDUCTED IN SEATTLE, WASHINGTON. ANY PARTY MAY BE REPRESENTED BY COUNSEL OR
OTHER AUTHORIZED REPRESENTATIVE. IN RENDERING A DECISION(S), THE ARBITRATOR
SHALL DETERMINE THE RIGHTS AND OBLIGATIONS OF THE PARTIES ACCORDING TO THE
SUBSTANTIVE AND PROCEDURAL LAWS OF THE STATE OF WASHINGTON AND THE TERMS AND
PROVISIONS OF THIS AGREEMENT. THE ARBITRATOR'S DECISION SHALL BE BASED ON THE
EVIDENCE INTRODUCED AT THE HEARING, INCLUDING ALL LOGICAL AND REASONABLE
INFERENCES THEREFROM. THE ARBITRATOR MAY MAKE ANY DETERMINATION, AND/OR GRANT
ANY REMEDY OR RELIEF THAT IS JUST AND EQUITABLE. THE DECISION MAY BE BASED ON,
AND ACCOMPANIED BY, A WRITTEN STATEMENT OF DECISION EXPLAINING THE FACTUAL AND
LEGAL BASIS FOR THE DECISION AS TO EACH OF THE PRINCIPAL CONTROVERTED ISSUES.
THE DECISION SHALL BE CONCLUSIVE AND BINDING, AND IT MAY THEREAFTER BE CONFIRMED
AS A JUDGMENT BY THE SUPERIOR COURT OF THE STATE OF WASHINGTON, SUBJECT ONLY TO
CHALLENGE ON THE GROUNDS PROVIDED ACCORDING TO WASHINGTON LAW. THE VALIDITY AND
ENFORCEABILITY OF THE ARBITRATOR'S DECISION IS TO BE DETERMINED EXCLUSIVELY BY
THE WASHINGTON COURTS PURSUANT TO THE PROVISIONS OF THIS AGREEMENT. THE
ARBITRATOR MAY AWARD COSTS, INCLUDING WITHOUT LIMITATION ATTORNEYS' FEES, AND
EXPERT AND WITNESS COSTS, TO THE PREVAILING PARTY, IF ANY, AS DETERMINATE BY THE
ARBITRATOR IN HIS DISCRETION, THE ARBITRATOR'S FEES AND COSTS SHALL BE PAID BY
THE NON-PREVAILING PARTY AS DETERMINED BY THE ARBITRATOR IN HIS DISCRETION. A
PARTY SHALL BE DETERMINED BY THE ARBITRATOR TO BE THE PREVAILING PARTY IF ITS
PROPOSAL FOR RESOLUTION OF DISPUTE IS THE CLOSER TO THAT ADOPTED BY THE
ARBITRATOR.
11.15.4 INJUNCTIVE RELIEF. NOTWITHSTANDING THE FOREGOING, IN THE
EVENT NO REMEDY AT LAW IS ADEQUATE AND THE EFFECT OF THE ALLEGED
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INJURY IS IRREPARABLE, EITHER PARTY MAY BRING AN ACTION IN THE SUPERIOR COURT
FOR KING COUNTY, WASHINGTON, FOR INJUNCTIVE RELIEF.
11.15.5 NOTICE. BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING
TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF
DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY WASHINGTON LAW
AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED
IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP
YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE
SPECIFICALLY INCLUDED IN THE "ARBITRATION OR DISPUTES" PROVISION. IF YOU REFUSE
TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED
TO ARBITRATE UNDER THE AUTHORITY OF WASHINGTON LAW. YOUR AGREEMENT TO THIS
ARBITRATION PROVISION IS VOLUNTARY. WE HAVE READ AND UNDERSTAND THE FOREGOING
AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE
"ARBITRATION OF DISPUTES" PROVISION TO NEUTRAL ARBITRATION.
[SIG] [SIG]
- -------------------------------- --------------------------------
SELLER'S INITIALS BUYER'S INITIALS
11.16 1031 Exchange. Buyer intends to complete this transaction
as part of a Section 1031 tax-deferred exchange. Seller agrees to cooperate with
Buyer in documenting and completing such exchange, and agrees that Buyer may
transfer Buyer's rights and obligations under this Agreement to a qualified
exchange intermediary; provided, however, that (a) Seller shall not be obligated
to agree to any delay in the closing beyond the time provided for in this
Agreement, (b) Buyer shall pay all additional third party costs incurred by
Seller as a result of the exchange and hold Seller harmless therefrom, (c) the
exchange shall in no way reduce the net amount to be received by Seller under
the terms of this Agreement, and (d) Seller shall not be obligated to take any
action or execute any documents in connection with the exchange which may expose
Seller (as determined in Seller's reasonable discretion) to additional risk or
liability. Buyer hereby agrees to indemnify, defend and hold Seller harmless
from all losses, liabilities, costs and expenses which may be incurred by Seller
arising out of or as a result of Seller's cooperation with Buyer's Section 1031
exchange.
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IN WITNESS WHEREOF, the parties have executed this Real Estate Purchase
and Sale Agreement and Joint Escrow Instructions as of the last of the dates set
forth below:
BUYER: PARKWAY CAPITAL, INC.,
a Washington corporation
By /s/ MICHAEL SANDORFFY
--------------------------------------------
Michael Sandorffy
Its President
SELLER: AMERICAN PROPERTIES INVESTMENTS, INC.,
a Washington corporation
By /s/ KENNETH L. UPTAIN
---------------------------------------------
Kenneth L. Uptain
President
By signing below , Legend Properties, Inc. (i) agrees to defend, protect,
indemnify and hold Buyer harmless against any and all claims, suits, judgments,
investigations, proceedings, liabilities, damages, causes of action, costs,
expenses and attorneys' fees arising out of or in connection with any breach of
warranty or representation of Seller in the foregoing agreement, or Seller's
default or Seller's failure to perform under any indemnity in the foregoing
agreement; (2) represents and warrants on behalf of itself the representations
and warranties contained in Sections 5.1(c), (d) and (e) of the foregoing
agreement, ( and all references therein to "Seller" shall be deemed to refer to
Legend Properties, Inc.), which representations and warranties shall continue to
be true at Closing and shall survive Closing. In no event shall Legend
Properties, Inc.'s obligations to Buyer exceed the amounts which Buyer is
entitled to receive from Seller under the foregoing agreement.
Date: August 5, 1997 LEGEND PROPERTIES, INC., a Delaware
corporation
By /s/ KENNETH L. UPTAIN
---------------------------------------------
Kenneth L. Uptain
President
-31-
<PAGE> 32
EXHIBIT "A"
LEGAL DESCRIPTION:
PARCEL A:
All that portion of Tract 24, Scriber Lakes Homes, according to the plat
thereof recorded in Volume 10 of Plats, page 57, records of Snohomish County,
Washington, described as follows:
Beginning at a point on the North line of said Tract 24, which is 149.03 feet
East of the Northwest corner thereof;
Thence East along the North line of said Tract, for 400 feet;
Thence South at right angles to said North line to a point on the South line
of the North half of said Tract 24;
Thence West along the South line of said North half of said Tract for 400 feet;
Thence North to the Point of Beginning.
PARCEL B:
Beginning at the Northwest corner of Tract 25, Scriber Lake Homes, according to
the plat thereof recorded in Volume 10 of Plats, page 57, records of Snohomish
County, Washington;
Thence East along the North line of said Tract for 700 feet;
Thence South at right angles to said North line to the South line of Tract 25;
Thence West to Southwest corner of said Tract;
Thence Northeasterly along Westerly line of Tract 25 to a Point of Beginning;
TOGETHER WITH that portion of vacated alley adjacent thereto and abutting
thereon which has reverted to said premises by operation of law;
EXCEPT that portion thereof as conveyed to First National Bank of Everett, by
Deed recorded July 2, 1952 in Volume 496 of Deeds, page 307, under Auditor's
File No. 1031672.
PARCEL C:
All of Tract 25, Scriber Lake Homes, according to the plat thereof recorded in
Volume 10 of Plats, page 57, records of Snohomish County, Washington;
EXCEPT the following described tract:
LEGAL DESCRIPTION CONTINUED NEXT PAGE
<PAGE> 33
LEGAL DESCRIPTION CONTINUED
Beginning at the Northwest corner of said Tract 25; Thence East along the North
line thereof, 700 feet; Thence South at right angles to the North line of said
tract to the South line thereof; Thence West along said South line to the
Southwest corner thereof; Thence Northeasterly along the Westerly line of said
Tract to the point of beginning.
PARCEL D:
That portion of Tract 26, Scriber Lake Homes, according to the plat thereof
recorded in Volume 10 of Plats, page 57, records of Snohomish County,
Washington, lying Westerly of a line drawn between the Northwest corner and the
Southeast corner of said Tract;
TOGETHER WITH a non-exclusive easement for ingress and egress over a strip of
land described as:
Beginning at the Northwest corner of Tract 26; Thence southeasterly across
tract 26 to the Southeast corner thereof; Thence Northeasterly along the East
line of said Tract 26 for 53.45 feet; Thence Northwesterly to the Point of
Beginning.
PARCEL E:
All that portion of Tract 25, Scriber Lake Homes, according to the plat thereof
recorded in Volume 10 of Plats, page 57, records of Snohomish County,
Washington, described as follows: Beginning at the Southwest corner of said
Tract 25; Thence East along South line of said Tract 25, 149.03 feet; Thence
North at right angles 56 feet; Thence West, parallel to South line of said
Tract 25, 116.52 feet, more or less, to the Easterly line of Pacific Highway;
Thence Southwesterly along Easterly line of Pacific Highway to Point of
Beginning.
LEGAL DESCRIPTION CONTINUED NEXT PAGE
<PAGE> 34
LEGAL DESCRIPTION CONTINUED
PARCEL F:
Tract 27, Scriber Lakes Homes, according to the plat thereof recorded in Volume
10 of Plats, page 57, records of Snohomish County, Washington;
EXCEPT the North 10 feet thereof conveyed to the City of Lynwood by Quit Claim
Deed recorded under Snohomish County Recording Number 9608120739.
PARCEL G:
Tract 29, Scriber Lakes Homes, according to the plat thereof recorded in Volume
10 of Plats, page 57, records of Snohomish County, Washington;
EXCEPT the following described tract:
Beginning at the Southwest corner of said Tract 29;
Thence Northerly along Westerly boundary of said Tract for 100 feet;
Thence Easterly to a Point on the Easterly line of said Tract which is 30 feet
Northeasterly from the Southeast corner thereof;
Thence Southwesterly along said Easterly line to the Southeast corner thereof;
Thence West along the South line of said Tract to Point of Beginning;
EXCEPT that portion thereof conveyed to the First National Bank of Everett, by
deed recorded November 2, 1956 in Volume 606 of Deeds, page 318, under
Auditor's File No. 1213855.
AND EXCEPT the North 10 feet thereof conveyed to the City of Lynnwood by Quit
Claim Deed recorded under Snohomish County Recording Number 9608120739.
LEGAL DESCRIPTION CONTINUED NEXT PAGE
<PAGE> 35
LEGAL DESCRIPTION CONTINUED
PARCEL H:
Tracts 28, 30, 31, 34, 35, 36 and 37, Scriber Lakes Homes, according to the
plat thereof recorded in Volume 10 of Plats, page 57, records of Snohomish
County, Washington,
TOGETHER WITH that portion of vacated alley, adjacent thereto and abutting
thereon which has reverted to said premises by operation of law.
EXCEPT that portion thereof of Tract 30, as conveyed to the First National Bank
of Everett, National Banking Association, by Deed recorded November 2, 1956 in
Volume 606 of Deeds, page 318 under Auditor's File No. 1213855;
AND EXCEPT the North 10 feet of Tracts 28, 30 and that portion of the North 10
feet of Tract 31 conveyed to the City of Lynnwood by Quit Claim Deed recorded
under Snohomish County Recording Number 9608120739.
ALSO that portion of Tract 29, Scriber Lake Homes, according to the plat
thereof recorded in Volume 10 of Plats, page 25, records of Snohomish County,
Washington, described as follows:
Beginning at the Southwest corner of said Tract 29;
Thence Northerly along Westerly boundary of said Tract, 100 feet;
Thence Easterly to a point on the Easterly line of said tract which is 30 feet
Northeasterly from the Southeast corner thereof;
Thence Southwesterly along said Easterly line to the Southeast corner thereof;
Thence West along the South line of said Tract to Point of Beginning.
LEGAL DESCRIPTION CONTINUED NEXT PAGE
<PAGE> 36
LEGAL DESCRIPTION CONTINUED
PARCEL I:
That portion of Tract 23, Scriber Lake Homes, according to the plat thereof
recorded in Volume 10 of Plats, page 57, records of Snohomish County,
Washington, described as follows:
Beginning at a point on the North line of Tract 23, 55 feet East of the
Northeast corner of a tract of land as conveyed to Melvin F. Kelly, et ux, by
Deed recorded May 16, 1947 in Volume 395 of deeds, page 439, under Auditor's
File No. 844908;
Thence Southwesterly along East line to Southeast corner of said Tract;
Thence West along South line thereof, to a point 308 feet East of Southwest
corner of said Tract;
Thence Northerly on a straight line to the point of beginning.
PARCEL J:
Tracts 32 and 33, Scriber Lake Homes, according to the plat thereof recorded in
Volume 10 of Plats, page 57, records of Snohomish County, Washington;
TOGETHER WITH that portion of vacated alley adjacent thereto and abutting
thereon which has reverted to said premises by operation of law.
PARCEL K:
That portion of Tract 23, Scriber Lake Homes, according to the plat thereof
recorded in Volume 10 of Plats, page 57, records of Snohomish County,
Washington, described as follows:
Beginning at the Northwest corner of Tract 23;
Thence Southwesterly along the Easterly line of State Highway No. 1 (U.S. 99),
45 feet to the true point of beginning;
Thence East, parallel to the North line of said Tract 23, a distance of 200
feet;
Thence North to intersect the North line of said Tract 23, a distance of 200
feet;
Thence Easterly along the North line of said Tract 23, a distance of 55 feet to
the Northwest corner of a tract of land conveyed to C.A. Forsgren under
Auditor's File No. 1334934;
LEGAL DESCRIPTION CONTINUED NEXT PAGE
<PAGE> 37
LEGAL DESCRIPTION CONTINUED
Thence Southerly along the Westerly line of Forsgren Tract to a point on the
South line of said Tract 23 at a point 308 feet East of the Southwest corner of
said Tract 23;
Thence West 308 feet, more or less, to the Easterly line of State Highway No. 1;
Thence Northerly along the Easterly line of said Highway to the Point of
Beginning.
PARCEL L:
Beginning at the Northwest corner of Tract 23, Scriber Lakes Homes, according
to the plat thereof recorded in Volume 10 of Plats, page 57, records of
Snohomish County, Washington;
Thence running Southwesterly along the Easterly line of U.S. Highway No. 99, a
distance of 45 feet;
Thence running East and parallel to the North line of said Tract 23, a distance
of 200 feet;
Thence running North to intersect the North line of said Tract 23;
Thence running West to a point of beginning, as per plat recorded in Volume 10
of Plats, page 57, records of Snohomish County, Washington.
Situated in the County of Snohomish, State of Washington.
PARCEL M:
The Westerly 200 feet of the Southerly 57 1/2 feet of the North half of Lot 22,
Scriber Lake Homes, according to the plat thereof recorded in Volume 10 of
Plats, page 57, records of Snohomish County, Washington.
PARCEL N:
South half of Tract 24, Scriber Lakes Homes, according to the plat thereof
recorded in Volume 10 of Plats, page 57, records of Snohomish County,
Washington.
LEGAL DESCRIPTION CONTINUED NEXT PAGE
<PAGE> 38
LEGAL DESCRIPTION CONTINUED
PARCEL O:
North half of Lot 22, Scriber Lake Homes, according to the plat thereof
recorded in Volume 10 of Plats, page 57, records of Snohomish County,
Washington;
EXCEPT the Westerly 200 feet of Southerly 57 1/2 feet of the North half of Lot
22, Scriber Lake Homes according to the plat thereof recorded in Volume 10 of
Plats, page 57, records of Snohomish County, Washington.
PARCEL P:
That portion of Tracts 29 and 30, Scriber Lake Homes, according to the plat
thereof recorded in Volume 10 of Plats, page 57, records of Snohomish County,
Washington, described as follows:
Beginning at the North line of said Lot 29, at a point lying North 89 degrees,
22'42" West thereon, 15.64 feet from the Northeast corner of Lot and running
Thence South 30 degrees, 45'20" West, parallel with the easterly line of said
Lot 146.24 feet; Thence North 59 degrees, 09'15" West 151.30 feet; Thence North
30 degrees, 45'20" East 58.18 feet to an intersection with the North line of
said Lot 30; Thence South 89 degrees, 22'42" East along the North lines of said
Lots 30 and 29, a distance of 174.92 feet to the point of beginning.
EXCEPT the North 10 feet thereof conveyed to the City of Lynwood by Quit Claim
Deed recorded under Snohomish County Recording Number 9608120739.
LEGAL DESCRIPTION CONTINUED NEXT PAGE
<PAGE> 39
LEGAL DESCRIPTION CONTINUED
PARCEL O:
All that portion of Tract 24, Scriber Lake Homes, according to the plat thereof
recorded in Volume 10 of Plats, page 57, records of the Auditor of the County
of Snohomish, State of Washington, and described as follows:
Beginning at the Northwest corner of said tract 24;
Thence South 30 degrees 45'20" West along the Easterly line of State Highway
No. 1 for 72.50 feet;
Thence East along the South line of the North half of said Tract for 185.43
feet;
Thence North 0 degrees 37'18" East for 62.70 feet;
Thence North 89 degrees 22'42" West for 149.03 feet to the Northwest corner
of said Tract 24, The Point of Beginning.
PARCEL R:
All that portion of the North half of Tract 24, Scriber Lake Homes, according
to the plat thereof recorded in Volume 10 of Plats, page 57, records of
Snohomish County, Washington lying East of following described line:
Beginning at a point on North line of Tract 24, 549.03 feet East of Northwest
corner of said Tract;
Thence South at right angles to said North line to an intersection with South
line of the North half of said Tract 24 and end of said line.
Situated in the City of Lynnwood, County of Snohomish, State of Washington.
<PAGE> 40
EXHIBIT B
PROPERTY INFORMATION
1. Rent Roll. The most recent rent roll of the Property ("Rent Roll")
which is certified as to its truth and accuracy and states the tenant, monthly
rent, term, options, date of lease, expiration date, gurantor, security deposit
and any amendments or modifications to the lease.
2. Leases. Copies of all leases and other agreements for occupancy or
use of any portion of the Property, including all amendments and guarantees
thereof and tenant correspondence (the "Leases").
3. Tax Statements. Copies of all ad valorem tax statements relating to
the Property for the current year or other current tax period (if available),
including the Property tax identification or assessor's parcel number(s).
4. Contracts. Copies of all management, maintenance, service, supply,
equipment rental and other contracts affecting the Property or used in the
operation and/or maintenance thereof (the "Contracts").
5. Financial Statements. Copies of financial statements reflecting the
operation of the Property for the two (2) calendar years, including statements
of cash flow and statements of income, expense, accounts payable and accounts
receivable for each such year, each fairly presenting the financial position of
Seller with respect to the Property at the end of each such year and the results
of the operations thereof for such year.
6. Proceedings. Copies of any documents or materials relating to any
litigation, investigation, condemnation, or proceeding of any kind pending or
threatened affecting any of the Property or the ability of Seller to consummate
the transaction contemplated by this Agreement.
7. Environmental Reports. Copies of all environmental investigations and
reports conducted or prepared on behalf of Seller and/or Seller's tenants and
any other environmental information in Seller's possession.
<PAGE> 41
EXHIBIT C
WHEN RECORDED RETURN TO:
--------------------
--------------------
--------------------
STATUTORY WARRANTY DEED
THE GRANTOR, AMERICAN PROPERTIES INVESTMENTS, INC., a Washington
corporation, for and in consideration of Ten Dollars ($10.00) and other good and
valuable consideration in hand paid, conveys and warrants to
___________________, a ________________________ the real estate situated in the
County of Snohomish, State of Washington, described in Exhibit A attached hereto
and incorporated herein by this reference.
Subject to: Encumbrances described on Exhibit B attached hereto and incorporated
herein by this reference.
Dated: _____________, 1997.
AMERICAN PROPERTIES INVESTMENTS, INC., a
Washington corporation
By
------------------------------
Kenneth L. Uptain
President
[To be conformed to recording requirements]
<PAGE> 42
STATE OF WASHINGTON )
) ss.
COUNTY OF ___________ )
I certify that I know or have satisfactory evidence that KENNETH L.
UPTAIN is the person who appeared before me, and said person acknowledged that
he/she signed this instrument, on oath stated that he/she was authorized to
execute the instrument and acknowledged it as the President of AMERICAN
PROPERTIES INVESTMENTS, INC. to be the free and voluntary act of such
corporation for the uses and purposes mentioned in the instrument.
DATED: ____________________________ _________________________________________
Print Name:
-------------------------------
NOTARY PUBLIC for the State of Washington,
residing at
-------------------------------------------
My appointment expires:
-------------------------------------------
<PAGE> 43
EXHIBIT D
BILL OF SALE
AND
ASSIGNMENT AND ASSUMPTION OF LEASES, CONTRACTS AND
TANGIBLE AND INTANGIBLE PERSONAL PROPERTY
This Bill of Sale and Assignment and Assumption of Leases, Contracts and
Tangible and Intangible Personal Property ("Assignment") is executed and
delivered pursuant to that certain Real Estate Purchase and Sale Agreement and
Joint Escrow Instructions (the "Purchase Agreement") dated as of ____________,
1997 between AMERICAN PROPERTIES INVESTMENTS, INC., a Washington corporation
("API") and _________________ ("Buyer"), concerning the real property described
in Schedule 1 attached hereto (the "Land"). All capitalized terms not otherwise
defined herein shall have the same meanings given them in the Purchase
Agreement. API and LEGEND PROPERTIES, INC., a Delaware corporation, are
referred. to herein collectively as "Seller".
1. Assignment. For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Seller hereby grants, sells,
transfers, conveys, assigns and delivers to Buyer all of Seller's interest in,
and delegates to Buyer all of Seller's duties under, all of the following
(together the "Assigned Rights"):
(a) Leases. The leases as set forth on the Rent Roll attached
hereto as Schedule 2 together with all amendments and modifications thereto and
all guarantees thereof (the "Leases"). Seller expressly excepts from this
assignment Seller's rights to receive funds and enforce its rights as payee
under the following documents: ____________________________________. This
Assignment of Leases is further subject to the rights of Seller to collect rents
more than thirty (30) days past due under the following leases: _______________.
(b) Tangible Personality. Seller represents to Buyer that Seller
owns no tangible personal property in connection with Land that is not attached
to the Land or the improvements thereon. Notwithstanding the foregoing, Seller
hereby grants, bargains, sells, conveys, and transfers to Buyer all of Seller's
right, title and interest in all of the furniture, fixtures, heating,
ventilation and air conditioning equipment, trade fixtures, office equipment,
supplies, tools and maintenance equipment, shades and blinds, carpeting,
sculptures, art work and all other tangible personal property, if any, of every
nature and description and all replacements thereof now owned by Seller and
located in or on the Land, except any such tangible personal property belonging
to tenants under the Leases.
(c) Intangible Property. To the extent assignable by Seller, any
and all of the intangible personal property related to the Land, including,
without limitation, all plans and specifications, warranties (including, without
limitation, any and all roof warranties), permits, approvals, and licenses
associated with the Land, and Seller's interest in the name of the Land, if any,
that is commonly known as the Lynnwood Center, and telephone exchange numbers.
(d) Contracts. The contracts ("Contracts") described in Schedule
3 attached hereto.
<PAGE> 44
2. Acceptance and Assumption. Buyer hereby accepts the foregoing
Assignment and assumes all of Seller's obligations under the Assigned Rights
from and after the date hereof.
3. Indemnifications. Seller shall defend, indemnify and hold harmless
Buyer from and against any liability, damages, causes of action, expenses, and
attorneys' fees incurred by Buyer, up to an amount not to exceed $2,000,000, by
reason of the failure of Seller to fulfill, perform, discharge, and observe its
obligations with respect to the Assigned Rights which are due to be fulfilled,
performed, discharged or observed on or before the date hereof. Buyer shall
defend, indemnify and hold harmless Seller from and against any liability,
damages, causes of action, expenses, and attorneys' fees incurred by Seller, up
to an amount not to exceed $2,000,000, by reason of the failure of Buyer to
fulfill, perform, discharge, and observe its obligations with respect to the
Assigned Rights which are due to be fulfilled, performed, discharged or observed
after the date hereof.
4. Miscellaneous.
(a) Seller and Buyer each agrees to execute such other documents
and perform such other acts as may be necessary or desirable to effectuate this
Agreement, provided that no such act or document shall alter or increase any
rights or obligations of any party hereto.
(b) In the event of any action or suit by either party hereto
against the other arising from or interpreting this Assignment, the prevailing
party in such action or suit shall, in addition to such other relief as may be
granted, be entitled to recover its reasonable costs of suit and attorneys'
fees, whether or not the same proceeds to final judgment.
(c) This Assignment shall be governed by and construed in
accordance with the laws of the State of Washington.
(d) This Assignment shall be binding upon and inure to the
benefit of Seller and Buyer and their respective successors and assigns. The
obligations of Seller are joint and several.
IN WITNESS WHEREOF, Seller and Buyer have executed this Assignment as of
the date first above written.
<PAGE> 45
SELLER: AMERICAN PROPERTIES INVESTMENTS, INC., a
Washington corporation
By
---------------------------------------
Kenneth L. Uptain
President
Date of Execution _______________
LEGEND PROPERTIES, INC., a Delaware
corporation
By
---------------------------------------
Kenneth L. Uptain
President
Date of Execution _______________
BUYER: __________________________________________
a ________________________________________
By________________________________________
Name______________________________________
Title_____________________________________
Date of Execution_________________________
<PAGE> 46
EXHIBIT E
ESTOPPEL CERTIFICATE
To: _________________ "Buyer")
Re: Lease dated ________________, 19__, between ("Tenant") and
("Landlord") concerning the premises known as ___________________
Suite _______, _________________, Washington the ("Premises")
located in the Lynnwood Center (the "Center")
For good and valuable consideration, the undersigned, as Tenant under
the Lease described above, hereby makes this Estoppel Certificate
("Certificate") and certifies and agrees in favor of Buyer and its heirs,
successors and assigns as follows:
1. Tenant is the lessee of the Premises described above-under a lease
agreement dated _________________ (as modified or amended, the "Lease") entered
into between Tenant and Landlord (or their respective predecessors in interest,
if any). The Lease is presently in full force and effect, and has not been
amended, modified or supplemented in any way, and the Lease represents the
entire agreement between Landlord and Tenant with respect to the Premises and
the leasing relationship, except as follows:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[if none, state "none"].
2. Tenant is not in default under the Lease, and there exists no fact or
conditions that would constitute a basis for any default on the part of Tenant
under the Lease upon the lapse of time or the giving of notice or both.
3. Tenant has no options or rights to extend the term of the Lease,
expand the Premises, or purchase the Center or any portion thereof except as
follows:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[if none, state "none"]
4. All construction, maintenance, and repair obligations of Landlord
have been performed in full and all allowances or other amounts. payable to
Tenant under the Lease. have been paid in full by Landlord. All conditions of
the Lease to be performed by Landlord and necessary to the obligation of Tenant
to perform its obligations under the Lease have been performed. All portions of
the Premises and any additional space required to be delivered to Tenant under
the Lease have been delivered. Tenant has no claims against Landlord for
termination of the Lease and no claims for offset or abatement of rents.
<PAGE> 47
5. Tenant has accepted the Premises and is paying rent under the Lease.
Tenant entered into occupancy of the entire Premises on __________, 19___, and
Tenant is presently occupying the entire space covered by the Lease for the
purposes designated therein. The Premises comprise _______ square feet of
leasable area. The Lease has not been assigned by Tenant, nor the Premises
sublet, except as follows: ________________________________________ [if none,
state "none"].
6. The amount of prepaid rent or security deposit, however referred to,
paid under the terms of the Lease is $___________. To Tenant's knowledge, no
portion of the foregoing amount has been applied by Landlord to the payment of
rent or any other amounts due under the Lease.
7. Tenant has not made any other prepayment of rent or other charges
more than one (1) month in advance and no payments have been made by Tenant
except as provided in the Lease.
8. The term of The Lease commenced on ____________ and will end on
______________. As of the date hereof, the minimum rental obligation under the
Lease is $________ per month and the monthly additional rental is $________ per
month. The minimum and additional rental has been paid to the date of
____________, 19___ and no rental has been paid in excess of thirty (30) days in
advance. Tenant is currently obligated to pay the entire amount of rent and
additional rent provided for in the Lease. There are no concessions, bonuses,
free rental periods, rebates, credits or other matters affecting the rental for
Tenant under the Lease, except as follows: [if none, state "none"].
9. As of the date of this Certificate, Tenant has no offsets,
abatements, reductions in rent, counterclaims or defenses under the Lease
against Landlord, and, to Tenant's knowledge, there exist no events that would
constitute a basis for such offset, abatement, reduction, counterclaim or
defense against Landlord upon the lapse of time or the giving of notice or both.
Tenant has no right to or claims for the refund of any rents or other sums
heretofore paid to Landlord (excluding the right to a refund of any security
deposit paid by Tenant in the amount set forth in Section 6 hereof).
10. Tenant acknowledges that the Landlord's interest in the Lease will
be assigned to Buyer and agrees, upon receipt of notice of such assignment from
Buyer or Landlord, to recognize Buyer as the landlord for all purposes and to
perform all of Tenant's obligations as lessee under the Lease, including,
without limitation, the payment of rent, directly to Buyer, or its agent, as the
landlord under the Lease, from and after the date of such notice. Additionally,
Tenant has no knowledge of any sale, assignment, hypothecation or pledge by
Landlord of the Lease or the rentals thereunder, other than the contemplated
assignment to Buyer.
11. Tenant has no right to terminate the Lease or cease operating based
upon a breach of any cotenancy provisions or any other provision of the Lease
conditioning Tenant's performance of its obligations under the Lease on the
occupancy of other premises by other tenants.
12. Tenant is not using the Premises in violation of any applicable
laws, rules, ordinances or regulations, including, but not limited to, any
applicable environmental laws, rules or regulations (collectively "Laws"); there
are no regulatory actions or other claims pending or threatened against Tenant
relating to the Premises or the Lease in connection with any Laws; Tenant has
not received any
<PAGE> 48
notice from any third party or governmental authority alleging a violation of
any Laws in connection with the Lease or the Premises.
13. There has not been filed by or against Tenant nor, to the best
knowledge and belief of Tenant, is there threatened against or contemplated by
Tenant, a petition in bankruptcy, voluntary or otherwise, any assignment for the
benefit of creditors, any petition seeking reorganization or arrangement under
bankruptcy laws of the United States or of any state thereof, or any other
action brought under said bankruptcy laws.
14. The address for notices to Tenant under the Lease is correctly set
forth in the Lease, or, if not, is as follows:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
15. To Tenant's knowledge, all guarantees of the Lease are in full force
and effect. The guarantors are as follows:
- --------------------------------------------------------------------------------
[if none, state "none"].
16. This Certificate may be executed in any number of counterparts, any
of which may contain the signatures of less than all of the parties, and all of
which shall be construed together as but a single instrument.
[FOR SAFEWAY AND PAYLESS ADD THE FOLLOWING PARAGRAPH:
"___. RENTS PAYABLE BY TENANT UNDER THE LEASE ARE INSURED IN AN AMOUNT
OF _____% OF THE ANNUAL RENTAL AMOUNT DISCLOSED IN PARAGRAPH 8, ABOVE."]
<PAGE> 49
17. This Certificate is executed for the benefit of and in order to
induce Buyer to purchase the Center, including, the Premises. This Certificate
is further executed for the benefit of any person or entity that takes title to
the Center Premises as assignee or nominee of Buyer, and in order to induce such
other person to take title thereto. Tenant makes this Certificate with the
understanding that Buyer and such assignees and/or nominee will materially rely
on this Certificate in purchasing the Center and the Premises. Tenant
acknowledges having read this Certificate and understands the certifications and
representations made herein. The undersigned signatory represents and warrants
that he, or she is duty authorized to execute this Certificate on behalf of
Tenant.
EXECUTED: _____________
TENANT: ______________________________
a ____________________________
By____________________________
Name__________________________
Title_________________________
By_____________________________
Name___________________________
Title__________________________
<PAGE> 50
EXHIBIT "F"
LEASE DISCLOSURES
1. Play Club is no longer occupying its leased premises.
T&G Corporation, Inc., dba New Dimension Salon has requested an
assignment of its lease to Ton Anh Thi. A form of assignment has been
prepared, but has not been executed.
2. Little Caesar's Pizza is delinquent $14,366.75 for past due rents and
impounds through May 31, 1997 and $1,665.50 for tenant improvement note
payments. On May 30, 1997, Seller agreed to a rent abatement.
3. PayLess Stores/Rite Aid disputes $2,428.78 attributable to 1995 and
1996 CAM reconciliation and impound variances.
4. Play Club owes $46,619.50 in unpaid rent and impounds for July through
February. Play Club has closed its business.
5. Seller has an exclusive leasing brokerage and commission agreement with
Terranomics Retail Services, L.P. A commission is due to Terranomics in
connection the lease with Pacific Finance Holdings, Inc., dba Fast Cash.
6. Although to Seller's knowledge no bankruptcy action has been filed,
Little Caesar's has advised the Seller that their store is not
succeeding and they are insolvent.
7. Starbucks is in possession of a portion of that Safeway leased premises.
8. Suns Cleaners is delinquent $5,230.74 for July and August rent.
<PAGE> 51
EXHIBIT "G"
CONTRACTS
1. Letter agreement with Evergreen Services Corporation (Landscape
Management) dated January 15, 1997, and addendum dated January 21, 1997.
2. Cleaning Service Contract with Total Care Maintenance dated February 2,
1997.
3. HVAC Maintenance Agreement with MacDonald-Miller Service.
4. Management Contract with Shelter Bay Retail Group dated August 1, 1995.
5. Exclusive Leasing, Brokerage and Commission Agreement with Terranomics
Retail Services, L.P. dated December 7, 1991, extended by oral agreement.
6. Installation and Service Agreement with Honeywell dated August 1, 1995.
7. Sweeping Contract with Whirlwind Services, Inc. dated July 31, 1997.
<PAGE> 52
EXHIBIT "H"
LITIGATION OR PROCEEDINGS
1. The City of Lynnwood has expressed its interest in acquiring an
approximately 10 foot wide and 167 foot long strip of the Property
abutting 196th Street Southwest. The City has asked Seller to propose a
purchase price for this strip of property.
2. The City of Lynnwood has requested that Seller provide a temporary
construction permit to the City covering a ten foot wide strip of the
Property abutting Highway 99 to accommodate city roadway improvements.
<PAGE> 53
EXHIBIT "I"
HAZARDOUS MATERIALS
1. Qualifications of Carl A. Mangold dated April 1989.
2. Phase I Environmental Site Audit dated April 7, 1989 prepared by Site
Analysis. [Note: this document is also Enclosure 13 to item No. 4, below.]
3. Asbestos Survey Report of selected buildings at the Lynnwood Shopping
Center prepared by Environmental Control Sciences, Inc. dated July 1989 and
supporting documents.
4. Certification of Asbestos Removal and Disposal dated October 4, 1989.
5. Certification of Asbestos Inspection Prior to Demolition dated
October 30, 1989.
6. Industrial Hygiene Surveillance and Air Monitoring for the Asbestos
Removal Project at the Lynnwood Shopping Center submitted by Environmental
Control Sciences, Inc. to Resource Group, Inc. on October 31, 1989.
7. Certificate of Underground Storage Tank Removal from the Lynnwood
Shopping Mall Site dated November 15, 1989.
8. Survey and Assessment of Asbestos and Hazardous Materials and Risk
Assessment dated February 1995 prepared by Environmental Control Sciences, Inc.
and supporting surveys, reports and correspondence.
9. Environmental Questionnaire and Disclosure Statement dated June 7,
1995 prepared in connection with loan from U.S. Bank of Washington National
Association.
10. June 19, 1995 letter and drawing from Carl A. Mangold, Environmental
Control Sciences, Inc., regarding UST's in vicinity of Lynnwood Center.
11. Phase I Asbestos Abatement prepared by Crown Delta Incorporated dated
June 12, 1995.
12. Phase II Asbestos Abatement prepared by Crown Delta Incorporated (no
date).
<PAGE> 54
13. Soil sampling test results prepared by Fredman & Bruya, Inc. dated
August 15, 1995.
14. Closure Report Following an Asbestos & Hazardous Waste Removal from
Four Buildings at the Center prepared by Environmental Control Sciences, Inc.
dated July, August & September 1995, and supporting surveys, reports and
correspondence.
15. Underground Storage Tank Closure Assessment for BP Branded Service
Station #11262, dated March 1996, submitted to TOSCO Refining and Marketing
Company by AGRA Earth & Environmental, Inc.
16. Three underground gasoline storage tanks and one underground used oil
storage tank located, removed and reinstalled on the site leased by Tosco
Northwest Company, dba BP Oil.
17. Closure Report for the Asbestos Removal Project, Burger Mill
Restaurant, prepared by Environmental Control Sciences, Inc., August 1992 and
supporting surveys, correspondence and reports.
18. The tenant Sun Cleaners uses Hazardous Materials in connection with
drycleaning operations.
19. In connection with maintenance of the Property, Sellers' contractors
and tenants may use cleaning and landscaping products which are classified as
Hazardous Materials.
20. Various of the tenants of the Property, including PayLess and
Safeway, may sell products classified as Hazardous Materials in the course of
legal retail operations.
<PAGE> 55
EXHIBIT J
TENANT NOTIFICATION LETTER
________________, 1997
- ---------------------
- ---------------------
- ---------------------
Re: Your lease (the "Lease") of space in the shopping center known as
"_____________" located in Lynnwood, Washington (the "Center")
Ladies and Gentlemen:
You are hereby notified that _____________ (the "Owner"), as owner of
the Center and the current owner of the landlord's interest under the Lease, has
sold the Center to _____________ ("Buyer") as of the date of this Tenant Notice
Letter set forth above, and in connection with such sale the Owner has assigned
and transferred its interest in the Lease and any and all security deposits
thereunder or relating thereto to Buyer, and Buyer has assumed and agreed to
perform all of the landlord's obligations under the Lease (including any
obligations set forth in the Lease to repay or account for any security deposits
thereunder) from and after such date. Accordingly, (i) all of your obligations
under the Lease from and after the date of this Tenant Notice Letter (including
your obligations to pay rent and fulfill your insurance requirements) shall be
performable to and for the benefit of Buyer, its successors and assigns and (ii)
all of the obligations of the landlord under the Lease (including any
obligations to repay or account for any security deposits thereunder) from and
after the date of this Tenant Notice Letter shall be binding obligations of
Buyer and its successors and assigns.
The address of Buyer for all purposes under the Lease (including the
payments of rentals, the recoupment of the security deposits and the giving of
any notices provided for in the Lease) is:
-------------------------
-------------------------
-------------------------
Very truly yours,
<PAGE> 56
EXHIBIT K
MAJOR TENANTS
1. The Sports Authority
2. PayLess Stores
3. Safeway, Inc.
4. Tosco NW (BP)
5. Hollywood Video
6. Boston Chicken
<PAGE> 57
EXHIBIT "L"
TENANT RECEIVABLES FOR T.L.'S
1. Viking Sewing owes approximately $2,891.73 for tenant improvements.
2. Little Caesar's owes approximately $10,713.38 for tenant improvements.
<PAGE> 1
AMENDMENT NO. 1
TO
PURCHASE AND SALE AGREEMENT
This Amendment No. 1 ("Amendment") is executed as of August 18, 1997, by
and between PARKWAY CAPITAL, INC., a Washington corporation, or assigns
("Buyer"), and AMERICAN PROPERTIES INVESTMENTS, INC., a Washington corporation
("Seller"), with respect to that certain Real Estate Purchase and Sale Agreement
and Joint Escrow Instructions between the parties dated as of August 5, 1997
("Agreement"). Capitalized terms not defined herein shall have the meanings set
forth in the Agreement.
The parties agree as follows:
1. Extension of Review Period. The parties hereby agree that Buyer's
Review Period shall be deemed to have commenced on August 18, 1997, for a period
of forty-five (45) days ending October 2, 1997. Buyer shall then have an
additional seven (7) days, until October 9, 1997, in which to obtain the
approval of Buyer's lender. The parties therefore agree that, notwithstanding
anything in the Agreement to the contrary, Buyer's Review Period shall be deemed
to expire on October 9, 1997, and the Agreement is hereby amended accordingly.
2. Scope of Amendment. Except as so amended, all of the terms and
conditions of the Agreement are incorporated herein by reference and remain in
full force and effect. Without limiting the generality of the foregoing, the
parties agree that the Title Review Period shall be unmodified, which Title
Review Period expires on September 25, 1997.
3. Counterparts. This document may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute the same document, whether or not all parties execute
each counterpart.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
BUYER: SELLER:
PARKWAY CAPITAL, INC., AMERICAN PROPERTIES INVESTMENTS, INC.,
a Washington corporation a Washington corporation
By /s/ MICHAEL SANDORFFY By /s/ RAYMOND J. WHITTY
------------------------------ -----------------------------------
Michael Sandorffy Raymond J. Whitty
Its President Its Treasurer
<PAGE> 1
AMENDMENT NO. 2
TO
PURCHASE AND SALE AGREEMENT
This Amendment No. 2 ("Amendment") is executed as of September 30, 1997,
by and between PARKWAY CAPITAL, INC., a Washington corporation, or assigns
("Buyer"), and AMERICAN PROPERTIES INVESTMENTS, INC., a Washington corporation
("Seller"), with respect to that certain Real Estate Purchase and Sale Agreement
and Joint Escrow Instructions between the parties dated as of August 5, 1997, as
amended by Amendment No. 1 dated as of August 18, 1997 (collectively, the
"Agreement"). Capitalized terms not defined herein shall have the meanings set
forth in the Agreement.
The parties agree as follows:
1. Extension of Review Period. Notwithstanding anything in the Agreement
to the contrary, the parties hereby agree that Buyer's Review Period (as
previously extended) is extended an additional seven (7) days from until October
9, 1997, until October 16, 1997, and the Agreement is hereby amended
accordingly.
2. Extension of Period to Remove Objections. The parties agree that
Seller will have an additional seven (7) days, until October 13, 1997, in which
to respond to Buyer's written notice of objections to matters shown on the PR,
Survey or UCC Searches. Accordingly, the third sentence of Section 3.4 of the
Agreement is hereby amended to read as follows:
Seller shall have until October 13, 1997, to deliver written notice to
Buyer stating which of the objected to encumbrances Seller will remove
on or before Closing.
3. Closing Date. Pursuant to Section 1 of the Agreement, the Closing
Date is the date occurring thirty (30) days after the end of the Review Period.
The parties hereby confirm that, based upon the extension of the Review Period
as set forth above, the Closing Date will be November 17, 1997.
4. Scope of Amendment. Except as so amended, all of the terms and
conditions of the Agreement are incorporated herein by reference and remain in
full force and effect.
5. Counterparts. This document may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute the same document, whether or not all parties execute
each counterpart.
<PAGE> 2
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
BUYER: SELLER:
PARKWAY CAPITAL, INC., AMERICAN PROPERTIES INVESTMENTS, INC.,
a Washington corporation a Washington corporation
By /s/ MICHAEL SANDORFFY By /s/ RAYMOND J. WHITTY
------------------------------ -----------------------------------
Michael Sandorffy Raymond J. Whitty
Its President Its Treasurer
<PAGE> 1
AMENDMENT NO. 3
TO
PURCHASE AND SALE AGREEMENT
This Amendment No. 3 ("Amendment") is executed as of October 16, 1997,
by and between PARKWAY CAPITAL, INC., a Washington corporation, or assigns
("Buyer"), and AMERICAN PROPERTIES INVESTMENTS, INC., a Washington corporation
("Seller"), with respect to that certain Real Estate Purchase and Sale Agreement
and Joint Escrow Instructions between the parties dated as of August 5, 1997, as
amended by Amendment No. 1 dated as of August 18, 1997, and Amendment No. 2
dated as of September 30, 1997 (collectively, the "Agreement"). Capitalized
terms not defined herein shall have the meanings set forth in the Agreement.
The parties agree as follows:
1. Waiver of Contingencies. Buyer has completed its inspection and
review of the Property and is fully satisfied with the Property except as to the
matters set forth in this Section 1 below, and hereby waives all contingencies
with respect to the Property that Buyer is required to waive on or before the
last day of the Review Period except for the following matters (referred to as
"Open Contingencies"):
a. Title and Survey Matters. (i) Special Exception No. 9 to the
Second Commitment dated July 29, 1997, under Order No. 526549.2 ("PR"), issued
by Transnation Title Insurance Company ("Title Insurer"), (ii) the matters
covered by paragraph no. 3 to Supplemental No. 1 to the PR dated July 29, 1997,
and (iii) title, survey and UCC objections that Seller agreed to remove in its
letter dated October 13, 1997.
b. Environmental Matters. (i) The adequacy of the prior
underground storage tank removal that was performed at the portion of the
Property occupied by TOSCO Corporation, and (ii) the environmental condition of
the portion of the Property occupied by In Kyu Kang and Kuy Ja Kang dba Sun
Cleaners.
c. PUD Matters. Contingencies with respect to City of Lynnwood
Planned Unit Development (PUD) for the Property (established by Ordinance No.
1723), which restricts the building floor area for the restaurants and/or
taverns on the Property.
d. Roof Warranties. Buyer's review of the roof warranties for the
Property and determination of whether they are assignable at Closing. Seller
agrees to cooperate to effect an assignment of the roof warranties for the
Property as of Closing. Any costs or expenses payable to third parties in
connection with an assignment of the roof warranties, including without
limitation, any inspection fees or costs and any recommended or required roof
repairs, shall be the responsibility of Buyer.
2. Extension of Review Period. Notwithstanding anything in the Agreement
to the contrary, the parties hereby agree that Buyer's Review Period (as
previously extended) is extended to October 23, 1997, with respect to the Open
Contingencies only, and the Agreement is hereby amended
<PAGE> 2
accordingly. Buyer acknowledges that Buyer's Review Period has expired with
respect to all contingencies that Buyer is required to waive on or before the
last day of the Review Period other than the Open Contingencies and that the
provisions of Section 1 of this Amendment shall control with respect to the Open
Contingencies.
3. Closing Date. Although Buyer's Review Period has been extended as set
forth in Section 1 of this Amendment, the parties agree that there will not be
an extension of the Closing Date, which the parties confirm will be November 17,
1997. Section 1 of the Agreement is hereby amended accordingly.
4. Property Repairs. Seller agrees to pay up to an aggregate sum of
$12,000.00 to third parties or in reimbursement of expenses incurred by Buyer
upon presentation of invoices for repairs, inspections or other improvements to
the Property to remedy concerns raised by Buyer after its inspection and review
of the Property (including without limitation any inspections and/or repairs
required for transfer of roof warranties).
5. Closing Conditions. Buyer does not waive its right to terminate the
Agreement under Section 10.1 of the Agreement because of a failure of one of the
Major Tenants to deliver an Estoppel Certificate on or before Closing, or any
other conditions to Closing that are not required under the terms of the
Agreement to be waived prior to Closing.
6. Scope of Amendment. Except as so amended, all of the terms and
conditions of the Agreement are incorporated herein by reference and remain in
full force and effect.
7. Counterparts. This document may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute the same document, whether or not all parties execute
each counterpart.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
BUYER: SELLER:
PARKWAY CAPITAL, INC., AMERICAN PROPERTIES INVESTMENTS, INC.,
a Washington corporation a Washington corporation
By /s/ MICHAEL SANDORFFY By /s/ RAYMOND J. WHITTY
------------------------------ -----------------------------------
Michael Sandorffy Raymond J. Whitty
Its President Its Treasurer
<PAGE> 1
AMENDMENT NO. 4
TO
PURCHASE AND SALE AGREEMENT
This Amendment No. 4 is executed as of October 23, 1997, by and between
PARKWAY CAPITAL, INC., a Washington corporation, or assigns ("Buyer"), and
AMERICAN PROPERTIES INVESTMENTS, INC., a Washington corporation ("Seller"), with
respect to that certain Real Estate Purchase and Sale Agreement and Joint Escrow
Instructions between the parties dated as of August 5, 1997, as amended by
Amendment No. 1 dated as of August 18, 1997, Amendment No. 2 dated as of
September 30, 1997, and Amendment No. 3 dated as of October 16, 1997
(collectively, the "Agreement"). Capitalized terms not defined herein shall have
the meanings set forth in the Agreement.
The parties agree as follows:
1. Waiver of Contingencies. Buyer confirms that Buyer has completed its
inspection and review of the Property, is fully satisfied with the Property and
has waived all contingencies with respect to the Property that Buyer is required
to waive on or before the last day of the Review Period except for the Open
Contingencies identified in Amendment No. 3.
2. Extension of Review Period. Notwithstanding anything to the contrary
in the Agreement (or any prior Amendment), the parties agree that Buyer's
Review Period (as previously extended) is hereby extended to October 28, 1997,
with respect to the Open Contingencies only, and the Agreement shall be deemed
amended accordingly. Buyer acknowledges that Buyer's Review Period has expired
with respect to all contingencies that Buyer is required to waive on or before
the last day of the Review Period other than the Open Contingencies.
3. Closing Date. Although Buyer's Review Period has been extended as set
forth in this Amendment No. 4, the parties agree that the Closing Date has not
been extended, which the parties confirm will be November 17, 1997.
4. Closing Conditions. By execution of this Amendment No. 4, Buyer does
not waive its right to terminate the Agreement under Section 10.1 of the
Agreement because of a failure of one of the Major Tenants to deliver an
Estoppel Certificate on or before Closing, or any other conditions to Closing
that are not required under the terms of the Agreement to be waived prior to
Closing.
5. Scope of Amendment. Except as expressly amended herein, all of the
terms and conditions of the Agreement (as previously amended) are incorporated
herein by reference and remain in full force and effect.
6. Counterparts. This document may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute the same document, whether or not all parties execute
each counterpart.
<PAGE> 2
IN WITNESS WHEREOF, the parties have executed this Amendment No. 4 as of
the date first written above.
BUYER: SELLER:
PARKWAY CAPITAL, INC., AMERICAN PROPERTIES INVESTMENTS, INC.,
a Washington corporation a Washington corporation
By /s/ MICHAEL SANDORFFY By /s/ RAYMOND J. WHITTY
------------------------------ -----------------------------------
Michael Sandorffy Raymond J. Whitty
Its President Its Treasurer
<PAGE> 1
AMENDMENT NO. 5
TO
PURCHASE AND SALE AGREEMENT
This Amendment No. 5 is executed as of October 28, 1997, by and between
PARKWAY CAPITAL, INC., a Washington corporation, or assigns ("Buyer"), and
AMERICAN PROPERTIES INVESTMENTS, INC., a Washington corporation ("Seller"), with
respect to that certain Real Estate Purchase and Sale Agreement and Joint Escrow
Instructions between the parties dated as of August 5, 1997, as amended by
Amendment No. 1 dated as of August 18, 1997, Amendment No. 2 dated as of
September 30, 1997, Amendment No. 3 dated as of October 16, 1997, and Amendment
No. 4 dated as of October 23, 1997 (collectively, the "Agreement"). Capitalized
terms not defined herein shall have the meanings set forth in the Agreement.
The parties agree as follows:
1. Waiver of Contingencies. Buyer confirms that Buyer has completed its
inspection and review of the Property, is fully satisfied with the Property and
has waived all contingencies with respect to the Property that Buyer is required
to waive on or before the last day of the Review Period, including without
limitation the Open Contingencies with respect to PUD Matters and Roof
Warranties (as identified in Amendment No. 3), except for the Open Contingencies
listed in Section 2 below.
2. Extension of Review Period. Notwithstanding anything to the contrary
in the Agreement (or any prior Amendment), the parties agree that Buyer's Review
Period (as previously extended) is hereby extended to November 4, 1997, with
respect to only the following Open Contingencies. Seller confirms that it will
cooperate with Buyer as may be reasonably necessary (but at no expense to
Seller) to assist Buyer in resolving these Open Contingencies prior to
expiration of Buyer's Review Period (as extended herein).
a. Title and Survey Matters. (i) The sewer easement that is the
subject of Exception No. 9 to the Second Commitment dated July 29, 1997, under
Order No. 526549.2 ("PR"), issued by Transnation Title Insurance Company, and
Exception No. 3 of Supplemental No. 1 to the PR dated July 29, 1997 (as amended
by Supplemental No. 2 dated October 21, 1997), and (ii) title, survey and UCC
objections that Seller agreed to remove in its letter dated October 13, 1997.
b. Environmental Matters. (i) The adequacy of the prior
underground storage tank removal that was performed at the portion of the
Property occupied by TOSCO Corporation, and (ii) the environmental condition of
the portion of the Property occupied by In Kyu Kang and Kuy Ja Kang dba Sun
Cleaners.
3. Roof Warranties. Buyer agrees that Buyer's Review Period for the Open
Contingency with respect to the roof warranties for the Property has expired.
Nevertheless, Seller confirms that Seller will cooperate with Buyer to effect an
assignment of the roof warranties held by Seller as of Closing, and Buyer
confirms that any costs or expenses payable to third parties in connection with
an assignment of the roof warranties, including without limitation, any
inspection fees or costs and any recommended or required roof repairs, shall be
the responsibility of Buyer. Buyer acknowledges that
<PAGE> 2
the roof warranty for the building occupied by Safeway, Inc. has been declared
void by the roofing company, U.S. Intec, Inc. Seller agrees to send notice to
Safeway, Inc. with respect to its obligation to repair the roof on the building
it occupies.
4. Closing Date. Although Buyer's Review Period has been extended as set
forth in this Amendment No. 5, the parties agree that the Closing Date has not
been extended, which the parties confirm will be November 17, 1997.
5. Closing Conditions. By execution of this Amendment No. 5, Buyer does
not waive its right to terminate the Agreement under Section 10.1 of the
Agreement because of a failure of one of the Major Tenants to deliver an
Estoppel Certificate on or before Closing, or any other condition to Closing
that is not required under the terms of the Agreement to be waived prior to
Closing.
6. Scope of Amendment. Except as expressly amended herein, all of the
terms and conditions of the Agreement (as previously amended) are incorporated
herein by reference and remain in full force and effect.
7. Counterparts. This document may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute the same document, whether or not all parties execute
each counterpart.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 5 as of
the date first written above.
BUYER: SELLER:
PARKWAY CAPITAL, INC., AMERICAN PROPERTIES INVESTMENTS, INC.,
a Washington corporation a Washington corporation
By /s/ MICHAEL SANDORFFY By /s/ RAYMOND J. WHITTY
------------------------------ -----------------------------------
Michael Sandorffy Raymond J. Whitty
Its President Its Treasurer
<PAGE> 1
AMENDMENT NO. 6
TO
PURCHASE AND SALE AGREEMENT
This Amendment No. 6 is executed as of November 4, 1997, by and between
PARKWAY CAPITAL, INC. a Washington corporation or assigns ("Buyer") and AMERICAN
PROPERTIES INVESTMENTS, INC., a Washington corporation ("Seller"), with
respect to that certain Real Estate Purchase and Sales Agreements and Joint
Escrow Instructions between the parties dated as of August 5, 1997, as amended
by Amendment No. 1 dated as of August 18, 1997, Amendment No. 2 dated as of
September 30, 1997, Amendment No. 3 dated as of October 16, 1997. Amendment No.
4 dated as of October 23, 1997, and Amendment No. 5 dated as of October 28, 1997
(collectively, the "Agreement"). Capitalized terms not defined herein shall have
the meetings set forth in the Agreement.
The parties agree as follows:
1. Waiver of Contingencies. Buyer confirms that Buyer has completed its
inspections and review of the Property, is fully satisfied with the Property
and has waived all contingencies with respect to the Property that Buyer is
required to waive on or before the last day of the Review Period, including
without limitation the Open Contingencies with respect to PUD Matters, Roof
Warranties, and Environmental Matters (as identified in Amendment No. 3),
except for the Open Contingencies listed in Section 2 below.
2. Extension of Review Period. Notwithstanding anything to the contrary in
the Agreement (or any prior Amendment), the parties agree that Buyer's Review
Period (as previously extended) is hereby extended to November 5, 1997, with
respect to only the following Open Contingencies. Seller confirms that it will
cooperate with Buyer as may be reasonably necessary (but at no expense to
Seller) to assist Buyer in resolving these Open Contingencies prior to
expiration of Buyer's Review Period (as extended herein).
a. Title and Survey Matters. (i) The server easement that is the
subject of Exception No. 9 to the Second Commitment dated July 29, 1997, under
Order No. 526549.2 ("PR"), issued by Transmation Title Insurance Company, and
Exception No. 3 of Supplemental No. 1 to the PR dated July 29, 1997 (as amended
by Supplemental No. 2 dated October 21, 1997), and (ii) title, survey and UCC
objections that Seller agreed to remove in its letter dated October 13, 1997.
b. Environmental Matters. The environmental condition of the portion
of the Property occupied by in Kyu Kang and Kuy Jr. Kang dba Sun Cleaners.
3. Roof Warranties. Buyer agrees that Buyer's Review Period for the Open
Contingency with respect to the roof warranties for the Property has expired.
Nevertheless, Seller confirms that Seller will cooperate with Buyer to effect an
assignment of the roof warranties held by Seller as of Closing and Buyer
confirms that any costs or expenses payable to third parties in connection with
an assignment of the roof warranties, including without limitation, any
inspection fees or costs and any recommended or required roof repairs, shall be
the responsibility of Buyer. Buyer acknowledges that
<PAGE> 2
the roof warranty for the building occupied by Safeway, Inc. has been declared
void by the roofing company, U.S. Intac, Inc. Seller agrees to send notice to
Safeway, Inc. with respect to its obligation to repair this roof on the
building it occupies.
4. TOSCO Indemnification. Buyer agrees that Buyer's Review Period for the
Open Contingency has expired with respect to the adequacy of the prior
underground storage tank removal that was performed at the portion of the
Property occupied by TOSCO Corporation. Nevertheless, Seller confirms that
Seller will cooperate with Buyer to request an indemnification from TOSCO
Corporation that is reasonably satisfactory to Buyer's lender, Nomura Asset
Capital Corporation.
5. Closing Date. Although Buyer's Review Period has been extended as set
forth in this Amendment No. 6, the parties agree that the Closing Date has not
been extended, which the parties confirm will be November 17, 1997.
6. Closing Conditions. By execution of this Amendment No. 6, Buyer does
not waive its rights to terminate the Agreement under Section 10.1 of the
Agreement because of a failure of one of the Major Tenants to deliver an
Estoppel Certificate on or before Closing, or any other condition to Closing
that is not required under the terms of the Agreement to be waived prior to
Closing.
7. Scope of Amendment. Except as expressly amended herein, all of the
terms and conditions of the Agreement (as previously amended) are incorporated
herein by reference and remain in full force and effect.
8. Counterparts. This document may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute the same document, whether or not all parties execute
each counterpart.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 6 as of
the date first written above.
BUYER: SELLER:
PARKWAY CAPITAL, INC. AMERICAN PROPERTIES INVESTMENTS
a Washington corporation INC., a Washington corporation
By /s/ Michael Sandorffy By /s/ Raymond J. Whitty
------------------------------------ --------------------------------------
Michael Sandorffy Raymond J. Whitty
Its President Its Treasurer
