<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to __________
Commission file number 1-10153
HOMEFED CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 33-0304982
------------------------------ ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
529 East South Temple, Salt Lake City, Utah 84102
--------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(801) 521-1066
--------------------------------------------------
(Registrant's telephone number, including area code)
N/A
-----------------------------------------------------
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed
all documents and reports required to be filed by Sections 12, 13
or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes [X] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date. On November 11, 1996, there
were 10,000,000 outstanding shares of the Registrant's Common Stock,
par value $.01 per share.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
HomeFed Corporation and Subsidiaries
Consolidated Balance Sheets
September 30, 1996 and December 31, 1995
(Amounts in thousands, except par value)
-----------------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Land and real estate held for development $ 18,017 $ 22,069
Cash and cash equivalents 1,562 2,373
Restricted cash 1,086 1,105
Investments 70 83
Deposits and other assets 707 1,221
------------ ------------
TOTAL $ 21,442 $ 26,851
============ ============
LIABILITIES
Notes payable $ 26,371 $ 27,122
Accounts payable and accrued liabilities 371 594
------------ ------------
Total liabilities 26,742 27,716
------------ ------------
STOCKHOLDERS' DEFICIT
Common Stock, $.01 par value;
100,000,000 shares authorized;
10,000,000 shares outstanding 100 100
Additional paid-in-capital 339,904 339,904
Accumulated deficit (345,304) (340,869)
------------ ------------
Total stockholders' deficit (5,300) (865)
------------ ------------
TOTAL $ 21,442 $ 26,851
============ ============
</TABLE>
See notes to interim consolidated financial statements.
2
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HomeFed Corporation and Subsidiaries
Consolidated Statements of Operations
For the periods ended September 30, 1996 and 1995
(Amounts in thousands, except per share amounts)
(Unaudited)
-------------------------------------------------------
<TABLE>
<CAPTION>
For the Three For the Nine
Month Period Ended Month Period Ended
September 30, September 30,
-------------------- --------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sales of residential properties $ 2,500 $ 2,264 $ 4,862 $ 6,123
Cost of sales 2,544 2,147 5,104 5,865
---------- ---------- ---------- ----------
Gross profit (loss) (44) 117 (242) 258
Provision for losses on real estate
investments - - 1,017 -
Interest expense 796 593 2,331 593
General and administrative expenses 260 303 942 938
---------- ---------- ---------- ----------
Loss from operations (1,100) (779) (4,532) (1,273)
Other income - net 40 53 148 86
---------- ---------- ---------- ----------
Loss before reorganization items (1,060) (726) (4,384) (1,187)
Reorganization items:
RTC settlement and professional fees - 1,846 - 1,945
---------- ---------- ---------- ----------
Loss before income taxes (1,060) (2,572) (4,384) (3,132)
Income tax expense (11) (6) (51) (11)
---------- ---------- ---------- ----------
Loss before extraordinary gain (1,071) (2,578) (4,435) (3,143)
Extraordinary gain on debt discharged
in bankruptcy - 108,881 - 108,881
---------- ---------- ---------- ----------
Net earnings (loss) (1,071) 106,303 (4,435) 105,738
========== ========== ========== ==========
Primary earnings (loss) per common
share:
Loss before extraordinary gain $ (0.11) $ (0.26) $ (0.44) $ (0.31)
Extraordinary gain 0.00 10.89 0.00 10.89
---------- ---------- ---------- ----------
Net earnings (loss) $ (0.11) $ 10.63 $ (0.44) $ 10.58
========== ========== ========== ==========
Fully diluted earnings (loss) per
common share:
Loss before extraordinary gain $ (0.11) $ (0.04) $ (0.44) $ (0.10)
Extraordinary gain 0.00 2.04 0.00 4.42
---------- ---------- ---------- ----------
Net earnings (loss) $ (0.11) $ 2.00 $ (0.44) $ 4.32
========== ========== ========== ==========
</TABLE>
See notes to interim consolidated financial statements.
3
<PAGE>
HomeFed Corporation and Subsidiaries
Consolidated Statements of Changes in Stockholders' Equity (Deficit)
For the nine months ended September 30, 1996 and 1995
(Amounts in thousands)
(Unaudited)
--------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Total
Shares Additional Stockholders'
$.01 Par Paid-In Accumulated Equity
Value Capital Deficit (Deficit)
------------ ------------ ------------- --------------
<S> <C> <C> <C> <C>
Balance, January 1, 1995 $ 215 $ 338,529 $ (445,589) $ (106,845)
Cancellation of old shares (215) 215
Issuance of new shares to
previous stockholders 58 (58)
Issuance of new shares
to Leucadia Financial
Corporation for cash 27 783 810
Issuance of new shares
to creditors 15 435 450
Net earnings 105,738 105,738
------------ ------------- -------------- --------------
Balance, September 30, 1995 $ 100 $ 339,904 $ (339,851) $ 153
============ ============= ============== ==============
Balance, January 1, 1996 $ 100 $ 339,904 $ (340,869) $ (865)
Net loss (4,435) (4,435)
------------ ------------- -------------- --------------
Balance, September 30, 1996 $ 100 $ 339,904 $ (345,304) $ (5,300)
============ ============= ============== ==============
</TABLE>
See notes to interim consolidated financial statements.
4
<PAGE>
HomeFed Corporation and Subsidiaries
Consolidated Statements of Cash Flows
For the nine months ended September 30, 1996 and 1995
(Amounts in thousands)
(Unaudited)
--------------------------------------------
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ (4,435) $ 105,738
Adjustments to reconcile net earnings (loss) to net
cash provided by (used in) operating activities:
Extraordinary gain on debt discharged in bankruptcy - (108,881)
Accrued interest added to principal 2,231 810
Provision for losses on real estate investments 1,017 -
Changes in operating assets and liabilities:
Land and real estate held for development 3,035 (2,134)
Deposits and other assets 264 33
Accounts payable and accrued liabilities (223) (539)
Decrease (increase) in restricted cash 19 (959)
---------- ----------
Net cash provided by (used in) operating activities 1,908 (5,932)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (increase) in other assets 250 (250)
Decrease in investments 13 14
---------- ----------
Net cash provided by (used in) investing activities 263 (236)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additions to notes payable 1,440 24,963
Repayments of notes payable (4,422) (514)
Payments to settle liabilities subject to compromise - (18,302)
Issuance of new shares to Leucadia Financial
Corporation for cash - 810
---------- ----------
Net cash provided by (used in) financing activities (2,982) 6,957
---------- ----------
Net increase (decrease) in cash (811) 789
Cash and cash equivalents, beginning of period 2,373 1,085
---------- ----------
Cash and cash equivalents, end of period $ 1,562 $ 1,874
========== ==========
</TABLE>
See notes to interim consolidated financial statements.
5
<PAGE>
HOMEFED CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies. The unaudited
interim consolidated financial statements, which reflect all
adjustments (consisting only of normal recurring items) that
management believes necessary to present fairly results of
interim operations, should be read in conjunction with the
Notes to Consolidated Financial Statements (including the
Summary of Significant Accounting Policies) included in the
audited consolidated financial statements for HomeFed
Corporation ("HomeFed" or the "Company") for the year ended
December 31, 1995, which are included in the Company's Annual
Report on Form 10-K for such year (the "1995 10-K"). Results
of operations for interim periods are not necessarily
indicative of annual results of operations. The consolidated
balance sheet at December 31, 1995 was extracted from the
Company's audited consolidated financial statements in the 1995
10-K, and does not include all disclosures required by
generally accepted accounting principles for annual financial
statements.
2. Chapter 11 Bankruptcy and Plan of Reorganization. On July 3,
1995, the Company emerged from Chapter 11 Bankruptcy protection
pursuant to its court approved plan of reorganization (the
"Plan"). The Plan was principally funded by a $20,000,000
convertible note (the "Convertible Note") issued to Leucadia
Financial Corporation ("LFC"), an indirect wholly-owned
subsidiary of Leucadia National Corporation, and by LFC's
purchase of 2,700,000 newly issued $.01 par value common shares
("Common Stock") of the Company for $810,000.
As part of the Plan, the Company settled pending litigation
with the Resolution Trust Company (the "RTC") in its capacity
as receiver and conservator of HomeFed Bank, F.S.B. ("HomeFed
Bank"), a former subsidiary of the Company. Under the RTC
settlement, the Company paid the RTC $3,100,000 and the Company
received a receivership certificate from the RTC which was
redeemed by the RTC for $1,402,000. In addition, the RTC
settlement provides that the Company is entitled to receive
$850,000 from any tax refunds received by the RTC relating to
HomeFed Bank for years prior to 1992. The Company has not
recorded an asset related to such tax refunds and no assurance
can be given that any such tax refunds will actually be
received.
Also under the Plan, general unsecured creditors, principally
the holders of the Company's convertible subordinated
debentures, received a pro rata share of (i) $16,900,000, (ii)
the Company's rights to the RTC tax refund relating to HomeFed
Bank and the $1,402,000 receivership certificate proceeds,
(iii) 1,500,000 shares of Common Stock valued by the Bankruptcy
6
<PAGE>
Court at $.30 per share, and (iv) an interest in the litigation
trust described below.
The Plan also provided for the issuance of 5,800,000 new shares
of Common Stock to the pre-effective date stockholders of the
Company and the old shares of common stock (approximately
21,484,000 shares) were canceled. As a result of shares
received as a general unsecured creditor and shares purchased
as described above, LFC owns approximately 41.2% of the
Company's Common Stock, without giving effect to the Common
Stock that LFC may acquire in the future pursuant to the terms
of the Convertible Note.
The Company's Restated Certificate of Incorporation contains
certain transfer restrictions with respect to the Company's
stock. Generally, such provisions restrict a person's ability
to accumulate 5% or more of the Company's Common Stock, as well
as the ability of a 5% stockholder to acquire additional shares
of Common Stock, in each case, after giving effect to numerous
rules of attribution, aggregation and calculation. In addition,
pursuant to the Plan, the Company is prohibited from issuing
additional shares of stock until July 3, 1999. The Company's
Restated Certificate of Incorporation further prohibits the
Company from issuing or redeeming any shares of stock as long
as the Convertible Note is outstanding. None of the foregoing
restrictions will prevent LFC's exchange of the Convertible
Note for Common Stock.
Certain pending claims are being prosecuted by a litigation
trust created for the benefit of the Company's creditors under
the Plan. Pursuant to the Plan, the Company loaned $250,000 to
the trust in order to pay litigation costs. The loan was
repaid with interest in the third quarter of 1996. The Company
will not otherwise receive any benefits from the trust.
3. Earnings Per Share. Primary earnings (loss) per share of
Common Stock for all periods presented was calculated by
dividing net earnings (loss) by the 10,000,000 shares of Common
Stock issued on July 3, 1995. Primary earnings (loss) per
share calculations based upon the pre-effective date
outstanding shares are not meaningful.
Fully diluted earnings (loss) per share of Common Stock was
calculated as described above and, for the periods ended
September 30, 1996, conversion of the Convertible Note was not
assumed since the effect of such assumed conversion would have
been to decrease loss per share. Fully diluted earnings per
share of Common Stock for the periods ended September 30, 1995
assumes the Convertible Note had been converted into Common
Stock and earnings increased to eliminate the related interest
expense. The number of shares used to calculate fully diluted
earnings (loss) per share was 10,000,000 and 24,657,000 for the
nine month periods ended September 30, 1996 and 1995,
respectively, and 10,000,000 and 53,492,000 for the three month
periods ended September 30, 1996 and 1995, respectively.
7
<PAGE>
4. Related Party Transactions. Notes payable consist primarily of
the Convertible Note issued to LFC and a note issued to LFC as
part of LFC's agreement to provide construction financing to
the Company, as described below. The Convertible Note bears
interest at 12% per annum payable quarterly; however, interest
is only paid if the Company has sufficient funds available, as
determined pursuant to the provisions of the loan agreement.
Unpaid interest is added to the principal balance each quarter.
Interest accrued during the nine month period ended September
30, 1996 of $1,968,000 was not paid and was added to the
principal balance as of September 30, 1996.
The construction financing bears interest based on the prime
rate, and any unpaid interest is added to the principal balance
at the end of each month. The interest rate at September 30,
1996 was 9.50%. Interest accrued during the nine month period
ended September 30, 1996 on the construction financing totaled
$381,000, of which $118,000 was paid to LFC and $263,000 was
added to the principal balance during such period. Payments of
principal and interest on the loans are payable on demand, and
if payments are not made upon demand, the applicable interest
rate is increased by 3% per annum. A payment equal to 110% of
the construction cost of the property being released is
required in order to release property from the construction
financing lien. As of September 30, 1996, the balance of the
construction financing loan was $3,071,000.
Pursuant to an Administrative Services Agreement dated March 1,
1996 (the "Administrative Services Agreement"), LFC has agreed
to provide administrative services to the Company for an annual
fee of $141,000, payable in monthly installments, through March
1, 1997. After March 1, 1997, the Administrative Services
Agreement provides that LFC and the Company will negotiate in
good faith to determine the compensation to be paid to LFC
under the Administrative Services Agreement for subsequent
periods. The Administrative Services Agreement will terminate
on March 1, 1999; provided, however, that LFC may terminate the
Administrative Services Agreement prior to March 1, 1999, upon
30 days written notice, if the Company and LFC are unable to
reach an agreement regarding the compensation to be paid to LFC
for periods after March 1, 1997. Administrative fees paid to
LFC for the nine month period ended September 30, 1996 totaled
$108,000.
5. Paradise Valley. In June of 1996, the Company entered into an
agreement to sell certain improved lots at the Paradise Valley
Project to The Forecast Group, L.P. In addition, the Company
granted options to The Forecast Group, L.P. to purchase certain
additional unimproved and partially improved lots from the
Company. The agreement and the options were subsequently
terminated by the buyer. On October 3, 1996, the Company
entered into new agreements with The Forecast Group, L.P.
Under the new agreements, the Company agreed to sell a total of
124 improved lots at the Paradise Valley Project to The
Forecast Group, L.P. for a total purchase price of $5,316,000.
8
<PAGE>
The sale of 62 lots covered by the agreements closed on October
31, 1996, and the Company received $2,670,000, less closing
costs. Subject to certain conditions, the sales of the
remaining lots are expected to close on May 1, 1997 and
September 1, 1997, pursuant to which the Company will receive
$1,010,000 and $1,636,000, respectively, less closing costs.
The Company has also granted options to The Forecast Group,
L.P. to purchase 156 additional lots for a total purchase price
of $5,781,950. The option with respect to 81 of these lots
will become exercisable following the sale expected to close on
May 1, 1997, and the option with respect to the remaining lots
will become exercisable following the sale expected to close on
September 1, 1997, each as described above. The options expire
on May 1, 1998. The Company is currently evaluating the real
estate market to determine the timing of development of the
remaining sites in the project.
6. Provision for Losses on Real Estate Investments. During the
nine month period ended September 30, 1996, the Company
recorded a loss of $1,017,000 due to its decision not to
complete the home development on the four detached single-
family residential sites at the Paradise Valley Project as
originally planned. The Company ceased building additional
homes at these sites and it is in the process of selling off
all remaining homes in inventory. The Company accepted a cash
offer for 124 unbuilt lots and granted options for the purchase
of 156 unbuilt lots as mentioned in Note 5 above.
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The purpose of this section is to discuss and analyze the
Company's consolidated financial condition, liquidity and capital
resources and results of operations. This analysis should be read
in conjunction with the Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in the
Company's 1995 10-K.
General
The Company is a holding company primarily engaged in the
investment in and development of residential real estate projects
in Northern California, through its wholly-owned subsidiaries
HomeFed Communities, Inc. and HomeFed Resources Corporation. The
Company's subsidiaries enter into contracts with local builders and
developers to provide construction, marketing and management
services.
Liquidity and Capital Resources
For the nine month period ended September 30, 1996, net cash
was provided by operating activities, principally from sales of
real estate. For the nine month period ended September 30, 1995,
net cash was used by operating activities, principally for real
estate development projects and to pay reorganization expenses.
The Company is a holding company whose principal source of funds is
dividends or borrowings from its subsidiaries. As a result, the
Company is dependent upon the cash flow, if any, from the real
estate development projects of its subsidiaries in order to pay its
expenses. The Company expects such cash flows will be sufficient
to cover overhead expenses and, pending receipt of funds from The
Forecast Group, L.P. ("The Forecast Group"), the Company expects cash
flows will also be sufficient to permit debt service payments on the
Convertible Note beginning in 1997. As more fully described in the 1995
10-K, no principal payments are due on the Convertible Note until July 1998
and accrued interest is only required to be paid under certain
conditions. Any unpaid interest is added to the principal balance
of the note on a quarterly basis.
LFC has agreed to provide up to an aggregate of $15,000,000 of
construction financing to certain of the Company's subsidiaries and
their affiliates while the Convertible Note is outstanding. The
construction financing is collateralized by certain assets of the
Company's subsidiaries or their affiliates, including real estate
under development. To facilitate the sale of property to home
buyers, LFC has agreed to release property from the construction
financing lien when it receives 110% of the assigned cost of
construction as a payment towards the outstanding loan. The
construction financing bears interest based upon the prime rate,
and any unpaid interest is added to the principal balance at the
end of each month. As of September 30, 1996, the outstanding
balance on this loan was approximately $3,071,000. The Company
believes that the construction financing provided by LFC will be
10
<PAGE>
adequate to complete its current development plans. Any additional
financing required from a lender other than LFC cannot be
collateralized by any of the Company's assets without LFC's
consent. Accordingly, the Company may be unable to obtain
additional financing from sources other than LFC.
In June of 1996, the Company entered into an agreement to sell
certain improved lots at the Paradise Valley Project to The
Forecast Group. In addition, the Company granted options to The Forecast
Group to purchase certain additional unimproved and partially improved
lots from the Company. The agreement and the options were subsequently
terminated by the buyer. On October 3, 1996, the Company entered into new
agreements with The Forecast Group, pursuant to which the Company agreed to
sell a total of 124 improved lots at the Paradise Valley Project to
The Forecast Group for a total purchase price of $5,316,000. The
sale of 62 lots covered by the agreements closed on October 31, 1996 and
the Company received $2,670,000, less closing costs. Subject to certain
conditions, the sales of the remaining lots are expected to close on May
1, 1997 and September 1, 1997, pursuant to which the Company expects to
receive $1,010,000 and $1,636,000, respectively, less closing costs.
The Company intends to use a portion of the proceeds from the foregoing sales
to repay the outstanding balance of the construction financing provided by
LFC. The Company has also granted options to The Forecast Group to purchase
156 additional lots from the Company for a total purchase price of $5,781,950.
The option with respect to 81 of these lots will become exercisable following
the sale expected to close on May 1, 1997, and the option with respect to
the remaining lots will become exercisable following the sale expected to
close on September 1, 1997, each as described above. The options expire on
May 1, 1998. It is uncertain whether the options will be exercised; however,
if such options are exercised, the Company expects to use the proceeds from
the sale of the lots covered by such options for future real estate
development, debt service payments on the Convertible Note and for working
capital needs.
Results of Operations
Sales of residential properties decreased in the nine month
period ended September 30, 1996, compared to the same period in
1995, due to reduced sales of new and trade home inventory. In the
three month period ended September 30, 1996, compared to the same
period in 1995, sales of residential properties increased because of a change
in the mix of homes sold. The Company sold the same number of homes in each
of the three month periods; however, the Company sold only new homes in the
1996 period, whereas, in the 1995 period the Company sold both trade and
new homes. New homes generally have higher sales prices than trade homes.
The decrease of cost of sales in the nine month period ended
September 30, 1996, compared to the same period in 1995, primarily
reflects the reduced level of sales. The increase of cost of sales
in the three month period ended September 30, 1996 reflects the mix
of homes sold and the reallocation of construction costs resulting from
the Company's decision to sell all remaining unbuilt lots in
11
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the four detached single-family residential sites at the Paradise
Valley Project.
During the nine month period ended September 30, 1996, the
Company recorded a provision for losses on real estate investments
of $1,017,000 related to its decision not to complete the four
detached single-family residential sites at the Paradise Valley
Project as originally planned.
Interest expense on the Convertible Note to LFC was approximately
$680,000 and $1,968,000 for the three month and nine month periods
ended September 30, 1996, compared to $585,000 for the same periods
in 1995. Interest expense on the construction financing loan
relating to substantially completed homes in inventory was $113,000
and $355,000 for the three month and nine month periods ended
September 30, 1996. All interest was capitalized on the
construction financing loan for the same periods in 1995.
In 1995, reorganization expenses primarily resulted from the settlement
of litigation with the RTC for a net amount of approximately $1,698,000.
Income tax expense for all periods presented principally relates
to state franchise taxes. The Company has not recorded federal
income tax benefits for its operating losses due to the uncertainty
of sufficient future taxable income which is required in order to
record such tax benefits.
In 1995, the extraordinary gain on debt discharged in bankruptcy resulted
from the Company's satisfaction of liabilities to creditors subject to
compromise of approximately $127,458,000, principally by the payment of
$18,302,000 and the issuance of 1,500,000 shares of Common Stock.
12
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed with this report.
10.1 Paradise Valley Unit 1 First Closing Purchase
Agreement and Escrow Instructions, dated October 3,
1996, between Paradise Valley Communities No. 1 and
The Forecast Group, L.P.
10.2 Paradise Valley Unit 2 First Closing Purchase
Agreement and Escrow Instructions, dated October 3,
1996, between Paradise Valley Communities No. 1 and
The Forecast Group, L.P.
10.3 Paradise Valley Unit 1 Second Closing Purchase
Agreement and Escrow Instructions, dated October 3,
1996, between Paradise Valley Communities No. 1 and
The Forecast Group, L.P.
10.4 Paradise Valley Unit 2 Second Closing Purchase
Agreement and Escrow Instructions, dated October 3,
1996, between Paradise Valley Communities No. 1 and
The Forecast Group, L.P.
10.5 Paradise Valley Unit 3 Option to Purchase Real
Property and Escrow Instructions, dated October 3,
1996, between Paradise Valley Communities No. 1 and
The Forecast Group, L.P.
10.6 Paradise Valley Unit 4 Option to Purchase Real
Property and Escrow Instructions, dated October 3,
1996, between Paradise Valley Communities No. 1 and
The Forecast Group, L.P.
27 Financial Data Schedule
(b) No report on Form 8-K was filed during the quarter for
which this report is filed.
13
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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.
HOMEFED CORPORATION
/s/ CORINNE A. MAKI
CORINNE A. MAKI, Treasurer
(Authorized Signatory and
Principal Financial and
Accounting Officer)
Date: November 13, 1996
14
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INDEX TO EXHIBITS
Exhibits
10.1 Paradise Valley Unit 1 First Closing Purchase Agreement
and Escrow Instructions, dated October 3, 1996, between
Paradise Valley Communities No. 1 and The Forecast Group,
L.P.
10.2 Paradise Valley Unit 2 First Closing Purchase Agreement
and Escrow Instructions, dated October 3, 1996, between
Paradise Valley Communities No. 1 and The Forecast Group,
L.P.
10.3 Paradise Valley Unit 1 Second Closing Purchase Agreement
and Escrow Instructions, dated October 3, 1996, between
Paradise Valley Communities No. 1 and The Forecast Group,
L.P.
10.4 Paradise Valley Unit 2 Second Closing Purchase Agreement
and Escrow Instructions, dated October 3, 1996, between
Paradise Valley Communities No. 1 and The Forecast Group,
L.P.
10.5 Paradise Valley Unit 3 Option to Purchase Real Property
and Escrow Instructions, dated October 3, 1996, between
Paradise Valley Communities No. 1 and The Forecast Group,
L.P.
10.6 Paradise Valley Unit 4 Option to Purchase Real Property
and Escrow Instructions, dated October 3, 1996, between
Paradise Valley Communities No. 1 and The Forecast Group,
L.P.
27 Financial Data Schedule.
15
<PAGE>
PARADISE VALLEY UNIT 1 FIRST CLOSING
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
BETWEEN
PARADISE VALLEY COMMUNITIES NO. 1
("Seller")
AND
THE FORECAST GROUP , L.P.
("Buyer")
<PAGE>
PARADISE VALLEY UNIT 1 FIRST CLOSING
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
THIS PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS ("Agreement") is made
and effective as of October 3, 1996 by and between Paradise Valley Communities
No. 1, a California general partnership ("Seller"), and The Forecast Group ,
L.P., a California limited partnership ("Buyer"), with reference to the facts
set forth below.
A. Seller is the owner of that certain land situated in the City of
Fairfield, County of Solano, State of California, more particularly described
in Exhibit A, attached hereto and incorporated herein ("Land"). The Land is a
portion of a residential subdivision consisting of four units, or
neighborhoods, each of which is referred to herein as a "Unit," and the Land
is a portion of Unit 1. Unit 1 consists of 56 single-family residential lots,
20 of which are subject to this Agreement. The term "Lots" refers to the
single-family residential lots located in Unit 1 that are specifically
described in Exhibit A. Unit 1 also consists of certain infrastructure
improvements and amenities, as described in the "Subdivision Map," as defined
in Section 1.21 of this Agreement, and related improvement plans and
specifications described in Exhibit B, attached hereto ("Improvements").
Buyer and Seller have also entered into that certain Paradise Valley Unit 1
Second Closing Purchase Agreement and Escrow Instructions dated October 3,
1996 ("Unit 1 Second Closing Purchase Agreement").
B. Buyer desires to purchase the Property (as defined herein) and
Seller desires to sell the Property to Buyer in accordance with the terms and
provisions set forth below.
NOW, THEREFORE, in consideration of the recitals set forth above, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as set forth below.
ARTICLE 1
DEFINED TERMS
Terms used in this Agreement with their initial letters capitalized and
not otherwise defined shall have the meanings set forth below.
1.1 Agreement. The term "Agreement" shall mean this Purchase
Agreement and Escrow Instructions between Seller and Buyer.
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1.2 Approved Exceptions. The term "Approved Exceptions" shall mean
those exceptions to title that are approved in accordance with this Agreement.
1.3 Business Day. The term "Business Day" shall mean any day other
than a Saturday, Sunday or legal holiday in the State of California. All
periods of time described in this Agreement that are not expressly measured by
Business Days shall be measured by calendar days.
1.4 Buyer. The term "Buyer" shall mean The Forecast Group , L.P., a
California limited partnership.
1.5 CLTA Owner's Title Policy. The term "CLTA Owner's Title Policy"
shall mean the California Land Title Association ("CLTA") owner's policy of
title insurance to be issued by the Title Company upon the Close of Escrow
pursuant to the terms of this Agreement.
1.6 Cash. The term "cash" shall mean: (i) currency of the United
States of America, (ii) cashier's check(s) currently dated and payable to
Escrow Agent or Seller, as required under this Agreement, drawn and paid
through a California banking or savings and loan institution, tendered to
Escrow Agent or Seller, as required under this Agreement one (1) Business Day
before funds are required to be delivered under this Agreement, or (iii) an
amount credited by wire transfer into Escrow Agent's or Seller's bank account,
as required under this Agreement.
1.7 Close of Escrow. The term "Close of Escrow" shall mean the
consummation of the purchase of the Property by Buyer from Seller and the
recordation of Seller's Grant Deed(s) in accordance with the terms and
provisions of this Agreement.
1.8 Closing Date. The term "Closing Date" shall mean the date on
which the closing will be held for the sale of the Property as set forth in
Section 8.1 of this Agreement.
1.9 County. The term "County" shall mean the County of Solano, in
the State of California.
1.10 Effective Date. The term "Effective Date" shall mean October 3,
1996, the date on which this Agreement is effective and deemed to have been
made.
1.11 Escrow. The term "Escrow" shall mean the escrow opened by
Escrow Agent pursuant to the terms of this Agreement.
1.12 Escrow Agent. The term "Escrow Agent" shall mean Chicago Title
Company, 604 Empire Street, Fairfield, California 94533 ("Chicago Title").
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1.13 Governmental Action. The term "Governmental Action" shall mean
(a) any order of a court of competent jurisdiction, and/or (b) any enactment,
by the initiative or referendum process or otherwise, of any Governmental
Agencies (as defined below) affecting the Property, either directly or
indirectly, including, but not limited to, limitation on the number of permits
or licenses that can be issued, declaration of policy, resolution, ordinance,
statute, regulation, or any other enactment of any Governmental Agency (as
defined below) and irrespective of whether the orders or enactments listed
immediately above contain the words "moratorium," "moratoria" or similar
words.
1.14 Governmental Agencies. The term "Governmental Agencies" shall
mean any local, county, state and/or federal governmental or quasi-governmental
agencies, authorities or regulatory bodies and any public or
private utility companies having jurisdiction over the Property.
1.15 Opening of Escrow. The term "Opening of Escrow" shall mean the
date Escrow Agent executes the Consent of Escrow Agent attached hereto, which
consent shall be executed by Escrow Agent upon delivery of this Agreement to
Escrow Agent.
1.16 Preliminary Report. The term "Preliminary Report" shall mean
the Preliminary Title Report dated June 10, 1996, issued by the Title Company.
1.17 Property Documents. The term "Property Documents" shall mean
the documents delivered by Seller to Buyer in connection with its feasibility
studies pursuant to Section 4.1 of this Agreement. The Property Documents are
listed in Exhibit B, attached hereto.
1.18 Property. The term "Property" shall mean the Land, the Lots,
the Subdivision Map (to the extent it relates to the Lots) and any public or
private entitlements, utility deposits, the non-exclusive use of the name "New
Providence," maps, plans, soils reports, environmental reports, marketing
studies, development agreements, permits and similar items that relate to the
development, sale and use of the Lots as single-family residential building
lots.
1.19 Purchase Price. The term "Purchase Price" shall mean the total
consideration to be paid by Buyer to Seller for the purchase of the Property
as set forth in Article 2 of this Agreement.
1.20 Seller. The term "Seller" shall mean Paradise Valley
Communities No. 1, a California general partnership.
1.21 Subdivision Map. The term "Subdivision Map" shall mean the
Subdivision Map of Paradise Valley North Unit No. 1, recorded on October 2,
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1989, in Book 57 of Maps, at Page 27, et. seq., in the Official Records of
Solano County.
1.22 Title Company. The term "Title Company" shall mean Chicago
Title.
ARTICLE 2
AGREEMENT OF PURCHASE AND SALE
2.1 Agreement for Purchase and Sale. In consideration of the
payment of the Purchase Price, Seller agrees to sell the Property to Buyer and
Buyer agrees to purchase the Property from Seller on the terms and conditions
set forth in this Agreement.
2.2 Purchase Price. The purchase price ("Purchase Price") for the
Property is One Million Twenty Thousand and 00/100 Dollars ($1,020,000).
2.3 Payment of Purchase Price. The Purchase Price shall be paid in
accordance with the provisions set forth below.
2.3.1 Cash deposited into
Escrow on the Opening of Escrow
under Section 3.1
("Buyer's Deposit") $ 50,000
2.3.2 Additional cash to be deposited
into Escrow upon Close of Escrow $ 970,000
Total Purchase Price: $1,020,000
==========
2.4 Nonrefundability of Deposits. The cash deposited into escrow
pursuant to Section 2.3.1, above, shall, upon the signing of this Agreement,
become nonrefundable and be released by the Escrow Agent to the Seller. Any
funds released from Escrow to Seller under this Section 2.4 shall apply to the
Purchase Price upon the Close of Escrow. Regardless of whether Escrow closes,
however, any funds released from Escrow to Seller shall constitute
nonrefundable consideration for Seller's taking the Property off the market,
unless Escrow fails to close due a default under or breach of this Agreement
by Seller, in which event, such deposits shall be returned to Buyer or, if the
Buyer elects the remedy of specific performance of this Agreement, applied to
the Purchase Price.
2.5 Assumption of Liabilities. Upon the terms and subject to the
conditions contained in this Agreement, Buyer shall assume, effective as of
the time of day on the Closing Date that Escrow Agent telephonically or in
writing notifies Seller and Buyer that Escrow has closed, Seller's obligations
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under the Property Documents with respect to the Property purchased under this
Agreement, except for such obligations as Seller specifically retains under
Article 6 of this Agreement.
ARTICLE 3
OPEN AND CLOSE OF ESCROW AND DELIVERY OF DOCUMENTS
3.1 Opening of Escrow. Buyer and Seller entered into a letter of
intent dated September 20, 1996 ("Letter of Intent") and delivered the Letter
of Intent together with $200,000 ("$200,000 Deposit") and Joint Escrow
Instructions dated September 20, 1996 ("Joint Escrow Instructions") to Escrow
Agent. The Joint Escrow Instructions require the Escrow Agent to allocate
$50,000 of the $200,000 Deposit to the Escrow established under this Agreement
upon the signing of this Agreement by both Buyer and Seller. Accordingly,
upon execution of this Agreement, Buyer and Seller shall open Escrow by
depositing with Escrow Agent a fully executed original of this Agreement for
use as escrow instructions. Escrow Agent shall thereupon transfer $50,000 of
the $200,000 Deposit to the Escrow established under this Agreement, and such
amount shall be treated as Buyer's Deposit. Escrow Agent shall execute the
Consent of Escrow Agent ("Consent") which appears at the end of this Agreement
and deliver a fully executed Consent to Buyer and Seller. Escrow Agent's
general conditions ("General Conditions") are attached hereto as Exhibit C and
incorporated herein by reference to the extent they are not inconsistent with
the provisions of this Agreement. If there is any inconsistency between the
provisions of the General Conditions and this Agreement, the provisions of
this Agreement shall control. If Escrow Agent requires additional
instructions, the parties agree to make any deletions, substitutions and
additions as the parties shall mutually approve as long as such deletions,
substitutions or additions do not materially alter the terms of this
Agreement.
3.2 Buyer's Deliveries. Buyer shall, at least one (1) Business Day
prior to the Close of Escrow (unless required to be delivered at an earlier
date under the terms of this Agreement), deliver to Escrow Agent each of the
following:
3.2.1 Purchase Price. The balance of the cash portion of the
Purchase Price;
3.2.2 Documents. Fully executed and, where appropriate,
notarized counterparts of the documents required to be executed by Buyer under
this Agreement;
3.2.3 Prorations, Fees and Costs. The amount, if any,
required of Buyer under Article 9 of this Agreement entitled "Prorations, Fees
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and Costs" and any other amounts payable upon the Close of Escrow under any
other provisions of this Agreement; and
3.2.4 General. Such other documents, instruments and
certificates as Seller may reasonably require to carry out the intent of this
Agreement; provided, however, that Buyer shall not be obligated to incur any
financial liability or obligation
in connection with the furnishing of any such documents, instruments or
certificates.
3.3 Seller's Deliveries. Seller shall, at least one (1) Business
Day prior to the Close of Escrow (unless required to be delivered at an
earlier date under the terms of this Agreement), deliver to Escrow Agent each
of the following:
3.3.1 Certificate of Non-Foreign Status. Prior to the Close
of Escrow, Seller shall execute and deposit into Escrow a Certificate of Non-
Foreign Status certifying that Seller is a non-foreign person in the form
attached hereto as Exhibit D and incorporated herein ("Certificate of Non-
Foreign Status");
3.3.2 Grant Deeds, Bill of Sale and Assignment of Leases.
Prior to the Close of Escrow, Seller shall execute, acknowledge and deposit
into Escrow Grant Deed(s) in the form attached hereto as Exhibit E; and
3.3.3 General. Such other documents, instruments and
certificates as Buyer may reasonably require to carry out the intent of this
Agreement; provided, however, that Seller shall not be obligated to incur any
financial liability or obligation in connection with the furnishing of any
such documents, instruments or certificates.
ARTICLE 4
FEASIBILITY REVIEW
4.1 Delivery of Property Documents. Seller has delivered to Buyer
the Property Documents. Buyer has analyzed the feasibility of its purchase
and use of the Property. Buyer has reviewed and analyzed the Property
Documents to determine their individual and collective impact on the Property
and its purchase and use by Buyer.
4.1.1 Review of Preliminary Report. Buyer has been provided
a Preliminary Report issued by the Title Company ("Preliminary Report"),
together with legible copies of all recorded documents described in the
Preliminary Report. Buyer has reviewed and approved the Preliminary Report,
except as set forth in Exhibit F attached hereto. If any title exceptions are
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recorded against the Property before the Close of Escrow in addition to those
specified in the Preliminary Report, Escrow Agent shall cause the Title
Company to issue a supplemental preliminary report ("Supplemental Report").
Buyer shall have five (5) Business Days after receipt of any Supplemental
Report, to review the title exceptions shown therein and to deliver to Seller
notice of approval or disapproval of any title exceptions disclosed in any
such report. Buyer's delivery of a written notice of approval shall be deemed
approval of the exceptions to title shown on any Supplemental Report issued as
of the date of such notice of approval. The title exceptions approved by
Buyer, as set forth in the Commitment for Title Insurance, Schedule B -
Section 2, attached hereto as Exhibit G, and such other exceptions as may be
approved by Buyer with respect to any Supplemental Report, are referred to
herein as "Approved Exceptions." Seller shall have until the Close of Escrow
to remove the title exceptions set forth in Schedule F. If any other title
exceptions are specifically disapproved, and Seller elects, within ten (10)
Business Days after the date of Buyer's disapproval, not to cure the
disapproved item, then Buyer shall have five (5) Business Days after the
receipt of Seller's notice of election not to cure the disapproved item to
waive its prior disapproval. If Buyer does not deliver notice of its election
to waive its prior disapproval, then the disapproved and uncured item will be
deemed disapproved. If a title exception is disapproved and uncured, Buyer
may terminate the Escrow by delivering a written notice of termination to
Seller and the Escrow Agent. Upon such termination, any deposits theretofore
paid to Seller or Escrow Agent (regardless of whether such deposits were
released to Seller) shall be immediately returned to Buyer, and this Agreement
shall be terminated. Seller shall thereupon be released from its obligation
to sell the Property to Buyer, and Buyer shall be released from any obligation
to purchase the Property.
4.1.2 Governmental Actions. Buyer has reviewed and
considered the impact on the Property of any and all applicable governmental
ordinances, rules and regulations, and evaluate the effect of any pending or
threatened Governmental Actions pertaining to the Property.
4.1.3 Studies and Investigations. Buyer has conducted such
independent investigations, studies and tests as it deemed necessary or
appropriate concerning Buyer's proposed use, sale, development and/or the
suitability of the Property for Buyer's intended purposes. Such
investigations included, without limitation, soils and engineering tests,
hazardous studies, investigations concerning the availability of the approvals
required from any Governmental Agencies for Buyer's proposed use of the
Property, investigations regarding the existence on the Property of any
threatened or endangered species, and of any archaeological artifacts on the
Property, the imposition or increase of any fees, charges or exactions by any
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Governmental Agencies and such economic feasibility and marketing studies as
Buyer deemed appropriate.
4.1.4 Physical Inspection. Buyer has inspected and approved
the physical condition of the Property and conducted any soil, hazardous waste
or engineering studies with respect to the Property Buyer deemed necessary or
appropriate.
4.2 Additional Information from Seller. Seller has provided Buyer
with such Additional Information (as hereinafter defined) as Buyer determined
to be necessary to complete its investigation of the Property, and Seller has,
and caused its agents, employees and consultants to, respond to questions
posed by Buyer with respect to the Property. As used herein, the term
"Additional Information" shall mean and refer to information in the possession
and/or control of Seller concerning (i) the Property and (ii) material changes
in information and documents previously provided to Buyer by Seller.
ARTICLE 5
CONDITIONS PRECEDENT TO CLOSE OF ESCROW
5.1 Subject to Satisfaction or Waiver. The Closing of the purchase
and sale described in this Agreement and the obligations of the parties under
this Agreement shall be subject to satisfaction or waiver (by the party in
whose favor the condition precedent has been established) of all the
conditions precedent set forth below.
5.1.1 Title Policy. Escrow Agent shall be unconditionally
committed to procure from the Title Company the CLTA Owner's Title Policy for
the Property with a liability limit in the amount of the Purchase Price
insuring fee title vested in Buyer. Buyer shall take title to the Property
subject only to: (a) Non-delinquent general, special and supplemental taxes,
bonds and assessments, including Mello-Roos bonds, if any; (b) any matters set
forth in the printed form portion of the CLTA Owner's Title Policy; (c) the
Approved Exceptions; and (d) any items caused or permitted to be placed of
record by Buyer as of the Close of Escrow.
5.1.2 Seller's Performance. Seller shall have duly performed
each and every undertaking and agreement to be performed by it hereunder prior
to the Close of Escrow.
5.1.3 Buyer's Performance. Buyer shall have duly performed
each and every undertaking and agreement to be performed by it hereunder prior
to the Close of Escrow.
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5.2 Failure of Conditions Precedent. The conditions precedent in
Sections 5.1.1 and 5.1.2 are for Buyer's benefit and can be waived only by
Buyer. The condition precedent in Section 5.1.3 is for Seller's benefit and
can be waived only by Seller. In the event that any of the conditions
precedent set forth above is neither satisfied nor waived by the Closing Date,
the party for whose benefit the condition has been created may terminate the
Escrow and this Agreement by giving a written notice of termination to the
other party and Escrow Agent, specifying the reason for termination and the
condition precedent that has not been satisfied. Upon receipt of such notice
of termination, Escrow Agent shall return to Buyer any funds that have not at
the time of termination been released to Seller pursuant to this Agreement,
less applicable Escrow cancellation charges, and any documents to the parties
who deposited them. If Buyer terminates the Escrow and this Agreement because
a condition precedent set forth in Section 5.1.1 or 5.1.2 is not satisfied,
Seller immediately shall return to Buyer any funds theretofore disbursed to
Seller from the Escrow. Seller shall thereupon be released from its
obligation to sell the Property to Buyer, and Buyer shall be released from its
obligation to purchase the Property.
5.3 Copy of Documents to Other Party. Each party will, concurrently
with its delivery to Escrow Agent of any documents described in this Article
5, deliver a copy of the same to the other party.
ARTICLE 6
COVENANTS AND AGREEMENTS
6.1 No Concern. Escrow Agent shall have no concern with, liability
or responsibility for, this Article.
6.2 Additional Escrow Instructions. Buyer and Seller covenant and
agree that they will execute any additional escrow instructions not
inconsistent with the terms of this Agreement as shall be reasonably required
by Escrow Agent.
6.3 Cooperation. Buyer and Seller acknowledge that it may be
necessary to execute documents other than those specifically referred to
herein in order to complete the acquisition of the Property as provided
herein. Both Buyer and Seller hereby agree to cooperate with each other by
executing such other documents or taking such other action as may be
reasonably necessary to complete this transaction in accordance with the
intent of the parties as evidenced in this Agreement.
6.4 Entry Upon Property. After execution of this Agreement, Buyer
and its designated agents and independent contractors shall have the right to
enter upon the Property to conduct surveys, soils tests, physical inspections,
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investigations and studies so long as Buyer has provided prior reasonable
notice of such entry to Seller and such activities will not interfere with
Seller's ownership and maintenance of the Property. Seller and Seller's
agents shall reasonably cooperate with Buyer, provided that such
investigations and studies shall be at the sole cost and expense of Buyer.
Buyer agrees to repair any damage caused by Buyer or its agents or independent
contractors to the Property and further agrees to indemnify, protect, defend
(with legal counsel acceptable to both Buyer and Seller) and hold Seller
harmless from and against any costs, expenses, losses, attorneys' fees and
liabilities (including, without limitation, claims of mechanics' liens)
incurred or sustained by Seller either prior or subsequent to the Close of
Escrow as a result of the conduct of Buyer, its agents, or independent
contractors under this Section 6.4. The covenants contained in this Section
6.4 shall survive the Close of Escrow or earlier termination of this
Agreement.
6.5 Indemnities of Buyer. Buyer agrees that it will protect,
defend, indemnify and hold Seller harmless from and against all actions,
causes of action, suits, claims, costs, losses, penalties, damages,
liabilities and expenses of any kind whatsoever, including reasonable
attorneys' fees ("Claims"), based upon or arising out of: (i) any Claim for
personal injury or property damage occurring on or about the Property after
the Closing Date or in connection with Buyer's or its agents' or independent
contractors' access to the Property prior to the Closing Date; (ii) any Claims
related to construction defects, soil subsidence or other similar claims
related to the Land, the Lots or the Improvements or any other improvements of
any kind made thereto or constructed thereon; and (iii) any other Claim
arising out of Buyer's ownership or operation of the Property after the
Closing Date.
6.6 Indemnities of Seller. Seller agrees that it will protect,
indemnify, defend and hold Buyer harmless from and against all Claims based
upon or arising out of: (i) any claim for personal injury or property damage
occurring on or about the Property prior to the Closing Date (except those
resulting from Buyer's access to the Property prior to the Closing Date); and
(ii) any liability or obligation which Buyer is not obligated to assume under
this Agreement. Notwithstanding the foregoing sentence, Seller shall not be
obligated to protect, defend indemnify or hold Buyer harmless from any Claims
related to construction defects, soil subsidence or other similar claims
related to the Land, the Lots or the Improvements or any other improvements of
any kind made thereto or constructed thereon.
6.7 Completion of Improvements; Maintenance Bonds. Seller will
complete the Improvements for Unit 1, as shown on the final Subdivision Map
therefor, and Dover/Foothill Boulevard, and shall obtain the City of
Fairfield's acceptance for maintenance of such Improvements. Buyer shall be
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responsible for maintenance of the Improvements from and after their
acceptance for maintenance by the City of Fairfield. Buyer will provide
maintenance bonds for all of the Unit 1 Improvements and Dover/Foothill
Boulevard upon the earlier of (i) Close of Escrow or (ii) acceptance for
maintenance by the City of Fairfield of the required work. If the
Improvements are not accepted for maintenance by the City of Fairfield by the
Close of Escrow, Seller will take such action and assume such responsibilities
as may be necessary to obtain the City of Fairfield's acceptance for
maintenance of such Improvements as soon as reasonably practicable following
the Close of Escrow. If Buyer does not close escrow under, and acquire the
property subject to, the Unit 1 Second Closing Purchase Agreement, Seller will
take steps to replace the maintenance bonds provided by Buyer to the extent
they pertain to the property subject to the Unit 1 Second Closing Purchase
Agreement.
6.8 Recreational Facility. Seller shall construct a recreational
facility, as described in the plans therefor included in the Project
Documents, upon the issuance of a building permit for the 351st dwelling unit
in the Paradise Valley development (exclusive of any building permits for the
NCROC project). Buyer shall provide Seller quarterly reports indicating the
number of closings in any given quarter to facilitate Seller's compliance with
this requirement.
6.9 Cost Sharing Agreement. Buyer acknowledges that Seller has
assumed certain obligations under that certain Paradise Valley Infrastructure
Cost Sharing Agreement dated October 20, 1989 ("Cost Sharing Agreement") with
Arcadia Homes and Winncrest Development. This Cost Sharing Agreement provides
for the completion of all infrastructure, common amenities, landscaping and
other similar items on parcels at the Paradise Valley project. Seller shall
remain responsible for completion of its responsibilities under the Cost
Sharing Agreement with respect to the Property. Buyer covenants and agrees
(i) to cooperate in, and not to interfere with, the full and complete
implementation of the Cost Sharing Agreement and (ii) to supply Seller with
any information on actual or estimated costs of improvements as may be
requested and required by Seller for reporting purposes under the Cost Sharing
Agreement.
6.10 Water and Sewer Line Reimbursements. Buyer acknowledges that
Seller is currently working with the City of Fairfield on reimbursements for
increasing the size of various water and sewer lines. Any reimbursements for
infrastructure, including the water and sewer lines, provided by Seller shall
be the sole property of Seller, and Buyer, promptly after receipt, shall
deliver such reimbursement payments to Seller if they are received by Buyer
after the Close of Escrow.
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6.11 Pacific Gas & Electric Deposits. Seller shall retain all
Pacific Gas & Electric deposits for Unit 1.
6.12 Transfer of Entitlements. Seller shall cooperate with Buyer and
execute, deliver, acknowledge and record such documents, instruments and
certificates as Buyer may reasonably require to effect the transfer of any
entitlements applicable to the Land, the Lots and the Improvements from the
City of Fairfield or any other Governmental Agency to Buyer.
6.13 Confidentiality. The parties hereto agree that they shall
maintain in confidence and not disclose any information, including, without
limitation, the Purchase Price and the price per Lot, related to this
Agreement, the Land, the Lots, the Improvements or any other Property without
the prior written consent of the other party to this Agreement. The preceding
sentence shall not prevent either party from disclosing the terms and
conditions of this Agreement and any and all information regarding the Land,
the Lots, the Improvements and the Property to the parties' respective counsel
and Governmental Agencies, such as the Securities Exchange Commission, having
jurisdiction over either party.
6.14 Status of Buyer as Declarant; Annexation of Lots. Upon the
Close of Escrow, Seller shall record in the County and deliver to Buyer a
certificate, as required under Section 2.11 of that certain Master Declaration
of Covenants, Conditions and Restrictions of Paradise Valley, which was
recorded in the Office of the County Recorder of Solano County, State of
California, on August 25, 1995, Serial No. 95-51486 ("CC&Rs"), designating
Buyer as a "Declarant," as defined in the CC&Rs, with respect to the Lots.
Promptly after the Close of Escrow, Seller shall use its reasonable best
efforts to place a representative of Buyer on the Board of Directors of the
"Association," as defined in the CC&Rs. Buyer will undertake, with Seller's
reasonable cooperation, the responsibility of preparing documentation for
annexation of the Lots under the CC&Rs and taking such other steps, including,
without limitation, obtaining from the California Department of Real Estate a
Subdivision Public Report pertaining to the sale of the Lots, as Buyer may
determine to be necessary or appropriate to effectively develop, market,
improve and sell the Lots.
6.15 Possession. Possession of the Property shall be delivered by
Seller to Buyer on the Closing Date upon recordation of the Grant Deed(s).
6.16 Survival of Covenants and Agreements. The covenants and
agreements set forth in Sections 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12,
6.13 and 6.14 of this Agreement shall survive the Close of Escrow.
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ARTICLE 7
ACKNOWLEDGMENTS AND REPRESENTATIONS
7.1 Seller's Representations.
7.1.1 No Rights to Acquire Property. No person, firm or
entity other than Buyer has any rights in, or right to acquire, the Property
or any part thereof, and as long as this Agreement remains in force, Seller
will not, without Buyer's prior written consent, lease, transfer, mortgage,
pledge, or convey, its interest in the Property, or any portion thereof, nor
any right therein or grant any right or option to anyone to effect any such
transaction.
7.1.2 Organization. Seller is a general partnership duly
organized and validly existing under the laws of the State of California with
full power to enter into this Agreement.
7.1.3 Authority. The execution and delivery of this
Agreement have been duly authorized and approved by all requisite partnership
action, and the consummation of the transactions contemplated hereby will be
duly authorized and approved by all requisite partnership action of Seller.
7.1.4 FIRPTA Affidavit. Seller is not a foreign corporation,
foreign partnership, foreign trust or foreign estate (as those terms are
defined in the Internal Revenue Code and the Treasury Regulations promulgated
thereunder) but rather a partnership formed under the laws of one of the
United States. Seller understands and agrees that the certification made in
this Section 7.1.4 may be disclosed to the Internal Revenue Service by Buyer
and that any false statement contained herein could be punished by fine,
imprisonment or both.
7.1.5 Latent Defects. Seller has no actual knowledge of any
latent defects on, in, under or above the Land, the Lots or the Improvements
(to the extent completed as of the date of this Agreement). For purposes of
this representation, the actual knowledge of Seller shall mean the actual
knowledge of only Patricia A. Wood and no other person.
7.2 Buyer's Representations.
7.2.1 Organization. Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the State
of California with full power to enter into this Agreement.
7.2.2 Authority. The execution and delivery of this
Agreement have been duly authorized and approved by all requisite partnership
action of Buyer and the consummation of the transactions contemplated hereby
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will be duly authorized and approved by all requisite partnership action of
Buyer.
7.3 Purchase "As-Is"; Limitation of Liability.
7.3.1 Buyer acknowledges that (i) except for Section 7.1.5,
Seller is not making and has not made any warranties or representations,
express or implied, as to the legal, physical and/or financial condition now
or in the future of the Land, the Lots, the Improvements or any Property, and
(ii) Buyer is buying the Property in an "as-is" condition based solely on
Buyer's own studies and investigations.
7.3.2 Buyer acknowledges that Seller shall have no liability
for any latent or patent defects discovered upon the Property following the
Close of Escrow.
7.3.3 Buyer confirms, acknowledges and agrees that no
officer, director, employee or representative of Seller or Seller's partners
(whether or not such individual has signed this Agreement on behalf of Seller)
makes any express or implied representation or warranty of any kind or nature
whatsoever concerning the Land, the Lots, the Improvements or any of the
Property. Buyer further acknowledges, confirms and agrees that any liability
with respect of this Agreement and the transactions contemplated herein shall
result in the liability of Seller or Seller's general partners only and not
any individual officer, director, employee or representative of Seller or
Seller's partners. Buyer therefore confirms, acknowledges and agrees that
Buyer may seek recourse only against Seller or Seller's general partners for
any liability arising out of or in connection with this Agreement and the
transactions contemplated hereby.
7.4 Survival. The representations made by Seller in Sections 7.1.1,
7.1.2, 7.1.3, 7.1.4 and 7.1.5, and by Buyer in Sections 7.2.1 and 7.2.2, and
the acknowledgments and covenants of Buyer in Sections 7.3.1, 7.3.2 and 7.3.3
of this Agreement shall survive the Close of Escrow.
ARTICLE 8
THE CLOSE OF ESCROW
8.1 Close of Escrow. Unless the parties mutually agree upon an
earlier closing date, Escrow shall close on October 31, 1996 ("Closing Date").
8.2 Closing Procedure. Escrow Agent shall close the Escrow on or
before the Closing Date by (i) recording Seller's Grant Deed(s) and such other
documents as may be necessary to procure the Title Policy and satisfy the
terms and conditions of this Agreement and (ii) delivering funds and documents
as set forth in Article 10 entitled "Recordation and Distribution of Funds and
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Documents" WHEN AND ONLY WHEN each of the following requirements has been
satisfied:
8.2.1 Funds and Instruments. All funds and instruments
required pursuant to Articles 2 and 3 have been delivered to Escrow Agent.
8.2.2 Satisfaction of Conditions Precedent. Each of the
conditions precedent set forth in Section 5.1 has been, or upon such closing
shall be, satisfied as provided for in Section 5.1.
8.2.3 Recordation. Escrow Agent shall have recorded the
documents deposited into Escrow for recordation in the Official Records of the
County.
8.3 Earlier Closing. If all of the conditions set forth in Sections
8.2.1 and 8.2.2 are satisfied at a date earlier than the Closing Date, Escrow
Agent shall close the Escrow at such earlier date provided Escrow Agent
obtains the written consent of Buyer and Seller to do so.
8.4 Termination of Escrow. If Escrow Agent cannot close the Escrow
on or before the Closing Date, it will, nevertheless, close the Escrow when
all conditions have been satisfied or waived as provided for in this
Agreement, notwithstanding that one or more of such conditions has not been
timely performed, unless (i) a notice of termination has theretofore been
delivered to Escrow Agent in accordance with the provisions of Section 5.2,
13.1 or 13.2, or (ii) after the Closing Date and prior to the Close of Escrow,
Escrow Agent receives a written notice to terminate the Escrow and this
Agreement from a party who, at the time such notice is delivered, is not in
default hereunder. The right to terminate the Escrow and this Agreement under
the provisions of clause (ii) of this Paragraph 8.4 shall be optional, not
mandatory; no delay in the giving of such notice shall affect the rights
hereunder of the party giving the same.
8.4.1 Notice of Termination. Escrow Agent shall have no
liability or responsibility for determining whether or not a party giving a
notice of termination is or is not in default hereunder. Within two (2)
working days after receipt of such notice from one party, Escrow Agent shall
deliver one copy of such notice to the other party. Unless written objection
to termination of the Escrow is received by Escrow Agent within ten (10) days
after Escrow Agent so delivers such notice, (i) Escrow Agent shall forthwith
terminate the Escrow and return all documents, funds or other items held by it
to the party depositing same, except that Escrow Agent may retain such
documents and other items usually retained by escrow agents in accordance with
standard escrow termination procedures and practices, and (ii) each party
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shall forthwith pay to Escrow Agent one-half of Escrow Agent's reasonable
escrow termination charges. Notwithstanding the foregoing provisions of this
Section 8.4.1, Escrow Agent may (i) retain any funds on deposit with it until
such time as its Escrow termination charges are paid in full and/or (ii)
deduct from any cash held by it sufficient funds to pay for its Escrow
termination charges in full. If written objection to the termination of the
Escrow is delivered to Escrow Agent within such 10-day period, Escrow Agent is
authorized to hold all funds and instruments delivered to it in connection
with the Escrow and may, in Escrow Agent's sole discretion, take no further
action until otherwise directed either by the parties' mutual written
instructions or final order of a court of competent jurisdiction.
8.4.2 Return of Deposits. If the Escrow is terminated under
either Section 13.1 or Section 13.2 or as a result of Seller's default under
or breach of this Agreement, Seller shall return to Buyer any funds disbursed
from the Escrow to Buyer prior to the termination of the Escrow.
ARTICLE 9
PRORATIONS, FEES AND COSTS
9.1 Prorations. Escrow Agent will prorate as of the Close of Escrow
between the parties, in cash, county, city and special district (if any) real
property taxes and assessments for the Property based on the latest
information available to Escrow Agent.
9.2 Thirty Day Month. All prorations and/or adjustments called for
in this Agreement are to be made on the basis of a thirty (30) day month,
unless otherwise specifically instructed in writing.
9.3 Seller's Fees and Costs. Seller shall pay (i) one-half of
Escrow Agent's escrow fee, (ii) usual Seller's document-drafting and recording
charges, (iii) the title insurance premium for the CLTA Owner's Title Policy
and any endorsements reasonably requested by Buyer's lender, and (iv) the
County Documentary Transfer Tax in the amount determined by Escrow Agent and
the County Recorder.
9.4 Buyer's Fees and Costs. Buyer shall pay (i) one-half of Escrow
Agent's escrow fee, (ii) usual Buyer's document-drafting and recording charges
and (iii) the additional premium for an American Land Title Association (ALTA)
title insurance policy, if Buyer desires that Title Company issue such a
policy.
9.5 Escrow Cancellation Charges Due to a Default. Notwithstanding
the provisions of Sections 9.3 and 9.4 above, if Escrow fails to close due to
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Seller's default, Seller shall pay all Escrow cancellation charges. If Escrow
fails to close due to Buyer's default, Buyer shall pay all Escrow cancellation
charges. If Escrow fails to close for any reason other than the foregoing,
Buyer and Seller shall each pay one-half of any Escrow cancellation charges.
"Escrow cancellation charges" means all fees, charges and expenses incurred by
Escrow Agent, including all expenses incurred in connection with issuance of
the Preliminary Report and other title matters.
ARTICLE 10
RECORDATION AND DISTRIBUTION OF FUNDS AND DOCUMENTS
10.1 Disbursements. Except as provided in Section 10.4, below, all
disbursements by Escrow Agent shall be made by checks of Escrow Agent.
10.2 Recorded Documents. Escrow Agent shall cause the County
Recorder of the County to mail Seller's Grant Deed (and each other documents
which are herein expressed to be, or by general usage are, recorded) after
recordation, to the grantee, beneficiary or person (i) acquiring rights under
said document or (ii) for whose benefit said document was acquired.
10.3 Unrecorded Documents. Escrow Agent shall, at the Close of
Escrow, deliver by certified mail, overnight courier or United States mail (or
will hold for personal pickup, if requested) one (1) copy of each unrecorded
document received hereunder by Escrow Agent to the payee or person (i)
acquiring rights under said document or (ii) for whose benefit said document
was acquired.
10.4 Payment of Funds at Close of Escrow. Escrow Agent shall, at the
Close of Escrow, deliver by wire transfer, in accordance with Seller's
instructions (or will hold for personal pickup, if requested) (i) to Seller,
or order, the cash, plus any proration or other credits to which Seller will
be entitled less any appropriate proration, deposits or other charges, and
(ii) to Buyer, or order, any excess funds theretofore delivered to Escrow
Agent by Buyer.
10.5 Conformed Copies. Escrow Agent shall, at the Close of Escrow,
deliver to Seller and Buyer a copy of the Seller's Grant Deed(s) (conformed to
show recording date) and conformed copies of each document recorded to place
title in the condition required by this Agreement.
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ARTICLE 11
REMEDIES
11.1 Liquidated Damages to Seller. If all of the conditions to
Closing for Buyer's benefit have either been satisfied or waived by Buyer by
the Closing Date, and the purchase and sale of the Property described herein
fails to close due to default by Buyer, it is agreed that the amounts released
from Escrow to Seller under this Agreement ("Released Amount") shall be
retained and accepted by Seller as liquidated damages and not as a penalty and
Seller shall be released from its obligation to sell the Property to Buyer,
and Buyer shall be released from its obligation to purchase the Property. It
is agreed that the Released Amount constitutes a reasonable estimate of the
damages to Seller. Buyer and Seller agree that it is impossible or
impractical presently to predict what monetary damages Seller would suffer in
such event. Buyer desires to limit the monetary damages for which Buyer might
be liable hereunder and Buyer and Seller desire to avoid the costs and delays
they would incur if a lawsuit were commenced to collect damages and therefore
agree that the liquidated damages provided hereunder shall constitute Seller's
sole and exclusive remedy hereunder. By the act of an authorized
representative of each party affixing its initials herein, each party
specifically confirms the accuracy of the above statements and its agreement
with them.
/s/ P.W. /s/ L.J.Y.
Seller's Initials Buyer's Initials
11.2 Specific Performance. If all of the conditions to Closing for
Seller's benefit have either been satisfied or waived by Seller by the Closing
Date, and the purchase and sale of the Property described herein fails to
close due to default by Seller, Buyer shall be entitled to bring an action for
specific performance of Seller's obligations under this Agreement.
ARTICLE 12
ASSIGNABILITY
12.1 Assignment. Neither party shall voluntarily or by operation of
law assign or otherwise transfer any of its rights or obligations under this
Agreement without obtaining the prior written consent of the other party,
which consent may not be unreasonably withheld. Notwithstanding the foregoing
sentence, Buyer shall have the right to assign its rights under this Agreement
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without consent of Seller to a corporation, partnership, limited liability
company or other entity in which the beneficial owners of at least 51% of the
equity interests in such entity own at least 51% of the equity interests in
Buyer, provided that Buyer shall remain liable for, and be responsible for the
performance of, any and all liabilities, obligations, representations,
covenants and agreements under this Agreement.
ARTICLE 13
EMINENT DOMAIN AND MATERIAL LOSS
13.1 Eminent Domain. In the event that, prior to the Close of
Escrow, all or any material portion of the Property is taken or appropriated
by any public or quasi-public authority under the power of eminent domain, or
Seller receives actual notice of any pending or threatened condemnation
proceedings, then either Buyer or Seller may terminate this Agreement without
further liability hereunder and the parties shall proceed in accordance with
Section 8.4, and, in such event, any portion of Buyer's Deposit, regardless of
whether or not it has been released from Escrow to Seller, shall be
immediately returned to Buyer, and any condemnation proceeds shall be the sole
property of Seller. If neither Seller nor Buyer elects to terminate this
Agreement in the event of any such taking, or threat of taking, and provided
that all conditions precedent to the Close of Escrow have either been
satisfied or waived, Escrow shall close in accordance with this Agreement, and
Seller shall assign to Buyer all of its right, title and interest in any
condemnation proceeds or award made by the governmental entity.
13.2 No Material Loss. If, prior to the Close of Escrow, and subject
to the satisfaction or waiver of all conditions precedent in favor of Buyer
and Seller, the Property shall suffer a Material Loss, Buyer shall have the
right to elect, within 30 days of receipt of notice of such Material Loss, (a)
to terminate this Agreement under Section 8.4.1 and receive a return of
Buyer's Deposit or (b) to purchase the Property as provided in this Agreement
and receive an assignment of any insurance proceeds Seller receives, or to
which Seller is or may become entitled, with respect to such Material Loss
upon Seller's receipt of such proceeds. The parties acknowledge and agree in
no event shall the Close of Escrow be extended due to a Material Loss.
Notwithstanding the foregoing, the assignment of any insurance proceeds as
provided herein shall not include any proceeds received for items not related
to the physical condition of the Property, such as proceeds from Seller's
business interruption insurance, if any. For purposes of this Agreement, a
"Material Loss" means a loss resulting from a casualty that either (i)
diminishes the value of the Property in an amount of at least 10% of the
Purchase Price or (ii) results in a loss of at least 10% of the aggregate
square footage of the Land as of the Effective Date.
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ARTICLE 14
GENERAL PROVISIONS
14.1 Attorneys' Fees. In the event any action, arbitration,
mediation or other dispute resolution proceeding shall be instituted between
Seller and Buyer in connection with this Agreement, the party prevailing in
such proceeding shall be entitled to recover from the other party all of its
costs of such proceeding, including, without limitation, attorneys' fees and
costs as fixed by the court therein.
14.2 Captions. The captions used herein are for convenience only and
are not a part of this Agreement and do not in any way limit or amplify the
terms and provisions hereof.
14.3 Construction of Agreement. The agreements contained herein
shall not be construed in favor of or against either party, but shall be
construed as if both parties prepared this Agreement.
14.4 Counterparts. This Agreement may be executed in counterparts,
all of which, when taken together, shall constitute a fully executed original.
14.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof
and all prior and contemporaneous agreements, representations, negotiations
and understandings of the parties hereto, oral or written, are hereby
superseded and merged herein. The foregoing sentence shall in no way affect
the validity of any instruments executed by the parties in the form of the
exhibits attached to this Agreement.
14.6 Exhibits and Schedules. All Exhibits and Schedules attached
hereto are incorporated herein by reference. Any Exhibits or Schedules that
are to be attached to the Agreement after the Effective Date but prior to the
Close of Escrow, shall be initialled by Buyer and Seller on each page and,
once so initialled, shall be sent to Escrow Agent for attachment to this
Agreement.
14.7 Gender and Number. The use herein of (i) the neuter gender
includes the masculine and the feminine and (ii) the singular number includes
the plural, whenever the context so requires.
14.8 Governing Law. This Agreement and the documents in the forms
attached as exhibits hereto shall be governed by and construed under the laws
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of the State of California. This Agreement shall be deemed made and entered
into in the County.
14.9 Joint and Several Liability. If any party consists of more than
one person or entity, the liability of each such person or entity signing this
Agreement shall be joint and several.
14.10 Modification. No modification, waiver, amendment, discharge or
change of this Agreement shall be valid unless the same is in writing and
signed by the party against which the enforcement of such modification,
waiver, amendment, discharge or change is or may be sought.
14.11 Real Estate Brokerage Commission. Seller shall pay a real
estate brokerage commission in the amount of $30,600 to Fred Harris upon the
Close of Escrow. Except as provided in the preceding sentence, neither party
is obligated to pay any real estate, brokerage or other commission or fee in
connection with the purchase and sale of the Property. Each party hereby
indemnifies, protects, defends (with legal counsel reasonably acceptable to
the other party) and holds the other party free and harmless from and against
any and all costs and liabilities, including, without limitation, reasonable
attorneys' fees and costs, for causes of action or proceedings which may be
instituted by any broker, agent or finder, licensed or otherwise, claiming
through, under or by reason of the conduct of such party in connection with
this transaction.
14.12 No Partnership or Joint Venture. Seller or Buyer shall not, by
virtue of this Agreement, in any way or for any reason be deemed to have
become a partner of the other in the conduct of its business or otherwise, or
a joint venturer. In addition, by virtue of this Agreement there shall not be
deemed to have occurred a merger of any joint enterprise between Buyer and
Seller.
14.13 Notice and Payments. Any notice to be given or other document to
be delivered by any party to the other or others hereunder, and any payments
from Buyer to Seller, may be delivered in person or by facsimile transmission
(provided that a confirming copy is sent by mail or overnight delivery as
herein specified) to an officer of any party, or may be deposited in the
United States mail, duly certified or registered, return receipt requested,
with postage prepaid, or by Federal Express or other similar overnight
delivery service, and addressed to the party for whom intended, as follows:
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To Seller at its business office:
Paradise Valley Communities No. 1
529 East South Temple
Salt Lake City, Utah 84102
Attention: Patricia A. Wood
Facsimile No.: (801)524-1751
With a copy to:
K. Michael Garrett, Esq.
Duckor Spradling & Metzger
401 West A Street, Suite 2400
San Diego, California 92101
Facsimile No.: (619)231-6629
To Buyer at its business office:
The Forecast Group , L.P.
10670 Civic Center Drive
Rancho Cucamonga, California 91730
Facsimile No.: (909)980-7305
With a copy to:
General Counsel
c/o The Forecast Group , L.P.
10670 Civic Center Drive
Rancho Cucamonga, California 91730
Facsimile No.: (909)987-8958
To Escrow Agent:
Chicago Title Company
604 Empire Street
Fairfield, California 94533
Attention: Ms. Sandy Rigby
Facsimile No.: (707) 425-4810
Any party hereto may from time to time, by written notice to the other,
designate a different address which shall be substituted for the one above
specified. Unless otherwise specifically provided for herein, all notices,
payments, demands or other communications given hereunder shall be in writing
and shall be deemed to have been duly given and received (i) upon personal
delivery, or (ii) as of the third business day after mailing by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as set forth above, or (iii) the immediately succeeding Business Day
after deposit with Federal Express or other similar overnight delivery
system.
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14.14 Remedies Cumulative. All rights and remedies of Buyer and
Seller contained in this Agreement shall be construed and held to be
cumulative.
14.15 Severability. In the event that any phrase, clause, sentence,
paragraph, section, article or other portion of this Agreement shall become
illegal, null or void or against public policy, for any reason, or shall be
held by any court of competent jurisdiction to be illegal, null or void or
against public policy, the remaining portions of this Agreement shall not be
affected thereby and shall remain in force and effect to the fullest extent
permissible by law.
14.16 Successors and Assigns. Subject to the restrictions and
prohibitions on assignment set forth in Article 12, each and all of the
covenants and conditions of this Agreement shall inure to the benefit of and
shall be binding upon the successors-in-interest, assigns, and legal
representatives of the parties hereto. As used in the foregoing, "successors"
shall refer to the parties' interest in the Property and to the successors to
all or substantially all of their assets and to their successors by merger or
consolidation.
14.17 Waiver. No waiver by Buyer or Seller of a breach of any of the
terms, covenants or conditions of this Agreement by the other party shall be
construed or held to be a waiver of any succeeding or preceding breach of the
same or any other term, covenant or condition herein contained. No waiver of
any default by Buyer or Seller hereunder shall be implied from any omission by
the other party to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect a default other
than as specified in such waiver. The consent or approval by Buyer or Seller
to or of any act by the other party requiring the consent or approval of the
first party shall not be deemed to waive or render unnecessary such party's
consent or approval to or of any subsequent similar acts by the other party.
14.18 Gender and Number. In this Agreement (unless the context
requires otherwise), the masculine, feminine and neuter genders and the
singular and the plural include one another.
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14.19 Time of the Essence. Time is of the essence of each and every
provision of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
SELLER:
PARADISE VALLEY COMMUNITIES NO. 1, a California
general partnership
By: HomeFed Communities, Inc.,
a California corporation,
General Partner
By: /s/ Patricia A. Wood
Patricia A. Wood,
President
By: HomeFed Resources
Corporation, a California
corporation, General Partner
By: /s/ Patricia A. Wood
Patricia A. Wood,
President
BUYER:
THE FORECAST GROUP , L.P.,
a California limited partnership
By: FORECAST HOMES, INC., a
California corporation, General Partner
By: /s/ Larry J. Young
Its: Division President
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CONSENT OF ESCROW AGENT
The undersigned Escrow Agent hereby agrees to (i) accept the foregoing
Agreement, (ii) be Escrow Agent under said Agreement and (iii) be bound by said
Agreement in the performance of its duties as Escrow Agent; provided, however,
the undersigned shall have no obligations, liability or responsibility under (i)
this Consent or otherwise unless and until said Agreement, fully signed by the
parties, has been delivered to the undersigned or (ii) any amendment to said
Agreement unless and until the same shall be accepted by the undersigned in
writing.
Dated: October 3, 1996 (the "Opening of the Escrow")
Chicago Title Company
By: /s/ Terri Piper
Its: CSEO
<PAGE>
LIST OF EXHIBITS
Exhibit A. . . . . . . . . . .Legal Description of Land -- Unit 1
Exhibit B . . . . . . . . . . . . . . . . . . Property Documents
Exhibit C. . . . . . . . . . . . . . General Conditions of Escrow
Exhibit D. . . . . . . . . . . .Certificate of Non-Foreign Status
Exhibit E. . . . . . . . . . . . . . . . . . . . . .Grant Deed(s)
Exhibit F. . . . . . . . . . . . . . . . . Disapproved Exceptions
Schedule G . . . . . . . . . . . .Commitment for Title Insurance,
Schedule B- Section 2
<PAGE>
EXHIBIT A
Legal Description of Land
Unit 1
ALL THAT REAL PROPERTY SITUATE IN THE CITY OF FAIRFIELD, COUNTY OF SOLANO, STATE
OF CALIFORNIA, DESCRIBED AS FOLLOWS:
LOTS 1 THROUGH 3, 14 THROUGH 26, 47 THROUGH 50, AS SHOWN ON THAT CERTAIN MAP
ENTITLED: "FINAL MAP OF PARADISE VALLEY NORTH UNIT NO. 1, BEING ALL OF PARCEL
1 OF THE PARCEL MAP ENTITLED 'LANDS OF ANDERSON & ROWLAND' FILED IN BOOK 34 OF
PARCEL MAPS, PAGE 8, SOLANO COUNTY RECORDS," FILED OCTOBER 2, 1989 IN THE OFFICE
OF THE RECORDER OF SOLANO COUNTY IN BOOK 57 OF MAPS, AT PAGE 27, SOLANO COUNTY
RECORDS.
<PAGE>
EXHIBIT B
Property Documents
- - Rough Grading and Erosion Plans dated September 1988 (6 copies)
- - Final Map Unit 1 dated September 1988, recorded on October 2, 1989,
Solano County Recorder (6 copies)
- - Final Map Unit 2 dated November 1988, recorded on September 27, 1990,
Solano County Recorder (6 copies)
- - Improvement Plans for Units 1 and 2 dated March 1989
(6 copies)
- - Development Agreement dated July 20, 1988
- - First Amendment to Development Agreement dated September 15, 1994 (not
yet fully executed)
- - Second Amendment to Development Agreement (not yet dated or fully
executed)
- - Covenants, Conditions, and Restrictions dated August 25, 1995
- - Anderson Consulting Group Report dated September 15, 1994
- - Department of Real Estate Public Report dated September 1, 1995
- - Letter to City of Fairfield regarding acceptance of improvements dated
May 28, 1996
- - Unapproved Plans for the Paradise Valley Recreation Facility
- - Cost Sharing Agreement dated October 20, 1989
- - Agreement with City of Fairfield regarding construction of recreational
facility dated August 31, 1995
- - Utility Deposit Balances dated May 31, 1996
- - Paradise Valley Master Association documents dated September 1995
- - Paradise Valley Master Association Bylaws dated August 21, 1995
- - Information regarding improvement bonds and maintenance obligations
for Units 1 and 2 and Dover/Foothill Boulevard
<PAGE>
EXHIBIT C
General Conditions of Escrow
<PAGE>
GENERAL PROVISIONS
1. The phrase "close of escrow" (for COE) as used in this
escrow means the date on which documents are recorded,
unless otherwise specified.
2. Recordation of any instruments delivered through this
escrow, if necessary or proper for the issuance of the
policy of title insurance called for, is authorized.
3. No examination or insurance as to the amount or payment of
personal property taxes is required unless specifically
requested.
4. You and any of your affiliates or employees are authorized
to use the information and documents in this escrow for any
purpose. You are further authorized to furnish to any
broker or lender identified with this transaction or anyone
acting on behalf of such broker or lender, any instructions,
amendments, statements, or notices of cancellation given in
connection with this escrow.
5. All written notices, communications, change of instructions
and documents are required to be delivered timely at the
office of Chicago Title Company as set forth herein.
6. All funds received in this escrow shall be deposited with
other escrow funds in one or more escrow (demand) accounts
of Chicago Title Company in any state or national bank. The
parties to this escrow understand that the escrow accounts
you maintain with the depository institutions contribute to
your value as a customer of these institutions which, in
turn, may make available to Chicago Title Company an array
of bank services, accommodations or other benefits. You
shall have no obligation to account for the value realized
by Chicago Title Company from these services, accommodations
or other benefits. All disbursements shall be made by your
check, unless otherwise instructed. You shall not be
responsible for any delay in closing if funds received by
escrow are not available for immediate withdrawal. Chicago
Title Company may, at its option, require concurrent
instructions from all principals prior to release of any
funds on deposit in this escrow.
7. If demand to cancel is submitted after the Time Limit Date,
any principal so requesting you to cancel this escrow shall
file notice of demand to cancel in your office in writing.
You shall within three (3) working days thereafter mail by
certified mail one copy of such notice to each of the other
principals at the address stated in this escrow. Unless
written objection thereto is filed in your office by a
principal within fifteen (15) calendar days after the date
of such mailing, you are instructed to cancel this escrow.
If this is a sale escrow, you may return the lender's papers
and/or funds upon lender's demand.
8. In the event that this escrow is canceled, any fees or
charges due Chicago Title Company including cancellation
fees and any expenditures incurred or authorized shall be
paid from funds on deposit unless otherwise specifically
agreed to or determined by a court of competent
jurisdiction. Upon payment thereof, return documents and
monies to the respective parties depositing same, or as
ordered by the court, and void any executed instruments.
9. If there is no written activity by a principal to this
escrow within any six-month period after the Time Limit Date
set forth herein, Chicago Title Company may, at its option,
terminate its agency obligation and cancel this escrow,
returning all documents, monies or other items held, to the
respective parties entitled thereto, less any fees and
charges as provided herein.
10. If, for any reason, funds are retained or remain in escrow
after the closing date, you may deduct therefrom a
reasonable charge as custodian, of not less than $25.00 per
month, unless otherwise specified.
11. In the event that you should receive or become aware of
conflicting demands or claims with respect to this escrow,
or the rights of any of the parties hereto, or any money or
property deposited herein, you shall have the absolute right
at your option to discontinue any or all further acts until
such conflict is resolved to your satisfaction.
12. In the event that any Offer to Purchase, Deposit Receipt, or
any other form of Purchase Agreement is deposited in this
escrow, it is understood that such document will be
effective only as among the parties signing said document.
You as escrow holder are not to be concerned with the terms
of such document and are relieved of all responsibility in
connection therewith. You are to be concerned only with the
directives specifically set forth in these escrow
instructions and amendments thereto. Further, you are not
to be concerned or liable for items designated as
"memoranda" in these escrow instructions nor with any other
agreement or contract between the parties.
13. You are released from and shall have no liability,
obligation or responsibility with respect to (a) withholding
of funds pursuant to Section 1445 of the Internal Revenue
Code of 1986 as amended, and to Sections 18662 and 18668 of
the California Revenue and Taxation Code, (b) advising the
parties as to the requirements of said Section 1445, (c)
determining whether the transferor is a foreign person or a
non-resident under such Section, nor (d) obtaining a
nonforeign affidavit or other exemption from withholding
under said Sections nor otherwise making any inquiry
concerning compliance with such Sections by any party to the
transaction.
14. The parties hereto, by execution of these instructions
acknowledge that the escrowholder assumes no responsibility
or liability whatsoever for the supervision of any act or
the performance of any condition which is a condition
subsequent to the closing of this escrow.
15. In the absence of instructions to the contrary, you are
hereby authorized to utilize wire services, overnight, next
day, or other expedited delivery services (as opposed to the
regular U.S. Mail) and to charge the respective party's
account accordingly.
16. If you pay a demand to reconvey a revolving line of credit
or equityline deed of trust, you are hereby instructed on my
behalf and for my benefit, to request that the lender
issuing said demand cancel said revolving line or equityline
of credit.
17. You are authorized to destroy or otherwise dispose of any
and all documents, papers, instructions, correspondence and
other material pertaining to this escrow at the expiration
of six (6) years from the close of escrow or cancellation
thereof, without liability and without further notice.
IMPORTANT NOTICE
Except for wire transfers, funds remitted to this escrow are
subject to availability requirements imposed by Section 12413.1
of the California Insurance Code. CASHIER'S, CERTIFIED or
TELLER'S checks, payable to CHICAGO TITLE COMPANY are generally
available for disbursement on the next business day following
the date of deposit.
Other forms of payment may cause extended delays in the closing
of your transaction pursuant to the requirements imposed by
State Law.
(Wire transfer information available upon request)
ALL PARTIES TO THIS ESCROW ACKNOWLEDGE THAT CHICAGO TITLE COMPANY
DOES NOT PROVIDE LEGAL ADVICE NOR HAS IT MADE ANY INVESTIGATION,
REPRESENTATIONS OR ASSURANCES WHATSOEVER REGARDING THE LEGAL
ASPECTS OR COMPLIANCE OF THIS TRANSACTION WITH ANY TAX,
SECURITIES OR ANY OTHER STATE OR FEDERAL LAWS. IT IS RECOMMENDED
THAT THE PARTIES OBTAIN INDEPENDENT LEGAL COUNSEL AS TO SUCH
MATTERS.
<PAGE>
EXHIBIT D
CERTIFICATE OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code of 1986, as amended ("Code"),
provides that a transferee (buyer) of a U.S. real property interest must
withhold tax if the transferor (seller) is a foreign person. Sections 18805 and
26131 of the California Revenue and Taxation Code provide that a transferee
(buyer) of a California real property interest must withhold tax if withholding
is required by Section 1445 of the United States Internal Revenue Code.
To inform The Forecast Group , L.P. ("Transferee"), that withholding of
tax under Section 1445 of the Code is not required upon disposition of certain
real property to the Transferee by Paradise Valley Communities No. 1, a
California general partnership, ("Transferor"), the undersigned hereby
represents and certifies the following on behalf of the Transferor:
1. The undersigned is the duly qualified and acting officer of the
Transferor;
2. The Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations), but rather is a corporation formed
under the laws of one of the United States;
3. The Transferor's U.S. employer identification number is
52-1671038;
4. The Transferor's address is 529 East South Temple, Salt Lake City,
Utah 84102-1089;
5. The Transferor understands that this certification may be
disclosed to the Internal Revenue Service and/or the California Franchise Board
by the Transferee and that any false statement contained herein could be
punished by fine, imprisonment, or both.
<PAGE>
Under penalty of perjury, the undersigned declares that the undersigned
has examined this certification and to the best of its knowledge and belief it
is true, correct, and complete.
Dated: , 1996 TRANSFEROR:
--------------
PARADISE VALLEY COMMUNITIES NO. 1,
a California general partnership
By: HomeFed Communities, Inc.,
a California corporation,
General Partner
By: ________________
Patricia A. Wood,
President
By: HomeFed Resources
Corporation, a California
corporation, General Partner
By: ________________
Patricia A. Wood,
President
<PAGE>
EXHIBIT E
Grant Deed(s)
[To Be Prepared and Attached Prior to Close of Escrow]
<PAGE>
EXHIBIT F
DISAPPROVED EXCEPTIONS
Instrument Entitled: Detachment and Development Agreement
Executed by: Solano Irrigation District, Arcadia
Development Co., et al.
Recorded: April 24, 1989 as Instrument
No. 890025219, Official Records
Deed of Trust
Dated: November 18, 1994
Amount: $1,000,000.00
Trustor: Paradise Valley Communities No. 1, a
California General Partnership
Trustee: Chicago Title Company, a California
Corporation
Beneficiary: Leucadia Financial Corporation
Recorded: November 30, 1994 as Instrument
No. 1994-00102706, Official Records
Re-recorded: July 3, 1995 as Instrument No. 1995-
00038553, Official Records
Deed of Trust
Dated: July 3, 1995
Amount: $20,000,000.00
Trustor: Paradise Valley Communities No. 1, a
California General Partnership
Trustee: Chicago Title Company, a California
Corporation
Beneficiary: Leucadia Financial Corporation, a
Utah Corporation
Recorded: July 13, 1995 as Instrument No. 1995-
00038615, Official Records
<PAGE>
EXHIBIT G
APPROVED EXCEPTIONS
(See attached)
<PAGE>
COMMITMENT FOR TITLE INSURANCE
SCHEDULE B - Section 2
Order No: 500768 DR
Page 1
Schedule B of the policy or policies to be issued will contain exceptions to the
following matters unless the same are disposed of to the satisfaction of the
Company:
A. Defects, liens, encumbrances, adverse claims or other matters, if any,
created, first appearing in the public records, or attaching subsequent
to the effective date hereof but prior to the date the proposed Insured
acquires for value of record the estate or interest or mortgage thereon
covered by this Commitment.
B. In addition to the Exceptions shown below, any standard coverage policy
of title insurance issued under the terms of this commitment will contain
the applicable Exclusions and Exceptions shown on attached list.
Exceptions:
A 1. General and special taxes for the fiscal year 1996-1997, a lien not
yet due and payable.
B 2. The Lien of Supplemental Taxes, if any, assessed pursuant to the
provisions of Chapter 3.5 (commencing with Section 75) of the Revenue
and Taxation Code of the State of California.
C 3. The fact that said land is within the bounds of the following Mello-
Roos Community Facilities District(s), the annual assessments of
which, if any, are collected with County Property Taxes
District(s): COMMUNITY FAC. DIST. #1
F-S USD - MELLO ROOS #5
D 4. An Agreement, upon the terms and conditions contained therein
Entitled: DEVELOPMENT AGREEMENT
Executed by: THE CITY OF FAIRFIELD, ARCADIA DEVELOPMENT CO.,
ET AL
Recorded: AUGUST 11, 1988 IN BOOK 1988 PAGE 100194
Instrument No.: 46643, OFFICIAL RECORDS
Reference is made to said instrument for further particulars
E An Agreement, upon the terms and conditions contained therein
Entitled: ASSUMPTION AND CONSENT TO ASSIGNMENT OF PARADISE
VALLEY DEVELOPMENT AGREEMENT
Executed by: PARADISE VALLEY COMMUNITIES NO. 1, A CALIFORNIA
LIMITED PARTNERSHIP, ET AL
Recorded: JANUARY 6, 1992
Instrument No.: 1992-00000836, OFFICIAL RECORDS
Reference is made to said instrument for further particulars
G 5. Easement for the purpose stated herein and incidental purposes as
created in that certain instrument
Recorded: OCTOBER 2, 1989 AS INSTRUMENT NO. 890068128
<PAGE>
Granted to: THE CITY OF FAIRFIELD
Purpose: THE ERRANT FLIGHT AND/OR ENTRY OF GOLF BALLS
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND AS MORE
PARTICULARLY IN SAID INSTRUMENT
H COVENANTS, CONDITIONS AND RESTRICTIONS, IF ANY (DELETING THEREFROM ANY
RESTRICTIONS BASED ON RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL
STATUS OR NATIONAL ORIGIN, UNLESS AND ONLY TO THE EXTENT THAT SAID
COVENANT (A) IS EXEMPT UNDER CHAPTER 42, SECTION 3607 OF THE UNITED
STATES CODE OR (B) RELATES TO HANDICAP BUT DOES NOT DISCRIMINATE
AGAINST HANDICAPPED PERSON(S) AS SET FORTH IN THE DOCUMENT REFERRED
TO IN THE NUMBERED ITEM LAST ABOVE SHOWN.
I 6. An easement for the purpose shown below and rights incidental thereto
as shown or as offered for dedication on the recorded map shown below
Map of: PARADISE VALLEY NORTH UNIT NO. 1
Recorded: OCTOBER 2, 1989 IN BOOK 57 OF MAPS, AT PAGE 27
Easement Purpose:PLANTING
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND, 10 FEET IN
WIDTH, COINCIDENT WITH THE LINES OF DORAL DRIVE
AND FULLERTON DRIVE
J 7. An easement for the purpose shown below and rights incidental thereto
as shown or as offered for dedication on the recorded map shown below
Map of : PARADISE VALLEY NORTH UNIT NO. 1
Recorded: OCTOBER 2, 1989 IN BOOK 57 OF MAPS, AT PAGE 27
Easement Purpose:PUBLIC SERVICE
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND, 10 FEET IN
WIDTH, COINCIDENT WITH THE LINES OF DORAL DRIVE
AND FULLERTON DRIVE; THOSE 5 FOOT BY 18 FOOT
PORTIONS OF THE HEREIN DESCRIBED LAND COINCIDENT
WITH THE INTERSECTIONS OF LOT LINES AND THE LINES
OF SAID DRIVES
K 8. An easement for the purpose shown below and rights incidental thereto
as shown or as offered for dedication on the recorded map shown below
Map of: PARADISE VALLEY NORTH UNIT NO. 1
Recorded: OCTOBER 2, 1989 IN BOOK 57 OF MAPS, AT PAGE 27
Easement Purpose:FENCE
Affects: THE SOUTHEASTERLY 5 FEET OF LOTS 4 THROUGH 6; THE
NORTHERLY 5 FEET OF LOTS 27 THROUGH 34
<PAGE>
L 9. THE FACT THAT OWNERSHIP OF SAID LAND DOES NOT INCLUDE RIGHTS OF ACCESS
TO OR FROM THE LAND ADJACENT THERETO, SUCH RIGHTS HAVING BEEN SEVERED
FROM SAID LAND BY THE MAP OF SAID TRACT
AFFECTS: THE SOUTHEASTERLY LINE OF LOTS 4 THROUGH 6 IN AND
TO PARADISE VALLEY DRIVE; THE NORTHERLY LINE OF
LOTS 27 THROUGH 34 IN AND TO THE GOLF COURSE
O 10. Easement for the purpose stated herein and incidental purposes as
created in that certain instrument
Recorded: OCTOBER 25, 1990 AS INSTRUMENT NO. 900084601
Granted to: THE CITY OF FAIRFIELD
Purpose: OVERSPRAY IN CONNECTION WITH THE WATERING OF A
MUNICIPAL GOLF COURSE AND THE INTRUSION OF GOLF
BALLS FROM THE FAIRWAYS, ROUGHS AND GREENS
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND, AS MORE
PARTICULARLY DESCRIBED IN SAID INSTRUMENT
P COVENANTS, CONDITIONS AND RESTRICTIONS, IF ANY (DELETING THEREFROM ANY
RESTRICTIONS BASED ON RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL
STATUS OR NATIONAL ORIGIN, UNLESS AND ONLY TO THE EXTENT THAT SAID
COVENANT (A) IS EXEMPT UNDER CHAPTER 42, SECTION 3607 OF THE UNITED
STATES CODE OR (B) RELATES TO HANDICAP BUT DOES NOT DISCRIMINATE
AGAINST HANDICAPPED PERSON(S) AS SET FORTH IN THE DOCUMENT REFERRED TO
IN THE NUMBERED ITEM LAST ABOVE SHOWN.
Q 11. Covenants, conditions and restrictions, but omitting any covenant or
restriction based on race, color, religion, sex, handicap, familial
status or national origin, contained in the Declaration
By: PARADISE VALLEY COMMUNITIES NO. 1, A CALIFORNIA
GENERAL PARTNERSHIP, FIRST AMERICAN TITLE
GUARANTY COMPANY, A CALIFORNIA CORPORATION AND
REYNEN, BARDIS & WINN, A CALIFORNIA LIMITED
PARTNERSHIP
Recorded: AUGUST 25, 1995 AS INSTRUMENT NO. 1995-00051486,
OFFICIAL RECORDS
R Said instrument provides that a violation thereof shall not defeat nor
render invalid the lien of any Mortgage or Deed of Trust made in good
faith and for value.
S Contains no reversionary clause.
T Declaration of Annexation, recorded SEPTEMBER 13, 1995 AS INSTRUMENT
NO. 1995-00055722, OFFICIAL RECORDS.
<PAGE>
U Declaration of Annexation, recorded SEPTEMBER 13, 1995 AS INSTRUMENT
NO. 1995-00055723, OFFICIAL RECORDS.
V Declaration of Annexation, recorded SEPTEMBER 13, 1995 AS INSTRUMENT
NO. 1995-00055724, OFFICIAL RECORDS.
AG END OF SCHEDULE B
STR/mg
<PAGE>
PARADISE VALLEY UNIT 2 FIRST CLOSING
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
BETWEEN
PARADISE VALLEY COMMUNITIES NO. 1
("Seller")
AND
THE FORECAST GROUP , L.P.
("Buyer")
<PAGE>
PARADISE VALLEY UNIT 2 FIRST CLOSING
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
THIS PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS ("Agreement") is made
and effective as of October 3, 1996 by and between Paradise Valley Communities
No. 1, a California general partnership ("Seller"), and The Forecast Group ,
L.P., a California limited partnership ("Buyer"), with reference to the facts
set forth below.
A. Seller is the owner of that certain land situated in the City of
Fairfield, County of Solano, State of California, more particularly described
in Exhibit A, attached hereto and incorporated herein ("Land"). The Land is a
portion of a residential subdivision consisting of four units, or
neighborhoods, each of which is referred to herein as a "Unit," and the Land
is a portion of Unit 2. Unit 2 consists of 104 single-family residential
lots, 42 of which are subject to this Agreement. The term "Lots" refers to
the single-family residential lots located in Unit 2 that are specifically
described in Exhibit A. Unit 2 also consists of certain infrastructure
improvements and amenities, as described in the "Subdivision Map," as defined
in Section 1.21 of this Agreement, and related improvement plans and
specifications described in Exhibit B, attached hereto ("Improvements").
Buyer and Seller have also entered into that certain Paradise Valley Unit 2
Second Closing Purchase Agreement and Escrow Instructions dated October 3,
1996 ("Unit 2 Second Closing Purchase Agreement").
B. Buyer desires to purchase the Property (as defined herein) and
Seller desires to sell the Property to Buyer in accordance with the terms and
provisions set forth below.
NOW, THEREFORE, in consideration of the recitals set forth above, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as set forth below.
ARTICLE 1
DEFINED TERMS
Terms used in this Agreement with their initial letters capitalized and
not otherwise defined shall have the meanings set forth below.
1.1 Agreement. The term "Agreement" shall mean this Purchase
Agreement and Escrow Instructions between Seller and Buyer.
1
<PAGE>
1.2 Approved Exceptions. The term "Approved Exceptions" shall mean
those exceptions to title that are approved in accordance with this Agreement.
1.3 Business Day. The term "Business Day" shall mean any day other
than a Saturday, Sunday or legal holiday in the State of California. All
periods of time described in this Agreement that are not expressly measured by
Business Days shall be measured by calendar days.
1.4 Buyer. The term "Buyer" shall mean The Forecast Group , L.P., a
California limited partnership.
1.5 CLTA Owner's Title Policy. The term "CLTA Owner's Title Policy"
shall mean the California Land Title Association ("CLTA") owner's policy of
title insurance to be issued by the Title Company upon the Close of Escrow
pursuant to the terms of this Agreement.
1.6 Cash. The term "cash" shall mean: (i) currency of the United
States of America, (ii) cashier's check(s) currently dated and payable to
Escrow Agent or Seller, as required under this Agreement, drawn and paid
through a California banking or savings and loan institution, tendered to
Escrow Agent or Seller, as required under this Agreement one (1) Business Day
before funds are required to be delivered under this Agreement, or (iii) an
amount credited by wire transfer into Escrow Agent's or Seller's bank account,
as required under this Agreement.
1.7 Close of Escrow. The term "Close of Escrow" shall mean the
consummation of the purchase of the Property by Buyer from Seller and the
recordation of Seller's Grant Deed(s) in accordance with the terms and
provisions of this Agreement.
1.8 Closing Date. The term "Closing Date" shall mean the date on
which the closing will be held for the sale of the Property as set forth in
Section 8.1 of this Agreement.
1.9 County. The term "County" shall mean the County of Solano, in
the State of California.
1.10 Effective Date. The term "Effective Date" shall mean October 3,
1996, the date on which this Agreement is effective and deemed to have been
made.
1.11 Escrow. The term "Escrow" shall mean the escrow opened by
Escrow Agent pursuant to the terms of this Agreement.
1.12 Escrow Agent. The term "Escrow Agent" shall mean Chicago Title
Company, 604 Empire Street, Fairfield, California 94533 ("Chicago Title").
2
<PAGE>
1.13 Governmental Action. The term "Governmental Action" shall mean
(a) any order of a court of competent jurisdiction, and/or (b) any enactment,
by the initiative or referendum process or otherwise, of any Governmental
Agencies (as defined below) affecting the Property, either directly or
indirectly, including, but not limited to, limitation on the number of permits
or licenses that can be issued, declaration of policy, resolution, ordinance,
statute, regulation, or any other enactment of any Governmental Agency (as
defined below) and irrespective of whether the orders or enactments listed
immediately above contain the words "moratorium," "moratoria" or similar
words.
1.14 Governmental Agencies. The term "Governmental Agencies" shall
mean any local, county, state and/or federal governmental or quasi-governmental
agencies, authorities or regulatory bodies and any public or
private utility companies having jurisdiction over the Property.
1.15 Opening of Escrow. The term "Opening of Escrow" shall mean the
date Escrow Agent executes the Consent of Escrow Agent attached hereto, which
consent shall be executed by Escrow Agent upon delivery of this Agreement to
Escrow Agent.
1.16 Preliminary Report. The term "Preliminary Report" shall mean
the Preliminary Title Report dated June 10, 1996, issued by the Title Company.
1.17 Property Documents. The term "Property Documents" shall mean
the documents delivered by Seller to Buyer in connection with its feasibility
studies pursuant to Section 4.1 of this Agreement. The Property Documents are
listed in Exhibit B, attached hereto.
1.18 Property. The term "Property" shall mean the Land, the Lots,
the Subdivision Map (to the extent it pertains to the Lots) and any public or
private entitlements, utility deposits, the non-exclusive use of the name
"Antigua," maps, plans, soils reports, environmental reports, marketing
studies, development agreements, permits and similar items that relate to the
development, sale and use of the Lots as single-family residential building
lots.
1.19 Purchase Price. The term "Purchase Price" shall mean the total
consideration to be paid by Buyer to Seller for the purchase of the Property
as set forth in Article 2 of this Agreement.
1.20 Seller. The term "Seller" shall mean Paradise Valley
Communities No. 1, a California general partnership.
1.21 Subdivision Map. The term "Subdivision Map" shall mean the
Subdivision Map of Paradise Valley North Unit No. 2, recorded on September 27,
3
<PAGE>
1990, in Book 59 of Maps, at Page 62, et. seq., in the Official Records of
Solano County.
1.22 Title Company. The term "Title Company" shall mean Chicago
Title.
ARTICLE 2
AGREEMENT OF PURCHASE AND SALE
2.1 Agreement for Purchase and Sale. In consideration of the
payment of the Purchase Price, Seller agrees to sell the Property to Buyer and
Buyer agrees to purchase the Property from Seller on the terms and conditions
set forth in this Agreement.
2.2 Purchase Price. The purchase price ("Purchase Price") for the
Property is One Million Six Hundred Fifty Thousand and No/100 Dollars
($1,650,000).
2.3 Payment of Purchase Price. The Purchase Price shall be paid in
accordance with the provisions set forth below.
2.3.1 Cash to be deposited into
Escrow on the Opening of Escrow
under Section 3.1
("Buyer's Deposit") $ 50,000
2.3.2 Additional cash to be deposited
into Escrow upon Close of Escrow $ 1,600,000
Total Purchase Price: $1,650,000
==========
2.4 Nonrefundability of Deposits. The cash deposited into escrow
pursuant to Section 2.3.1, above, shall, upon the signing of this Agreement,
become nonrefundable and be released by the Escrow Agent to the Seller. Any
funds released from Escrow to Seller under this Section 2.4 shall apply to the
Purchase Price upon the Close of Escrow. Regardless of whether Escrow closes,
however, any funds released from Escrow to Seller shall constitute
nonrefundable consideration for Seller's taking the Property off the market,
unless Escrow fails to close due a default under or breach of this Agreement
by Seller, in which event, such deposits shall be returned to Buyer or, if the
Buyer elects the remedy of specific performance of this Agreement, applied to
the Purchase Price.
2.5 Assumption of Liabilities. Upon the terms and subject to the
conditions contained in this Agreement, Buyer shall assume, effective as of
the time of day on the Closing Date that Escrow Agent telephonically or in
writing notifies Seller and Buyer that Escrow has closed Seller's obligations
4
<PAGE>
under the Property Documents with respect to the Property purchased under this
Agreement, except for such obligations as Seller specifically retains under
Article 6 of this Agreement.
ARTICLE 3
OPEN AND CLOSE OF ESCROW AND DELIVERY OF DOCUMENTS
3.1 Opening of Escrow. Buyer and Seller entered into a letter of
intent dated September 20, 1996 ("Letter of Intent") and delivered the Letter
of Intent together with $200,000 ("$200,000 Deposit") and Joint Escrow
Instructions dated September 20, 1996 ("Joint Escrow Instructions") to Escrow
Agent. The Joint Escrow Instructions require the Escrow Agent to allocate
$50,000 of the $200,000 Deposit to the Escrow established under this Agreement
upon the signing of this Agreement by both Buyer and Seller. Accordingly,
upon execution of this Agreement, Buyer and Seller shall open Escrow by
depositing with Escrow Agent a fully executed original of this Agreement for
use as escrow instructions. Escrow Agent shall thereupon transfer $50,000 of
the $200,000 Deposit to the Escrow established under this Agreement, and such
amount shall be treated as Buyer's Deposit. Escrow Agent shall execute the
Consent of Escrow Agent ("Consent") which appears at the end of this Agreement
and deliver a fully executed Consent to Buyer and Seller. Escrow Agent's
general conditions ("General Conditions") are attached hereto as Exhibit C and
incorporated herein by reference to the extent they are not inconsistent with
the provisions of this Agreement. If there is any inconsistency between the
provisions of the General Conditions and this Agreement, the provisions of
this Agreement shall control. If Escrow Agent requires additional
instructions, the parties agree to make any deletions, substitutions and
additions as the parties shall mutually approve as long as such deletions,
substitutions or additions do not materially alter the terms of this
Agreement.
3.2 Buyer's Deliveries. Buyer shall, at least one (1) Business Day
prior to the Close of Escrow (unless required to be delivered at an earlier
date under the terms of this Agreement), deliver to Escrow Agent each of the
following:
3.2.1 Purchase Price. The balance of the cash portion of the
Purchase Price;
3.2.2 Documents. Fully executed and, where appropriate,
notarized counterparts of the documents required to be executed by Buyer under
this Agreement;
3.2.3 Prorations, Fees and Costs. The amount, if any,
required of Buyer under Article 9 of this Agreement entitled "Prorations, Fees
and Costs" and any other amounts payable upon the Close of Escrow under any
5
<PAGE>
other provisions of this Agreement; and
3.2.4 General. Such other documents, instruments and
certificates as Seller may reasonably require to carry out the intent of this
Agreement; provided, however, that Buyer shall not be obligated to incur any
financial liability or obligation in connection with the furnishing of any such
documents, instruments or certificates.
3.3 Seller's Deliveries. Seller shall, at least one (1) Business
Day prior to the Close of Escrow (unless required to be delivered at an
earlier date under the terms of this Agreement), deliver to Escrow Agent each
of the following:
3.3.1 Certificate of Non-Foreign Status. Prior to the Close
of Escrow, Seller shall execute and deposit into Escrow a Certificate of
Non-Foreign Status certifying that Seller is a non-foreign person in the form
attached hereto as Exhibit D and incorporated herein ("Certificate of Non-
Foreign Status");
3.3.2 Grant Deeds, Bill of Sale and Assignment of Leases.
Prior to the Close of Escrow, Seller shall execute, acknowledge and deposit
into Escrow Grant Deed(s) in the form attached hereto as Exhibit E; and
3.3.3 General. Such other documents, instruments and
certificates as Buyer may reasonably require to carry out the intent of this
Agreement; provided, however, that Seller shall not be obligated to incur any
financial liability or obligation in connection with the furnishing of any
such documents, instruments or certificates.
ARTICLE 4
FEASIBILITY REVIEW
4.1 Feasibility Review Period; Delivery of Property Documents.
Seller has delivered to Buyer the Property Documents. Buyer has analyzed the
feasibility of its purchase and use of the Property. Buyer has reviewed and
analyzed the Property Documents to determine their individual and collective
impact on the Property and its purchase and use by Buyer.
4.1.1 Review of Preliminary Report. Buyer has been provided
a Preliminary Report issued by the Title Company ("Preliminary Report"),
together with legible copies of all recorded documents described in the
Preliminary Report. Buyer has reviewed and approved the Preliminary Report,
except as set forth in Exhibit F attached hereto. If any title exceptions are
recorded against the Property before the Close of Escrow in addition to those
6
<PAGE>
specified in the Preliminary Report, Escrow Agent shall cause the Title
Company to issue a supplemental preliminary report ("Supplemental Report").
Buyer shall have five (5) Business Days after receipt of any Supplemental
Report, to review the title exceptions shown therein and to deliver to Seller
notice of approval or disapproval of any title exceptions disclosed in any
such report. Buyer's delivery of a written notice of approval shall be deemed
approval of the exceptions to title shown on any Supplemental Report issued as
of the date of such notice of approval. The title exceptions approved by
Buyer, as set forth in the Commitment for Title Insurance, Schedule B -
Section 2, attached hereto as Exhibit G, and such other exceptions as may be
approved by Buyer with respect to any Supplemental Report, are referred to
herein as "Approved Exceptions." Seller shall have until the Close of Escrow
to remove the title exceptions set forth in Exhibit F. If any other title
exceptions are specifically disapproved, and Seller elects, within ten (10)
Business Days after the date of Buyer's disapproval, not to cure the
disapproved item, then Buyer shall have five (5) Business Days after the
receipt of Seller's notice of election not to cure the disapproved item to
waive its prior disapproval. If Buyer does not deliver notice of its election
to waive its prior disapproval, then the disapproved and uncured item will be
deemed disapproved. If a title exception is disapproved and uncured, Buyer
may terminate the Escrow by delivering a written notice of termination to
Seller and the Escrow Agent. Upon such termination, any deposits theretofore
paid to Seller or Escrow Agent (regardless of whether such deposits were
released to Seller) shall be immediately returned to Buyer, and this Agreement
shall be terminated. Seller shall thereupon be released from its obligation
to sell the Property to Buyer, and Buyer shall be released from any obligation
to purchase the Property.
4.1.2 Governmental Actions. Buyer has reviewed and
considered the impact on the Property of any and all applicable governmental
ordinances, rules and regulations, and evaluate the effect of any pending or
threatened Governmental Actions pertaining to the Property.
4.1.3 Studies and Investigations. Buyer has conducted such
independent investigations, studies and tests as it deemed necessary or
appropriate concerning Buyer's proposed use, sale, development and/or the
suitability of the Property for Buyer's intended purposes. Such
investigations included, without limitation, soils and engineering tests,
hazardous studies, investigations concerning the availability of the approvals
required from any Governmental Agencies for Buyer's proposed use of the
Property, investigations regarding the existence on the Property of any
threatened or endangered species, and of any archaeological artifacts on the
Property, the imposition or increase of any fees, charges or exactions by any
Governmental Agencies and such economic feasibility and marketing studies as
Buyer deemed appropriate.
7
<PAGE>
4.1.4 Physical Inspection. Buyer has inspected and approved
the physical condition of the Property and conducted any soil, hazardous waste
or engineering studies with respect to the Property Buyer deemed necessary or
appropriate.
4.2 Additional Information from Seller. Seller has provided Buyer
with such Additional Information (as hereinafter defined) as Buyer determined
to be necessary to complete its investigation of the Property, and Seller has,
and has caused its agents, employees and consultants to, respond to questions
posed by Buyer with respect to the Property. As used herein, the term
"Additional Information" shall mean and refer to information in the possession
and/or control of Seller concerning (i) the Property and (ii) material changes
in information and documents previously provided to Buyer by Seller.
ARTICLE 5
CONDITIONS PRECEDENT TO CLOSE OF ESCROW
5.1 Subject to Satisfaction or Waiver. The Closing of the purchase
and sale described in this Agreement and the obligations of the parties under
this Agreement shall be subject to satisfaction or waiver (by the party in
whose favor the condition precedent has been established) of all the
conditions precedent set forth below.
5.1.1 Title Policy. Escrow Agent shall be unconditionally
committed to procure from the Title Company the CLTA Owner's Title Policy for
the Property with a liability limit in the amount of the Purchase Price
insuring fee title vested in Buyer. Buyer shall take title to the Property
subject only to: (a) Non-delinquent general, special and supplemental taxes,
bonds and assessments, including Mello-Roos bonds, if any; (b) any matters set
forth in the printed form portion of the CLTA Owner's Title Policy; (c) the
Approved Exceptions; and (d) any items caused or permitted to be placed of
record by Buyer as of the Close of Escrow.
5.1.2 Seller's Performance. Seller shall have duly performed
each and every undertaking and agreement to be performed by it hereunder prior
to the Close of Escrow.
5.1.3 Buyer's Performance. Buyer shall have duly performed
each and every undertaking and agreement to be performed by it hereunder prior
to the Close of Escrow.
5.2 Failure of Conditions Precedent. The conditions precedent in
Sections 5.1.1 and 5.1.2 are for Buyer's benefit and can be waived only by
Buyer. The condition precedent in Section 5.1.3 is for Seller's benefit and
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can be waived only by Seller. In the event that any of the conditions
precedent set forth above is neither satisfied nor waived by the Closing Date,
the party for whose benefit the condition has been created may terminate the
Escrow and this Agreement by giving a written notice of termination to the
other party and Escrow Agent, specifying the reason for termination and the
condition precedent that has not been satisfied. Upon receipt of such notice
of termination, Escrow Agent shall return to Buyer any funds that have not at
the time of termination been released to Seller pursuant to this Agreement,
less applicable Escrow cancellation charges, and any documents to the parties
who deposited them. If Buyer terminates the Escrow and this Agreement because
a condition precedent set forth in Section 5.1.1 or 5.1.2 is not satisfied,
Seller immediately shall return to Buyer any funds theretofore disbursed to
Seller from the Escrow. Seller shall thereupon be released from its
obligation to sell the Property to Buyer, and Buyer shall be released from its
obligation to purchase the Property.
5.3 Copy of Documents to Other Party. Each party will, concurrently
with its delivery to Escrow Agent of any documents described in this Article
5, deliver a copy of the same to the other party.
ARTICLE 6
COVENANTS AND AGREEMENTS
6.1 No Concern. Escrow Agent shall have no concern with, liability
or responsibility for, this Article.
6.2 Additional Escrow Instructions. Buyer and Seller covenant and
agree that they will execute any additional escrow instructions not
inconsistent with the terms of this Agreement as shall be reasonably required
by Escrow Agent.
6.3 Cooperation. Buyer and Seller acknowledge that it may be
necessary to execute documents other than those specifically referred to
herein in order to complete the acquisition of the Property as provided
herein. Both Buyer and Seller hereby agree to cooperate with each other by
executing such other documents or taking such other action as may be
reasonably necessary to complete this transaction in accordance with the
intent of the parties as evidenced in this Agreement.
6.4 Entry Upon Property. After execution of this Agreement, Buyer
and its designated agents and independent contractors shall have the right to
enter upon the Property to conduct surveys, soils tests, physical inspections,
investigations and studies so long as Buyer has provided prior reasonable
notice of such entry to Seller and such activities will not interfere with
Seller's ownership and maintenance of the Property. Seller and Seller's
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agents shall reasonably cooperate with Buyer, provided that such
investigations and studies shall be at the sole cost and expense of Buyer.
Buyer agrees to repair any damage caused by Buyer or its agents or independent
contractors to the Property and further agrees to indemnify, protect, defend
(with legal counsel acceptable to both Buyer and Seller) and hold Seller
harmless from and against any costs, expenses, losses, attorneys' fees and
liabilities (including, without limitation, claims of mechanics' liens)
incurred or sustained by Seller either prior or subsequent to the Close of
Escrow as a result of the conduct of Buyer, its agents, or independent
contractors under this Section 6.4. The covenants contained in this Section
6.4 shall survive the Close of Escrow or earlier termination of this
Agreement.
6.5 Indemnities of Buyer. Buyer agrees that it will protect,
defend, indemnify and hold Seller harmless from and against all actions,
causes of action, suits, claims, costs, losses, penalties, damages,
liabilities and expenses of any kind whatsoever, including reasonable
attorneys' fees ("Claims"), based upon or arising out of: (i) any Claim for
personal injury or property damage occurring on or about the Property after
the Closing Date or in connection with Buyer's or its agents' or independent
contractors' access to the Property prior to the Closing Date; (ii) any Claims
related to construction defects, soil subsidence or other similar claims
related to the Land, the Lots or the Improvements or any other improvements of
any kind made thereto or constructed thereon; and (iii) any other Claim
arising out of Buyer's ownership or operation of the Property after the
Closing Date.
6.6 Indemnities of Seller. Seller agrees that it will protect,
indemnify, defend and hold Buyer harmless from and against all Claims based
upon or arising out of: (i) any claim for personal injury or property damage
occurring on or about the Property prior to the Closing Date (except those
resulting from Buyer's access to the Property prior to the Closing Date);
(ii) any liability or obligation which Buyer is not obligated to assume under
this Agreement; and (iii) any loss or liability pertaining to, or resulting
from, the drainage system installed on the Tooby property, which is adjacent
to the eastern edge of the Land, including, without limitation, any stoppage
of construction on or sales of the Lots caused by such drainage system or by
any action or inaction by any Governmental Agency with respect to such
drainage system. Notwithstanding the foregoing sentence, Seller shall not be
obligated to protect, defend indemnify or hold Buyer harmless from any Claims
related to construction defects, soil subsidence or other similar claims
related to the Land, the Lots or the Improvements or any other improvements of
any kind made thereto or constructed thereon.
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6.7 Completion of Improvements; Maintenance Bonds. Seller will
complete the Improvements for Unit 2, as shown on the final Subdivision Map
therefor, and Dover/Foothill Boulevard, and shall obtain the City of
Fairfield's acceptance for maintenance of such Improvements. If the
Improvements are not accepted for maintenance by the City of Fairfield by the
Close of Escrow, Seller will take such action and assume such responsibilities
as may be necessary to obtain the City of Fairfield's acceptance for
maintenance of such Improvements as soon as reasonably practicable following
the Close of Escrow. Buyer shall be responsible for maintenance of the
Improvements from and after their acceptance for maintenance by the City of
Fairfield. Buyer will provide maintenance bonds for all of the Unit 2
Improvements and Dover/Foothill Boulevard upon the earlier of (i) Close of
Escrow or (ii) acceptance for maintenance by the City of Fairfield of the
required work. If Buyer does not close escrow and acquire the property
subject to the Unit 2 Second Closing Purchase Agreement, Seller will take
steps to replace the maintenance bonds provided by Buyer to the extent they
pertain to the property subject to the Unit 2 Second Closing Purchase
Agreement.
6.8 Recreational Facility. Seller shall construct a recreational
facility, as described in the plans therefor included in the Project
Documents, upon the issuance of a building permit for the sale of the 351st
dwelling unit the Paradise Valley development (exclusive of any building
permits for the NCROC project). Buyer shall provide Seller quarterly reports
indicating the number of closings in any given quarter to facilitate Seller's
compliance with this requirement.
6.9 Demolition of Parking Lot. Seller will demolish the parking lot
for the Unit 2 model homes and convert that lot to a residential building lot
on or before May 1, 1997.
6.10 Cost Sharing Agreement. Buyer acknowledges that Seller has
assumed certain obligations under that certain Paradise Valley Infrastructure
Cost Sharing Agreement dated October 20, 1989 ("Cost Sharing Agreement") with
Arcadia Homes and Winncrest Development. This Cost Sharing Agreement provides
for the completion of all infrastructure, common amenities, landscaping and
other similar items on parcels at the Paradise Valley project. Seller shall
remain responsible for completion of its responsibilities under the Cost
Sharing Agreement with respect to the Property. Buyer covenants and agrees
(i) to cooperate in, and not to interfere with, the full and complete
implementation of the Cost Sharing Agreement and (ii) to supply Seller with
any information on actual or estimated costs of improvements as may be
requested and required by Seller for reporting purposes under the Cost Sharing
Agreement.
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6.11 Water and Sewer Line Reimbursements. Buyer acknowledges that
Seller is currently working with the City of Fairfield on reimbursements for
increasing the size of various water and sewer lines. Any reimbursements for
infrastructure, including the water and sewer lines, provided by Seller shall
be the sole property of Seller, and Buyer, promptly after receipt, shall
deliver such reimbursement payments to Seller if they are received by Buyer
after the Close of Escrow.
6.12 Pacific Gas & Electric Deposits. Buyer shall retain all Pacific
Gas & Electric deposits for Unit 2.
6.13 Transfer of Entitlements. Seller shall cooperate with Buyer and
execute, deliver, acknowledge and record such documents, instruments and
certificates as Buyer may reasonably require to effect the transfer of any
entitlements applicable to the Land, the Lots and the Improvements from the
City of Fairfield or any other Governmental Agency to Buyer.
6.14 Confidentiality. The parties hereto agree that they shall
maintain in confidence and not disclose any information, including, without
limitation, the Purchase Price and the price per Lot, related to this
Agreement, the Land, the Lots, the Improvements or any other Property without
the prior written consent of the other party to this Agreement. The preceding
sentence shall not prevent either party from disclosing the terms and
conditions of this Agreement and any and all information regarding the Land,
the Lots, the Improvements and the Property to the parties' respective counsel
and Governmental Agencies, such as the Securities Exchange Commission, having
jurisdiction over either party.
6.15 Status of Buyer as Declarant; Annexation of Lots. Upon the
Close of Escrow, Seller shall record in the County and deliver to Buyer a
certificate, as required under Section 2.11 of that certain Master Declaration
of Covenants, Conditions and Restrictions of Paradise Valley, which was
recorded in the Office of the County Recorder of Solano County, State of
California, on August 25, 1995, Serial No. 95-51486 ("CC&Rs"), designating
Buyer as a "Declarant," as defined in the CC&Rs, with respect to the Lots.
Buyer will undertake, with Seller's reasonable cooperation the responsibility
of preparing documentation for annexation of the Lots under the CC&Rs and
taking such other steps, including, without limitation, obtaining from the
California Department of Real Estate a Subdivision Public Report pertaining to
the sale of the Lots, as Buyer may determine to be necessary or appropriate to
effectively develop, market, improve and sell the Lots.
6.16 Possession. Possession of the Property shall be delivered by
Seller to Buyer on the Closing Date upon recordation of the Grant Deed(s).
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6.17 Survival of Covenants and Agreements. The covenants and
agreements set forth in Sections 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12,
6.13, 6.14 and 6.15 of this Agreement shall survive the Close of Escrow.
ARTICLE 7
ACKNOWLEDGMENTS AND REPRESENTATIONS
7.1 Seller's Representations.
7.1.1 No Rights to Acquire Property. No person, firm or
entity other than Buyer has any rights in, or right to acquire, the Property
or any part thereof, and as long as this Agreement remains in force, Seller
will not, without Buyer's prior written consent, lease, transfer, mortgage,
pledge, or convey, its interest in the Property, or any portion thereof, nor
any right therein or grant any right or option to anyone to effect any such
transaction.
7.1.2 Organization. Seller is a general partnership duly
organized and validly existing under the laws of the State of California with
full power to enter into this Agreement.
7.1.3 Authority. The execution and delivery of this
Agreement have been duly authorized and approved by all requisite partnership
action, and the consummation of the transactions contemplated hereby will be
duly authorized and approved by all requisite partnership action of Seller.
7.1.4 FIRPTA Affidavit. Seller is not a foreign corporation,
foreign partnership, foreign trust or foreign estate (as those terms are
defined in the Internal Revenue Code and the Treasury Regulations promulgated
thereunder) but rather a partnership formed under the laws of one of the
United States. Seller understands and agrees that the certification made in
this Section 7.1.4 may be disclosed to the Internal Revenue Service by Buyer
and that any false statement contained herein could be punished by fine,
imprisonment or both.
7.1.5 Latent Defects. Seller has no actual knowledge of any
latent defects on, in, under or above the Land, the Lots or the Improvements
(to the extent completed as of the date of this Agreement). Buyer
acknowledges that Seller has disclosed that there are issues to be resolved by
Seller with respect to the drainage system installed on the Tooby property,
which is adjacent to the eastern edge of the Land. For purposes of this
representation, the actual knowledge of Seller shall mean the actual knowledge
of only Patricia A. Wood and no other person.
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7.2 Buyer's Representations.
7.2.1 Organization. Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the State
of California with full power to enter into this Agreement.
7.2.2 Authority. The execution and delivery of this
Agreement have been duly authorized and approved by all requisite partnership
action of Buyer and the consummation of the transactions contemplated hereby
will be duly authorized and approved by all requisite partnership action of
Buyer.
7.3 Purchase "As-Is"; Limitation of Liability.
7.3.1 Buyer acknowledges that (i) except for Section 7.1.5,
Seller is not making and has not made any warranties or representations,
express or implied, as to the legal, physical and/or financial condition now
or in the future of the Land, the Lots, the Improvements or any Property, and
(ii) Buyer is buying the Property in an "as-is" condition based solely on
Buyer's own studies and investigations.
7.3.2 Buyer acknowledges that Seller shall have no liability
for any latent or patent defects discovered upon the Property following the
Close of Escrow.
7.3.3 Buyer confirms, acknowledges and agrees that no
officer, director, employee or representative of Seller or Seller's partners
(whether or not such individual has signed this Agreement on behalf of Seller)
makes any express or implied representation or warranty of any kind or nature
whatsoever concerning the Land, the Lots, the Improvements or any of the
Property. Buyer further acknowledges, confirms and agrees that any liability
with respect of this Agreement and the transactions contemplated herein shall
result in the liability of Seller or Seller's general partners only and not
any individual officer, director, employee or representative of Seller or
Seller's partners. Buyer therefore confirms, acknowledges and agrees that
Buyer may seek recourse only against Seller or Seller's general partners for
any liability arising out of or in connection with this Agreement and the
transactions contemplated hereby.
7.4 Survival. The representations made by Seller in Sections 7.1.1,
7.1.2, 7.1.3, 7.1.4 and 7.1.5, and by Buyer in Sections 7.2.1 and 7.2.2, and
the acknowledgments and covenants of Buyer in Sections 7.3.1, 7.3.2 and 7.3.3
of this Agreement shall survive the Close of Escrow.
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ARTICLE 8
THE CLOSE OF ESCROW
8.1 Close of Escrow. Unless the parties mutually agree upon an
earlier closing date, Escrow shall close on October 31, 1996 ("Closing Date").
8.2 Closing Procedure. Escrow Agent shall close the Escrow on or
before the Closing Date by (i) recording Seller's Grant Deed(s) and such other
documents as may be necessary to procure the Title Policy and satisfy the
terms and conditions of this Agreement and (ii) delivering funds and documents
as set forth in Article 10 entitled "Recordation and Distribution of Funds and
Documents" WHEN AND ONLY WHEN each of the following requirements has been
satisfied:
8.2.1 Funds and Instruments. All funds and instruments
required pursuant to Articles 2 and 3 have been delivered to Escrow Agent.
8.2.2 Satisfaction of Conditions Precedent. Each of the
conditions precedent set forth in Section 5.1 has been, or upon such closing
shall be, satisfied as provided for in Section 5.1.
8.2.3 Recordation. Escrow Agent shall have recorded the
documents deposited into Escrow for recordation in the Official Records of the
County.
8.3 Earlier Closing. If all of the conditions set forth in Sections
8.2.1 and 8.2.2 are satisfied at a date earlier than the Closing Date, Escrow
Agent shall close the Escrow at such earlier date provided Escrow Agent
obtains the written consent of Buyer and Seller to do so.
8.4 Termination of Escrow. If Escrow Agent cannot close the Escrow
on or before the Closing Date, it will, nevertheless, close the Escrow when
all conditions have been satisfied or waived as provided for in this
Agreement, notwithstanding that one or more of such conditions has not been
timely performed, unless (i) a notice of termination has theretofore been
delivered to Escrow Agent in accordance with the provisions of Section 5.2,
13.1 or 13.2, or (ii) after the Closing Date and prior to the Close of Escrow,
Escrow Agent receives a written notice to terminate the Escrow and this
Agreement from a party who, at the time such notice is delivered, is not in
default hereunder. The right to terminate the Escrow and this Agreement under
the provisions of clause (ii) of this Paragraph 8.4 shall be optional, not
mandatory; no delay in the giving of such notice shall affect the rights
hereunder of the party giving the same.
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8.4.1 Notice of Termination. Escrow Agent shall have no
liability or responsibility for determining whether or not a party giving a
notice of termination is or is not in default hereunder. Within two (2)
working days after receipt of such notice from one party, Escrow Agent shall
deliver one copy of such notice to the other party. Unless written objection
to termination of the Escrow is received by Escrow Agent within ten (10) days
after Escrow Agent so delivers such notice, (i) Escrow Agent shall forthwith
terminate the Escrow and return all documents, funds or other items held by it
to the party depositing same, except that Escrow Agent may retain such
documents and other items usually retained by escrow agents in accordance with
standard escrow termination procedures and practices, and (ii) each party
shall forthwith pay to Escrow Agent one-half of Escrow Agent's reasonable
escrow termination charges. Notwithstanding the foregoing provisions of this
Section 8.4.1, Escrow Agent may (i) retain any funds on deposit with it until
such time as its Escrow termination charges are paid in full and/or (ii)
deduct from any cash held by it sufficient funds to pay for its Escrow
termination charges in full. If written objection to the termination of the
Escrow is delivered to Escrow Agent within such 10-day period, Escrow Agent is
authorized to hold all funds and instruments delivered to it in connection
with the Escrow and may, in Escrow Agent's sole discretion, take no further
action until otherwise directed either by the parties' mutual written
instructions or final order of a court of competent jurisdiction.
8.4.2 Return of Deposits. If the Escrow is terminated under
either Section 13.1 or Section 13.2 or as a result of Seller's default under
or breach of this Agreement, Seller shall return to Buyer any funds disbursed
from the Escrow to Buyer prior to the termination of the Escrow.
ARTICLE 9
PRORATIONS, FEES AND COSTS
9.1 Prorations. Escrow Agent will prorate as of the Close of Escrow
between the parties, in cash, county, city and special district (if any) real
property taxes and assessments for the Property based on the latest
information available to Escrow Agent.
9.2 Thirty Day Month. All prorations and/or adjustments called for
in this Agreement are to be made on the basis of a thirty (30) day month,
unless otherwise specifically instructed in writing.
9.3 Seller's Fees and Costs. Seller shall pay (i) one-half of
Escrow Agent's escrow fee, (ii) usual Seller's document-drafting and recording
charges, (iii) the title insurance premium for the CLTA Owner's Title Policy
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and any endorsements reasonably requested by Buyer's lender, and (iv) the
County Documentary Transfer Tax in the amount determined by Escrow Agent and
the County Recorder.
9.4 Buyer's Fees and Costs. Buyer shall pay (i) one-half of Escrow
Agent's escrow fee, (ii) usual Buyer's document-drafting and recording charges
and (iii) the additional premium for an American Land Title Association (ALTA)
title insurance policy, if Buyer desires that Title Company issue such a
policy.
9.5 Escrow Cancellation Charges Due to a Default. Notwithstanding
the provisions of Sections 9.3 and 9.4 above, if Escrow fails to close due to
Seller's default, Seller shall pay all Escrow cancellation charges. If Escrow
fails to close due to Buyer's default, Buyer shall pay all Escrow cancellation
charges. If Escrow fails to close for any reason other than the foregoing,
Buyer and Seller shall each pay one-half of any Escrow cancellation charges.
"Escrow cancellation charges" means all fees, charges and expenses incurred by
Escrow Agent, including all expenses incurred in connection with issuance of
the Preliminary Report and other title matters.
ARTICLE 10
RECORDATION AND DISTRIBUTION OF FUNDS AND DOCUMENTS
10.1 Disbursements. Except as provided in Section 10.4, below, all
disbursements by Escrow Agent shall be made by checks of Escrow Agent.
10.2 Recorded Documents. Escrow Agent shall cause the County
Recorder of the County to mail Seller's Grant Deed (and each other documents
which are herein expressed to be, or by general usage are, recorded) after
recordation, to the grantee, beneficiary or person (i) acquiring rights under
said document or (ii) for whose benefit said document was acquired.
10.3 Unrecorded Documents. Escrow Agent shall, at the Close of
Escrow, deliver by certified mail, overnight courier or United States mail (or
will hold for personal pickup, if requested) one (1) copy of each unrecorded
document received hereunder by Escrow Agent to the payee or person (i)
acquiring rights under said document or (ii) for whose benefit said document
was acquired.
10.4 Payment of Funds at Close of Escrow. Escrow Agent shall, at the
Close of Escrow, deliver by wire transfer, in accordance with Seller's
instructions (or will hold for personal pickup, if requested) (i) to Seller,
or order, the cash, plus any proration or other credits to which Seller will
be entitled less any appropriate proration, deposits or other charges, and
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(ii) to Buyer, or order, any excess funds theretofore delivered to Escrow
Agent by Buyer.
10.5 Conformed Copies. Escrow Agent shall, at the Close of Escrow,
deliver to Seller and Buyer a copy of the Seller's Grant Deed(s) (conformed to
show recording date) and conformed copies of each document recorded to place
title in the condition required by this Agreement.
ARTICLE 11
REMEDIES
11.1 Liquidated Damages to Seller. If all of the conditions to
Closing for Buyer's benefit have either been satisfied or waived by Buyer by
the Closing Date, and the purchase and sale of the Property described herein
fails to close due to default by Buyer, it is agreed that the amounts released
from Escrow to Seller under this Agreement ("Released Amount") shall be
retained and accepted by Seller as liquidated damages and not as a penalty and
Seller shall be released from its obligation to sell the Property to Buyer,
and Buyer shall be released from its obligation to purchase the Property. It
is agreed that the Released Amount constitutes a reasonable estimate of the
damages to Seller. Buyer and Seller agree that it is impossible or
impractical presently to predict what monetary damages Seller would suffer in
such event. Buyer desires to limit the monetary damages for which Buyer might
be liable hereunder and Buyer and Seller desire to avoid the costs and delays
they would incur if a lawsuit were commenced to collect damages and therefore
agree that the liquidated damages provided hereunder shall constitute Seller's
sole and exclusive remedy hereunder. By the act of an authorized
representative of each party affixing its initials herein, each party
specifically confirms the accuracy of the above statements and its agreement
with them.
/s/ P.W. /s/ L.J.Y.
Seller's Initials Buyer's Initials
11.2 Specific Performance. If all of the conditions to Closing for
Seller's benefit have either been satisfied or waived by Seller by the Closing
Date, and the purchase and sale of the Property described herein fails to
close due to default by Seller, Buyer shall be entitled to bring an action for
specific performance of Seller's obligations under this Agreement.
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ARTICLE 12
ASSIGNABILITY
12.1 Assignment. Neither party shall voluntarily or by operation of
law assign or otherwise transfer any of its rights or obligations under this
Agreement without obtaining the prior written consent of the other party,
which consent may not be unreasonably withheld. Notwithstanding the foregoing
sentence, Buyer shall have the right to assign its rights under this Agreement
without consent of Seller to a corporation, partnership, limited liability
company or other entity in which the beneficial owners of at least 51% of the
equity interests in such entity own at least 51% of the equity interests in
Buyer, provided that Buyer shall remain liable for, and be responsible for the
performance of, any and all liabilities, obligations, representations,
covenants and agreements under this Agreement.
ARTICLE 13
EMINENT DOMAIN AND MATERIAL LOSS
13.1 Eminent Domain. In the event that, prior to the Close of
Escrow, all or any material portion of the Property is taken or appropriated
by any public or quasi-public authority under the power of eminent domain, or
Seller receives actual notice of any pending or threatened condemnation
proceedings, then either Buyer or Seller may terminate this Agreement without
further liability hereunder and the parties shall proceed in accordance with
Section 8.4, and, in such event, any portion of Buyer's Deposit, regardless of
whether or not it has been released from Escrow to Seller, shall be
immediately returned to Buyer, and any condemnation proceeds shall be the sole
property of Seller. If neither Seller nor Buyer elects to terminate this
Agreement in the event of any such taking, or threat of taking, and provided
that all conditions precedent to the Close of Escrow have either been
satisfied or waived, Escrow shall close in accordance with this Agreement, and
Seller shall assign to Buyer all of its right, title and interest in any
condemnation proceeds or award made by the governmental entity.
13.2 No Material Loss. If, prior to the Close of Escrow, and subject
to the satisfaction or waiver of all conditions precedent in favor of Buyer
and Seller, the Property shall suffer a Material Loss, Buyer shall have the
right to elect, within 30 days of receipt of notice of such Material Loss, (a)
to terminate this Agreement under Section 8.4.1 and receive a return of
Buyer's Deposit or (b) to purchase the Property as provided in this Agreement
and receive an assignment of any insurance proceeds Seller receives, or to
which Seller is or may become entitled, with respect to such Material Loss
upon Seller's receipt of such proceeds. The parties acknowledge and agree in
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no event shall the Close of Escrow be extended due to a Material Loss.
Notwithstanding the foregoing, the assignment of any insurance proceeds as
provided herein shall not include any proceeds received for items not related
to the physical condition of the Property, such as proceeds from Seller's
business interruption insurance, if any. For purposes of this Agreement, a
"Material Loss" means a loss resulting from a casualty that either (i)
diminishes the value of the Property in an amount of at least 10% of the
Purchase Price or (ii) results in a loss of at least 10% of the aggregate
square footage of the Land as of the Effective Date.
ARTICLE 14
GENERAL PROVISIONS
14.1 Attorneys' Fees. In the event any action, arbitration,
mediation or other dispute resolution proceeding shall be instituted between
Seller and Buyer in connection with this Agreement, the party prevailing in
such proceeding shall be entitled to recover from the other party all of its
costs of such proceeding, including, without limitation, attorneys' fees and
costs as fixed by the court therein.
14.2 Captions. The captions used herein are for convenience only and
are not a part of this Agreement and do not in any way limit or amplify the
terms and provisions hereof.
14.3 Construction of Agreement. The agreements contained herein
shall not be construed in favor of or against either party, but shall be
construed as if both parties prepared this Agreement.
14.4 Counterparts. This Agreement may be executed in counterparts,
all of which, when taken together, shall constitute a fully executed original.
14.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof
and all prior and contemporaneous agreements, representations, negotiations
and understandings of the parties hereto, oral or written, are hereby
superseded and merged herein. The foregoing sentence shall in no way affect
the validity of any instruments executed by the parties in the form of the
exhibits attached to this Agreement.
14.6 Exhibits and Schedules. All Exhibits and Schedules attached
hereto are incorporated herein by reference. Any Exhibits or Schedules that
are to be attached to the Agreement after the Effective Date but prior to the
Close of Escrow, shall be initialled by Buyer and Seller on each page and,
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once so initialled, shall be sent to Escrow Agent for attachment to this
Agreement.
14.7 Gender and Number. The use herein of (i) the neuter gender
includes the masculine and the feminine and (ii) the singular number includes
the plural, whenever the context so requires.
14.8 Governing Law. This Agreement and the documents in the forms
attached as exhibits hereto shall be governed by and construed under the laws
of the State of California. This Agreement shall be deemed made and entered
into in the County.
14.9 Joint and Several Liability. If any party consists of more than
one person or entity, the liability of each such person or entity signing this
Agreement shall be joint and several.
14.10 Modification. No modification, waiver, amendment, discharge or
change of this Agreement shall be valid unless the same is in writing and
signed by the party against which the enforcement of such modification,
waiver, amendment, discharge or change is or may be sought.
14.11 Real Estate Brokerage Commission. Seller shall pay a real
estate brokerage commission in the amount of $49,500 to Fred Harris upon the
Close of Escrow. Except as provided in the preceding sentence, neither party
is obligated to pay any real estate, brokerage or other commission or fee in
connection with the purchase and sale of the Property. Each party hereby
indemnifies, protects, defends (with legal counsel reasonably acceptable to
the other party) and holds the other party free and harmless from and against
any and all costs and liabilities, including, without limitation, reasonable
attorneys' fees and costs, for causes of action or proceedings which may be
instituted by any broker, agent or finder, licensed or otherwise, claiming
through, under or by reason of the conduct of such party in connection with
this transaction.
14.12 No Partnership or Joint Venture. Seller or Buyer shall not, by
virtue of this Agreement, in any way or for any reason be deemed to have
become a partner of the other in the conduct of its business or otherwise, or
a joint venturer. In addition, by virtue of this Agreement there shall not be
deemed to have occurred a merger of any joint enterprise between Buyer and
Seller.
14.13 Notice and Payments. Any notice to be given or other document to
be delivered by any party to the other or others hereunder, and any payments
from Buyer to Seller, may be delivered in person or by facsimile transmission
(provided that a confirming copy is sent by mail or overnight delivery as
herein specified) to an officer of any party, or may be deposited in the
21
<PAGE>
United States mail, duly certified or registered, return receipt requested,
with postage prepaid, or by Federal Express or other similar overnight
delivery service, and addressed to the party for whom intended, as follows:
To Seller at its business office:
Paradise Valley Communities No. 1
529 East South Temple
Salt Lake City, Utah 84102
Attention: Patricia A. Wood
Facsimile No.: (801)524-1751
With a copy to:
K. Michael Garrett, Esq.
Duckor Spradling & Metzger
401 West A Street, Suite 2400
San Diego, California 92101
Facsimile No.: (619)231-6629
To Buyer at its business office:
The Forecast Group , L.P.
10670 Civic Center Drive
Rancho Cucamonga, California 91730
Facsimile No.: (909)980-7305
With a copy to:
General Counsel
c/o The Forecast Group , L.P.
10670 Civic Center Drive
Rancho Cucamonga, California 91730
Facsimile No.: (909)987-8958
To Escrow Agent:
Chicago Title Company
604 Empire Street
Fairfield, California 94533
Attention: Ms. Sandy Rigby
Facsimile No.: (707) 425-4810
Any party hereto may from time to time, by written notice to the other,
designate a different address which shall be substituted for the one above
specified. Unless otherwise specifically provided for herein, all notices,
payments, demands or other communications given hereunder shall be in writing
and shall be deemed to have been duly given and received (i) upon personal
delivery, or (ii) as of the third business day after mailing by United States
22
<PAGE>
registered or certified mail, return receipt requested, postage prepaid,
addressed as set forth above, or (iii) the immediately succeeding Business Day
after deposit with Federal Express or other similar overnight delivery
system.
14.14 Remedies Cumulative. All rights and remedies of Buyer and
Seller contained in this Agreement shall be construed and held to be
cumulative.
14.15 Severability. In the event that any phrase, clause, sentence,
paragraph, section, article or other portion of this Agreement shall become
illegal, null or void or against public policy, for any reason, or shall be
held by any court of competent jurisdiction to be illegal, null or void or
against public policy, the remaining portions of this Agreement shall not be
affected thereby and shall remain in force and effect to the fullest extent
permissible by law.
14.16 Successors and Assigns. Subject to the restrictions and
prohibitions on assignment set forth in Article 12, each and all of the
covenants and conditions of this Agreement shall inure to the benefit of and
shall be binding upon the successors-in-interest, assigns, and legal
representatives of the parties hereto. As used in the foregoing, "successors"
shall refer to the parties' interest in the Property and to the successors to
all or substantially all of their assets and to their successors by merger or
consolidation.
14.17 Waiver. No waiver by Buyer or Seller of a breach of any of the
terms, covenants or conditions of this Agreement by the other party shall be
construed or held to be a waiver of any succeeding or preceding breach of the
same or any other term, covenant or condition herein contained. No waiver of
any default by Buyer or Seller hereunder shall be implied from any omission by
the other party to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect a default other
than as specified in such waiver. The consent or approval by Buyer or Seller
to or of any act by the other party requiring the consent or approval of the
first party shall not be deemed to waive or render unnecessary such party's
consent or approval to or of any subsequent similar acts by the other party.
14.18 Gender and Number. In this Agreement (unless the context
requires otherwise), the masculine, feminine and neuter genders and the
singular and the plural include one another.
23
<PAGE>
14.19 Time of the Essence. Time is of the essence of each and every
provision of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
SELLER:
PARADISE VALLEY COMMUNITIES
NO. 1, a California
general partnership
By: HomeFed Communities, Inc.,
a California corporation,
General Partner
By: /s/ Patricia A. Wood
Patricia A. Wood,
President
By: HomeFed Resources
Corporation, a California
corporation, General Partner
By: /s/ Patricia A. Wood
Patricia A. Wood,
President
BUYER:
THE FORECAST GROUP , L.P.,
a California limited partnership
By: FORECAST HOMES, INC., a
California corporation, General Partner
By: /s/ Larry J. Young
Its: Division President
24
<PAGE>
CONSENT OF ESCROW AGENT
The undersigned Escrow Agent hereby agrees to (i) accept the foregoing
Agreement, (ii) be Escrow Agent under said Agreement and (iii) be bound by said
Agreement in the performance of its duties as Escrow Agent; provided, however,
the undersigned shall have no obligations, liability or responsibility under (i)
this Consent or otherwise unless and until said Agreement, fully signed by the
parties, has been delivered to the undersigned or (ii) any amendment to said
Agreement unless and until the same shall be accepted by the undersigned in
writing.
Dated: October 3, 1996 (the "Opening of the Escrow")
Chicago Title Company
By: /s/ Terri Piper
Its: CSEO
<PAGE>
LIST OF EXHIBITS
Exhibit A. . . . . . . . . . .Legal Description of Land -- Unit 2
Exhibit B . . . . . . . . . . . . . . . . . . Property Documents
Exhibit C. . . . . . . . . . . . . . General Conditions of Escrow
Exhibit D. . . . . . . . . . . .Certificate of Non-Foreign Status
Exhibit E. . . . . . . . . . . . . . . . . . . . . .Grant Deed(s)
Exhibit F. . . . . . . . . . . . . . . . . Dissapproved Exceptions
Exhibit G. . . . . . . . . . . . . Commitment for Title Insurance,
Schedule B- Section 2
<PAGE>
EXHIBIT A
Legal Description of Land
Unit 2
ALL THAT REAL PROPERTY SITUATE IN THE CITY OF FAIRFIELD, COUNTY OF SOLANO, STATE
OF CALIFORNIA, DESCRIBED AS FOLLOWS:
LOTS 6 THROUGH 10, 21 THROUGH 30, 68 THROUGH 74, 81 THROUGH 97 AND 101 THROUGH
103, AS SHOWN ON THAT CERTAIN MAP ENTITLED: "FINAL MAP OF PARADISE VALLEY NORTH
UNIT NO. 2, BEING ALL OF LOT 51 AS SHOWN ON THE FINAL MAP OF PARADISE VALLEY
NORTH UNIT NO. 1 AS FILED IN BOOK 57 OF MAPS, AT PAGE 27, SOLANO COUNTY
RECORDS," FILED SEPTEMBER 27, 1990 IN THE OFFICE OF THE RECORDER OF SOLANO
COUNTY IN BOOK 59 OF MAPS, AT PAGE 62, SOLANO COUNTY RECORDS.
<PAGE>
EXHIBIT B
Property Documents
- - Rough Grading and Erosion Plans dated September 1988 (6 copies)
- - Final Map Unit 1 dated September 1988 (6 copies)
- - Final Map Unit 2 dated November 1988 (6 copies)
- - Improvement Plans for Units 1 and 2 dated March 1989
(6 copies)
- - Development Agreement dated July 20, 1988
- - First Amendment to Development Agreement dated September 15, 1994 (not
yet fully executed)
- - Second Amendment to Development Agreement (not yet dated or fully
executed)
- - Covenants, Conditions, and Restrictions dated August 25, 1995
- - Anderson Consulting Group Report dated September 15, 1994
- - Department of Real Estate Public Report dated September 1, 1995
- - Letter to City of Fairfield regarding acceptance of improvements dated
May 28, 1996
- - Unapproved Plans for the Paradise Valley Recreation Facility
- - Cost Sharing Agreement dated October 20, 1989
- - Agreement with City of Fairfield regarding construction of recreational
facility dated August 31, 1995
- - Utility Deposit Balances dated May 31, 1996
- - Paradise Valley Master Association documents dated September 1995
- - Paradise Valley Master Association Bylaws dated August 21, 1995
- - Information regarding improvement bonds and maintenance obligations for
Units 1 and 2 and Dover/Foothill Boulevard
<PAGE>
EXHIBIT C
General Conditions of Escrow
<PAGE>
GENERAL PROVISIONS
1. The phrase "close of escrow" (for COE) as used in this
escrow means the date on which documents are recorded,
unless otherwise specified.
2. Recordation of any instruments delivered through this
escrow, if necessary or proper for the issuance of the
policy of title insurance called for, is authorized.
3. No examination or insurance as to the amount or payment of
personal property taxes is required unless specifically
requested.
4. You and any of your affiliates or employees are authorized
to use the information and documents in this escrow for any
purpose. You are further authorized to furnish to any
broker or lender identified with this transaction or anyone
acting on behalf of such broker or lender, any instructions,
amendments, statements, or notices of cancellation given in
connection with this escrow.
5. All written notices, communications, change of instructions
and documents are required to be delivered timely at the
office of Chicago Title Company as set forth herein.
6. All funds received in this escrow shall be deposited with
other escrow funds in one or more escrow (demand) accounts
of Chicago Title Company in any state or national bank. The
parties to this escrow understand that the escrow accounts
you maintain with the depository institutions contribute to
your value as a customer of these institutions which, in
turn, may make available to Chicago Title Company an array
of bank services, accommodations or other benefits. You
shall have no obligation to account for the value realized
by Chicago Title Company from these services, accommodations
or other benefits. All disbursements shall be made by your
check, unless otherwise instructed. You shall not be
responsible for any delay in closing if funds received by
escrow are not available for immediate withdrawal. Chicago
Title Company may, at its option, require concurrent
instructions from all principals prior to release of any
funds on deposit in this escrow.
7. If demand to cancel is submitted after the Time Limit Date,
any principal so requesting you to cancel this escrow shall
file notice of demand to cancel in your office in writing.
You shall within three (3) working days thereafter mail by
certified mail one copy of such notice to each of the other
principals at the address stated in this escrow. Unless
written objection thereto is filed in your office by a
principal within fifteen (15) calendar days after the date
of such mailing, you are instructed to cancel this escrow.
If this is a sale escrow, you may return the lender's papers
and/or funds upon lender's demand.
8. In the event that this escrow is canceled, any fees or
charges due Chicago Title Company including cancellation
fees and any expenditures incurred or authorized shall be
paid from funds on deposit unless otherwise specifically
agreed to or determined by a court of competent
jurisdiction. Upon payment thereof, return documents and
monies to the respective parties depositing same, or as
ordered by the court, and void any executed instruments.
9. If there is no written activity by a principal to this
escrow within any six-month period after the Time Limit Date
set forth herein, Chicago Title Company may, at its option,
terminate its agency obligation and cancel this escrow,
returning all documents, monies or other items held, to the
respective parties entitled thereto, less any fees and
charges as provided herein.
10. If, for any reason, funds are retained or remain in escrow
after the closing date, you may deduct therefrom a
reasonable charge as custodian, of not less than $25.00 per
month, unless otherwise specified.
11. In the event that you should receive or become aware of
conflicting demands or claims with respect to this escrow,
or the rights of any of the parties hereto, or any money or
property deposited herein, you shall have the absolute right
at your option to discontinue any or all further acts until
such conflict is resolved to your satisfaction.
12. In the event that any Offer to Purchase, Deposit Receipt, or
any other form of Purchase Agreement is deposited in this
escrow, it is understood that such document will be
effective only as among the parties signing said document.
You as escrow holder are not to be concerned with the terms
of such document and are relieved of all responsibility in
connection therewith. You are to be concerned only with the
directives specifically set forth in these escrow
instructions and amendments thereto. Further, you are not
to be concerned or liable for items designated as
"memoranda" in these escrow instructions nor with any other
agreement or contract between the parties.
13. You are released from and shall have no liability,
obligation or responsibility with respect to (a) withholding
of funds pursuant to Section 1445 of the Internal Revenue
Code of 1986 as amended, and to Sections 18662 and 18668 of
the California Revenue and Taxation Code, (b) advising the
parties as to the requirements of said Section 1445, (c)
determining whether the transferor is a foreign person or a
non-resident under such Section, nor (d) obtaining a
nonforeign affidavit or other exemption from withholding
under said Sections nor otherwise making any inquiry
concerning compliance with such Sections by any party to the
transaction.
14. The parties hereto, by execution of these instructions
acknowledge that the escrowholder assumes no responsibility
or liability whatsoever for the supervision of any act or
the performance of any condition which is a condition
subsequent to the closing of this escrow.
15. In the absence of instructions to the contrary, you are
hereby authorized to utilize wire services, overnight, next
day, or other expedited delivery services (as opposed to the
regular U.S. Mail) and to charge the respective party's
account accordingly.
16. If you pay a demand to reconvey a revolving line of credit
or equityline deed of trust, you are hereby instructed on my
behalf and for my benefit, to request that the lender
issuing said demand cancel said revolving line or equityline
of credit.
17. You are authorized to destroy or otherwise dispose of any
and all documents, papers, instructions, correspondence and
other material pertaining to this escrow at the expiration
of six (6) years from the close of escrow or cancellation
thereof, without liability and without further notice.
IMPORTANT NOTICE
Except for wire transfers, funds remitted to this escrow are
subject to availability requirements imposed by Section 12413.1
of the California Insurance Code. CASHIER'S, CERTIFIED or
TELLER'S checks, payable to CHICAGO TITLE COMPANY are generally
available for disbursement on the next business day following
the date of deposit.
Other forms of payment may cause extended delays in the closing
of your transaction pursuant to the requirements imposed by
State Law.
(Wire transfer information available upon request)
ALL PARTIES TO THIS ESCROW ACKNOWLEDGE THAT CHICAGO TITLE COMPANY
DOES NOT PROVIDE LEGAL ADVICE NOR HAS IT MADE ANY INVESTIGATION,
REPRESENTATIONS OR ASSURANCES WHATSOEVER REGARDING THE LEGAL
ASPECTS OR COMPLIANCE OF THIS TRANSACTION WITH ANY TAX,
SECURITIES OR ANY OTHER STATE OR FEDERAL LAWS. IT IS RECOMMENDED
THAT THE PARTIES OBTAIN INDEPENDENT LEGAL COUNSEL AS TO SUCH
MATTERS.
<PAGE>
EXHIBIT D
CERTIFICATE OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code of 1986, as amended ("Code"),
provides that a transferee (buyer) of a U.S. real property interest must
withhold tax if the transferor (seller) is a foreign person. Sections 18805 and
26131 of the California Revenue and Taxation Code provide that a transferee
(buyer) of a California real property interest must withhold tax if withholding
is required by Section 1445 of the United States Internal Revenue Code.
To inform The Forecast Group , L.P. ("Transferee"), that withholding of
tax under Section 1445 of the Code is not required upon disposition of certain
real property to the Transferee by Paradise Valley Communities No. 1, a
California general partnership, ("Transferor"), the undersigned hereby
represents and certifies the following on behalf of the Transferor:
1. The undersigned is the duly qualified and acting officer of the
Transferor;
2. The Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations), but rather is a corporation formed
under the laws of one of the United States;
3. The Transferor's U.S. employer identification number is
52-1671038;
4. The Transferor's address is 529 East South Temple, Salt Lake City,
Utah 84102-1089;
5. The Transferor understands that this certification may be
disclosed to the Internal Revenue Service and/or the California Franchise Board
by the Transferee and that any false statement contained herein could be
punished by fine, imprisonment, or both.
<PAGE>
Under penalty of perjury, the undersigned declares that the undersigned
has examined this certification and to the best of its knowledge and belief it
is true, correct, and complete.
Dated:____________, 1996 TRANSFEROR:
PARADISE VALLEY COMMUNITIES NO. 1,
a California general partnership
By: HomeFed Communities, Inc.,
a California corporation,
General Partner
By: ________________
Patricia A. Wood,
President
By: HomeFed Resources
Corporation, a California
corporation, General Partner
By: ________________
Patricia A. Wood,
President
<PAGE>
EXHIBIT E
Grant Deed(s)
[To Be Prepared and Attached Prior to Close of Escrow]
<PAGE>
EXHIBIT F
DISAPPROVED EXCEPTIONS
Instrument Entitled: Detachment and Development Agreement
Executed by: Solano Irrigation District, Arcadia
Development Co., et al.
Recorded: April 24, 1989 as Instrument
No. 890025219, Official Records
Deed of Trust
Dated: November 18, 1994
Amount: $1,000,000.00
Trustor: Paradise Valley Communities No. 1, a
California General Partnership
Trustee: Chicago Title Company, a California
Corporation
Beneficiary: Leucadia Financial Corporation
Recorded: November 30, 1994 as Instrument
No. 1994-00102706, Official Records
Re-recorded: July 3, 1995 as Instrument No. 1995-
00038553, Official Records
Deed of Trust
Dated: July 3, 1995
Amount: $20,000,000.00
Trustor: Paradise Valley Communities No. 1, a
California General Partnership
Trustee: Chicago Title Company, a California
Corporation
Beneficiary: Leucadia Financial Corporation, a
Utah Corporation
Recorded: July 13, 1995 as Instrument No. 1995-
00038615, Official Records
<PAGE>
EXHIBIT G
APPROVED EXCEPTIONS
(See attached)
<PAGE>
COMMITMENT FOR TITLE INSURANCE
SCHEDULE B - SECTION 2
Order No: 500768 DR
Schedule B of the policy or policies to be issued will contain exceptions to the
following matters unless the same are disposed of to the satisfaction of the
Company:
A. Defects, liens, encumbrances, adverse claims or other matters, if any,
created, first appearing in the public records, or attaching subsequent to
the effective date hereof but prior to the date the proposed Insured
acquires for value of record the estate or interest or mortgage thereon
covered by this Commitment.
B. In addition to the Exceptions shown below, any standard coverage policy of
title insurance issued under the terms of this commitment will contain the
applicable Exclusions and Exceptions shown on attached list.
Exceptions:
A 1. General and special taxes for the fiscal year 1996-1997, a lien not
yet due and payable.
B 2. The Lien of Supplemental Taxes, if any, assessed pursuant to the
provisions of Chapter 3.5 (commencing with Section 75) of the Revenue
and Taxation Code of the State of California.
C 3. The fact that said land is within the bounds of the following Mello-
Roos Community Facilities District(s), the annual assessments of
which, if any, are collected with County Property Taxes
District(s): COMMUNITY FAC. DIST. #1
F-S USD - MELLO ROOS #5
D 4. An Agreement, upon the terms and conditions contained therein
Entitled: DEVELOPMENT AGREEMENT
Executed by: THE CITY OF FAIRFIELD, ARCADIA DEVELOPMENT
CO., ET AL
Recorded: AUGUST 11, 1988 IN BOOK 100194
Instrument No.: 46643, OFFICIAL RECORDS
Reference is made to said instrument for further particulars
E An Agreement, upon the terms and conditions contained therein
Entitled: ASSUMPTION AND CONSENT TO ASSIGNMENT OF
PARADISE VALLEY DEVELOPMENT AGREEMENT
Executed by: PARADISE VALLEY COMMUNITIES NO. 1, A
CALIFORNIA LIMITED PARTNERSHIP, ET AL
Recorded: JANUARY 6, 1992
Instrument No.: 1992-00000836, OFFICIAL RECORDS
Reference is made to said instrument for further particulars
G 5. Easement for the purpose stated herein and incidental purposes as
created in that certain instrument
Recorded: OCTOBER 2, 1989 AS INSTRUMENT NO. 890068128
<PAGE>
Granted to: THE CITY OF FAIRFIELD
Purpose: THE ERRANT FLIGHT AND/OR ENTRY OF GOLF BALLS
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND AS
MORE PARTICULARLY IN SAID INSTRUMENT
H COVENANTS, CONDITIONS AND RESTRICTIONS, IF ANY (DELETING THEREFROM ANY
RESTRICTIONS BASED ON RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL
STATUS OR NATIONAL ORIGIN, UNLESS AND ONLY TO THE EXTENT THAT SAID
COVENANT (A) IS EXEMPT UNDER CHAPTER 42, SECTION 3607 OF THE UNITED
STATES CODE OR (B) RELATES TO HANDICAP BUT DOES NOT DISCRIMINATE
AGAINST HANDICAPPED PERSON(S) AS SET FORTH IN THE DOCUMENT REFERRED TO
IN THE NUMBERED ITEM LAST ABOVE SHOWN.
I 6. An easement for the purpose shown below and rights incidental thereto
as shown or as offered for dedication on the recorded map shown below
Map Of: PARADISE VALLEY NORTH UNIT NO.1
Recorded: OCTOBER 2, 1989 IN BOOK 57 OF MAPS, AT PAGE 27
Easement Purpose: PLANTING
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND, 10 FEET
IN WIDTH, COINCIDENT WITH THE LINES OF DORAL
DRIVE AND FULLERTON DRIVE
J 7. An easement for the purpose shown below and rights incidental thereto
as shown or as offered for dedication on the recorded map shown below
Map Of: PARADISE VALLEY NORTH UNIT NO. 1
Recorded: OCTOBER 2, 1989 IN BOOK 57 OF MAPS, AT PAGE 27
Easement: PUBLIC SERVICE
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND, 10 FEET
IN WIDTH, COINCIDENT WITH THE LINES OF DORAL
DRIVE AND FULLERTON DRIVE; THOSE 5 FOOT BY 18
FOOT PORTIONS OF THE HEREIN DESCRIBED LAND
COINCIDENT WITH THE INTERSECTIONS OF LOT LINES
AND THE LINES OF SAID DRIVES
K 8. An easement for the purpose shown below and rights incidental thereto
as shown or as offered for dedication on the recorded map shown below
Map Of: PARADISE VALLEY NORTH UNIT NO. 1
Recorded: OCTOBER 2, 1989 IN BOOK 57 OF MAPS, AT PAGE 27
Easement Purpose: FENCE
Affects: THE SOUTHEASTERLY 5 FEET OF LOTS 4 THROUGH 6;
THE NORTHERLY 5 FEET OF LOTS 27 THROUGH 34
<PAGE>
L 9. THE FACT THAT OWNERSHIP OF SAID LAND DOES NOT INCLUDE RIGHTS OF ACCESS
TO OR FROM THE LAND ADJACENT THERETO, SUCH RIGHTS HAVING BEEN SEVERED
FROM SAID LAND BY THE MAP OF SAID TRACT
AFFECTS: THE SOUTHEASTERLY LINE OF LOTS 4 THROUGH 6 IN
AND TO PARADISE VALLEY DRIVE; THE NORTHERLY
LINE OF LOTS 27 THROUGH 34 IN AND TO THE GOLF
COURSE
O 10. Easement for the purpose stated herein and incidental purposes as
created in that certain instrument
Recorded: OCTOBER 25, 1990 AS INSTUMENT NO. 900084601
Granted to: THE CITY OF FAIRFIELD
Purpose: OVERSPRAY IN CONNECTION WITH THE WATERING OF A
MUNICIPAL GOLF COURSE AND THE INTRUSION OF GOLF
BALLS FROM THE FAIRWAYS, ROUGHS AND GREENS
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND, AS MORE
PARTICULARLY DESCRIBED IN SAID INSTRUMENT
P COVENANTS, CONDITIONS AND RESTRICTIONS, IF ANY (DELETING THEREFROM ANY
RESTRICTIONS BASED ON RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL
STATUS OR NATIONAL ORIGIN, UNLESS AND ONLY TO THE EXTENT THAT SAID
COVENANT (A) IS EXEMPT UNDER CHAPTER 42, SECTION 3607 OF THE UNITED
STATES CODE OR (B) RELATES TO HANDICAP BUT DOES NOT DISCRIMINATE
AGAINST HANDICAPPED PERSON(S) AS SET FORTH IN THE DOCUMENT REFERRED TO
IN THE NUMBERED ITEM LAST ABOVE SHOWN.
Q 11. Covenants, conditions and restrictions, but omitting any covenant or
restriction based on race, color, religion, sex, handicap, familial
status or national origin, contained in the Declaration
By: PARADISE VALLEY COMMUNITIES NO. 1, A
CALIFORNIA GENERAL PARTNERSHIP, FIRST
AMERICAN TITLE GUARANTY COMPANY, A CALIFORNIA
CORPORATION AND REYNEN, BARDIS & WINN, A
CALIFORNIA LIMITED PARTNERSHIP
Recorded: AUGUST 25, 1995 AS INSTRUMENT NO. 1995-
00051486, OFFICIAL RECORDS
R Said instrument provides that a violation thereof shall not defeat nor
render invalid the lien of any Mortgage or Deed of Trust made in good
faith and for value.
S Contains no reversionary clause.
T Declaration of Annexation, recorded SEPTEMBER 13, 1995 AS INSTRUMENT
NO. 1995-00055722, OFFICIAL RECORDS.
<PAGE>
U Declaration of Annexation, recorded SEPTEMBER 13, 1995 AS INSTRUMENT
NO. 1995-00055723, OFFICIAL RECORDS.
V Declaration of Annexation, recorded SEPTEMBER 13, 1995 AS INSTRUMENT
NO. 1995-00055724, OFFICIAL RECORDS.
AG END OF SCHEDULE B
STR/mg
<PAGE>
PARADISE VALLEY UNIT 1 SECOND CLOSING
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
BETWEEN
PARADISE VALLEY COMMUNITIES NO. 1
("Seller")
AND
THE FORECAST GROUP , L.P.
("Buyer")
<PAGE>
PARADISE VALLEY UNIT 1 SECOND CLOSING
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
THIS PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS ("Agreement") is made
and effective as of October 3, 1996 by and between Paradise Valley Communities
No. 1, a California general partnership ("Seller"), and The Forecast Group ,
L.P., a California limited partnership ("Buyer"), with reference to the facts
set forth below.
A. Seller is the owner of that certain land situated in the City of
Fairfield, County of Solano, State of California, more particularly described
in Exhibit A, attached hereto and incorporated herein ("Land"). The Land is a
portion of a residential subdivision consisting of four units, or
neighborhoods, each of which is referred to herein as a "Unit," and the Land
is a portion of Unit 1. Unit 1 consists of 56 single-family residential lots,
20 of which are subject to this Agreement. The term "Lots" refers to the
single-family residential lots located in Unit 1 that are specifically
described in Exhibit A. Unit 1 also consists of certain infrastructure
improvements and amenities, as described in the "Subdivision Map," as defined
in Section 1.21 of this Agreement, and related improvement plans and
specifications described in Exhibit B, attached hereto ("Improvements").
B. Buyer desires to purchase the Property (as defined herein) and
Seller desires to sell the Property to Buyer in accordance with the terms and
provisions set forth below.
NOW, THEREFORE, in consideration of the recitals set forth above, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as set forth below.
ARTICLE 1
DEFINED TERMS
Terms used in this Agreement with their initial letters capitalized and
not otherwise defined shall have the meanings set forth below.
1.1 Agreement. The term "Agreement" shall mean this Purchase
Agreement and Escrow Instructions between Seller and Buyer.
1.2 Approved Exceptions. The term "Approved Exceptions" shall mean
those exceptions to title that are approved in accordance with this Agreement.
1
<PAGE>
1.3 Business Day. The term "Business Day" shall mean any day other
than a Saturday, Sunday or legal holiday in the State of California. All
periods of time described in this Agreement that are not expressly measured by
Business Days shall be measured by calendar days.
1.4 Buyer. The term "Buyer" shall mean The Forecast Group , L.P., a
California limited partnership.
1.5 CLTA Owner's Title Policy. The term "CLTA Owner's Title Policy"
shall mean the California Land Title Association ("CLTA") owner's policy of
title insurance to be issued by the Title Company upon the Close of Escrow
pursuant to the terms of this Agreement.
1.6 Cash. The term "cash" shall mean: (i) currency of the United
States of America, (ii) cashier's check(s) currently dated and payable to
Escrow Agent or Seller, as required under this Agreement, drawn and paid
through a California banking or savings and loan institution, tendered to
Escrow Agent or Seller, as required under this Agreement one (1) Business Day
before funds are required to be delivered under this Agreement, or (iii) an
amount credited by wire transfer into Escrow Agent's or Seller's bank account,
as required under this Agreement.
1.7 Close of Escrow. The term "Close of Escrow" shall mean the
consummation of the purchase of the Property by Buyer from Seller and the
recordation of Seller's Grant Deed(s) in accordance with the terms and
provisions of this Agreement.
1.8 Closing Date. The term "Closing Date" shall mean the date on
which the closing will be held for the sale of the Property as set forth in
Section 8.1 of this Agreement.
1.9 County. The term "County" shall mean the County of Solano, in
the State of California.
1.10 Effective Date. The term "Effective Date" shall mean October 3,
1996, the date on which this Agreement is effective and deemed to have been
made.
1.11 Escrow. The term "Escrow" shall mean the escrow opened by
Escrow Agent pursuant to the terms of this Agreement.
1.12 Escrow Agent. The term "Escrow Agent" shall mean Chicago Title
Company, 604 Empire Street, Fairfield, California 94533 ("Chicago Title").
1.13 Governmental Action. The term "Governmental Action" shall mean
(a) any order of a court of competent jurisdiction, and/or (b) any enactment,
by the initiative or referendum process or otherwise, of any Governmental
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Agencies (as defined below) affecting the Property, either directly or
indirectly, including, but not limited to, limitation on the number of permits
or licenses that can be issued, declaration of policy, resolution, ordinance,
statute, regulation, or any other enactment of any Governmental Agency (as
defined below) and irrespective of whether the orders or enactments listed
immediately above contain the words "moratorium," "moratoria" or similar
words.
1.14 Governmental Agencies. The term "Governmental Agencies" shall
mean any local, county, state and/or federal governmental or quasi-governmental
agencies, authorities or regulatory bodies and any public or
private utility companies having jurisdiction over the Property.
1.15 Opening of Escrow. The term "Opening of Escrow" shall mean the
date Escrow Agent executes the Consent of Escrow Agent attached hereto, which
consent shall be executed by Escrow Agent upon delivery of this Agreement to
Escrow Agent.
1.16 Preliminary Report. The term "Preliminary Report" shall mean
the Preliminary Title Report dated June 10, 1996, issued by the Title Company.
1.17 Property Documents. The term "Property Documents" shall mean
the documents delivered by Seller to Buyer in connection with its feasibility
studies pursuant to Section 4.1 of this Agreement. The Property Documents are
listed in Exhibit B, attached hereto.
1.18 Property. The term "Property" shall mean the Land, the Lots,
the Subdivision Map (to the extent it relates to the Lots) and any public or
private entitlements, utility deposits, the non-exclusive use of the name "New
Providence," maps, plans, soils reports, environmental reports, marketing
studies, development agreements, permits and similar items that relate to the
development, sale and use of the Lots as single-family residential building
lots.
1.19 Purchase Price. The term "Purchase Price" shall mean the total
consideration to be paid by Buyer to Seller for the purchase of the Property
as set forth in Article 2 of this Agreement.
1.20 Seller. The term "Seller" shall mean Paradise Valley
Communities No. 1, a California general partnership.
1.21 Subdivision Map. The term "Subdivision Map" shall mean the
Subdivision Map of Paradise Valley North Unit No. 1, recorded on October 2,
1989, in Book 57 of Maps, at Page 27, et. seq., in the Official Records of
Solano County.
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1.22 Title Company. The term "Title Company" shall mean Chicago
Title.
ARTICLE 2
AGREEMENT OF PURCHASE AND SALE
2.1 Agreement for Purchase and Sale. In consideration of the
payment of the Purchase Price, Seller agrees to sell the Property to Buyer and
Buyer agrees to purchase the Property from Seller on the terms and conditions
set forth in this Agreement.
2.2 Purchase Price. The purchase price ("Purchase Price") for the
Property is One Million Ten Thousand and 00/100 Dollars ($1,010,000).
2.3 Payment of Purchase Price. The Purchase Price shall be paid in
accordance with the provisions set forth below.
2.3.1 Cash deposited into
Escrow on the Opening of Escrow
under Section 3.1
("Buyer's Deposit") $ 50,000
2.3.2 Additional cash to be deposited
into Escrow upon Close of Escrow $ 960,000
Total Purchase Price: $1,010,000
==========
2.4 Nonrefundability of Deposits. The cash deposited into escrow
pursuant to Section 2.3.1, above, shall, upon the signing of this Agreement,
become nonrefundable and be released by the Escrow Agent to the Seller. Any
funds released from Escrow to Seller under this Section 2.4 shall apply to the
Purchase Price upon the Close of Escrow. Regardless of whether Escrow closes,
however, any funds released from Escrow to Seller shall constitute
nonrefundable consideration for Seller's taking the Property off the market,
unless Escrow fails to close due a default under or breach of this Agreement
by Seller, in which event, such deposits shall be returned to Buyer or, if the
Buyer elects the remedy of specific performance of this Agreement, applied to
the Purchase Price.
2.5 Assumption of Liabilities. Upon the terms and subject to the
conditions contained in this Agreement, Buyer shall assume, effective as of
the time of day on the Closing Date that Escrow Agent telephonically or in
writing notifies Seller and Buyer that Escrow has closed, Seller's obligations
under the Property Documents with respect to the Property purchased under this
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Agreement, except for such obligations as Seller specifically retains under
Article 6 of this Agreement.
ARTICLE 3
OPEN AND CLOSE OF ESCROW AND DELIVERY OF DOCUMENTS
3.1 Opening of Escrow. Buyer and Seller entered into a letter of
intent dated September 20, 1996 ("Letter of Intent") and delivered the Letter
of Intent together with $200,000 ("$200,000 Deposit") and Joint Escrow
Instructions dated September 20, 1996 ("Joint Escrow Instructions") to Escrow
Agent. The Joint Escrow Instructions require the Escrow Agent to allocate
$50,000 of the $200,000 Deposit to the Escrow established under this Agreement
upon the signing of this Agreement by both Buyer and Seller. Accordingly,
upon execution of this Agreement, Buyer and Seller shall open Escrow by
depositing with Escrow Agent a fully executed original of this Agreement for
use as escrow instructions. Escrow Agent shall thereupon transfer $50,000 of
the $200,000 Deposit to the Escrow established under this Agreement, and such
amount shall be treated as Buyer's Deposit. Escrow Agent shall execute the
Consent of Escrow Agent ("Consent") which appears at the end of this Agreement
and deliver a fully executed Consent to Buyer and Seller. Escrow Agent's
general conditions ("General Conditions") are attached hereto as Exhibit C and
incorporated herein by reference to the extent they are not inconsistent with
the provisions of this Agreement. If there is any inconsistency between the
provisions of the General Conditions and this Agreement, the provisions of
this Agreement shall control. If Escrow Agent requires additional
instructions, the parties agree to make any deletions, substitutions and
additions as the parties shall mutually approve as long as such deletions,
substitutions or additions do not materially alter the terms of this
Agreement.
3.2 Buyer's Deliveries. Buyer shall, at least one (1) Business Day
prior to the Close of Escrow (unless required to be delivered at an earlier
date under the terms of this Agreement), deliver to Escrow Agent each of the
following:
3.2.1 Purchase Price. The balance of the cash portion of the
Purchase Price;
3.2.2 Documents. Fully executed and, where appropriate,
notarized counterparts of the documents required to be executed by Buyer under
this Agreement;
3.2.3 Prorations, Fees and Costs. The amount, if any,
required of Buyer under Article 9 of this Agreement entitled "Prorations, Fees
and Costs" and any other amounts payable upon the Close of Escrow under any
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other provisions of this Agreement; and
3.2.4 General. Such other documents, instruments and
certificates as Seller may reasonably require to carry out the intent of this
Agreement; provided, however, that Buyer shall not be obligated to incur any
financial liability or obligation in connection with the furnishing of any such
documents, instruments or certificates.
3.3 Seller's Deliveries. Seller shall, at least one (1) Business
Day prior to the Close of Escrow (unless required to be delivered at an
earlier date under the terms of this Agreement), deliver to Escrow Agent each
of the following:
3.3.1 Certificate of Non-Foreign Status. Prior to the Close
of Escrow, Seller shall execute and deposit into Escrow a Certificate of Non-
Foreign Status certifying that Seller is a non-foreign person in the form
attached hereto as Exhibit D and incorporated herein ("Certificate of Non-
Foreign Status");
3.3.2 Grant Deeds, Bill of Sale and Assignment of Leases.
Prior to the Close of Escrow, Seller shall execute, acknowledge and deposit
into Escrow Grant Deed(s) in the form attached hereto as Exhibit E; and
3.3.3 General. Such other documents, instruments and
certificates as Buyer may reasonably require to carry out the intent of this
Agreement; provided, however, that Seller shall not be obligated to incur any
financial liability or obligation in connection with the furnishing of any
such documents, instruments or certificates.
ARTICLE 4
FEASIBILITY REVIEW
4.1 Delivery of Property Documents. Seller has delivered to Buyer
the Property Documents. Buyer has analyzed the feasibility of its purchase
and use of the Property. Buyer has reviewed and analyzed the Property
Documents to determine their individual and collective impact on the Property
and its purchase and use by Buyer.
4.1.1 Review of Preliminary Report. Buyer has been provided
a Preliminary Report issued by the Title Company ("Preliminary Report"),
together with legible copies of all recorded documents described in the
Preliminary Report. Buyer has reviewed and approved the Preliminary Report,
except as set forth in Exhibit F attached hereto. If any title exceptions are
recorded against the Property before the Close of Escrow in addition to those
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specified in the Preliminary Report, Escrow Agent shall cause the Title
Company to issue a supplemental preliminary report ("Supplemental Report").
Buyer shall have five (5) Business Days after receipt of any Supplemental
Report, to review the title exceptions shown therein and to deliver to Seller
notice of approval or disapproval of any title exceptions disclosed in any
such report. Buyer's delivery of a written notice of approval shall be deemed
approval of the exceptions to title shown on any Supplemental Report issued as
of the date of such notice of approval. The title exceptions approved by
Buyer, as set forth in the Commitment for Title Insurance, Schedule B -
Section 2, attached hereto as Exhibit G, and such other exceptions as may be
approved by Buyer with respect to any Supplemental Report, are referred to
herein as "Approved Exceptions." Seller shall have until the Close of Escrow
to remove the title exceptions set forth in Exhibit F. If any other title
exceptions are specifically disapproved, and Seller elects, within ten (10)
Business Days after the date of Buyer's disapproval, not to cure the
disapproved item, then Buyer shall have five (5) Business Days after the
receipt of Seller's notice of election not to cure the disapproved item to
waive its prior disapproval. If Buyer does not deliver notice of its election
to waive its prior disapproval, then the disapproved and uncured item will be
deemed disapproved. If a title exception is disapproved and uncured, Buyer
may terminate the Escrow by delivering a written notice of termination to
Seller and the Escrow Agent. Upon such termination, any deposits theretofore
paid to Seller or Escrow Agent (regardless of whether such deposits were
released to Seller) shall be immediately returned to Buyer, and this Agreement
shall be terminated. Seller shall thereupon be released from its obligation
to sell the Property to Buyer, and Buyer shall be released from any obligation
to purchase the Property.
4.1.2 Governmental Actions. Buyer has reviewed and
considered the impact on the Property of any and all applicable governmental
ordinances, rules and regulations, and evaluate the effect of any pending or
threatened Governmental Actions pertaining to the Property.
4.1.3 Studies and Investigations. Buyer has conducted such
independent investigations, studies and tests as it deemed necessary or
appropriate concerning Buyer's proposed use, sale, development and/or the
suitability of the Property for Buyer's intended purposes. Such
investigations included, without limitation, soils and engineering tests,
hazardous studies, investigations concerning the availability of the approvals
required from any Governmental Agencies for Buyer's proposed use of the
Property, investigations regarding the existence on the Property of any
threatened or endangered species, and of any archaeological artifacts on the
Property, the imposition or increase of any fees, charges or exactions by any
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Governmental Agencies and such economic feasibility and marketing studies as
Buyer deemed appropriate.
4.1.4 Physical Inspection. Buyer has inspected and approved
the physical condition of the Property and conducted any soil, hazardous waste
or engineering studies with respect to the Property Buyer deemed necessary or
appropriate.
4.2 Additional Information from Seller. Seller has provided Buyer
with such Additional Information (as hereinafter defined) as Buyer determined
to be necessary to complete its investigation of the Property, and Seller has,
and caused its agents, employees and consultants to, respond to questions
posed by Buyer with respect to the Property. As used herein, the term
"Additional Information" shall mean and refer to information in the possession
and/or control of Seller concerning (i) the Property and (ii) material changes
in information and documents previously provided to Buyer by Seller.
ARTICLE 5
CONDITIONS PRECEDENT TO CLOSE OF ESCROW
5.1 Subject to Satisfaction or Waiver. The Closing of the purchase
and sale described in this Agreement and the obligations of the parties under
this Agreement shall be subject to satisfaction or waiver (by the party in
whose favor the condition precedent has been established) of all the
conditions precedent set forth below.
5.1.1 Title Policy. Escrow Agent shall be unconditionally
committed to procure from the Title Company the CLTA Owner's Title Policy for
the Property with a liability limit in the amount of the Purchase Price
insuring fee title vested in Buyer. Buyer shall take title to the Property
subject only to: (a) Non-delinquent general, special and supplemental taxes,
bonds and assessments, including Mello-Roos bonds, if any; (b) any matters set
forth in the printed form portion of the CLTA Owner's Title Policy; (c) the
Approved Exceptions; and (d) any items caused or permitted to be placed of
record by Buyer as of the Close of Escrow.
5.1.2 Seller's Performance. Seller shall have duly performed
each and every undertaking and agreement to be performed by it hereunder prior
to the Close of Escrow.
5.1.3 Buyer's Performance. Buyer shall have duly performed
each and every undertaking and agreement to be performed by it hereunder prior
to the Close of Escrow.
5.2 Failure of Conditions Precedent. The conditions precedent in
Sections 5.1.1 and 5.1.2 are for Buyer's benefit and can be waived only by
Buyer. The condition precedent in Section 5.1.3 is for Seller's benefit and
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can be waived only by Seller. In the event that any of the conditions
precedent set forth above is neither satisfied nor waived by the Closing Date,
the party for whose benefit the condition has been created may terminate the
Escrow and this Agreement by giving a written notice of termination to the
other party and Escrow Agent, specifying the reason for termination and the
condition precedent that has not been satisfied. Upon receipt of such notice
of termination, Escrow Agent shall return to Buyer any funds that have not at
the time of termination been released to Seller pursuant to this Agreement,
less applicable Escrow cancellation charges, and any documents to the parties
who deposited them. If Buyer terminates the Escrow and this Agreement because
a condition precedent set forth in Section 5.1.1 or 5.1.2 is not satisfied,
Seller immediately shall return to Buyer any funds theretofore disbursed to
Seller from the Escrow. Seller shall thereupon be released from its
obligation to sell the Property to Buyer, and Buyer shall be released from its
obligation to purchase the Property.
5.3 Copy of Documents to Other Party. Each party will, concurrently
with its delivery to Escrow Agent of any documents described in this Article
5, deliver a copy of the same to the other party.
ARTICLE 6
COVENANTS AND AGREEMENTS
6.1 No Concern. Escrow Agent shall have no concern with, liability
or responsibility for, this Article.
6.2 Additional Escrow Instructions. Buyer and Seller covenant and
agree that they will execute any additional escrow instructions not
inconsistent with the terms of this Agreement as shall be reasonably required
by Escrow Agent.
6.3 Cooperation. Buyer and Seller acknowledge that it may be
necessary to execute documents other than those specifically referred to
herein in order to complete the acquisition of the Property as provided
herein. Both Buyer and Seller hereby agree to cooperate with each other by
executing such other documents or taking such other action as may be
reasonably necessary to complete this transaction in accordance with the
intent of the parties as evidenced in this Agreement.
6.4 Entry Upon Property. After execution of this Agreement, Buyer
and its designated agents and independent contractors shall have the right to
enter upon the Property to conduct surveys, soils tests, physical inspections,
investigations and studies so long as Buyer has provided prior reasonable
notice of such entry to Seller and such activities will not interfere with
Seller's ownership and maintenance of the Property. Seller and Seller's
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agents shall reasonably cooperate with Buyer, provided that such
investigations and studies shall be at the sole cost and expense of Buyer.
Buyer agrees to repair any damage caused by Buyer or its agents or independent
contractors to the Property and further agrees to indemnify, protect, defend
(with legal counsel acceptable to both Buyer and Seller) and hold Seller
harmless from and against any costs, expenses, losses, attorneys' fees and
liabilities (including, without limitation, claims of mechanics' liens)
incurred or sustained by Seller either prior or subsequent to the Close of
Escrow as a result of the conduct of Buyer, its agents, or independent
contractors under this Section 6.4. The covenants contained in this Section
6.4 shall survive the Close of Escrow or earlier termination of this
Agreement.
6.5 Indemnities of Buyer. Buyer agrees that it will protect,
defend, indemnify and hold Seller harmless from and against all actions,
causes of action, suits, claims, costs, losses, penalties, damages,
liabilities and expenses of any kind whatsoever, including reasonable
attorneys' fees ("Claims"), based upon or arising out of: (i) any Claim for
personal injury or property damage occurring on or about the Property after
the Closing Date or in connection with Buyer's or its agents' or independent
contractors' access to the Property prior to the Closing Date; (ii) any Claims
related to construction defects, soil subsidence or other similar claims
related to the Land, the Lots or the Improvements or any other improvements of
any kind made thereto or constructed thereon; and (iii) any other Claim
arising out of Buyer's ownership or operation of the Property after the
Closing Date.
6.6 Indemnities of Seller. Seller agrees that it will protect,
indemnify, defend and hold Buyer harmless from and against all Claims based
upon or arising out of: (i) any claim for personal injury or property damage
occurring on or about the Property prior to the Closing Date (except those
resulting from Buyer's access to the Property prior to the Closing Date); and
(ii) any liability or obligation which Buyer is not obligated to assume under
this Agreement. Notwithstanding the foregoing sentence, Seller shall not be
obligated to protect, defend indemnify or hold Buyer harmless from any Claims
related to construction defects, soil subsidence or other similar claims
related to the Land, the Lots or the Improvements or any other improvements of
any kind made thereto or constructed thereon.
6.7 Completion of Improvements; Maintenance Bonds. Seller will
complete the Improvements for Unit 1, as shown on the final Subdivision Map
therefor, and Dover/Foothill Boulevard, and shall obtain the City of
Fairfield's acceptance for maintenance of such Improvements. If the
Improvements are not accepted for maintenance by the City of Fairfield by the
Close of Escrow, Seller will take such action and assume such responsibilities
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as may be necessary to obtain the City of Fairfield's acceptance for
maintenance of such Improvements as soon as reasonably practicable following
the Close of Escrow. Buyer shall be responsible for maintenance of the
Improvements from and after their acceptance for maintenance by the City of
Fairfield.
6.8 Recreational Facility. Seller shall construct a recreational
facility, as described in the plans therefor included in the Project
Documents, upon the issuance of a building permit for the 351st dwelling unit
in the Paradise Valley development (exclusive of any building permits for the
NCROC project). Buyer shall provide Seller quarterly reports indicating the
number of closings in any given quarter to facilitate Seller's compliance with
this requirement.
6.9 Cost Sharing Agreement. Buyer acknowledges that Seller has
assumed certain obligations under that certain Paradise Valley Infrastructure
Cost Sharing Agreement dated October 20, 1989 ("Cost Sharing Agreement") with
Arcadia Homes and Winncrest Development. This Cost Sharing Agreement provides
for the completion of all infrastructure, common amenities, landscaping and
other similar items on parcels at the Paradise Valley project. Seller shall
remain responsible for completion of its responsibilities under the Cost
Sharing Agreement with respect to the Property. Buyer covenants and agrees
(i) to cooperate in, and not to interfere with, the full and complete
implementation of the Cost Sharing Agreement and (ii) to supply Seller with
any information on actual or estimated costs of improvements as may be
requested and required by Seller for reporting purposes under the Cost Sharing
Agreement.
6.10 Water and Sewer Line Reimbursements. Buyer acknowledges that
Seller is currently working with the City of Fairfield on reimbursements for
increasing the size of various water and sewer lines. Any reimbursements for
infrastructure, including the water and sewer lines, provided by Seller shall
be the sole property of Seller, and Buyer, promptly after receipt, shall
deliver such reimbursement payments to Seller if they are received by Buyer
after the Close of Escrow.
6.11 Pacific Gas & Electric Deposits. Seller shall retain all
Pacific Gas & Electric deposits for Unit 1.
6.12 Transfer of Entitlements. Seller shall cooperate with Buyer and
execute, deliver, acknowledge and record such documents, instruments and
certificates as Buyer may reasonably require to effect the transfer of any
entitlements applicable to the Land, the Lots and the Improvements from the
City of Fairfield or any other Governmental Agency to Buyer.
6.13 Confidentiality. The parties hereto agree that they shall
maintain in confidence and not disclose any information, including, without
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limitation, the Purchase Price and the price per Lot, related to this
Agreement, the Land, the Lots, the Improvements or any other Property without
the prior written consent of the other party to this Agreement. The preceding
sentence shall not prevent either party from disclosing the terms and
conditions of this Agreement and any and all information regarding the Land,
the Lots, the Improvements and the Property to the parties' respective counsel
and Governmental Agencies, such as the Securities Exchange Commission, having
jurisdiction over either party.
6.14 Status of Buyer as Declarant; Annexation of Lots. Upon the
Close of Escrow, Seller shall record in the County and deliver to Buyer a
certificate, as required under Section 2.11 of that certain Master Declaration
of Covenants, Conditions and Restrictions of Paradise Valley, which was
recorded in the Office of the County Recorder of Solano County, State of
California, on August 25, 1995, Serial No. 95-51486 ("CC&Rs"), designating
Buyer as a "Declarant," as defined in the CC&Rs, with respect to the Lots.
Buyer will undertake, with Seller's reasonable cooperation, the responsibility
of preparing documentation for annexation of the Lots under the CC&Rs and
taking such other steps, including, without limitation, obtaining from the
California Department of Real Estate a Subdivision Public Report pertaining to
the sale of the Lots, as Buyer may determine to be necessary or appropriate to
effectively develop, market, improve and sell the Lots.
6.15 Possession. Possession of the Property shall be delivered by
Seller to Buyer on the Closing Date upon recordation of the Grant Deed(s).
6.16 Survival of Covenants and Agreements. The covenants and
agreements set forth in Sections 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12,
6.13 and 6.14 of this Agreement shall survive the Close of Escrow.
ARTICLE 7
ACKNOWLEDGMENTS AND REPRESENTATIONS
7.1 Seller's Representations.
7.1.1 No Rights to Acquire Property. No person, firm or
entity other than Buyer has any rights in, or right to acquire, the Property
or any part thereof, and as long as this Agreement remains in force, Seller
will not, without Buyer's prior written consent, lease, transfer, mortgage,
pledge, or convey, its interest in the Property, or any portion thereof, nor
any right therein or grant any right or option to anyone to effect any such
transaction.
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7.1.2 Organization. Seller is a general partnership duly
organized and validly existing under the laws of the State of California with
full power to enter into this Agreement.
7.1.3 Authority. The execution and delivery of this
Agreement have been duly authorized and approved by all requisite partnership
action, and the consummation of the transactions contemplated hereby will be
duly authorized and approved by all requisite partnership action of Seller.
7.1.4 FIRPTA Affidavit. Seller is not a foreign corporation,
foreign partnership, foreign trust or foreign estate (as those terms are
defined in the Internal Revenue Code and the Treasury Regulations promulgated
thereunder) but rather a partnership formed under the laws of one of the
United States. Seller understands and agrees that the certification made in
this Section 7.1.4 may be disclosed to the Internal Revenue Service by Buyer
and that any false statement contained herein could be punished by fine,
imprisonment or both.
7.1.5 Latent Defects. Seller has no actual knowledge of any
latent defects on, in, under or above the Land, the Lots or the Improvements
(to the extent completed as of the date of this Agreement). For purposes of
this representation, the actual knowledge of Seller shall mean the actual
knowledge of only Patricia A. Wood and no other person.
7.2 Buyer's Representations.
7.2.1 Organization. Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the State
of California with full power to enter into this Agreement.
7.2.2 Authority. The execution and delivery of this
Agreement have been duly authorized and approved by all requisite partnership
action of Buyer and the consummation of the transactions contemplated hereby
will be duly authorized and approved by all requisite partnership action of
Buyer.
7.3 Purchase "As-Is"; Limitation of Liability.
7.3.1 Buyer acknowledges that (i) except for Section 7.1.5,
Seller is not making and has not made any warranties or representations,
express or implied, as to the legal, physical and/or financial condition now
or in the future of the Land, the Lots, the Improvements or any Property, and
(ii) Buyer is buying the Property in an "as-is" condition based solely on
Buyer's own studies and investigations.
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7.3.2 Buyer acknowledges that Seller shall have no liability
for any latent or patent defects discovered upon the Property following the
Close of Escrow.
7.3.3 Buyer confirms, acknowledges and agrees that no
officer, director, employee or representative of Seller or Seller's partners
(whether or not such individual has signed this Agreement on behalf of Seller)
makes any express or implied representation or warranty of any kind or nature
whatsoever concerning the Land, the Lots, the Improvements or any of the
Property. Buyer further acknowledges, confirms and agrees that any liability
with respect of this Agreement and the transactions contemplated herein shall
result in the liability of Seller or Seller's general partners only and not
any individual officer, director, employee or representative of Seller or
Seller's partners. Buyer therefore confirms, acknowledges and agrees that
Buyer may seek recourse only against Seller or Seller's general partners for
any liability arising out of or in connection with this Agreement and the
transactions contemplated hereby.
7.4 Survival. The representations made by Seller in Sections 7.1.1,
7.1.2, 7.1.3, 7.1.4 and 7.1.5, and by Buyer in Sections 7.2.1 and 7.2.2, and
the acknowledgments and covenants of Buyer in Sections 7.3.1, 7.3.2 and 7.3.3
of this Agreement shall survive the Close of Escrow.
ARTICLE 8
THE CLOSE OF ESCROW
8.1 Close of Escrow. Unless the parties mutually agree upon an
earlier closing date, Escrow shall close on May 1, 1997 ("Closing Date").
8.2 Closing Procedure. Escrow Agent shall close the Escrow on or
before the Closing Date by (i) recording Seller's Grant Deed(s) and such other
documents as may be necessary to procure the Title Policy and satisfy the
terms and conditions of this Agreement and (ii) delivering funds and documents
as set forth in Article 10 entitled "Recordation and Distribution of Funds and
Documents" WHEN AND ONLY WHEN each of the following requirements has been
satisfied:
8.2.1 Funds and Instruments. All funds and instruments
required pursuant to Articles 2 and 3 have been delivered to Escrow Agent.
8.2.2 Satisfaction of Conditions Precedent. Each of the
conditions precedent set forth in Section 5.1 has been, or upon such closing
shall be, satisfied as provided for in Section 5.1.
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8.2.3 Recordation. Escrow Agent shall have recorded the
documents deposited into Escrow for recordation in the Official Records of the
County.
8.3 Earlier Closing. If all of the conditions set forth in Sections
8.2.1 and 8.2.2 are satisfied at a date earlier than the Closing Date, Escrow
Agent shall close the Escrow at such earlier date provided Escrow Agent
obtains the written consent of Buyer and Seller to do so.
8.4 Termination of Escrow. If Escrow Agent cannot close the Escrow
on or before the Closing Date, it will, nevertheless, close the Escrow when
all conditions have been satisfied or waived as provided for in this
Agreement, notwithstanding that one or more of such conditions has not been
timely performed, unless (i) a notice of termination has theretofore been
delivered to Escrow Agent in accordance with the provisions of Section 5.2,
13.1 or 13.2, or (ii) after the Closing Date and prior to the Close of Escrow,
Escrow Agent receives a written notice to terminate the Escrow and this
Agreement from a party who, at the time such notice is delivered, is not in
default hereunder. The right to terminate the Escrow and this Agreement under
the provisions of clause (ii) of this Paragraph 8.4 shall be optional, not
mandatory; no delay in the giving of such notice shall affect the rights
hereunder of the party giving the same.
8.4.1 Notice of Termination. Escrow Agent shall have no
liability or responsibility for determining whether or not a party giving a
notice of termination is or is not in default hereunder. Within two (2)
working days after receipt of such notice from one party, Escrow Agent shall
deliver one copy of such notice to the other party. Unless written objection
to termination of the Escrow is received by Escrow Agent within ten (10) days
after Escrow Agent so delivers such notice, (i) Escrow Agent shall forthwith
terminate the Escrow and return all documents, funds or other items held by it
to the party depositing same, except that Escrow Agent may retain such
documents and other items usually retained by escrow agents in accordance with
standard escrow termination procedures and practices, and (ii) each party
shall forthwith pay to Escrow Agent one-half of Escrow Agent's reasonable
escrow termination charges. Notwithstanding the foregoing provisions of this
Section 8.4.1, Escrow Agent may (i) retain any funds on deposit with it until
such time as its Escrow termination charges are paid in full and/or (ii)
deduct from any cash held by it sufficient funds to pay for its Escrow
termination charges in full. If written objection to the termination of the
Escrow is delivered to Escrow Agent within such 10-day period, Escrow Agent is
authorized to hold all funds and instruments delivered to it in connection
with the Escrow and may, in Escrow Agent's sole discretion, take no further
action until otherwise directed either by the parties' mutual written
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instructions or final order of a court of competent jurisdiction.
8.4.2 Return of Deposits. If the Escrow is terminated under
either Section 13.1 or Section 13.2 or as a result of Seller's default under
or breach of this Agreement, Seller shall return to Buyer any funds disbursed
from the Escrow to Buyer prior to the termination of the Escrow.
ARTICLE 9
PRORATIONS, FEES AND COSTS
9.1 Prorations. Escrow Agent will prorate as of the Close of Escrow
between the parties, in cash, county, city and special district (if any) real
property taxes and assessments for the Property based on the latest
information available to Escrow Agent.
9.2 Thirty Day Month. All prorations and/or adjustments called for
in this Agreement are to be made on the basis of a thirty (30) day month,
unless otherwise specifically instructed in writing.
9.3 Seller's Fees and Costs. Seller shall pay (i) one-half of
Escrow Agent's escrow fee, (ii) usual Seller's document-drafting and recording
charges, (iii) the title insurance premium for the CLTA Owner's Title Policy
and any endorsements reasonably requested by Buyer's lender, and (iv) the
County Documentary Transfer Tax in the amount determined by Escrow Agent and
the County Recorder.
9.4 Buyer's Fees and Costs. Buyer shall pay (i) one-half of Escrow
Agent's escrow fee, (ii) usual Buyer's document-drafting and recording charges
and (iii) the additional premium for an American Land Title Association (ALTA)
title insurance policy, if Buyer desires that Title Company issue such a
policy.
9.5 Escrow Cancellation Charges Due to a Default. Notwithstanding
the provisions of Sections 9.3 and 9.4 above, if Escrow fails to close due to
Seller's default, Seller shall pay all Escrow cancellation charges. If Escrow
fails to close due to Buyer's default, Buyer shall pay all Escrow cancellation
charges. If Escrow fails to close for any reason other than the foregoing,
Buyer and Seller shall each pay one-half of any Escrow cancellation charges.
"Escrow cancellation charges" means all fees, charges and expenses incurred by
Escrow Agent, including all expenses incurred in connection with issuance of
the Preliminary Report and other title matters.
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ARTICLE 10
RECORDATION AND DISTRIBUTION OF FUNDS AND DOCUMENTS
10.1 Disbursements. Except as provided in Section 10.4, below, all
disbursements by Escrow Agent shall be made by checks of Escrow Agent.
10.2 Recorded Documents. Escrow Agent shall cause the County
Recorder of the County to mail Seller's Grant Deed (and each other documents
which are herein expressed to be, or by general usage are, recorded) after
recordation, to the grantee, beneficiary or person (i) acquiring rights under
said document or (ii) for whose benefit said document was acquired.
10.3 Unrecorded Documents. Escrow Agent shall, at the Close of
Escrow, deliver by certified mail, overnight courier or United States mail (or
will hold for personal pickup, if requested) one (1) copy of each unrecorded
document received hereunder by Escrow Agent to the payee or person (i)
acquiring rights under said document or (ii) for whose benefit said document
was acquired.
10.4 Payment of Funds at Close of Escrow. Escrow Agent shall, at the
Close of Escrow, deliver by wire transfer, in accordance with Seller's
instructions (or will hold for personal pickup, if requested) (i) to Seller,
or order, the cash, plus any proration or other credits to which Seller will
be entitled less any appropriate proration, deposits or other charges, and
(ii) to Buyer, or order, any excess funds theretofore delivered to Escrow
Agent by Buyer.
10.5 Conformed Copies. Escrow Agent shall, at the Close of Escrow,
deliver to Seller and Buyer a copy of the Seller's Grant Deed(s) (conformed to
show recording date) and conformed copies of each document recorded to place
title in the condition required by this Agreement.
ARTICLE 11
REMEDIES
11.1 Liquidated Damages to Seller. If all of the conditions to
Closing for Buyer's benefit have either been satisfied or waived by Buyer by
the Closing Date, and the purchase and sale of the Property described herein
fails to close due to default by Buyer, it is agreed that the amounts released
from Escrow to Seller under this Agreement ("Released Amount") shall be
retained and accepted by Seller as liquidated damages and not as a penalty and
Seller shall be released from its obligation to sell the Property to Buyer,
and Buyer shall be released from its obligation to purchase the Property. It
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is agreed that the Released Amount constitutes a reasonable estimate of the
damages to Seller. Buyer and Seller agree that it is impossible or
impractical presently to predict what monetary damages Seller would suffer in
such event. Buyer desires to limit the monetary damages for which Buyer might
be liable hereunder and Buyer and Seller desire to avoid the costs and delays
they would incur if a lawsuit were commenced to collect damages and therefore
agree that the liquidated damages provided hereunder shall constitute Seller's
sole and exclusive remedy hereunder. By the act of an authorized
representative of each party affixing its initials herein, each party
specifically confirms the accuracy of the above statements and its agreement
with them.
/s/ P.W. /s/ L.J.Y.
Seller's Initials Buyer's Initials
11.2 Specific Performance. If all of the conditions to Closing for
Seller's benefit have either been satisfied or waived by Seller by the Closing
Date, and the purchase and sale of the Property described herein fails to
close due to default by Seller, Buyer shall be entitled to bring an action for
specific performance of Seller's obligations under this Agreement.
ARTICLE 12
ASSIGNABILITY
12.1 Assignment. Neither party shall voluntarily or by operation of
law assign or otherwise transfer any of its rights or obligations under this
Agreement without obtaining the prior written consent of the other party,
which consent may not be unreasonably withheld. Notwithstanding the foregoing
sentence, Buyer shall have the right to assign its rights under this Agreement
without consent of Seller to a corporation, partnership, limited liability
company or other entity in which the beneficial owners of at least 51% of the
equity interests in such entity own at least 51% of the equity interests in
Buyer, provided that Buyer shall remain liable for, and be responsible for the
performance of, any and all liabilities, obligations, representations,
covenants and agreements under this Agreement.
ARTICLE 13
EMINENT DOMAIN AND MATERIAL LOSS
13.1 Eminent Domain. In the event that, prior to the Close of
Escrow, all or any material portion of the Property is taken or appropriated
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by any public or quasi-public authority under the power of eminent domain, or
Seller receives actual notice of any pending or threatened condemnation
proceedings, then either Buyer or Seller may terminate this Agreement without
further liability hereunder and the parties shall proceed in accordance with
Section 8.4, and, in such event, any portion of Buyer's Deposit, regardless of
whether or not it has been released from Escrow to Seller, shall be
immediately returned to Buyer, and any condemnation proceeds shall be the sole
property of Seller. If neither Seller nor Buyer elects to terminate this
Agreement in the event of any such taking, or threat of taking, and provided
that all conditions precedent to the Close of Escrow have either been
satisfied or waived, Escrow shall close in accordance with this Agreement, and
Seller shall assign to Buyer all of its right, title and interest in any
condemnation proceeds or award made by the governmental entity.
13.2 No Material Loss. If, prior to the Close of Escrow, and subject
to the satisfaction or waiver of all conditions precedent in favor of Buyer
and Seller, the Property shall suffer a Material Loss, Buyer shall have the
right to elect, within 30 days of receipt of notice of such Material Loss, (a)
to terminate this Agreement under Section 8.4.1 and receive a return of
Buyer's Deposit or (b) to purchase the Property as provided in this Agreement
and receive an assignment of any insurance proceeds Seller receives, or to
which Seller is or may become entitled, with respect to such Material Loss
upon Seller's receipt of such proceeds. The parties acknowledge and agree in
no event shall the Close of Escrow be extended due to a Material Loss.
Notwithstanding the foregoing, the assignment of any insurance proceeds as
provided herein shall not include any proceeds received for items not related
to the physical condition of the Property, such as proceeds from Seller's
business interruption insurance, if any. For purposes of this Agreement, a
"Material Loss" means a loss resulting from a casualty that either (i)
diminishes the value of the Property in an amount of at least 10% of the
Purchase Price or (ii) results in a loss of at least 10% of the aggregate
square footage of the Land as of the Effective Date.
ARTICLE 14
GENERAL PROVISIONS
14.1 Attorneys' Fees. In the event any action, arbitration,
mediation or other dispute resolution proceeding shall be instituted between
Seller and Buyer in connection with this Agreement, the party prevailing in
such proceeding shall be entitled to recover from the other party all of its
costs of such proceeding, including, without limitation, attorneys' fees and
costs as fixed by the court therein.
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14.2 Captions. The captions used herein are for convenience only and
are not a part of this Agreement and do not in any way limit or amplify the
terms and provisions hereof.
14.3 Construction of Agreement. The agreements contained herein
shall not be construed in favor of or against either party, but shall be
construed as if both parties prepared this Agreement.
14.4 Counterparts. This Agreement may be executed in counterparts,
all of which, when taken together, shall constitute a fully executed original.
14.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof
and all prior and contemporaneous agreements, representations, negotiations
and understandings of the parties hereto, oral or written, are hereby
superseded and merged herein. The foregoing sentence shall in no way affect
the validity of any instruments executed by the parties in the form of the
exhibits attached to this Agreement.
14.6 Exhibits and Schedules. All Exhibits and Schedules attached
hereto are incorporated herein by reference. Any Exhibits or Schedules that
are to be attached to the Agreement after the Effective Date but prior to the
Close of Escrow, shall be initialled by Buyer and Seller on each page and,
once so initialled, shall be sent to Escrow Agent for attachment to this
Agreement.
14.7 Gender and Number. The use herein of (i) the neuter gender
includes the masculine and the feminine and (ii) the singular number includes
the plural, whenever the context so requires.
14.8 Governing Law. This Agreement and the documents in the forms
attached as exhibits hereto shall be governed by and construed under the laws
of the State of California. This Agreement shall be deemed made and entered
into in the County.
14.9 Joint and Several Liability. If any party consists of more than
one person or entity, the liability of each such person or entity signing this
Agreement shall be joint and several.
14.10 Modification. No modification, waiver, amendment, discharge or
change of this Agreement shall be valid unless the same is in writing and
signed by the party against which the enforcement of such modification,
waiver, amendment, discharge or change is or may be sought.
14.11 Real Estate Brokerage Commission. Seller shall pay a real
estate brokerage commission in the amount of $30,300 to Fred Harris upon the
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Close of Escrow. Except as provided in the preceding sentence, neither party
is obligated to pay any real estate, brokerage or other commission or fee in
connection with the purchase and sale of the Property. Each party hereby
indemnifies, protects, defends (with legal counsel reasonably acceptable to
the other party) and holds the other party free and harmless from and against
any and all costs and liabilities, including, without limitation, reasonable
attorneys' fees and costs, for causes of action or proceedings which may be
instituted by any broker, agent or finder, licensed or otherwise, claiming
through, under or by reason of the conduct of such party in connection with
this transaction.
14.12 No Partnership or Joint Venture. Seller or Buyer shall not, by
virtue of this Agreement, in any way or for any reason be deemed to have
become a partner of the other in the conduct of its business or otherwise, or
a joint venturer. In addition, by virtue of this Agreement there shall not be
deemed to have occurred a merger of any joint enterprise between Buyer and
Seller.
14.13 Notice and Payments. Any notice to be given or other document to
be delivered by any party to the other or others hereunder, and any payments
from Buyer to Seller, may be delivered in person or by facsimile transmission
(provided that a confirming copy is sent by mail or overnight delivery as
herein specified) to an officer of any party, or may be deposited in the
United States mail, duly certified or registered, return receipt requested,
with postage prepaid, or by Federal Express or other similar overnight
delivery service, and addressed to the party for whom intended, as follows:
To Seller at its business office:
Paradise Valley Communities No. 1
529 East South Temple
Salt Lake City, Utah 84102
Attention: Patricia A. Wood
Facsimile No.: (801)524-1751
With a copy to:
K. Michael Garrett, Esq.
Duckor Spradling & Metzger
401 West A Street, Suite 2400
San Diego, California 92101
Facsimile No.: (619)231-6629
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To Buyer at its business office:
The Forecast Group , L.P.
10670 Civic Center Drive
Rancho Cucamonga, California 91730
Facsimile No.: (909)980-7305
With a copy to:
General Counsel
c/o The Forecast Group , L.P.
10670 Civic Center Drive
Rancho Cucamonga, California 91730
Facsimile No.: (909)987-8958
To Escrow Agent:
Chicago Title Company
604 Empire Street
Fairfield, California 94533
Attention: Ms. Sandy Rigby
Facsimile No.: (707) 425-4810
Any party hereto may from time to time, by written notice to the other,
designate a different address which shall be substituted for the one above
specified. Unless otherwise specifically provided for herein, all notices,
payments, demands or other communications given hereunder shall be in writing
and shall be deemed to have been duly given and received (i) upon personal
delivery, or (ii) as of the third business day after mailing by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as set forth above, or (iii) the immediately succeeding Business Day
after deposit with Federal Express or other similar overnight delivery
system.
14.14 Remedies Cumulative. All rights and remedies of Buyer and
Seller contained in this Agreement shall be construed and held to be
cumulative.
14.15 Severability. In the event that any phrase, clause, sentence,
paragraph, section, article or other portion of this Agreement shall become
illegal, null or void or against public policy, for any reason, or shall be
held by any court of competent jurisdiction to be illegal, null or void or
against public policy, the remaining portions of this Agreement shall not be
affected thereby and shall remain in force and effect to the fullest extent
permissible by law.
14.16 Successors and Assigns. Subject to the restrictions and
prohibitions on assignment set forth in Article 12, each and all of the
covenants and conditions of this Agreement shall inure to the benefit of and
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shall be binding upon the successors-in-interest, assigns, and legal
representatives of the parties hereto. As used in the foregoing, "successors"
shall refer to the parties' interest in the Property and to the successors to
all or substantially all of their assets and to their successors by merger or
consolidation.
14.17 Waiver. No waiver by Buyer or Seller of a breach of any of the
terms, covenants or conditions of this Agreement by the other party shall be
construed or held to be a waiver of any succeeding or preceding breach of the
same or any other term, covenant or condition herein contained. No waiver of
any default by Buyer or Seller hereunder shall be implied from any omission by
the other party to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect a default other
than as specified in such waiver. The consent or approval by Buyer or Seller
to or of any act by the other party requiring the consent or approval of the
first party shall not be deemed to waive or render unnecessary such party's
consent or approval to or of any subsequent similar acts by the other party.
14.18 Gender and Number. In this Agreement (unless the context
requires otherwise), the masculine, feminine and neuter genders and the
singular and the plural include one another.
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14.19 Time of the Essence. Time is of the essence of each and every
provision of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
SELLER:
PARADISE VALLEY COMMUNITIES
NO. 1, a California
general partnership
By: HomeFed Communities, Inc.,
a California corporation,
General Partner
By: /s/ Patricia A. Wood
Patricia A. Wood,
President
By: HomeFed Resources
Corporation, a California
corporation, General Partner
By: /s/ Patricia A. Wood
Patricia A. Wood,
President
BUYER:
THE FORECAST GROUP , L.P.,
a California limited partnership
By: FORECAST HOMES, INC., a
California corporation, General Partner
By: /s/ Larry J. Young
Its: Division President
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CONSENT OF ESCROW AGENT
The undersigned Escrow Agent hereby agrees to (i) accept the foregoing
Agreement, (ii) be Escrow Agent under said Agreement and (iii) be bound by said
Agreement in the performance of its duties as Escrow Agent; provided, however,
the undersigned shall have no obligations, liability or responsibility under (i)
this Consent or otherwise unless and until said Agreement, fully signed by the
parties, has been delivered to the undersigned or (ii) any amendment to said
Agreement unless and until the same shall be accepted by the undersigned in
writing.
Dated: October 3, 1996 (the "Opening of the Escrow")
Chicago Title Company
By: /s/ Terri Piper
Its: CSEO
<PAGE>
LIST OF EXHIBITS
Exhibit A. . . . . . . . . . .Legal Description of Land -- Unit 1
Exhibit B . . . . . . . . . . . . . . . . . . Property Documents
Exhibit C. . . . . . . . . . . . . . General Conditions of Escrow
Exhibit D. . . . . . . . . . . .Certificate of Non-Foreign Status
Exhibit E. . . . . . . . . . . . . . . . . . . . . .Grant Deed(s)
Exhibit F. . . . . . . . . . . . . . . . Disapproved Exceptions
Exhibit G . . . . . . . . . . . Commitment for Title Insurance,
Schedule B- Section 2
<PAGE>
EXHIBIT A
Legal Description of Land
Unit 1
ALL THAT REAL PROPERTY SITUATE IN THE CITY OF FAIRFIELD, COUNTY OF SOLANO, STATE
OF CALIFORNIA, DESCRIBED AS FOLLOWS:
LOTS 4 THROUGH 6, 27 THROUGH 34, 38 THROUGH 40, 51 THROUGH 56, AS SHOWN ON THAT
CERTAIN MAP ENTITLED: "FINAL MAP OF PARADISE VALLEY NORTH UNIT NO. 1, BEING ALL
OF PARCEL 1 OF THE PARCEL MAP ENTITLED "LANDS OF ANDERSON & ROWLAND' FILED IN
BOOK 34 OF PARCEL MAPS, PAGE 8, SOLANO COUNTY RECORDS," FILED OCTOBER 2, 1989 IN
THE OFFICE OF THE RECORDER OF SOLANO COUNTY IN BOOK 57 OF MAPS, AT PAGE 27,
SOLANO COUNTY RECORDS.
<PAGE>
EXHIBIT B
Property Documents
- - Rough Grading and Erosion Plans dated September 1988 (6 copies)
- - Final Map Unit 1 dated September 1988 (6 copies)
- - Final Map Unit 2 dated November 1988 (6 copies)
- - Improvement Plans for Units 1 and 2 dated March 1989
(6 copies)
- - Development Agreement dated July 20, 1988
- - First Amendment to Development Agreement dated September 15, 1994 (not
yet fully executed)
- - Second Amendment to Development Agreement (not yet dated or fully
executed)
- - Covenants, Conditions, and Restrictions dated August 25, 1995
- - Anderson Consulting Group Report dated September 15, 1994
- - Department of Real Estate Public Report dated September 1, 1995
- - Letter to City of Fairfield regarding acceptance of improvements dated
May 28, 1996
- - Unapproved Plans for the Paradise Valley Recreation Facility
- - Cost Sharing Agreement dated October 20, 1989
- - Agreement with City of Fairfield regarding construction of recreational
facility dated August 31, 1995
- - Utility Deposit Balances dated May 31, 1996
- - Paradise Valley Master Association documents dated September 1995
- - Paradise Valley Master Association Bylaws dated August 21, 1995
- - Information regarding improvement bonds and maintenance obligations for
Units 1 and 2 and Dover/Foothill Boulevard
<PAGE>
EXHIBIT C
General Conditions of Escrow
<PAGE>
GENERAL PROVISIONS
1. The phrase "close of escrow" (for COE) as used in this
escrow means the date on which documents are recorded,
unless otherwise specified.
2. Recordation of any instruments delivered through this
escrow, if necessary or proper for the issuance of the
policy of title insurance called for, is authorized.
3. No examination or insurance as to the amount or payment of
personal property taxes is required unless specifically
requested.
4. You and any of your affiliates or employees are authorized
to use the information and documents in this escrow for any
purpose. You are further authorized to furnish to any
broker or lender identified with this transaction or anyone
acting on behalf of such broker or lender, any instructions,
amendments, statements, or notices of cancellation given in
connection with this escrow.
5. All written notices, communications, change of instructions
and documents are required to be delivered timely at the
office of Chicago Title Company as set forth herein.
6. All funds received in this escrow shall be deposited with
other escrow funds in one or more escrow (demand) accounts
of Chicago Title Company in any state or national bank. The
parties to this escrow understand that the escrow accounts
you maintain with the depository institutions contribute to
your value as a customer of these institutions which, in
turn, may make available to Chicago Title Company an array
of bank services, accommodations or other benefits. You
shall have no obligation to account for the value realized
by Chicago Title Company from these services, accommodations
or other benefits. All disbursements shall be made by your
check, unless otherwise instructed. You shall not be
responsible for any delay in closing if funds received by
escrow are not available for immediate withdrawal. Chicago
Title Company may, at its option, require concurrent
instructions from all principals prior to release of any
funds on deposit in this escrow.
7. If demand to cancel is submitted after the Time Limit Date,
any principal so requesting you to cancel this escrow shall
file notice of demand to cancel in your office in writing.
You shall within three (3) working days thereafter mail by
certified mail one copy of such notice to each of the other
principals at the address stated in this escrow. Unless
written objection thereto is filed in your office by a
principal within fifteen (15) calendar days after the date
of such mailing, you are instructed to cancel this escrow.
If this is a sale escrow, you may return the lender's papers
and/or funds upon lender's demand.
8. In the event that this escrow is canceled, any fees or
charges due Chicago Title Company including cancellation
fees and any expenditures incurred or authorized shall be
paid from funds on deposit unless otherwise specifically
agreed to or determined by a court of competent
jurisdiction. Upon payment thereof, return documents and
monies to the respective parties depositing same, or as
ordered by the court, and void any executed instruments.
9. If there is no written activity by a principal to this
escrow within any six-month period after the Time Limit Date
set forth herein, Chicago Title Company may, at its option,
terminate its agency obligation and cancel this escrow,
returning all documents, monies or other items held, to the
respective parties entitled thereto, less any fees and
charges as provided herein.
10. If, for any reason, funds are retained or remain in escrow
after the closing date, you may deduct therefrom a
reasonable charge as custodian, of not less than $25.00 per
month, unless otherwise specified.
11. In the event that you should receive or become aware of
conflicting demands or claims with respect to this escrow,
or the rights of any of the parties hereto, or any money or
property deposited herein, you shall have the absolute right
at your option to discontinue any or all further acts until
such conflict is resolved to your satisfaction.
12. In the event that any Offer to Purchase, Deposit Receipt, or
any other form of Purchase Agreement is deposited in this
escrow, it is understood that such document will be
effective only as among the parties signing said document.
You as escrow holder are not to be concerned with the terms
of such document and are relieved of all responsibility in
connection therewith. You are to be concerned only with the
directives specifically set forth in these escrow
instructions and amendments thereto. Further, you are not
to be concerned or liable for items designated as
"memoranda" in these escrow instructions nor with any other
agreement or contract between the parties.
13. You are released from and shall have no liability,
obligation or responsibility with respect to (a) withholding
of funds pursuant to Section 1445 of the Internal Revenue
Code of 1986 as amended, and to Sections 18662 and 18668 of
the California Revenue and Taxation Code, (b) advising the
parties as to the requirements of said Section 1445, (c)
determining whether the transferor is a foreign person or a
non-resident under such Section, nor (d) obtaining a
nonforeign affidavit or other exemption from withholding
under said Sections nor otherwise making any inquiry
concerning compliance with such Sections by any party to the
transaction.
14. The parties hereto, by execution of these instructions
acknowledge that the escrowholder assumes no responsibility
or liability whatsoever for the supervision of any act or
the performance of any condition which is a condition
subsequent to the closing of this escrow.
15. In the absence of instructions to the contrary, you are
hereby authorized to utilize wire services, overnight, next
day, or other expedited delivery services (as opposed to the
regular U.S. Mail) and to charge the respective party's
account accordingly.
16. If you pay a demand to reconvey a revolving line of credit
or equityline deed of trust, you are hereby instructed on my
behalf and for my benefit, to request that the lender
issuing said demand cancel said revolving line or equityline
of credit.
17. You are authorized to destroy or otherwise dispose of any
and all documents, papers, instructions, correspondence and
other material pertaining to this escrow at the expiration
of six (6) years from the close of escrow or cancellation
thereof, without liability and without further notice.
IMPORTANT NOTICE
Except for wire transfers, funds remitted to this escrow are
subject to availability requirements imposed by Section 12413.1
of the California Insurance Code. CASHIER'S, CERTIFIED or
TELLER'S checks, payable to CHICAGO TITLE COMPANY are generally
available for disbursement on the next business day following
the date of deposit.
Other forms of payment may cause extended delays in the closing
of your transaction pursuant to the requirements imposed by
State Law.
(Wire transfer information available upon request)
ALL PARTIES TO THIS ESCROW ACKNOWLEDGE THAT CHICAGO TITLE COMPANY
DOES NOT PROVIDE LEGAL ADVICE NOR HAS IT MADE ANY INVESTIGATION,
REPRESENTATIONS OR ASSURANCES WHATSOEVER REGARDING THE LEGAL
ASPECTS OR COMPLIANCE OF THIS TRANSACTION WITH ANY TAX,
SECURITIES OR ANY OTHER STATE OR FEDERAL LAWS. IT IS RECOMMENDED
THAT THE PARTIES OBTAIN INDEPENDENT LEGAL COUNSEL AS TO SUCH
MATTERS.
<PAGE>
EXHIBIT D
CERTIFICATE OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code of 1986, as amended ("Code"),
provides that a transferee (buyer) of a U.S. real property interest must
withhold tax if the transferor (seller) is a foreign person. Sections 18805 and
26131 of the California Revenue and Taxation Code provide that a transferee
(buyer) of a California real property interest must withhold tax if withholding
is required by Section 1445 of the United States Internal Revenue Code.
To inform The Forecast Group , L.P. ("Transferee"), that withholding of
tax under Section 1445 of the Code is not required upon disposition of certain
real property to the Transferee by Paradise Valley Communities No. 1, a
California general partnership, ("Transferor"), the undersigned hereby
represents and certifies the following on behalf of the Transferor:
1. The undersigned is the duly qualified and acting officer of the
Transferor;
2. The Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations), but rather is a corporation formed
under the laws of one of the United States;
3. The Transferor's U.S. employer identification number is
52-1671038;
4. The Transferor's address is 529 East South Temple, Salt Lake City,
Utah 84102-1089;
5. The Transferor understands that this certification may be
disclosed to the Internal Revenue Service and/or the California Franchise Board
by the Transferee and that any false statement contained herein could be
punished by fine, imprisonment, or both.
<PAGE>
Under penalty of perjury, the undersigned declares that the undersigned
has examined this certification and to the best of its knowledge and belief it
is true, correct, and complete.
Dated:________________, 1996 TRANSFEROR:
PARADISE VALLEY COMMUNITIES NO. 1,
a California general partnership
By: HomeFed Communities, Inc.,
a California corporation,
General Partner
By: ________________
Patricia A. Wood,
President
By: HomeFed Resources
Corporation, a California
corporation, General Partner
By: ________________
Patricia A. Wood,
President
<PAGE>
EXHIBIT E
Grant Deed(s)
[To Be Prepared and Attached Prior to Close of Escrow]
<PAGE>
EXHIBIT F
DISAPPROVED EXCEPTIONS
Instrument Entitled: Detachment and Development Agreement
Executed by: Solano Irrigation District, Arcadia
Development Co., et al.
Recorded: April 24, 1989 as Instrument
No. 890025219, Official Records
Deed of Trust
Dated: November 18, 1994
Amount: $1,000,000.00
Trustor: Paradise Valley Communities No. 1, a
California General Partnership
Trustee: Chicago Title Company, a California
Corporation
Beneficiary: Leucadia Financial Corporation
Recorded: November 30, 1994 as Instrument
No. 1994-00102706, Official Records
Re-recorded: July 3, 1995 as Instrument No. 1995-
00038553, Official Records
Deed of Trust
Dated: July 3, 1995
Amount: $20,000,000.00
Trustor: Paradise Valley Communities No. 1, a
California General Partnership
Trustee: Chicago Title Company, a California
Corporation
Beneficiary: Leucadia Financial Corporation, a
Utah Corporation
Recorded: July 13, 1995 as Instrument No. 1995-
00038615, Official Records
<PAGE>
EXHIBIT G
APPROVED EXCEPTIONS
(See attached)
<PAGE>
COMMITMENT FOR TITLE INSURANCE
SCHEDULE B - SECTION 2
Order No: 500768 DR
Schdule B of the policy or policies to be issued will contain exceptions to the
following matters unless the same are disposed of to the satisfaction of the
Company:
A. Defects, liens, encumbrances, adverse claims or other matters, if any,
created, first appearing in the public records, or attaching subsequent
to the effective date hereof but prior to the date the proposed Insured
acquires for value of record the estate or interest or mortgage thereon
covered by this Commitment.
B. In addition to the Exceptions shown below, any standard coverage policy
of title insurance issued under the terms of this commitment will contain
the applicable Exclusions and Exceptions shown on attached list.
Exceptions:
A 1. General and special taxes for the fiscal year 1996-1997, a lien not
yet due and payable.
B 2. The Lien of Supplemental Taxes, if any, assessed pursuant to the
provisions of Chapter 3.5 (commencing with Section 75) of the Revenue
and Taxation Code of the State of California.
C 3. The fact that said land is within the bounds of the following Mello-
Roos Community Facilities District(s), the annual assessments of
which, if any, are collected with County Property Taxes
District(s): COMMUNITY FAC. DIST. #1
F-S USD - MELLO ROOS #5
D 4. An Agreement, upon the terms and conditions contained therein
Entitled: DEVELOPMENT AGREEMENT
Executed by: THE CITY OF FAIRFIELD, ARCADIA DEVELOPMENT CO.,
ET AL
Recorded: AUGUST 11, 1988 IN BOOK 1988 PAGE 100194
Instrument No.: 46643, OFFICIAL RECORDS
Reference is made to said instrument for further particulars
E An Agreement, upon the terms and conditions contained therein
Entitled: ASSUMPTION AND CONSENT TO ASSIGNMENT OF PARADISE
VALLEY DEVELOPMENT AGREEMENT
Executed by: PARADISE VALLEY COMMUNITIES NO. 1, A CALIFORNIA
LIMITED PARTNERSHIP, ET AL
Recorded: JANUARY 6, 1992
Instrument No. 1992-00000836, OFFICIAL RECORDS
Reference is made to said instrument for further particulars
G 5. Easement for the purpose stated herein and incidental purposes as
created in that certain instrument
Recorded: OCTOBER 2, 1989 AS INSTRUMENT NO. 890068128
<PAGE>
Granted to: THE CITY OF FAIRFIELD
Purpose: THE ERRANT FLIGHT AND/OR ENTRY OF GOLF BALLS
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND AS MORE
PARTICULARLY IN SAID INSTRUMENT
H COVENANTS, CONDITIONS AND RESTRICTIONS, IF ANY (DELETING THEREFROM ANY
RESTRICTIONS BASED ON RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL
STATUS OR NATIONAL ORIGIN, UNLESS AND ONLY TO THE EXTENT THAT SAID
COVENANT (A) IS EXEMPT UNDER CHAPTER 42, SECTION 3607 OF THE UNITED
STATES CODE OR (B) RELATES TO HANDICAP BUT DOES NOT DISCRIMINATE
AGAINST HANDICAPPED PERSON(S) AS SET FORTH IN THE DOCUMENT REFERRED TO
IN THE NUMBERED ITEM LAST ABOVE SHOWN.
I 6. An easement for the purpose shown below and rights incidental thereto
as shown or as offered for dedication on the recorded map shown below
Map Of: PARADISE VALLEY NORTH UNIT NO. 1
Recorded: OCTOBER 2, 1989 IN BOOK 57 OF MAPS, AT PAGE 27
Easement Purpose: PLANTING
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND, 10 FEET
IN WIDTH, COINCIDENT WITH THE LINES OF DORAL
DRIVE AND FULLERTON DRIVE
J 7. An easement for the purpose shown below and rights incidental thereto
as shown or as offered for dedication on the recorded map shown below
Map Of: PARADISE VALLEY NORTH UNIT NO. 1
Recorded: OCTOBER 2, 1989 IN BOOK 57 OF MAPS, AT PAGE 27
Easement Purpose: PUBLIC SERVICE
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND, 10 FEET
IN WIDTH, COINCIDENT WITH THE LINES OF DORAL
DRIVE AND FULLERTON DRIVE; THOSE 5 FOOT BY 18
FOOT PORTIONS OF THE HEREIN DESCRIBED LAND
COINCIDENT WITH THE INTERSECTIONS OF LOT LINES
AND THE LINES OF SAID DRIVES
K 8. An easement for the purpose shown below and rights incidental thereto
as shown or as offered for dedication on the recorded map shown below
Map Of: PARADISE VALLEY NORTH UNIT NO. 1
Recorded: OCTOBER 2, 1989 IN BOOK 57 OF MAPS, AT PAGE 27
Easement Purpose: FENCE
Affects: THE SOUTHEASTERLY 5 FEET OF LOTS 4 THROUGH 6;
THE NORTHERLY 5 FEET OF LOTS 27 THROUGH 34
<PAGE>
L 9. THE FACT THAT OWNERSHIP OF SAID LAND DOES NOT INCLUDE RIGHTS OF ACCESS
TO OR FROM THE LAND ADJACENT THERETO, SUCH RIGHTS HAVING BEEN SEVERED
FROM SAID LAND BY THE MAP OF SAID TRACT
AFFECTS: THE SOUTHEASTERLY LINE OF LOTS 4 THROUGH 6 IN
AND TO PARADISE VALLEY DRIVE; THE NORTHERLY LINE
OF LOTS 27 THROUGH 34 IN AND TO THE GOLF COURSE
O 10. Easement for the purpose stated herein and incidental purposes as
created in that certain instrument
Recorded: OCTOBER 25, 1990 AS INSTRUMENT NO. 900084601
Granted to: THE CITY OF FAIRFIELD
Purpose: OVERSPRAY IN CONNECTION WITH THE WATERING OF A
MUNICIPAL GOLF COURSE AND THE INTRUSION OF GOLF
BALLS FROM THE FAIRWAYS, ROUGHS AND GREENS
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND, AS MORE
PARTICULARLY DESCRIBED IN SAID INSTRUMENT
P COVENANTS, CONDITIONS AND RESTRICTIONS, IF ANY (DELETING THEREFROM ANY
RESTRICTIONS BASED ON RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL
STATUS OR NATIONAL ORIGIN, UNLESS AND ONLY TO THE EXTENT THAT SAID
COVENANT (A) IS EXEMPT UNDER CHAPTER 42, SECTION 3607 OF THE UNITED
STATES CODE OR (B) RELATES TO HANDICAP BUT DOES NOT DISCRIMINATE
AGAINST HANDICAPPED PERSON(S) AS SET FORTH IN THE DOCUMENT REFERRED TO
IN THE NUMBERED ITEM LAST ABOVE SHOWN.
Q 11. Covenants, conditions and restrictions, but omitting any covenant or
restriction based on race, color, religion, sex, handicap, familial
status or national origin, contained in the Declaration
By: PARADISE VALLEY COMMUNITIES NO. 1, A CALIFORNIA
GENERAL PARTNERSHIP, FIRST AMERICAN TITLE
GUARANTY COMPANY, A CALIFORNIA CORPORATION AND
REYNEN, BARDIS & WINN, A CALIFORNIA LIMITED
PARTNERSHIP
Recorded: AUGUST 25, 1995 AS INSTRUMENT NO. 1995-00051486,
OFFICIAL RECORDS
R Said instrument provides that a violation thereof shall not defeat nor
render invalid the lien of any Mortgage or Deed of Trust made in good
faith and for value.
S Contains no reversionary clause.
T Declaration of Annexation, recorded SEPTEMBER 13, 1995 AS INSTRUMENT
NO. 1995-00055722, OFFICIAL RECORDS.
<PAGE>
U Declaration of Annexation, recorded SEPTEMBER 13, 1995 AS INSTRUMENT
NO. 1995-00055723, OFFICIAL RECORDS.
V Declaration of Annexation, recorded SEPTEMBER 13, 1995 AS INSTRUMENT
NO. 1995-00055724, OFFICIAL RECORDS.
AG END OF SCHEDULE B
STR/mg
<PAGE>
PARADISE VALLEY UNIT 2 SECOND CLOSING
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
BETWEEN
PARADISE VALLEY COMMUNITIES NO. 1
("Seller")
AND
THE FORECAST GROUP , L.P.
("Buyer")
<PAGE>
PARADISE VALLEY UNIT 2 SECOND CLOSING
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
THIS PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS ("Agreement") is made
and effective as of October 3, 1996 by and between Paradise Valley Communities
No. 1, a California general partnership ("Seller"), and The Forecast Group ,
L.P., a California limited partnership ("Buyer"), with reference to the facts
set forth below.
A. Seller is the owner of that certain land situated in the City of
Fairfield, County of Solano, State of California, more particularly described
in Exhibit A, attached hereto and incorporated herein ("Land"). The Land is a
portion of a residential subdivision consisting of four units, or
neighborhoods, each of which is referred to herein as a "Unit," and the Land
is a portion of Unit 2. Unit 2 consists of 104 single-family residential
lots, 42 of which are subject to this Agreement. The term "Lots" refers to
the single-family residential lots located in Unit 2 that are specifically
described in Exhibit A. Unit 2 also consists of certain infrastructure
improvements and amenities, as described in the "Subdivision Map," as defined
in Section 1.21 of this Agreement, and related improvement plans and
specifications described in Exhibit B, attached hereto ("Improvements").
B. Buyer desires to purchase the Property (as defined herein) and
Seller desires to sell the Property to Buyer in accordance with the terms and
provisions set forth below.
NOW, THEREFORE, in consideration of the recitals set forth above, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as set forth below.
ARTICLE 1
DEFINED TERMS
Terms used in this Agreement with their initial letters capitalized and
not otherwise defined shall have the meanings set forth below.
1.1 Agreement. The term "Agreement" shall mean this Purchase
Agreement and Escrow Instructions between Seller and Buyer.
1.2 Approved Exceptions. The term "Approved Exceptions" shall mean
those exceptions to title that are approved in accordance with this Agreement.
1
<PAGE>
1.3 Business Day. The term "Business Day" shall mean any day other
than a Saturday, Sunday or legal holiday in the State of California. All
periods of time described in this Agreement that are not expressly measured by
Business Days shall be measured by calendar days.
1.4 Buyer. The term "Buyer" shall mean The Forecast Group , L.P., a
California limited partnership.
1.5 CLTA Owner's Title Policy. The term "CLTA Owner's Title Policy"
shall mean the California Land Title Association ("CLTA") owner's policy of
title insurance to be issued by the Title Company upon the Close of Escrow
pursuant to the terms of this Agreement.
1.6 Cash. The term "cash" shall mean: (i) currency of the United
States of America, (ii) cashier's check(s) currently dated and payable to
Escrow Agent or Seller, as required under this Agreement, drawn and paid
through a California banking or savings and loan institution, tendered to
Escrow Agent or Seller, as required under this Agreement one (1) Business Day
before funds are required to be delivered under this Agreement, or (iii) an
amount credited by wire transfer into Escrow Agent's or Seller's bank account,
as required under this Agreement.
1.7 Close of Escrow. The term "Close of Escrow" shall mean the
consummation of the purchase of the Property by Buyer from Seller and the
recordation of Seller's Grant Deed(s) in accordance with the terms and
provisions of this Agreement.
1.8 Closing Date. The term "Closing Date" shall mean the date on
which the closing will be held for the sale of the Property as set forth in
Section 8.1 of this Agreement.
1.9 County. The term "County" shall mean the County of Solano, in
the State of California.
1.10 Effective Date. The term "Effective Date" shall mean October 3,
1996, the date on which this Agreement is effective and deemed to have been
made.
1.11 Escrow. The term "Escrow" shall mean the escrow opened by
Escrow Agent pursuant to the terms of this Agreement.
1.12 Escrow Agent. The term "Escrow Agent" shall mean Chicago Title
Company, 604 Empire Street, Fairfield, California 94533 ("Chicago Title").
1.13 Governmental Action. The term "Governmental Action" shall mean
(a) any order of a court of competent jurisdiction, and/or (b) any enactment,
by the initiative or referendum process or otherwise, of any Governmental
2
<PAGE>
Agencies (as defined below) affecting the Property, either directly or
indirectly, including, but not limited to, limitation on the number of permits
or licenses that can be issued, declaration of policy, resolution, ordinance,
statute, regulation, or any other enactment of any Governmental Agency (as
defined below) and irrespective of whether the orders or enactments listed
immediately above contain the words "moratorium," "moratoria" or similar
words.
1.14 Governmental Agencies. The term "Governmental Agencies" shall
mean any local, county, state and/or federal governmental or quasi-governmental
agencies, authorities or regulatory bodies and any public or
private utility companies having jurisdiction over the Property.
1.15 Opening of Escrow. The term "Opening of Escrow" shall mean the
date Escrow Agent executes the Consent of Escrow Agent attached hereto, which
consent shall be executed by Escrow Agent upon delivery of this Agreement to
Escrow Agent.
1.16 Preliminary Report. The term "Preliminary Report" shall mean
the Preliminary Title Report dated June 10, 1996, issued by the Title Company.
1.17 Property Documents. The term "Property Documents" shall mean
the documents delivered by Seller to Buyer in connection with its feasibility
studies pursuant to Section 4.1 of this Agreement. The Property Documents are
listed in Exhibit B, attached hereto.
1.18 Property. The term "Property" shall mean the Land, the Lots,
the Subdivision Map (to the extent it pertains to the Lots) and any public or
private entitlements, utility deposits, the non-exclusive use of the name
"Antigua," maps, plans, soils reports, environmental reports, marketing
studies, development agreements, permits and similar items that relate to the
development, sale and use of the Lots as single-family residential building
lots.
1.19 Purchase Price. The term "Purchase Price" shall mean the total
consideration to be paid by Buyer to Seller for the purchase of the Property
as set forth in Article 2 of this Agreement.
1.20 Seller. The term "Seller" shall mean Paradise Valley
Communities No. 1, a California general partnership.
1.21 Subdivision Map. The term "Subdivision Map" shall mean the
Subdivision Map of Paradise Valley North Unit No. 2, recorded on September 27,
1990, in Book 59 of Maps, at Page 62, et. seq., in the Official Records of
Solano County.
3
<PAGE>
1.22 Title Company. The term "Title Company" shall mean Chicago
Title.
ARTICLE 2
AGREEMENT OF PURCHASE AND SALE
2.1 Agreement for Purchase and Sale. In consideration of the
payment of the Purchase Price, Seller agrees to sell the Property to Buyer and
Buyer agrees to purchase the Property from Seller on the terms and conditions
set forth in this Agreement.
2.2 Purchase Price. The purchase price ("Purchase Price") for the
Property is One Million Six Hundred thirty-Six Thousand and No/100 Dollars
($1,636,000).
2.3 Payment of Purchase Price. The Purchase Price shall be paid in
accordance with the provisions set forth below.
2.3.1 Cash to be deposited into
Escrow on the Opening of Escrow
Under Section 3.1
("Buyer's Deposit") $ 50,000
2.3.2 Additional cash to be deposited
into Escrow upon Close of Escrow $ 1,586,000
Total Purchase Price: $ 1,636,000
===========
2.4 Nonrefundability of Deposits. The cash deposited into escrow
pursuant to Section 2.3.1, above, shall, upon the signing of this Agreement,
become nonrefundable and be released by the Escrow Agent to the Seller. Any
funds released from Escrow to Seller under this Section 2.4 shall apply to the
Purchase Price upon the Close of Escrow. Regardless of whether Escrow closes,
however, any funds released from Escrow to Seller shall constitute
nonrefundable consideration for Seller's taking the Property off the market,
unless Escrow fails to close due a default under or breach of this Agreement
by Seller, in which event, such deposits shall be returned to Buyer or, if the
Buyer elects the remedy of specific performance of this Agreemente Purchase
Price.
2.5 Assumption of Liabilities. Upon the terms and subject to the
conditions contained in this Agreement, Buyer shall assume, effective as of
the time of day on the Closing Date that Escrow Agent telephonically or in
writing notifies Seller and Buyer that Escrow has closed Seller's obligations
under the Property Documents with respect to the Property purchased under this
Agreement, except for such obligations as Seller specifically retains under
Article 6 of this Agreement.
4
<PAGE>
ARTICLE 3
OPEN AND CLOSE OF ESCROW AND DELIVERY OF DOCUMENTS
3.1 Opening of Escrow. Buyer and Seller entered into a letter of
intent dated September 20, 1996 ("Letter of Intent") and delivered the Letter
of Intent together with $200,000 ("$200,000 Deposit") and Joint Escrow
Instructions dated September 20, 1996 ("Joint Escrow Instructions") to Escrow
Agent. The Joint Escrow Instructions require the Escrow Agent to allocate
$50,000 of the $200,000 Deposit to the Escrow established under this Agreement
upon the signing of this Agreement by both Buyer and Seller. Accordingly,
upon execution of this Agreement, Buyer and Seller shall open Escrow by
depositing with Escrow Agent a fully executed original of this Agreement for
use as escrow instructions. Escrow Agent shall thereupon transfer $50,000 of
the $200,000 deposit to the Escrow established under this Agreement, and such
amount shall be treated as Buyer's Deposit. Escrow Agent shall execute the
Consent of Escrow Agent ("Consent") which appears at the end of this Agreement
and deliver a fully executed Consent to Buyer and Seller. Escrow Agent's
general conditions ("General Conditions") are attached hereto as Exhibit C and
incorporated herein by reference to the extent they are not inconsistent with
the provisions of this Agreement. If there is any inconsistency between the
provisions of the General Conditions and this Agreement, the provisions of
this Agreement shall control. If Escrow Agent requires additional
instructions, the parties agree to make any deletions, substitutions and
additions as the parties shall mutually approve as long as such deletions,
substitutions or additions do not materially alter the terms of this
Agreement.
3.2 Buyer's Deliveries. Buyer shall, at least one (1) Business Day
prior to the Close of Escrow (unless required to be delivered at an earlier
date under the terms of this Agreement), deliver to Escrow Agent each of the
following:
3.2.1 Purchase Price. The balance of the cash portion of the
Purchase Price;
3.2.2 Documents. Fully executed and, where appropriate,
notarized counterparts of the documents required to be executed by Buyer under
this Agreement;
3.2.3 Prorations, Fees and Costs. The amount, if any,
required of Buyer under Article 9 of this Agreement entitled "Prorations, Fees
and Costs" and any other amounts payable upon the Close of Escrow under any
5
<PAGE>
other provisions of this Agreement; and
3.2.4 General. Such other documents, instruments and
certificates as Seller may reasonably require to carry out the intent of this
Agreement; provided, however, that Buyer shall not be obligated to incur any
financial liability or obligation in connection with the furnishing of any such
documents, instruments or certificates.
3.3 Seller's Deliveries. Seller shall, at least one (1) Business
Day prior to the Close of Escrow (unless required to be delivered at an
earlier date under the terms of this Agreement), deliver to Escrow Agent each
of the following:
3.3.1 Certificate of Non-Foreign Status. Prior to the Close
of Escrow, Seller shall execute and deposit into Escrow a Certificate of Non-
Foreign Status certifying that Seller is a non-foreign person in the form
attached hereto as Exhibit D and incorporated herein ("Certificate of Non-
Foreign Status");
3.3.2 Grant Deeds, Bill of Sale and Assignment of Leases.
Prior to the Close of Escrow, Seller shall execute, acknowledge and deposit
into Escrow Grant Deed(s) in the form attached hereto as Exhibit E; and
3.3.3 General. Such other documents, instruments and
certificates as Buyer may reasonably require to carry out the intent of this
Agreement; provided, however, that Seller shall not be obligated to incur any
financial liability or obligation in connection with the furnishing of any
such documents, instruments or certificates.
ARTICLE 4
FEASIBILITY REVIEW
4.1 Feasibility Review Period; Delivery of Property Documents.
Seller has delivered to Buyer the Property Documents. Buyer has analyzed the
feasibility of its purchase and use of the Property. Buyer has reviewed and
analyzed the Property Documents to determine their individual and collective
impact on the Property and its purchase and use by Buyer.
4.1.1 Review of Preliminary Report. Buyer has been provided
a Preliminary Report issued by the Title Company ("Preliminary Report"),
together with legible copies of all recorded documents described in the
Preliminary Report. Buyer has reviewed and approved the Preliminary Report,
except as set forth in Exhibit F attached hereto. If any title exceptions are
recorded against the Property before the Close of Escrow in addition to those
6
<PAGE>
specified in the Preliminary Report, Escrow Agent shall cause the Title
Company to issue a supplemental preliminary report ("Supplemental Report").
Buyer shall have five (5) Business Days after receipt of any Supplemental
Report, to review the title exceptions shown therein and to deliver to Seller
notice of approval or disapproval of any title exceptions disclosed in any
such report. Buyer's delivery of a written notice of approval shall be deemed
approval of the exceptions to title shown on any Supplemental Report issued as
of the date of such notice of approval. The title exceptions approved by
Buyer, as set forth in the Commitment for Title Insurance, Schedule B -
Section 2, attached hereto as Exhibit G, and such other exceptions as may be
approved by Buyer with respect to any Supplemental Report, are referred to
herein as "Approved Exceptions." Seller shall have until the Close of Escrow
to remove the title exceptions set forth in Exhibit F. If any other title
exceptions are specifically disapproved, and Seller elects, within ten (10)
Business Days after the date of Buyer's disapproval, not to cure the
disapproved item, then Buyer shall have five (5) Business Days after the
receipt of Seller's notice of election not to cure the disapproved item to
waive its prior disapproval. If Buyer does not deliver notice of its election
to waive its prior disapproval, then the disapproved and uncured item will be
deemed disapproved. If a title exception is disapproved and uncured, Buyer
may terminate the Escrow by delivering a written notice of termination to
Seller and the Escrow Agent. Upon such termination, any deposits theretofore
paid to Seller or Escrow Agent (regardless of whether such deposits were
released to Seller) shall be immediately returned to Buyer, and this Agreement
shall be terminated. Seller shall thereupon be released from its obligation
to sell the Property to Buyer, and Buyer shall be released from any obligation
to purchase the Property.
4.1.2 Governmental Actions. Buyer has reviewed and
considered the impact on the Property of any and all applicable governmental
ordinances, rules and regulations, and evaluate the effect of any pending or
threatened Governmental Actions pertaining to the Property.
4.1.3 Studies and Investigations. Buyer has conducted such
independent investigations, studies and tests as it deemed necessary or
appropriate concerning Buyer's proposed use, sale, development and/or the
suitability of the Property for Buyer's intended purposes. Such
investigations included, without limitation, soils and engineering tests,
hazardous studies, investigations concerning the availability of the approvals
required from any Governmental Agencies for Buyer's proposed use of the
Property, investigations regarding the existence on the Property of any
threatened or endangered species, and of any archaeological artifacts on the
Property, the imposition or increase of any fees, charges or exactions by any
7
<PAGE>
Governmental Agencies and such economic feasibility and marketing studies as
Buyer deemed appropriate.
4.1.4 Physical Inspection. Buyer has inspected and approved
the physical condition of the Property and conducted any soil, hazardous waste
or engineering studies with respect to the Property Buyer deemed necessary or
appropriate.
4.2 Additional Information from Seller. Seller has provided Buyer
with such Additional Information (as hereinafter defined) as Buyer determined
to be necessary to complete its investigation of the Property, and Seller has,
and has caused its agents, employees and consultants to, respond to questions
posed by Buyer with respect to the Property. As used herein, the term
"Additional Information" shall mean and refer to information in the possession
and/or control of Seller concerning (i) the Property and (ii) material changes
in information and documents previously provided to Buyer by Seller.
ARTICLE 5
CONDITIONS PRECEDENT TO CLOSE OF ESCROW
5.1 Subject to Satisfaction or Waiver. The Closing of the purchase
and sale described in this Agreement and the obligations of the parties under
this Agreement shall be subject to satisfaction or waiver (by the party in whose
favor the conditions precedent set forth below.
5.1.1 Title Policy. Escrow Agent shall be unconditionally
committed to procure from the Title Company the CLTA Owner's Title Policy for
the Property with a liability limit in the amount of the Purchase Price
insuring fee title vested in Buyer. Buyer shall take title to the Property
subject only to: (a) Non-delinquent general, special and supplemental taxes,
bonds and assessments, including Mello-Roos bonds, if any; (b) any matters set
forth in the printed form portion of the CLTA Owner's Title Policy; (c) the
Approved Exceptions; and (d) any items caused or permitted to be placed of
record by Buyer as of the Close of Escrow.
5.1.2 Seller's Performance. Seller shall have duly performed
each and every undertaking and agreement to be performed by it hereunder prior
to the Close of Escrow.
5.1.3 Buyer's Performance. Buyer shall have duly performed
each and every undertaking and agreement to be performed by it hereunder prior
to the Close of Escrow.
5.2 Failure of Conditions Precedent. The conditions precedent in
Sections 5.1.1 and 5.1.2 are for Buyer's benefit and can be waived only by
Buyer. The condition precedent in Section 5.1.3 is for Seller's benefit and
8
<PAGE>
can be waived only by Seller. In the event that any of the conditions
precedent set forth above is neither satisfied nor waived by the Closing Date,
the party for whose benefit the condition has been created may terminate the
Escrow and this Agreement by giving a written notice of termination to the
other party and Escrow Agent, specifying the reason for termination and the
condition precedent that has not been satisfied. Upon receipt of such notice
of termination, Escrow Agent shall return to Buyer any funds that have not at
the time of termination been released to Seller pursuant to this Agreement,
less applicable Escrow cancellation charges, and any documents to the parties
who deposited them. If Buyer terminates the Escrow and this Agreement because
a condition precedent set forth in Section 5.1.1 or 5.1.2 is not satisfied,
Seller immediately shall return to Buyer any funds theretofore disbursed to
Seller from the Escrow. Seller shall thereupon be released from its
obligation to sell the Property to Buyer, and Buyer shall be released from its
obligation to purchase the Property.
5.3 Copy of Documents to Other Party. Each party will, concurrently
with its delivery to Escrow Agent of any documents described in this Article
5, deliver a copy of the same to the other party.
ARTICLE 6
COVENANTS AND AGREEMENTS
6.1 No Concern. Escrow Agent shall have no concern with, liability
or responsibility for, this Article.
6.2 Additional Escrow Instructions. Buyer and Seller covenant and
agree that they will execute any additional escrow instructions not
inconsistent with the terms of this Agreement as shall be reasonably required
by Escrow Agent.
6.3 Cooperation. Buyer and Seller acknowledge that it may be
necessary to execute documents other than those specifically referred to
herein in order to complete the acquisition of the Property as provided
herein. Both Buyer and Seller hereby agree to cooperate with each other by
executing such other documents or taking such other action as may be
reasonably necessary to complete this transaction in accordance with the
intent of the parties as evidenced in this Agreement.
6.4 Entry Upon Property. After execution of this Agreement, Buyer
and its designated agents and independent contractors shall have the right to
enter upon the Property to conduct surveys, soils tests, physical inspections,
investigations and studies so long as Buyer has provided prior reasonable
notice of such entry to Seller and such activities will not interfere with
Seller's ownership and maintenance of the Property. Seller and Seller's
9
<PAGE>
agents shall reasonably cooperate with Buyer, provided that such
investigations and studies shall be at the sole cost and expense of Buyer.
Buyer agrees to repair any damage caused by Buyer or its agents or independent
contractors to the Property and further agrees to indemnify, protect, defend
(with legal counsel acceptable to both Buyer and Seller) and hold Seller
harmless from and against any costs, expenses, losses, attorneys' fees and
liabilities (including, without limitation, claims of mechanics' liens)
incurred or sustained by Seller either prior or subsequent to the Close of
Escrow as a result of the conduct of Buyer, its agents, or independent
contractors under this Section 6.4. The covenants contained in this Section
6.4 shall survive the Close of Escrow or earlier termination of this
Agreement.
6.5 Indemnities of Buyer. Buyer agrees that it will protect,
defend, indemnify and hold Seller harmless from and against all actions,
causes of action, suits, claims, costs, losses, penalties, damages,
liabilities and expenses of any kind whatsoever, including reasonable
attorneys' fees ("Claims"), based upon or arising out of: (i) any Claim for
personal injury or property damage occurring on or about the Property after
the Closing Date or in connection with Buyer's or its agents' or independent
contractors' access to the Property prior to the Closing Date; (ii) any Claims
related to construction defects, soil subsidence or other similar claims
related to the Land, the Lots or the Improvements or any other improvements of
any kind made thereto or constructed thereon; and (iii) any other Claim
arising out of Buyer's ownership or operation of the Property after the
Closing Date.
6.6 Indemnities of Seller. Seller agrees that it will protect,
indemnify, defend and hold Buyer harmless from and against all Claims based
upon or arising out of: (i) any claim for personal injury or property damage
occurring on or about the Property prior to the Closing Date (except those
resulting from Buyer's access to the Property prior to the Closing Date); (ii)
any liability or obligation which Buyer is not obligated to assume under this
Agreement; and (iii) any loss or liability pertaining to, or resulting from,
the drainage system installed on the Tooby property, which is adjacent to the
eastern edge of the Land, including, without limitation, any stoppage of
construction on, or sales of, the Lots caused by such drainage system or by
any action or inaction by any Governmental Agency with respect to such
drainage system. Notwithstanding the foregoing sentence, Seller shall not be
obligated to protect, defend indemnify or hold Buyer harmless from any Claims
related to construction defects, soil subsidence or other similar claims
related to the Land, the Lots or the Improvements or any other improvements of
any kind made thereto or constructed thereon.
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6.7 Completion of Improvements; Maintenance Bonds. Seller will
complete the Improvements for Unit 2, as shown on the final Subdivision Map
therefor, and Dover/Foothill Boulevard, and shall obtain the City of
Fairfield's acceptance for maintenance of such Improvements. If the
Improvements are not accepted for maintenance by the City of Fairfield by the
Close of Escrow, Seller will take such action and assume such responsibilities
as may be necessary to obtain the City of Fairfield's acceptance for
maintenance of such Improvements as soon as reasonably practicable following
the Close of Escrow. Buyer shall be responsible for maintenance of the
Improvements from and after their acceptance for maintenance by the City of
Fairfield.
6.8 Recreational Facility. Seller shall construct a recreational
facility, as described in the plans therefor included in the Project
Documents, upon the issuance of a building permit for the 351st dwelling unit
in the Paradise Valley development (exclusive of any building permits for the
NCROC project). Buyer shall provide Seller quarterly reports indicating the
number of closings in any given quarter to facilitate Seller's compliance with
this requirement.
6.9 Demolition of Parking Lot. Seller will demolish the parking lot
for the Unit 2 model homes and convert that lot to a residential building lot
on or before May 1, 1997.
6.10 Cost Sharing Agreement. Buyer acknowledges that Seller has
assumed certain obligations under that certain Paradise Valley Infrastructure
Cost Sharing Agreement dated October 20, 1989 ("Cost Sharing Agreement") with
Arcadia Homes and Winncrest Development. This Cost Sharing Agreement provides
for the completion of all infrastructure, common amenities, landscaping and
other similar items on parcels at the Paradise Valley project. Seller shall
remain responsible for completion of its responsibilities under the Cost
Sharing Agreement with respect to the Property. Buyer covenants and agrees
(i) to cooperate in, and not to interfere with, the full and complete
implementation of the Cost Sharing Agreement and (ii) to supply Seller with
any information on actual or estimated costs of improvements as may be
requested and required by Seller for reporting purposes under the Cost Sharing
Agreement.
6.11 Water and Sewer Line Reimbursements. Buyer acknowledges that
Seller is currently working with the City of Fairfield on reimbursements for
increasing the size of various water and sewer lines. Any reimbursements for
infrastructure, including the water and sewer lines, provided by Seller shall
be the sole property of Seller, and Buyer,promptly after receipt, shall
deliver such reimbursement payments to Seller if they are received by Buyer
after the Close of Escrow.
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6.12 Pacific Gas & Electric Deposits. Buyer shall retain all Pacific
Gas & Electric deposits for Unit 2.
6.13 Transfer of Entitlements. Seller shall cooperate with Buyer and
execute, deliver, acknowledge and record such documents, instruments and
certificates as Buyer may reasonably require to effect the transfer of any
entitlements applicable to the Land, the Lots and the Improvements from the
City of Fairfield or any other Governmental Agency to Buyer.
6.14 Confidentiality. The parties hereto agree that they shall
maintain in confidence and not disclose any information, including, without
limitation, the Purchase Price and the price per Lot, related to this
Agreement, the Land, the Lots, the Improvements or any other Property without
the prior written consent of the other party to this Agreement. The preceding
sentence shall not prevent either party from disclosing the terms and
conditions of this Agreement and any and all information regarding the Land,
the Lots, the Improvements and the Property to the parties' respective counsel
and Governmental Agencies, such as the Securities Exchange Commission, having
jurisdiction over either party.
6.15 Status of Buyer as Declarant; Annexation of Lots. Upon the
Close of Escrow, Seller shall record in the County and deliver to Buyer a
certificate, as required under Section 2.11 of that certain Master Declaration
of Covenants, Conditions and Restrictions of Paradise Valley, which was
recorded in the Office of the County Recorder of Solano County, State of
California, on August 25, 1995, Serial No. 95-51486 ("CC&Rs"), designating
Buyer as a "Declarant," as defined in the CC&Rs, with respect to the Lots.
Buyer will undertake, with Seller's reasonable cooperation, the responsibility
of preparing documentation for annexation of the Lots under the CC&Rs and
taking such other steps, including, without limitation, obtaining from the
California Department of Real Estate a Subdivision Public Report pertaining to
the sale of the Lots, as Buyer may determine to be necessary or appropriate to
effectively develop, market, improve and sell the Lots.
6.16 Possession. Possession of the Property shall be delivered by
Seller to Buyer on the Closing Date upon recordation of the Grant Deed(s).
6.17 Survival of Covenants and Agreements. The covenants and
agreements set forth in Sections 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12,
6.13, 6.14 and 6.15 of this Agreement shall survive the Close of Escrow.
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ARTICLE 7
ACKNOWLEDGMENTS AND REPRESENTATIONS
7.1 Seller's Representations.
7.1.1 No Rights to Acquire Property. No person, firm or
entity other than Buyer has any rights in, or right to acquire, the Property
or any part thereof, and as long as this Agreement remains in force, Seller
will not, without Buyer's prior written consent, lease, transfer, mortgage,
pledge, or convey, its interest in the Property, or any portion thereof, nor
any right therein or grant any right or option to anyone to effect any such
transaction.
7.1.2 Organization. Seller is a general partnership duly
organized and validly existing under the laws of the State of California with
full power to enter into this Agreement.
7.1.3 Authority. The execution and delivery of this
Agreement have been duly authorized and approved by all requisite partnership
action, and the consummation of the transactions contemplated hereby will be
duly authorized and approved by all requisite partnership action of Seller.
7.1.4 FIRPTA Affidavit. Seller is not a foreign corporation,
foreign partnership, foreign trust or foreign estate (as those terms are
defined in the Internal Revenue Code and the Treasury Regulations promulgated
thereunder) but rather a partnership formed under the laws of one of the
United States. Seller understands and agrees that the certification made in
this Section 7.1.4 may be disclosed to the Internal Revenue Service by Buyer
and that any false statement contained herein could be punished by fine,
imprisonment or both.
7.1.5 Latent Defects. Seller has no actual knowledge of any
latent defects on, in, under or above the Land, the Lots or the Improvements
(to the extent completed as of the date of this Agreement). Buyer
acknowledges that Seller has disclosed that there are issues to be resolved by
Seller in connection with the drainage system installed on the Tooby property,
which is adjacent to the eastern edge of the Land. For purposes of this
representation, the actual knowledge of Seller shall mean the actual knowledge
of only Patricia A. Wood and no other person.
7.2 Buyer's Representations.
7.2.1 Organization. Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the State
of California with full power to enter into this Agreement.
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7.2.2 Authority. The execution and delivery of this
Agreement have been duly authorized and approved by all requisite partnership
action of Buyer and the consummation of the transactions contemplated hereby
will be duly authorized and approved by all requisite partnership action of
Buyer.
7.3 Purchase "As-Is"; Limitation of Liability.
7.3.1 Buyer acknowledges that (i) except for Section 7.1.5,
Seller is not making and has not made any warranties or representations,
express or implied, as to the legal, physical and/or financial condition now
or in the future of the Land, the Lots, the Improvements or any Property, and
(ii) Buyer is buying the Property in an "as-is" condition based solely on
Buyer's own studies and investigations.
7.3.2 Buyer acknowledges that Seller shall have no liability
for any latent or patent defects discovered upon the Property following the
Close of Escrow.
7.3.3 Buyer confirms, acknowledges and agrees that no
officer, director, employee or representative of Seller or Seller's partners
(whether or not such individual has signed this Agreement on behalf of Seller)
makes any express or implied representation or warranty of any kind or nature
whatsoever concerning the Land, the Lots, the Improvements or any of the
Property. Buyer further acknowledges, confirms and agrees that any liability
with respect of this Agreement and the transactions contemplated herein shall
result in the liability of Seller or Seller's general partners only and not
any individual officer, director, employee or representative of Seller or
Seller's partners. Buyer therefore confirms, acknowledges and agrees that
Buyer may seek recourse only against Seller or Seller's general partners for
any liability arising out of or in connection with this Agreement and the
transactions contemplated hereby.
7.4 Survival. The representations made by Seller in Sections 7.1.1,
7.1.2, 7.1.3, 7.1.4 and 7.1.5, and by Buyer in Sections 7.2.1 and 7.2.2, and
the acknowledgments and covenants of Buyer in Sections 7.3.1, 7.3.2 and 7.3.3
of this Agreement shall survive the Close of Escrow.
ARTICLE 8
THE CLOSE OF ESCROW
8.1 Close of Escrow. Unless the parties mutually agree upon an
earlier closing date, Escrow shall close on September 1, 1997 ("Closing
Date").
8.2 Closing Procedure. Escrow Agent shall close the Escrow on or
before the Closing Date by (i) recording Seller's Grant Deed(s) and such other
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documents as may be necessary to procure the Title Policy and satisfy the
terms and conditions of this Agreement and (ii) delivering funds and documents
as set forth in Article 10 entitled "Recordation and Distribution of Funds and
Documents" WHEN AND ONLY WHEN each of the following requirements has been
satisfied:
8.2.1 Funds and Instruments. All funds and instruments
required pursuant to Articles 2 and 3 have been delivered to Escrow Agent.
8.2.2 Satisfaction of Conditions Precedent. Each of the
conditions precedent set forth in Section 5.1 has been, or upon such closing
shall be, satisfied as provided for in Section 5.1.
8.2.3 Recordation. Escrow Agent shall have recorded the
documents deposited into Escrow for recordation in the Official Records of the
County.
8.3 Earlier Closing. If all of the conditions set forth in Sections
8.2.1 and 8.2.2 are satisfied at a date earlier than the Closing Date, Escrow
Agent shall close the Escrow at such earlier date provided Escrow Agent
obtains the written consent of Buyer and Seller to do so.
8.4 Termination of Escrow. If Escrow Agent cannot close the Escrow
on or before the Closing Date, it will, nevertheless, close the Escrow when
all conditions have been satisfied or waived as provided for in this
Agreement, notwithstanding that one or more of such conditions has not been
timely performed, unless (i) a notice of termination has theretofore been
delivered to Escrow Agent in accordance with the provisions of Section 5.2,
13.1 or 13.2, or (ii) after the Closing Date and prior to the Close of Escrow,
Escrow Agent receives a written notice to terminate the Escrow and this
Agreement from a party who, at the time such notice is delivered, is not in
default hereunder. The right to terminate the Escrow and this Agreement under
the provisions of clause (ii) of this Paragraph 8.4 shall be optional, not
mandatory; no delay in the giving of such notice shall affect the rights
hereunder of the party giving the same.
8.4.1 Notice of Termination. Escrow Agent shall have no
liability or responsibility for determining whether or not a party giving a
notice of termination is or is not in default hereunder. Within two (2)
working days after receipt of such notice from one party, Escrow Agent shall
deliver one copy of such notice to the other party. Unless written objection
to termination of the Escrow is received by Escrow Agent within ten (10) days
after Escrow Agent so delivers such notice, (i) Escrow Agent shall forthwith
terminate the Escrow and return all documents, funds or other items held by it
to the party depositing same, except that Escrow Agent may retain such
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documents and other items usually retained by escrow agents in accordance with
standard escrow termination procedures and practices, and (ii) each party
shall forthwith pay to Escrow Agent one-half of Escrow Agent's reasonable
escrow termination charges. Notwithstanding the foregoing provisions of this
Section 8.4.1, Escrow Agent may (i) retain any funds on deposit with it until
such time as its Escrow termination charges are paid in full and/or (ii)
deduct from any cash held by it sufficient funds to pay for its Escrow
termination charges in full. If written objection to the termination of the
Escrow is delivered to Escrow Agent within such 10-day period, Escrow Agent is
authorized to hold all funds and instruments delivered to it in connection
with the Escrow and may, in Escrow Agent's sole discretion, take no further
action until otherwise directed either by the parties' mutual written
instructions or final order of a court of competent jurisdiction.
8.4.2 Return of Deposits. If the Escrow is terminated under
either Section 13.1 or Section 13.2 or as a result of Seller's default under
or breach of this Agreement, Seller shall return to Buyer any funds disbursed
from the Escrow to Buyer prior to the termination of the Escrow.
ARTICLE 9
PRORATIONS, FEES AND COSTS
9.1 Prorations. Escrow Agent will prorate as of the Close of Escrow
between the parties, in cash, county, city and special district (if any) real
property taxes and assessments for the Property based on the latest
information available to Escrow Agent.
9.2 Thirty Day Month. All prorations and/or adjustments called for
in this Agreement are to be made on the basis of a thirty (30) day month,
unless otherwise specifically instructed in writing.
9.3 Seller's Fees and Costs. Seller shall pay (i) one-half of
Escrow Agent's escrow fee, (ii) usual Seller's document-drafting and recording
charges, (iii) the title insurance premium for the CLTA Owner's Title Policy
and any endorsements reasonably requested by Buyer's lender, and (iv) the
County Documentary Transfer Tax in the amount determined by Escrow Agent and
the County Recorder.
9.4 Buyer's Fees and Costs. Buyer shall pay (i) one-half of Escrow
Agent's escrow fee, (ii) usual Buyer's document-drafting and recording charges
and (iii) the additional premium for an American Land Title Association (ALTA)
title insurance policy, if Buyer desires that Title Company issue such a
policy.
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9.5 Escrow Cancellation Charges Due to a Default. Notwithstanding
the provisions of Sections 9.3 and 9.4 above, if Escrow fails to close due to
Seller's default, Seller shall pay all Escrow cancellation charges. If Escrow
fails to close due to Buyer's default, Buyer shall pay all Escrow cancellation
charges. If Escrow fails to close for any reason other than the foregoing,
Buyer and Seller shall each pay one-half of any Escrow cancellation charges.
"Escrow cancellation charges" means all fees, charges and expenses incurred by
Escrow Agent, including all expenses incurred in connection with issuance of
the Preliminary Report and other title matters.
ARTICLE 10
RECORDATION AND DISTRIBUTION OF FUNDS AND DOCUMENTS
10.1 Disbursements. Except as provided in Section 10.4, below, all
disbursements by Escrow Agent shall be made by checks of Escrow Agent.
10.2 Recorded Documents. Escrow Agent shall cause the County
Recorder of the County to mail Seller's Grant Deed (and each other documents
which are herein expressed to be, or by general usage are, recorded) after
recordation, to the grantee, beneficiary or person (i) acquiring rights under
said document or (ii) for whose benefit said document was acquired.
10.3 Unrecorded Documents. Escrow Agent shall, at the Close of
Escrow, deliver by certified mail, overnight courier or United States mail (or
will hold for personal pickup, if requested) one (1) copy of each unrecorded
document received hereunder by Escrow Agent to the payee or person (i)
acquiring rights under said document or (ii) for whose benefit said document
was acquired.
10.4 Payment of Funds at Close of Escrow. Escrow Agent shall, at the
Close of Escrow, deliver by wire transfer, in accordance with Seller's
instructions (or will hold for personal pickup, if requested) (i) to Seller,
or order, the cash, plus any proration or other credits to which Seller will
be entitled less any appropriate proration, deposits or other charges, and
(ii) to Buyer, or order, any excess funds theretofore delivered to Escrow
Agent by Buyer.
10.5 Conformed Copies. Escrow Agent shall, at the Close of Escrow,
deliver to Seller and Buyer a copy of the Seller's Grant Deed(s) (conformed to
show recording date) and conformed copies of each document recorded to place
title in the condition required by this Agreement.
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ARTICLE 11
REMEDIES
11.1 Liquidated Damages to Seller. If all of the conditions to
Closing for Buyer's benefit have either been satisfied or waived by Buyer by
the Closing Date, and the purchase and sale of the Property described herein
fails to close due to default by Buyer, it is agreed that the amounts released
from Escrow to Seller under this Agreement ("Released Amount") shall be
retained and accepted by Seller as liquidated damages and not as a penalty and
Seller shall be released from its obligation to sell the Property to Buyer,
and Buyer shall be released from its obligation to purchase the Property. It
is agreed that the Released Amount constitutes a reasonable estimate of the
damages to Seller. Buyer and Seller agree that it is impossible or
impractical presently to predict what monetary damages Seller would suffer in
such event. Buyer desires to limit the monetary damages for which Buyer might
be liable hereunder and Buyer and Seller desire to avoid the costs and delays
they would incur if a lawsuit were commenced to collect damages and therefore
agree that the liquidated damages provided hereunder shall constitute Seller's
sole and exclusive remedy hereunder. By the act of an authorized
representative of each party affixing its initials herein, each party
specifically confirms the accuracy of the above statements and its agreement
with them.
/s/ P.W. /s/ L.J.Y
Seller's Initials Buyer's Initials
11.2 Specific Performance. If all of the conditions to Closing for
Seller's benefit have either been satisfied or waived by Seller by the Closing
Date, and the purchase and sale of the Property described herein fails to
close due to default by Seller, Buyer shall be entitled to bring an action for
specific performance of Seller's obligations under this Agreement.
ARTICLE 12
ASSIGNABILITY
12.1 Assignment. Neither party shall voluntarily or by operation of
law assign or otherwise transfer any of its rights or obligations under this
Agreement without obtaining the prior written consent of the other party,
which consent may not be unreasonably withheld. Notwithstanding the foregoing
sentence, Buyer shall have the right to assign its rights under this Agreement
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without consent of Seller to a corporation, partnership, limited liability
company or other entity in which the beneficial owners of at least 51% of the
equity interests in such entity own at least 51% of the equity interests in
Buyer, provided that Buyer shall remain liable for, and be responsible for the
performance of, any and all liabilities, obligations, representations,
covenants and agreements under this Agreement.
ARTICLE 13
EMINENT DOMAIN AND MATERIAL LOSS
13.1 Eminent Domain. In the event that, prior to the Close of
Escrow, all or any material portion of the Property is taken or appropriated
by any public or quasi-public authority under the power of eminent domain, or
Seller receives actual notice of any pending or threatened condemnation
proceedings, then either Buyer or Seller may terminate this Agreement without
further liability hereunder and the parties shall proceed in accordance with
Section 8.4, and, in such event, any portion of Buyer's Deposit, regardless of
whether or not it has been released from Escrow to Seller, shall be
immediately returned to Buyer, and any condemnation proceeds shall be the sole
property of Seller. If neither Seller nor Buyer elects to terminate this
Agreement in the event of any such taking, or threat of taking, and provided
that all conditions precedent to the Close of Escrow have either been
satisfied or waived, Escrow shall close in accordance with this Agreement, and
Seller shall assign to Buyer all of its right, title and interest in any
condemnation proceeds or award made by the governmental entity.
13.2 No Material Loss. If, prior to the Close of Escrow, and subject
to the satisfaction or waiver of all conditions precedent in favor of Buyer
and Seller, the Property shall suffer a Material Loss, Buyer shall have the
right to elect, within 30 days of receipt of notice of such Material Loss, (a)
to terminate this Agreement under Section 8.4.1 and receive a return of
Buyer's Deposit or (b) to purchase the Property as provided in this Agreement
and receive an assignment of any insurance proceeds Seller receives, or to
which Seller is or may become entitled, with respect to such Material Loss
upon Seller's receipt of such proceeds. The parties acknowledge and agree in
no event shall the Close of Escrow be extended due to a Material Loss.
Notwithstanding the foregoing, the assignment of any insurance proceeds as
provided herein shall not include any proceeds received for items not related
to the physical condition of the Property, such as proceeds from Seller's
business interruption insurance, if any. For purposes of this Agreement, a
"Material Loss" means a loss resulting from a casualty that either (i)
diminishes the value of the Property in an amount of at least 10% of the
Purchase Price or (ii) results in a loss of at least 10% of the aggregate
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square footage of the Land as of the Effective Date.
ARTICLE 14
GENERAL PROVISIONS
14.1 Attorneys' Fees. In the event any action, arbitration,
mediation or other dispute resolution proceeding shall be instituted between
Seller and Buyer in connection with this Agreement, the party prevailing in
such proceeding shall be entitled to recover from the other party all of its
costs of such proceeding, including, without limitation, attorneys' fees and
costs as fixed by the court therein.
14.2 Captions. The captions used herein are for convenience only and
are not a part of this Agreement and do not in any way limit or amplify the
terms and provisions hereof.
14.3 Construction of Agreement. The agreements contained herein
shall not be construed in favor of or against either party, but shall be
construed as if both parties prepared this Agreement.
14.4 Counterparts. This Agreement may be executed in counterparts,
all of which, when taken together, shall constitute a fully executed original.
14.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof
and all prior and contemporaneous agreements, representations, negotiations
and understandings of the parties hereto, oral or written, are hereby
superseded and merged herein. The foregoing sentence shall in no way affect
the validity of any instruments executed by the parties in the form of the
exhibits attached to this Agreement.
14.6 Exhibits and Schedules. All Exhibits and Schedules attached
hereto are incorporated herein by reference. Any Exhibits or Schedules that
are to be attached to the Agreement after the Effective Date but prior to the
Close of Escrow, shall be initialled by Buyer and Seller on each page and,
once so initialled, shall be sent to Escrow Agent for attachment to this
Agreement.
14.7 Gender and Number. The use herein of (i) the neuter gender
includes the masculine and the feminine and (ii) the singular number includes
the plural, whenever the context so requires.
14.8 Governing Law. This Agreement and the documents in the forms
attached as exhibits hereto shall be governed by and construed under the laws
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of the State of California. This Agreement shall be deemed made and entered
into in the County.
14.9 Joint and Several Liability. If any party consists of more than
one person or entity, the liability of each such person or entity signing this
Agreement shall be joint and several.
14.10 Modification. No modification, waiver, amendment, discharge or
change of this Agreement shall be valid unless the same is in writing and
signed by the party against which the enforcement of such modification,
waiver, amendment, discharge or change is or may be sought.
14.11 Real Estate Brokerage Commission. Seller shall pay a real
estate brokerage commission in the amount of $49,080 to Fred Harris upon the
Close of Escrow. Except as provided in the preceding sentence, neither party
is obligated to pay any real estate, brokerage or other commission or fee in
connection with the purchase and sale of the Property. Each party hereby
indemnifies, protects, defends (with legal counsel reasonably acceptable to
the other party) and holds the other party free and harmless from and against
any and all costs and liabilities, including, without limitation, reasonable
attorneys' fees and costs, for causes of action or proceedings which may be
instituted by any broker, agent or finder, licensed or otherwise, claiming
through, under or by reason of the conduct of such party in connection with
this transaction.
14.12 No Partnership or Joint Venture. Seller or Buyer shall not, by
virtue of this Agreement, in any way or for any reason be deemed to have
become a partner of the other in the conduct of its business or otherwise, or
a joint venturer. In addition, by virtue of this Agreement there shall not be
deemed to have occurred a merger of any joint enterprise between Buyer and
Seller.
14.13 Notice and Payments. Any notice to be given or other document to
be delivered by any party to the other or others hereunder, and any payments
from Buyer to Seller, may be delivered in person or by facsimile transmission
(provided that a confirming copy is sent by mail or overnight delivery as
herein specified) to an officer of any party, or may be deposited in the
United States mail, duly certified or registered, return receipt requested,
with postage prepaid, or by Federal Express or other similar overnight
delivery service, and addressed to the party for whom intended, as follows:
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To Seller at its business office:
Paradise Valley Communities No. 1
529 East South Temple
Salt Lake City, Utah 84102
Attention: Patricia A. Wood
Facsimile No.: (801)524-1751
With a copy to:
K. Michael Garrett, Esq.
Duckor Spradling & Metzger
401 West A Street, Suite 2400
San Diego, California 92101
Facsimile No.: (619)231-6629
To Buyer at its business office:
The Forecast Group , L.P.
10670 Civic Center Drive
Rancho Cucamonga, California 91730
Facsimile No.: (909)980-7305
With a copy to:
General Counsel
c/o The Forecast Group , L.P.
10670 Civic Center Drive
Rancho Cucamonga, California 91730
Facsimile No.: (909)987-8958
To Escrow Agent:
Chicago Title Company
604 Empire Street
Fairfield, California 94533
Attention: Ms. Sandy Rigby
Facsimile No.: (707) 425-4810
Any party hereto may from time to time, by written notice to the other,
designate a different address which shall be substituted for the one above
specified. Unless otherwise specifically provided for herein, all notices,
payments, demands or other communications given hereunder shall be in writing
and shall be deemed to have been duly given and received (i) upon personal
delivery, or (ii) as of the third business day after mailing by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as set forth above, or (iii) the immediately succeeding Business Day
after deposit with Federal Express or other similar overnight delivery
system.
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14.14 Remedies Cumulative. All rights and remedies of Buyer and
Seller contained in this Agreement shall be construed and held to be
cumulative.
14.15 Severability. In the event that any phrase, clause, sentence,
paragraph, section, article or other portion of this Agreement shall become
illegal, null or void or against public policy, for any reason, or shall be
held by any court of competent jurisdiction to be illegal, null or void or
against public policy, the remaining portions of this Agreement shall not be
affected thereby and shall remain in force and effect to the fullest extent
permissible by law.
14.16 Successors and Assigns. Subject to the restrictions and
prohibitions on assignment set forth in Article 12, each and all of the
covenants and conditions of this Agreement shall inure to the benefit of and
shall be binding upon the successors-in-interest, assigns, and legal
representatives of the parties hereto. As used in the foregoing, "successors"
shall refer to the parties' interest in the Property and to the successors to
all or substantially all of their assets and to their successors by merger or
consolidation.
14.17 Waiver. No waiver by Buyer or Seller of a breach of any of the
terms, covenants or conditions of this Agreement by the other party shall be
construed or held to be a waiver of any succeeding or preceding breach of the
same or any other term, covenant or condition herein contained. No waiver of
any default by Buyer or Seller hereunder shall be implied from any omission by
the other party to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect a default other
than as specified in such waiver. The consent or approval by Buyer or Seller
to or of any act by the other party requiring the consent or approval of the
first party shall not be deemed to waive or render unnecessary such party's
consent or approval to or of any subsequent similar acts by the other party.
14.18 Gender and Number. In this Agreement (unless the context
requires otherwise), the masculine, feminine and neuter genders and the
singular and the plural include one another.
23
<PAGE>
14.19 Time of the Essence. Time is of the essence of each and every
provision of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
SELLER:
PARADISE VALLEY COMMUNITIES NO. 1, a
California general partnership
By: HomeFed Communities, Inc.,
a California corporation,
General Partner
By: /s/ Patricia A. Wood
Patricia A. Wood,
President
By: HomeFed Resources
Corporation, a California
corporation, General Partner
By: /s/ Patricia A. Wood
Patricia A. Wood,
President
BUYER:
THE FORECAST GROUP , L.P.,
a California limited partnership
By: FORECAST HOMES, INC., a
California corporation, General Partner
By: /s/ Larry J. Young
Its: Division President
24
<PAGE>
CONSENT OF ESCROW AGENT
The undersigned Escrow Agent hereby agrees to (i) accept the foregoing
Agreement, (ii) be Escrow Agent under said Agreement and (iii) be bound by said
Agreement in the performance of its duties as Escrow Agent; provided, however,
the undersigned shall have no obligations, liability or responsibility under (i)
this Consent or otherwise unless and until said Agreement, fully signed by the
parties, has been delivered to the undersigned or (ii) any amendment to said
Agreement unless and until the same shall be accepted by the undersigned in
writing.
Dated: October 3, 1996 (the "Opening of the Escrow")
Chicago Title Company
By: /s/ Terri Piper
Its: CSEO
<PAGE>
LIST OF EXHIBITS
Exhibit A. . . . . . . . . . .Legal Description of Land -- Unit 2
Exhibit B . . . . . . . . . . . . . . . . . . Property Documents
Exhibit C. . . . . . . . . . . . . . General Conditions of Escrow
Exhibit D. . . . . . . . . . . .Certificate of Non-Foreign Status
Exhibit E. . . . . . . . . . . . . . . . . . . . . .Grant Deed(s)
Exhibit F. . . . . . . . . . . . . . . . . Disapproved Exceptions
Exhibit G . . . . . . . . . . . . Commitment for Title Insurance,
Schedule B- Section 2
<PAGE>
EXHIBIT A
Legal Description of Land
Unit 2
ALL THAT REAL PROPERTY SITUATE IN THE CITY OF FAIRFIELD, COUNTY OF SOLANO, STATE
OF CALIFORNIA, DESCRIBED AS FOLLOWS:
LOTS 1, 31 THROUGH 67, 98 THROUGH 100, AND 104, AS SHOWN ON THAT CERTAIN MAP
ENTITLED: "FINAL MAP OF PARADISE VALLEY NORTH UNIT NO. 2, BEING ALL OF LOT 61
AS SHOWN ON THE FINAL MAP OF PARADISE VALLEY NORTH UNIT NO. 1 AS FILED IN BOOK
57 OF MAPS, AT PAGE 27, SOLANO COUNTY RECORDS," FILED SEPTEMBER 27, 1990 IN THE
OFFICE OF THE RECORDER OF SOLANO COUNTY IN BOOK 59 OF MAPS, AT PAGE 62, SOLANO
COUNTY RECORDS.
<PAGE>
EXHIBIT B
Property Documents
- - Rough Grading and Erosion Plans dated September 1988 (6 copies)
- - Final Map Unit 1 dated September 1988 (6 copies)
- - Final Map Unit 2 dated November 1988 (6 copies)
- - Improvement Plans for Units 1 and 2 dated March 1989
(6 copies)
- - Development Agreement dated July 20, 1988
- - First Amendment to Development Agreement dated September 15, 1994 (not
yet fully executed)
- - Second Amendment to Development Agreement (not yet dated or fully
executed)
- - Covenants, Conditions, and Restrictions dated August 25, 1995
- - Anderson Consulting Group Report dated September 15, 1994
- - Department of Real Estate Public Report dated September 1, 1995
- - Letter to City of Fairfield regarding acceptance of improvements dated
May 28, 1996
- - Unapproved Plans for the Paradise Valley Recreation Facility
- - Cost Sharing Agreement dated October 20, 1989
- - Agreement with City of Fairfield regarding construction of recreational
facility dated August 31, 1995
- - Utility Deposit Balances dated May 31, 1996
- - Paradise Valley Master Association documents dated September 1995
- - Paradise Valley Master Association Bylaws dated August 21, 1995
- - Information regarding improvement bonds and maintenance obligations for
Units 1 and 2 and Dover/Foothill Boulevard
<PAGE>
EXHIBIT C
General Conditions of Escrow
<PAGE>
GENERAL PROVISIONS
1. The phrase "close of escrow" (for COE) as used in this
escrow means the date on which documents are recorded,
unless otherwise specified.
2. Recordation of any instruments delivered through this
escrow, if necessary or proper for the issuance of the
policy of title insurance called for, is authorized.
3. No examination or insurance as to the amount or payment of
personal property taxes is required unless specifically
requested.
4. You and any of your affiliates or employees are authorized
to use the information and documents in this escrow for any
purpose. You are further authorized to furnish to any
broker or lender identified with this transaction or anyone
acting on behalf of such broker or lender, any instructions,
amendments, statements, or notices of cancellation given in
connection with this escrow.
5. All written notices, communications, change of instructions
and documents are required to be delivered timely at the
office of Chicago Title Company as set forth herein.
6. All funds received in this escrow shall be deposited with
other escrow funds in one or more escrow (demand) accounts
of Chicago Title Company in any state or national bank. The
parties to this escrow understand that the escrow accounts
you maintain with the depository institutions contribute to
your value as a customer of these institutions which, in
turn, may make available to Chicago Title Company an array
of bank services, accommodations or other benefits. You
shall have no obligation to account for the value realized
by Chicago Title Company from these services, accommodations
or other benefits. All disbursements shall be made by your
check, unless otherwise instructed. You shall not be
responsible for any delay in closing if funds received by
escrow are not available for immediate withdrawal. Chicago
Title Company may, at its option, require concurrent
instructions from all principals prior to release of any
funds on deposit in this escrow.
7. If demand to cancel is submitted after the Time Limit Date,
any principal so requesting you to cancel this escrow shall
file notice of demand to cancel in your office in writing.
You shall within three (3) working days thereafter mail by
certified mail one copy of such notice to each of the other
principals at the address stated in this escrow. Unless
written objection thereto is filed in your office by a
principal within fifteen (15) calendar days after the date
of such mailing, you are instructed to cancel this escrow.
If this is a sale escrow, you may return the lender's papers
and/or funds upon lender's demand.
8. In the event that this escrow is canceled, any fees or
charges due Chicago Title Company including cancellation
fees and any expenditures incurred or authorized shall be
paid from funds on deposit unless otherwise specifically
agreed to or determined by a court of competent
jurisdiction. Upon payment thereof, return documents and
monies to the respective parties depositing same, or as
ordered by the court, and void any executed instruments.
9. If there is no written activity by a principal to this
escrow within any six-month period after the Time Limit Date
set forth herein, Chicago Title Company may, at its option,
terminate its agency obligation and cancel this escrow,
returning all documents, monies or other items held, to the
respective parties entitled thereto, less any fees and
charges as provided herein.
10. If, for any reason, funds are retained or remain in escrow
after the closing date, you may deduct therefrom a
reasonable charge as custodian, of not less than $25.00 per
month, unless otherwise specified.
11. In the event that you should receive or become aware of
conflicting demands or claims with respect to this escrow,
or the rights of any of the parties hereto, or any money or
property deposited herein, you shall have the absolute right
at your option to discontinue any or all further acts until
such conflict is resolved to your satisfaction.
12. In the event that any Offer to Purchase, Deposit Receipt, or
any other form of Purchase Agreement is deposited in this
escrow, it is understood that such document will be
effective only as among the parties signing said document.
You as escrow holder are not to be concerned with the terms
of such document and are relieved of all responsibility in
connection therewith. You are to be concerned only with the
directives specifically set forth in these escrow
instructions and amendments thereto. Further, you are not
to be concerned or liable for items designated as
"memoranda" in these escrow instructions nor with any other
agreement or contract between the parties.
13. You are released from and shall have no liability,
obligation or responsibility with respect to (a) withholding
of funds pursuant to Section 1445 of the Internal Revenue
Code of 1986 as amended, and to Sections 18662 and 18668 of
the California Revenue and Taxation Code, (b) advising the
parties as to the requirements of said Section 1445, (c)
determining whether the transferor is a foreign person or a
non-resident under such Section, nor (d) obtaining a
nonforeign affidavit or other exemption from withholding
under said Sections nor otherwise making any inquiry
concerning compliance with such Sections by any party to the
transaction.
14. The parties hereto, by execution of these instructions
acknowledge that the escrowholder assumes no responsibility
or liability whatsoever for the supervision of any act or
the performance of any condition which is a condition
subsequent to the closing of this escrow.
15. In the absence of instructions to the contrary, you are
hereby authorized to utilize wire services, overnight, next
day, or other expedited delivery services (as opposed to the
regular U.S. Mail) and to charge the respective party's
account accordingly.
16. If you pay a demand to reconvey a revolving line of credit
or equityline deed of trust, you are hereby instructed on my
behalf and for my benefit, to request that the lender
issuing said demand cancel said revolving line or equityline
of credit.
17. You are authorized to destroy or otherwise dispose of any
and all documents, papers, instructions, correspondence and
other material pertaining to this escrow at the expiration
of six (6) years from the close of escrow or cancellation
thereof, without liability and without further notice.
IMPORTANT NOTICE
Except for wire transfers, funds remitted to this escrow are
subject to availability requirements imposed by Section 12413.1
of the California Insurance Code. CASHIER'S, CERTIFIED or
TELLER'S checks, payable to CHICAGO TITLE COMPANY are generally
available for disbursement on the next business day following
the date of deposit.
Other forms of payment may cause extended delays in the closing
of your transaction pursuant to the requirements imposed by
State Law.
(Wire transfer information available upon request)
ALL PARTIES TO THIS ESCROW ACKNOWLEDGE THAT CHICAGO TITLE COMPANY
DOES NOT PROVIDE LEGAL ADVICE NOR HAS IT MADE ANY INVESTIGATION,
REPRESENTATIONS OR ASSURANCES WHATSOEVER REGARDING THE LEGAL
ASPECTS OR COMPLIANCE OF THIS TRANSACTION WITH ANY TAX,
SECURITIES OR ANY OTHER STATE OR FEDERAL LAWS. IT IS RECOMMENDED
THAT THE PARTIES OBTAIN INDEPENDENT LEGAL COUNSEL AS TO SUCH
MATTERS.
<PAGE>
EXHIBIT D
CERTIFICATE OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code of 1986, as amended ("Code"),
provides that a transferee (buyer) of a U.S. real property interest must
withhold tax if the transferor (seller) is a foreign person. Sections 18805 and
26131 of the California Revenue and Taxation Code provide that a transferee
(buyer) of a California real property interest must withhold tax if withholding
is required by Section 1445 of the United States Internal Revenue Code.
To inform The Forecast Group , L.P. ("Transferee"), that withholding of
tax under Section 1445 of the Code is not required upon disposition of certain
real property to the Transferee by Paradise Valley Communities No. 1, a
California general partnership, ("Transferor"), the undersigned hereby
represents and certifies the following on behalf of the Transferor:
1. The undersigned is the duly qualified and acting officer of the
Transferor;
2. The Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations), but rather is a corporation formed
under the laws of one of the United States;
3. The Transferor's U.S. employer identification number is
52-1671038;
4. The Transferor's address is 529 East South Temple, Salt Lake City,
Utah 84102-1089;
5. The Transferor understands that this certification may be
disclosed to the Internal Revenue Service and/or the California Franchise Board
by the Transferee and that any false statement contained herein could be
punished by fine, imprisonment, or both.
<PAGE>
Under penalty of perjury, the undersigned declares that the undersigned
has examined this certification and to the best of its knowledge and belief it
is true, correct, and complete.
Dated: _______________, 1996 TRANSFEROR:
PARADISE VALLEY COMMUNITIES NO. 1,
a California general partnership
By: HomeFed Communities, Inc.,
a California corporation,
General Partner
By: ________________
Patricia A. Wood,
President
By: HomeFed Resources
Corporation, a California
corporation, General Partner
By: ________________
Patricia A. Wood,
President
<PAGE>
EXHIBIT E
Grant Deed(s)
[To Be Prepared and Attached Prior to Close of Escrow]
<PAGE>
EXHIBIT F
DISAPPROVED EXCEPTIONS
Instrument Entitled: Detachment and Development Agreement
Executed by: Solano Irrigation District, Arcadia
Development Co., et al.
Recorded: April 24, 1989 as Instrument
No. 890025219, Official Records
Deed of Trust
Dated: November 18, 1994
Amount: $1,000,000.00
Trustor: Paradise Valley Communities No. 1, a
California General Partnership
Trustee: Chicago Title Company, a California
Corporation
Beneficiary: Leucadia Financial Corporation
Recorded: November 30, 1994 as Instrument
No. 1994-00102706, Official Records
Re-recorded: July 3, 1995 as Instrument No. 1995-00038553,
Official Records
Deed of Trust
Dated: July 3, 1995
Amount: $20,000,000.00
Trustor: Paradise Valley Communities No. 1, a
California General Partnership
Trustee: Chicago Title Company, a California
Corporation
Beneficiary: Leucadia Financial Corporation, a
Utah Corporation
Recorded: July 13, 1995 as Instrument No. 1995-00038615,
Official Records
<PAGE>
EXHIBIT G
APPROVED EXCEPTIONS
(See attached)
<PAGE>
COMMITMENT FOR TITLE INSURANCE
SCHEDULE B - SECTION 2
Order No: 500768 DR
Schdule B of the policy or policies to be issued will contain exceptions to the
following matters unless the same are disposed of to the satisfaction of the
Company:
A. Defects, liens, encumbrances, adverse claims or other matters, if any,
created, first appearing in the public records, or attaching subsequent
to the effective date hereof but prior to the date the proposed Insured
acquires for value of record the estate or interest or mortgage thereon
covered by this Commitment.
B. In addition to the Exceptions shown below, any standard coverage policy
of title insurance issued under the terms of this commitment will contain
the applicable Exclusions and Exceptions shown on attached list.
Exceptions:
A 1. General and special taxes for the fiscal year 1996-1997, a lien not
yet due and payable.
B 2. The Lien of Supplemental Taxes, if any, assessed pursuant to the
provisions of Chapter 3.5 (commencing with Section 75) of the Revenue
and Taxation Code of the State of California.
C 3. The fact that said land is within the bounds of the following Mello-
Roos Community Facilities District(s), the annual assessments of
which, if any, are collected with County Property Taxes
District(s): COMMUNITY FAC. DIST. #1
F-S USD - MELLO ROOS #5
D 4. An Agreement, upon the terms and conditions contained therein
Entitled: DEVELOPMENT AGREEMENT
Executed by: THE CITY OF FAIRFIELD, ARCADIA DEVELOPMENT CO.,
ET AL
Recorded: AUGUST 11, 1988 IN BOOK 1988 PAGE 100194
Instrument No.: 46643, OFFICIAL RECORDS
Reference is made to said instrument for further particulars
E An Agreement, upon the terms and conditions contained therein
Entitled: ASSUMPTION AND CONSENT TO ASSIGNMENT OF PARADISE
VALLEY DEVELOPMENT AGREEMENT
Executed by: PARADISE VALLEY COMMUNITIES NO. 1, A CALIFORNIA
LIMITED PARTNERSHIP, ET AL
Recorded: JANUARY 6, 1992
Instrument No. 1992-00000836, OFFICIAL RECORDS
Reference is made to said instrument for further particulars
G 5. Easement for the purpose stated herein and incidental purposes as
created in that certain instrument
Recorded: OCTOBER 2, 1989 AS INSTRUMENT NO. 890068128
<PAGE>
Granted to: THE CITY OF FAIRFIELD
Purpose: THE ERRANT FLIGHT AND/OR ENTRY OF GOLF BALLS
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND AS MORE
PARTICULARLY IN SAID INSTRUMENT
H COVENANTS, CONDITIONS AND RESTRICTIONS, IF ANY (DELETING THEREFROM ANY
RESTRICTIONS BASED ON RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL
STATUS OR NATIONAL ORIGIN, UNLESS AND ONLY TO THE EXTENT THAT SAID
COVENANT (A) IS EXEMPT UNDER CHAPTER 42, SECTION 3607 OF THE UNITED
STATES CODE OR (B) RELATES TO HANDICAP BUT DOES NOT DISCRIMINATE
AGAINST HANDICAPPED PERSON(S) AS SET FORTH IN THE DOCUMENT REFERRED TO
IN THE NUMBERED ITEM LAST ABOVE SHOWN.
I 6. An easement for the purpose shown below and rights incidental thereto
as shown or as offered for dedication on the recorded map shown below
Map Of: PARADISE VALLEY NORTH UNIT NO. 1
Recorded: OCTOBER 2, 1989 IN BOOK 57 OF MAPS, AT PAGE 27
Easement Purpose: PLANTING
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND, 10 FEET
IN WIDTH, COINCIDENT WITH THE LINES OF DORAL
DRIVE AND FULLERTON DRIVE
J 7. An easement for the purpose shown below and rights incidental thereto
as shown or as offered for dedication on the recorded map shown below
Map Of: PARADISE VALLEY NORTH UNIT NO. 1
Recorded: OCTOBER 2, 1989 IN BOOK 57 OF MAPS, AT PAGE 27
Easement Purpose: PUBLIC SERVICE
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND, 10 FEET
IN WIDTH, COINCIDENT WITH THE LINES OF DORAL
DRIVE AND FULLERTON DRIVE; THOSE 5 FOOT BY 18
FOOT PORTIONS OF THE HEREIN DESCRIBED LAND
COINCIDENT WITH THE INTERSECTIONS OF LOT LINES
AND THE LINES OF SAID DRIVES
K 8. An easement for the purpose shown below and rights incidental thereto
as shown or as offered for dedication on the recorded map shown below
Map Of: PARADISE VALLEY NORTH UNIT NO. 1
Recorded: OCTOBER 2, 1989 IN BOOK 57 OF MAPS, AT PAGE 27
Easement Purpose: FENCE
Affects: THE SOUTHEASTERLY 5 FEET OF LOTS 4 THROUGH 6;
THE NORTHERLY 5 FEET OF LOTS 27 THROUGH 34
<PAGE>
L 9. THE FACT THAT OWNERSHIP OF SAID LAND DOES NOT INCLUDE RIGHTS OF ACCESS
TO OR FROM THE LAND ADJACENT THERETO, SUCH RIGHTS HAVING BEEN SEVERED
FROM SAID LAND BY THE MAP OF SAID TRACT
AFFECTS: THE SOUTHEASTERLY LINE OF LOTS 4 THROUGH 6 IN
AND TO PARADISE VALLEY DRIVE; THE NORTHERLY LINE
OF LOTS 27 THROUGH 34 IN AND TO THE GOLF COURSE
O 10. Easement for the purpose stated herein and incidental purposes as
created in that certain instrument
Recorded: OCTOBER 25, 1990 AS INSTRUMENT NO. 900084601
Granted to: THE CITY OF FAIRFIELD
Purpose: OVERSPRAY IN CONNECTION WITH THE WATERING OF A
MUNICIPAL GOLF COURSE AND THE INTRUSION OF GOLF
BALLS FROM THE FAIRWAYS, ROUGHS AND GREENS
Affects: PORTIONS OF THE HEREIN DESCRIBED LAND, AS MORE
PARTICULARLY DESCRIBED IN SAID INSTRUMENT
P COVENANTS, CONDITIONS AND RESTRICTIONS, IF ANY (DELETING THEREFROM ANY
RESTRICTIONS BASED ON RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL
STATUS OR NATIONAL ORIGIN, UNLESS AND ONLY TO THE EXTENT THAT SAID
COVENANT (A) IS EXEMPT UNDER CHAPTER 42, SECTION 3607 OF THE UNITED
STATES CODE OR (B) RELATES TO HANDICAP BUT DOES NOT DISCRIMINATE
AGAINST HANDICAPPED PERSON(S) AS SET FORTH IN THE DOCUMENT REFERRED TO
IN THE NUMBERED ITEM LAST ABOVE SHOWN.
Q 11. Covenants, conditions and restrictions, but omitting any covenant or
restriction based on race, color, religion, sex, handicap, familial
status or national origin, contained in the Declaration
By: PARADISE VALLEY COMMUNITIES NO. 1, A CALIFORNIA
GENERAL PARTNERSHIP, FIRST AMERICAN TITLE
GUARANTY COMPANY, A CALIFORNIA CORPORATION AND
REYNEN, BARDIS & WINN, A CALIFORNIA LIMITED
PARTNERSHIP
Recorded: AUGUST 25, 1995 AS INSTRUMENT NO. 1995-00051486,
OFFICIAL RECORDS
R Said instrument provides that a violation thereof shall not defeat nor
render invalid the lien of any Mortgage or Deed of Trust made in good
faith and for value.
S Contains no reversionary clause.
T Declaration of Annexation, recorded SEPTEMBER 13, 1995 AS INSTRUMENT
NO. 1995-00055722, OFFICIAL RECORDS.
<PAGE>
U Declaration of Annexation, recorded SEPTEMBER 13, 1995 AS INSTRUMENT
NO. 1995-00055723, OFFICIAL RECORDS.
V Declaration of Annexation, recorded SEPTEMBER 13, 1995 AS INSTRUMENT
NO. 1995-00055724, OFFICIAL RECORDS.
AG END OF SCHEDULE B
STR/mg
<PAGE>
PARADISE VALLEY UNIT 3
OPTION TO PURCHASE REAL PROPERTY AND ESCROW INSTRUCTIONS
BETWEEN
PARADISE VALLEY COMMUNITIES NO. 1
("Seller")
AND
THE FORECAST GROUP, L.P.
("Buyer")
<PAGE>
PARADISE VALLEY UNIT 3
OPTION TO PURCHASE REAL PROPERTY AND ESCROW INSTRUCTIONS
THIS OPTION TO PURCHASE REAL PROPERTY AND ESCROW INSTRUCTIONS
("Agreement") is made and effective as of October 3, 1996 by and between
Paradise Valley Communities No. 1, a California general partnership
("Seller"), and The Forecast Group, L.P., a California limited partnership
("Buyer"), with reference to the facts set forth below.
A. Seller is the owner of that certain land situated in the City of
Fairfield, County of Solano, State of California, more particularly described
in Exhibit A attached hereto and incorporated herein ("Land"). The Land is a
portion of a residential subdivision ("Subdivision") consisting of four units,
or neighborhoods. The Land consists of one unit or neighborhood, which is
referred to herein as "Unit 3." Unit 3 consists of undeveloped land, which
has been subdivided into 75 single-family residential lots pursuant to the
"Subdivision Map," as defined in Section 1.22 of this Agreement. The term
"Lots" refers to the single-family residential lots located in Unit 3 that are
specifically described in Exhibit A, attached hereto. Work on the Lots in
Unit 3 and the infrastructure improvements and amenities ("Improvements") for
Unit, as described in the Subdivision Map and related improvement plans and
specifications described in Exhibit B, attached hereto has not begun. The
Lots and Improvements are not complete.
B. Buyer has entered into the Paradise Valley Unit 2 Second Closing
Purchase Agreement and Escrow Instructions dated October 3, 1996 ("Unit 2
Second Closing Purchase Agreement"), pursuant to which Buyer has agreed to
purchase from Seller certain single-family residential lots located on land
near or adjacent to the Lots and comprising a portion of the Subdivision.
Buyer desires to obtain an option to purchase the Property (as defined herein)
and Seller desires to grant to Buyer an option to purchase the Property in
accordance with the terms and provisions set forth below.
NOW, THEREFORE, in consideration of the recitals set forth above, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as set forth below.
1
<PAGE>
ARTICLE 1
DEFINED TERMS
Terms used in this Agreement with their initial letters capitalized and
not otherwise defined shall have the meanings set forth below.
1.1 Agreement. The term "Agreement" shall mean this Option to
Purchase Real Property and Escrow Instructions between Seller and Buyer.
1.2 Approved Exceptions. The term "Approved Exceptions" shall mean
those exceptions to title that are approved in accordance with this Agreement.
1.3 Business Day. The term "Business Day" shall mean any day other
than a Saturday, Sunday or legal holiday in the State of California. All
periods of time described in this agreement that are not expressly measured by
Business Days shall be measured by calendar days.
1.4 Buyer. The term "Buyer" shall mean The Forecast Group, L.P., a
California limited partnership.
1.5 CLTA Owner's Title Policy. The term "CLTA Owner's Title Policy"
shall mean the California Land Title Association ("CLTA") owner's policy of
title insurance to be issued by the Title Company upon the Close of Escrow
pursuant to the terms of this Agreement.
1.6 Cash. The term "cash" shall mean: (i) currency of the United
States of America, (ii) cashier's check(s) currently dated and payable to
Escrow Agent or Seller, as required under this Agreement, drawn and paid
through a California banking or savings and loan institution, tendered to
Escrow Agent or Seller, as required under this Agreement one (1) Business Day
before funds are required to be delivered under this Agreement, or (iii) an
amount credited by wire transfer into Escrow Agent's or Seller's bank account,
as required under this Agreement.
1.7 Close of Escrow. The term "Close of Escrow" shall mean the
consummation of the purchase of the Property by Buyer from Seller and the
recordation of Seller's Grant Deed(s) in accordance with the terms and
provisions of this Agreement.
1.8 Closing Date. The term "Closing Date" shall mean the date on
which the closing will be held for the sale of the Property as set forth in
Section 8.1 of this Agreement.
2
<PAGE>
1.9 County. The term "County" shall mean the County of Solano, in
the State of California.
1.10 Effective Date. The term "Effective Date" shall mean October 3,
1996, the date on which this Agreement is effective and deemed to have been
made.
1.11 Escrow. The term "Escrow" shall mean the escrow opened by
Escrow Agent pursuant to the terms of this Agreement.
1.12 Escrow Agent. The term "Escrow Agent" shall mean Chicago Title
Company, 604 Empire Street, Fairfield, California 94533 ("Chicago Title").
1.13 Feasibility Review Period. The term "Feasibility Review Period"
shall mean the period of time which commences on the Effective Date, and
terminates at midnight on May 1, 1998.
1.14 Governmental Action. The term "Governmental Action" shall mean
(a) any order of a court of competent jurisdiction, and/or (b) any enactment,
by the initiative or referendum process or otherwise, of any Governmental
Agencies (as defined below) affecting the Property, either directly or
indirectly, including, but not limited to, limitation on the number of permits
or licenses that can be issued, declaration of policy, resolution, ordinance,
statute, regulation, or any other enactment of any Governmental Agency (as
defined below) and irrespective of whether the orders or enactments listed
immediately above contain the words "moratorium," "moratoria" or similar
words.
1.15 Governmental Agencies. The term "Governmental Agencies" shall
mean any local, county, state and/or federal governmental or quasi-governmental
agencies, authorities or regulatory bodies and any public or
private utility companies having jurisdiction over the Property.
1.16 Opening of Escrow. The term "Opening of Escrow" shall mean the
date Escrow Agent executes the Consent of Escrow Agent attached hereto, which
consent shall be executed by Escrow Agent upon delivery of this Agreement to
Escrow Agent.
1.17 Preliminary Report. The term "Preliminary Report" shall mean
the Preliminary Title Report dated June 14, 1996, issued by the Title Company
to be reviewed by Buyer during the Feasibility Review Period.
1.18 Property Documents. The term "Property Documents" shall mean
the documents delivered by Seller to Buyer in connection with its feasibility
studies pursuant to Section 4.1 of this Agreement. The Property Documents are
listed in Exhibit B, attached hereto.
3
<PAGE>
1.19 Property. The term "Property" shall mean the Land and the
Subdivision Map and the Lots to the extent completed, and any public or
private entitlements, maps, utility deposits, plans, soils reports,
environmental reports, marketing studies, development agreements, permits and
similar items that relate to the development, sale and use of the Lots as
single-family residential building lots.
1.20 Purchase Price. The term "Purchase Price" shall mean the total
consideration to be paid by Buyer to Seller for the purchase of the Property
as set forth in Article 2 of this Agreement.
1.21 Seller. The term "Seller" shall mean Paradise Valley
Communities No. 1, a California general partnership.
1.22 Subdivision Map. The term "Subdivision Map" shall mean the
Subdivision Map of Paradise Valley North Unit No. 3, recorded on June 11,
1991, in Book 60 of Maps, at Page 82, et. seq., in the Official Records of
Solano County, as amended by that certain Certificate of Correction for
Subdivisions recorded September 23, 1991, in Book 1991, as Instrument No.
1991-00069160, Official Records of Solano County.
1.23 Title Company. The term "Title Company" shall mean Chicago
Title.
ARTICLE 2
GRANT OF OPTIONS AGREEMENT OF PURCHASE AND SALE
2.1 Grant of Option. In consideration of Buyer's entering into the
Purchase Agreement and Buyer's delivery of $1,000 cash ("Option Payment") to
Seller, Seller hereby grants to Buyer the right and option to purchase and
acquire the Property at the Purchase Price and upon the terms and conditions
hereinbelow set forth. The option granted herein shall expire at midnight on
May 1, 1998 (the "Expiration Date").
2.2 Purchase Price. The purchase price ("Purchase Price") for the
Property is Two Million One Hundred Seventy-One Thousand Three Hundred and
00/100 Dollars ($2,171,300).
2.3 Payment of Purchase Price. The Purchase Price shall be paid in
cash upon the Close of Escrow. The Option Payment shall be credited against
the Purchase Price.
2.4 Assumption of Liabilities. Upon the terms and subject to the
conditions contained in this Agreement, Buyer shall assume, effective as of
the time of day on the Closing Date that Escrow Agent telephonically or in
writing notifies Seller and Buyer that Escrow has closed, Seller's obligations
under the Property Documents with respect to the Property purchased under this
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Agreement, which include, without limitation, the obligation to complete the
Lots and any necessary Improvements in accordance with the Subdivision Map and
all applicable documents, instruments, codes, ordinances, regulations and
permits.
ARTICLE 3
EXERCISE OF OPTION;
OPEN AND CLOSE OF ESCROW; DELIVERY OF DOCUMENTS
3.1 Exercise of Option. Buyer shall exercise the option to purchase
the Property under this Agreement by delivering to Seller, on or before the
Expiration Date, a written notice of Buyer's exercise of the option to
purchase the Property under this Agreement ("Notice of Exercise"). Buyer
shall have the right to deliver the Notice of Exercise and thereby exercise
the option to purchase the Property under this Agreement if, and only if, at
the time of Buyer's delivery of the Notice of Exercise, (i) Buyer is not in
default under this Agreement and (ii) Buyer has closed the escrow, and
acquired the lots and property upon the Second Closing with respect to Unit 2,
under the Unit 2 Second Closing Purchase Agreement. If the Notice of Exercise
is not delivered to Seller on or before the Expiration Date, Buyer's option to
purchase the Property and this Agreement shall immediately terminate upon the
Expiration Date. Upon any such termination of the option to purchase the
Property, the Buyer will execute, acknowledge and deliver to the Seller a
quitclaim deed and such other documentation as Seller may determine to be
reasonable and necessary in order to evidence the termination of any interest
of Buyer in the Property.
3.2 Opening of Escrow. Upon Buyer's timely delivery to Seller of
the Notice of Exercise, Buyer and Seller shall open Escrow by depositing with
Escrow Agent a fully executed original of this Agreement for use as escrow
instructions, and Escrow Agent shall execute the Consent of Escrow Agent
("Consent") which appears at the end of this Agreement and deliver a fully
executed Consent to Buyer and Seller. Seller shall also deposit the Option
Payment into Escrow upon the opening of Escrow. Escrow Agent's general
conditions ("General Conditions") are attached hereto as Exhibit C and
incorporated herein by reference to the extent they are not inconsistent with
the provisions of this Agreement. If there is any inconsistency between the
provisions of the General Conditions and this Agreement, the provisions of
this Agreement shall control. If Escrow Agent requires additional
instructions, the parties agree to make any deletions, substitutions and
additions as the parties shall mutually approve, as long as such deletions,
substitutions or additions do not materially alter the terms of this
Agreement.
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3.3 Buyer's Deliveries. Buyer shall, at least one (1) Business Day
prior to the Close of Escrow (unless required to be delivered at an earlier
date under the terms of this Agreement), deliver to Escrow Agent each of the
following:
3.3.1 Purchase Price. Cash in the amount of the Purchase
Price, less the Option Payment;
3.3.2 Documents. Fully executed and, where appropriate,
notarized counterparts of the documents required to be executed by Buyer under
this Agreement;
3.3.3 Prorations, Fees and Costs. The amount, if any,
required of Buyer under Article 9 of this Agreement entitled "Prorations, Fees
and Costs" and any other amounts payable upon the Close of Escrow under any
other provisions of this Agreement; and
3.3.4 General. Such other documents, instruments and
certificates as Seller may reasonably require to carry out the intent of this
Agreement; provided, however, that Buyer shall not be obligated to incur any
financial liability or obligation
in connection with the furnishing of any such documents, instruments or
certificates.
3.4 Seller's Deliveries. Seller shall, at least one (1) Business
Day prior to the Close of Escrow (unless required to be delivered at an
earlier date under the terms of this Agreement), deliver to Escrow Agent each
of the following:
3.4.1 Certificate of Non-Foreign Status. Prior to the Close
of Escrow, Seller shall execute and deposit into Escrow a Certificate of Non-
Foreign Status certifying that Seller is a non-foreign person in the form
attached hereto as Exhibit D and incorporated herein ("Certificate of Non-
Foreign Status");
3.4.2 Grant Deeds. Prior to the Close of Escrow, Seller
shall execute, acknowledge and deposit into Escrow Grant Deed(s) in the form
attached hereto as Exhibit E; and
3.4.3 General. Such other documents, instruments and
certificates as Buyer may reasonably require to carry out the intent of this
Agreement; provided, however, that Seller shall not be obligated to incur any
financial liability or obligation in connection with the furnishing of any
such documents, instruments or certificates.
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ARTICLE 4
FEASIBILITY REVIEW
4.1 Feasibility Review Period; Delivery of Property Documents.
During the Feasibility Review Period, Buyer shall analyze the feasibility of
its purchase and use of the Property. Buyer is solely responsible for any and
all costs incurred by Buyer in connection with its review and/or
investigations of the matters set forth in this Article 4. Seller has
delivered to Buyer the Property Documents. During the Feasibility Review
Period, Buyer shall review and analyze the Property Documents to determine
their individual and collective impact on the Property and its purchase and
use by Buyer.
4.1.1 Review of Preliminary Report. Seller has caused to be
provided to Buyer a Preliminary Report issued by the Title Company
("Preliminary Report"), together with legible copies of all recorded documents
described in the Preliminary Report. Buyer shall have the right to review and
approve the Preliminary Report during the Feasibility Review Period. If any
title exceptions are recorded against the Property before the Close of Escrow
in addition to those specified in the Preliminary Report, Escrow Agent shall
cause the Title Company to issue a supplemental preliminary report
("Supplemental Report"). Buyer shall have until the expiration of the
Feasibility Review Period with respect to any title exceptions shown in the
Preliminary Report, and five (5) Business Days after receipt of any
Supplemental Report, to review the title exceptions shown therein and to
deliver to Seller notice of approval or disapproval of any title exceptions
disclosed in any such report. Buyer's delivery of the Notice of Approval
described in Section 4.3 shall be deemed approval of the exceptions to title
shown on the Preliminary Report and any Supplemental Report issued as of the
date of such Notice of Approval. Any title exceptions approved by Buyer are
referred to herein as "Approved Exceptions." If any title exceptions are
specifically disapproved, and Seller elects, within five (5) Business Days
after the date of Buyer's disapproval, not to cure the disapproved item, then
Buyer shall have five (5) Business Days after the receipt of Seller's notice
of election not to cure the disapproved item to waive its prior disapproval.
If Buyer does not deliver notice of its election to waive its prior
disapproval, then the disapproved and uncured item will be deemed disapproved.
If a title exception is disapproved and uncured, Buyer may terminate the
Escrow by delivering a written notice of termination to Seller and the Escrow
Agent. Upon such termination, any deposits theretofore paid to Seller or
Escrow Agent (regardless of whether such deposits were released to Seller)
shall be immediately returned to Buyer, and this Agreement shall be
terminated. Seller shall thereupon be released from its obligation to sell
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the Property to Buyer, and Buyer shall be released from any obligation to
purchase the Property.
4.1.2 Governmental Actions. Buyer shall review and consider
the impact on the Property of any and all applicable governmental ordinances,
rules and regulations, and evaluate the effect of any pending or threatened
Governmental Actions pertaining to the Property.
4.1.3 Studies and Investigations. Buyer shall conduct such
independent investigations, studies and tests as it deems necessary or
appropriate concerning Buyer's proposed use, sale, development and/or the
suitability of the Property for Buyer's intended purposes. Such
investigations may include, without limitation, soils and engineering tests,
hazardous studies, investigations concerning the availability of the approvals
required from any Governmental Agencies for Buyer's proposed use of the
Property, investigations regarding the existence on the Property of any
threatened or endangered species, and of any archaeological artifacts on the
Property, the imposition or increase of any fees, charges or exactions by any
Governmental Agencies and such economic feasibility and marketing studies as
Buyer deems appropriate.
4.1.4 Physical Inspection. During the Feasibility Review
Period, Buyer shall have the right to inspect and approve of the physical
condition of the Property and shall conduct any soil, hazardous waste or
engineering studies with respect to the Property as Buyer may deem necessary
or appropriate. All such studies and inspections shall be conducted by Buyer
at its sole expense.
4.2 Additional Information from Seller. During the Feasibility
Review Period, Seller shall provide Buyer with such Additional Information (as
hereinafter defined) as Buyer reasonably may determine to be necessary to
complete its investigation of the Property, and Seller shall, and shall cause
its agents, employees and consultants to, respond to questions posed by Buyer
with respect to the Property. As used herein, the term "Additional
Information" shall mean and refer to information in the possession and/or
control of Seller concerning (i) the Property and (ii) material changes in
information and documents previously provided to Buyer by Seller during the
Feasibility Review Period.
4.3 Satisfaction of Feasibility Review. At any time during the
Feasibility Review Period, Buyer shall have the right to terminate this
Agreement if Buyer disapproves of any aspect of the Property or the
feasibility of Buyer using the Property as Buyer intends. If Buyer approves
of the Property and elects to continue this Agreement beyond the Feasibility
Review Period, Buyer shall, prior to expiration of the Feasibility Review
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Period, deliver notice of such election ("Notice of Approval") to Seller and
Escrow Agent. In such event, the terms and provisions of this Agreement shall
continue in full force and effect, subject to the provisions of Section 4.1.1
regarding disapproved and uncured title exceptions shown in any Supplemental
Report. The parties acknowledge and agree that the continued effectiveness of
this Agreement shall be conditioned upon Buyer's delivery of a Notice of
Approval and that Buyer's delivery of a Notice of Approval shall be deemed to
be its approval of all aspects of the Property, including, without limitation,
title issues, with the exception of matters specifically set forth in this
Agreement for which Buyer has continuing rights of approval after the
Feasibility Review Period. Buyer's failure to deliver its Notice of Approval
before expiration of the Feasibility Review Period shall be deemed to be
Buyer's disapproval of the Property. If no Notice of Approval has been
delivered by the expiration of the Feasibility Review Period, or within the
period described in Section 4.1.1 with respect to any title exception shown in
any Supplemental Report that is disapproved and uncured, this Agreement shall
upon such expiration immediately terminate, and Escrow Agent shall return all
funds, less applicable Escrow cancellation charges, and documents to the
parties who deposited them. Seller shall thereupon be released from its
obligation to sell the Property to Buyer, and Buyer shall be released from any
obligation to purchase the Property. Buyer shall also deliver to Seller,
without warranty, any documents related to the Property which Buyer has
created during the Feasibility Review Period.
ARTICLE 5
CONDITIONS PRECEDENT TO CLOSE OF ESCROW
5.1 Subject to Satisfaction or Waiver. The Closing of the purchase
and sale described in this Agreement and the obligations of the parties under
this Agreement shall be subject to satisfaction or waiver (by the party in
whose favor the condition precedent has been established) of all the
conditions precedent set forth below.
5.1.1 Title Policy. Escrow Agent shall be unconditionally
committed to procure from the Title Company the CLTA Owner's Title Policy for
the Property with a liability limit in the amount of the Purchase Price
insuring fee title vested in Buyer. Buyer shall take title to the Property
subject only to: (a) Non-delinquent general, special and supplemental taxes,
bonds and assessments, including Mello-Roos bonds, if any; (b) any matters set
forth in the printed form portion of the CLTA Owner's Title Policy; (c) the
Approved Exceptions; and (d) any items caused or permitted to be placed of
record by Buyer as of the Close of Escrow.
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5.1.2 Seller's Performance. Seller shall have duly performed
each and every undertaking and agreement to be performed by it hereunder prior
to the Close of Escrow.
5.1.3 Buyer's Performance. Buyer shall have duly performed
each and every undertaking and agreement to be performed by it hereunder prior
to the Close of Escrow.
5.1.4 Closing Under Purchase Agreement. Buyer shall have
closed escrow under the Purchase Agreement and acquired the Property described
therein.
5.1.5 Improvement Bonds. In accordance with Section 6.7,
Buyer shall have replaced the existing improvement bonds affecting the Lots
with improvement bonds obtained by Buyer and shall have obtained a release of
Seller with respect to any liability for such replaced improvement bonds.
5.2 Failure of Conditions Precedent. The conditions precedent in
Sections 5.1.1 and 5.1.2 are for Buyer's benefit and can be waived only by
Buyer. The conditions precedent in Sections 5.1.3, 5.1.4 and 5.1.5 are for
Seller's benefit and can be waived only by Seller. In the event that any of
the conditions precedent set forth above is neither satisfied nor waived by
the Closing Date, the party for whose benefit the condition has been created
may terminate the Escrow and this Agreement by giving a written notice of
termination to the other party and Escrow Agent, specifying the reason for
termination and the condition precedent that has not been satisfied. Upon
receipt of such notice of termination, Escrow Agent shall return any funds
that have been deposited in Escrow to the person who made such deposit, less
applicable Escrow cancellation charges, and any documents to the parties who
deposited them. If Buyer terminates the Escrow and this Agreement because a
condition precedent set forth in Section 5.1.1 or 5.1.2 is not satisfied,
Seller immediately shall return to Buyer any funds theretofore disbursed to
Seller from the Escrow. Seller shall thereupon be released from its
obligation to sell the Property to Buyer, and Buyer shall be released from its
obligation to purchase the Property.
5.3 Copy of Documents to Other Party. Each party will, concurrently
with its delivery to Escrow Agent of any documents described in this Article
5, deliver a copy of the same to the other party.
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ARTICLE 6
COVENANTS AND AGREEMENTS
6.1 No Concern. Escrow Agent shall have no concern with, liability
or responsibility for, this Article.
6.2 Additional Escrow Instructions. Buyer and Seller covenant and
agree that they will execute any additional escrow instructions not
inconsistent with the terms of this Agreement as shall be reasonably required
by Escrow Agent.
6.3 Cooperation. Buyer and Seller acknowledge that it may be
necessary to execute documents other than those specifically referred to
herein in order to complete the acquisition of the Property as provided
herein. Both Buyer and Seller hereby agree to cooperate with each other by
executing such other documents or taking such other action as may be
reasonably necessary to complete this transaction in accordance with the
intent of the parties as evidenced in this Agreement.
6.4 Entry Upon Property. After execution of this Agreement, Buyer
and its designated agents and independent contractors shall have the right to
enter upon the Property to conduct surveys, soils tests, physical inspections,
investigations and studies so long as Buyer has provided prior reasonable
notice of such entry to Seller and such activities will not interfere with
Seller's ownership and maintenance of the Property. Seller and Seller's
agents shall reasonably cooperate with Buyer, provided that such
investigations and studies shall be at the sole cost and expense of Buyer.
Buyer agrees to repair any damage caused by Buyer or its agents or independent
contractors to the Property and further agrees to indemnify, protect, defend
(with legal counsel acceptable to both Buyer and Seller) and hold Seller
harmless from and against any costs, expenses, losses, attorneys' fees and
liabilities (including, without limitation, claims of mechanics' liens)
incurred or sustained by Seller either prior or subsequent to the Close of
Escrow as a result of the conduct of Buyer, its agents, or independent
contractors under this Section 6.4. The covenants contained in this Section
6.4 shall survive the Close of Escrow or earlier termination of this
Agreement.
6.5 Indemnities of Buyer. Buyer agrees that it will protect,
defend, indemnify and hold Seller harmless from and against all actions,
causes of action, suits, claims, costs, losses, penalties, damages,
liabilities and expenses of any kind whatsoever, including reasonable
attorneys' fees ("Claims"), based upon or arising out of: (i) any Claim for
personal injury or property damage occurring on or about the Property after
the Closing Date or in connection with Buyer's or its agents' or independent
contractors' access to the Property prior to the Closing Date; (ii) any Claims
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related to construction defects, soil subsidence or other similar claims
related to the Land, the Lots or the Improvements or any other improvements of
any kind made thereto or constructed thereon; and (iii) any other Claim
arising out of Buyer's ownership or operation of the Property after the
Closing Date.
6.6 Indemnities of Seller. Seller agrees that it will protect,
indemnify, defend and hold Buyer harmless from and against all Claims based
upon or arising out of: (i) any claim for personal injury or property damage
based upon an event occurring on or about the Property prior to the Closing
Date (except those resulting from Buyer's access to the Property prior to the
Closing Date); (ii) any liability or obligation which Buyer is not obligated
to assume under this Agreement; and (iii) any loss or liability pertaining to,
or resulting from, the drainage system installed on the Tooby property, which
is adjacent to the eastern edge of the Land, including, without limitation,
any stoppage of construction on, or sales of, the Lots caused by such drainage
system or by any action or inaction by any Governmental Agency with respect to
such drainage system. Notwithstanding the foregoing sentence, Seller shall
not be obligated to protect, defend, indemnify or hold Buyer harmless from any
Claims related to construction defects, soil subsidence or other similar
claims related to the Land, the Lots or the Improvements or any other
improvements of any kind made thereto or constructed thereon.
6.7 Improvement Bonds. Prior to the Close of Escrow, Buyer will
obtain and provide improvement bonds for the Lots and related Improvements,
deliver to Seller evidence of such bonds and obtain Seller's release under any
bonds applicable to the Lots or Improvements.
6.8 Recreational Facility. Seller shall construct a recreational
facility, as described in the plans therefor included in the Project
Documents, upon the issuance of a building permit for the 351st dwelling unit
in the Paradise Valley development (exclusive of any building permits for the
NCROC project). Buyer shall provide Seller quarterly reports indicating the
number of closings in any given quarter to facilitate Seller's compliance with
this requirement.
6.9 Cost Sharing Agreement. Buyer acknowledges that Seller has
assumed certain obligations under that certain Paradise Valley Infrastructure
Cost Sharing Agreement dated October 20, 1989 ("Cost Sharing Agreement") with
Arcadia Homes and Winncrest Development. This Cost Sharing Agreement provides
for the completion of all infrastructure, common amenities, landscaping and
other similar items on parcels at the Paradise Valley project. Seller shall
remain responsible for completion of its responsibilities under the Cost
Sharing Agreement with respect to the Property. Buyer covenants and agrees
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(i) to cooperate in, and not to interfere with, the full and complete
implementation of the Cost Sharing Agreement and (ii) to supply Seller with
any information on actual or estimated costs of improvements as may be
requested and required by Seller for reporting purposes under the Cost Sharing
Agreement.
6.10 Water and Sewer Line Reimbursements. Buyer acknowledges that
Seller is currently working with the City of Fairfield on reimbursements for
increasing the size of various water and sewer lines. Any reimbursements for
infrastructure, including the water and sewer lines, provided by Seller shall
be the sole property of Seller, and Buyer , promptly after receipt, shall
deliver such reimbursement payments to Seller if they are received by Buyer
after the Close of Escrow.
6.11 Pacific Gas & Electric Deposits. Buyer and Seller acknowledge
that there are no Pacific Gas & Electric deposits or other utility deposits
applicable to the Lots.
6.12 Transfer of Entitlements. Seller shall cooperate with Buyer and
execute, deliver, acknowledge and record such documents, instruments and
certificates as Buyer may reasonably require to effect the transfer of any
entitlements applicable to the Land, the Lots and the Improvements from the
City of Fairfield or any other Governmental Agency to Buyer.
6.13 Confidentiality. The parties hereto agree that they shall
maintain in confidence and not disclose any information, including, without
limitation, the Purchase Price and the price per Lot, related to this
Agreement, the Land, the Lots, the Improvements or any other Property without
the prior written consent of the other party to this Agreement. The preceding
sentence shall not prevent either party from disclosing the terms and
conditions of this Agreement and any and all information regarding the Land,
the Lots, the Improvements and the Property to the parties' respective counsel
and Governmental Agencies, such as the Securities Exchange Commission, having
jurisdiction over either party.
6.14 Completion of Lots. Buyer acknowledges that no work on the Lots
and Improvements has been done and the Lots and Improvements are not complete.
Buyer covenants and agrees to complete the Lots and the related Improvements
in accordance with the Subdivision Map and any and all applicable documents,
instruments, codes, ordinances, regulations and permits.
6.15 Status of Buyer as Declarant; Annexation of Lots. Upon the
Close of Escrow, Seller shall record in the County and deliver to Buyer a
certificate, as required under Section 2.11 of that certain Master Declaration
of Covenants, Conditions and Restrictions of Paradise Valley, which was
recorded in the Office of the County Recorder of Solano County, State of
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California, on August 25, 1995, Serial No. 95-51486 ("CC&Rs"), designating
Buyer as a "Declarant," as defined in the CC&Rs, with respect to the Lots.
Buyer will undertake, with Seller's reasonable cooperation, the responsibility
of preparing documentation for annexation of the Lots under the CC&Rs and
taking such other steps, including, without limitation, obtaining from the
California Department of Real Estate a Subdivision Public Report pertaining to
the sale of the Lots, as Buyer may determine to be necessary or appropriate to
effectively develop, market, improve and sell Lots.
6.16 Possession. Possession of the Property shall be delivered by
Seller to Buyer on the Closing Date upon recordation of the Grant Deed(s).
6.17 Survival of Covenants and Agreements. The covenants and
agreements set forth in Sections 6.5, 6.6, 6.8, 6.9, 6.10, 6.12, 6.13, 6.14
and 6.15 of this Agreement shall survive the Close of Escrow.
ARTICLE 7
ACKNOWLEDGMENTS AND REPRESENTATIONS
7.1 Seller's Representations.
7.1.1 No Rights to Acquire Property. No person, firm or
entity other than Buyer has any rights in, or right to acquire, the Property
or any part thereof, and as long as this Agreement remains in force, Seller
will not, without Buyer's prior written consent, lease, transfer, mortgage,
pledge, or convey, its interest in the Property, or any portion thereof, nor
any right therein, or grant any right or option to anyone to effect any such
transaction.
7.1.2 Organization. Seller is a general partnership duly
organized and validly existing under the laws of the State of California with
full power to enter into this Agreement.
7.1.3 Authority. The execution and delivery of this
Agreement have been duly authorized and approved by all requisite partnership
action, and the consummation of the transactions contemplated hereby will be
duly authorized and approved by all requisite partnership action of Seller.
7.1.4 FIRPTA Affidavit. Seller is not a foreign corporation,
foreign partnership, foreign trust or foreign estate (as those terms are
defined in the Internal Revenue Code and the Treasury Regulations promulgated
thereunder) but rather a partnership formed under the laws of one of the
United States. Seller understands and agrees that the certification made in
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this Section 7.1.4 may be disclosed to the Internal Revenue Service by Buyer
and that any false statement contained herein could be punished by fine,
imprisonment or both.
7.1.5 Latent Defects. Seller has no actual knowledge of any
latent defects on, in, under or above the Land, the Lots or the Improvements
(to the extent completed as of the date of this Agreement). Buyer
acknowledges that Seller has disclosed that there are issues to be resolved by
Seller in connection with the drainage system installed on the Tooby property,
which is adjacent to the eastern edge of the Land. For purposes of this
representation, the actual knowledge of Seller shall mean the actual knowledge
of only Patricia A. Wood and no other person.
7.2 Buyer's Representations.
7.2.1 Organization. Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the State
of California with full power to enter into this Agreement.
7.2.2 Authority. The execution and delivery of this
Agreement have been duly authorized and approved by all requisite partnership
action of Buyer and the consummation of the transactions contemplated hereby
will be duly authorized and approved by all requisite partnership action of
Buyer.
7.3 Purchase "As-Is"; Limitation of Liability.
7.3.1 Buyer acknowledges that (i) the Land does not have on
it finished Lots or Improvements, (ii) no work has been done with respect to
the Lots and the Improvements, (iii) the Lots and related Improvements are not
complete, (iv) except for Section 7.1.5, Seller is not making and has not made
any warranties or representations, express or implied, as to the legal,
physical and/or financial condition now or in the future of the Land, the
Lots, the Improvements or any Property, and (v) Buyer is buying the Property
in an "as-is" condition based solely on Buyer's own studies and
investigations.
7.3.2 Buyer acknowledges that Seller shall have no liability
for any latent or patent defects discovered upon the Property following the
Close of Escrow.
7.3.3 Buyer confirms, acknowledges and agrees that no
officer, director, employee or representative of Seller or Seller's partners
(whether or not such individual has signed this Agreement on behalf of Seller)
makes any express or implied representation or warranty of any kind or nature
whatsoever concerning the Land, the Lots, the Improvements or any of the
Property. Buyer further acknowledges, confirms and agrees that any liability
with respect of this Agreement and the transactions contemplated herein shall
result in the liability of Seller or Seller's general partners only and not
any individual officer, director, employee or representative of Seller or
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Seller's partners. Buyer therefore confirms, acknowledges and agrees that
Buyer may seek recourse only against Seller or Seller's general partners for
any liability arising out of or in connection with this Agreement and the
transactions contemplated hereby.
7.4 Survival. The representations made by Seller in Sections 7.1.1,
7.1.2, 7.1.3, 7.1.4 and 7.1.5, and by Buyer in Sections 7.2.1 and 7.2.2, and
the acknowledgments and covenants of Buyer in Sections 7.3.1, 7.3.2 and 7.3.3
of this Agreement shall survive the Close of Escrow.
ARTICLE 8
THE CLOSE OF ESCROW
8.1 Close of Escrow. If Buyer timely and properly exercises its
option to purchase the Property under this Agreement, Escrow shall close on
the date that is thirty (30) days after the date upon which Buyer delivers the
Notice of Exercise described in Section 3.1 of this Agreement ("Closing
Date").
8.2 Closing Procedure. Escrow Agent shall close the Escrow on or
before the Closing Date by (i) recording Seller's Grant Deed(s) and such other
documents as may be necessary to procure the Title Policy and satisfy the
terms and conditions of this Agreement and (ii) delivering funds and documents
as set forth in Article 10 entitled "Recordation and Distribution of Funds and
Documents" WHEN AND ONLY WHEN each of the following requirements has been
satisfied:
8.2.1 Funds and Instruments. All funds and instruments
required pursuant to Articles 2 and 3 have been delivered to Escrow Agent.
8.2.2 Satisfaction of Conditions Precedent. Each of the
conditions precedent set forth in Section 5.1 has been, or upon such closing
shall be, satisfied as provided for in Section 5.1.
8.2.3 Recordation. Escrow Agent shall have recorded the
documents deposited into Escrow for recordation in the Official Records of the
County.
8.3 Earlier Closing. If all of the conditions set forth in Sections
8.2.1 and 8.2.2 are satisfied at a date earlier than the Closing Date, Escrow
Agent shall close the Escrow at such earlier date provided Escrow Agent
obtains the written consent of Buyer and Seller to do so.
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8.4 Termination of Escrow. If Escrow Agent cannot close the Escrow
on or before the Closing Date, it will, nevertheless, close the Escrow when
all conditions have been satisfied or waived as provided for in this
Agreement, notwithstanding that one or more of such conditions has not been
timely performed, unless (i) a notice of termination has therefore been
delivered to Escrow Agent in accordance with the provisions of Section 5.2,
13.1 or 13.2, or (ii) after the Closing Date and prior to the Close of Escrow,
Escrow Agent receives a written notice to terminate the Escrow and this
Agreement from a party who, at the time such notice is delivered, is not in
default hereunder. The right to terminate the Escrow and this Agreement under
the provisions of clause (ii) of this Paragraph 8.4 shall be optional, not
mandatory; no delay in the giving of such notice shall affect the rights
hereunder of the party giving the same.
8.4.1 Notice of Termination. Escrow Agent shall have no
liability or responsibility for determining whether or not a party giving a
notice of termination is or is not in default hereunder. Within two (2)
working days after receipt of such notice from one party, Escrow Agent shall
deliver one copy of such notice to the other party. Unless written objection
to termination of the Escrow is received by Escrow Agent within ten (10) days
after Escrow Agent so delivers such notice, (i) Escrow Agent shall forthwith
terminate the Escrow and return all documents, funds or other items held by it
to the party depositing same, except that Escrow Agent may retain such
documents and other items usually retained by escrow agents in accordance with
standard escrow termination procedures and practices, and (ii) each party
shall forthwith pay to Escrow Agent one-half of Escrow Agent's reasonable
escrow termination charges. Notwithstanding the foregoing provisions of this
Section 8.4.1, Escrow Agent may (i) retain any funds on deposit with it until
such time as its Escrow termination charges are paid in full and/or (ii)
deduct from any cash held by it sufficient funds to pay for its Escrow
termination charges in full. If written objection to the termination of the
Escrow is delivered to Escrow Agent within such 10-day period, Escrow Agent is
authorized to hold all funds and instruments delivered to it in connection
with the Escrow and may, in Escrow Agent's sole discretion, take no further
action until otherwise directed either by the parties' mutual written
instructions or final order of a court of competent jurisdiction.
8.4.2 Return of Deposits. If the Escrow is terminated under
either Section 13.1 or Section 13.2 or as a result of Seller's default under
or breach of this Agreement, Seller shall return to Buyer any funds disbursed
from the Escrow to Buyer prior to the termination of the Escrow.
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ARTICLE 9
PRORATIONS, FEES AND COSTS
9.1 Prorations. Escrow Agent will prorate as of the Close of Escrow
between the parties, in cash, county, city and special district (if any) real
property taxes and assessments for the Property based on the latest
information available to Escrow Agent.
9.2 Thirty Day Month. All prorations and/or adjustments called for
in this Agreement are to be made on the basis of a thirty (30) day month,
unless otherwise specifically instructed in writing.
9.3 Seller's Fees and Costs. Seller shall pay (i) one-half of
Escrow Agent's escrow fee, (ii) usual Seller's document-drafting and recording
charges, (iii) the title insurance premium for the CLTA Owner's Title Policy
and any endorsements reasonably requested by Buyer's lender, and (iv) the
County Documentary Transfer Tax in the amount determined by Escrow Agent and
the County Recorder.
9.4 Buyer's Fees and Costs. Buyer shall pay (i) one-half of Escrow
Agent's escrow fee, (ii) usual Buyer's document-drafting and recording charges
and (iii) the additional premium for an American Land Title Association (ALTA)
title insurance policy, if Buyer desires that Title Company issue such a
policy.
9.5 Escrow Cancellation Charges Due to a Default. Notwithstanding
the provisions of Sections 9.3 and 9.4 above, if Escrow fails to close due to
Seller's default, Seller shall pay all Escrow cancellation charges. If Escrow
fails to close due to Buyer's default, Buyer shall pay all Escrow cancellation
charges. If Escrow fails to close for any reason other than the foregoing,
Buyer and Seller shall each pay one-half of any Escrow cancellation charges.
"Escrow cancellation charges" means all fees, charges and expenses incurred by
Escrow Agent, including all expenses incurred in connection with issuance of
the Preliminary Report and other title matters.
ARTICLE 10
RECORDATION AND DISTRIBUTION OF FUNDS AND DOCUMENTS
10.1 Disbursements. Except as provided in Section 10.4, below, all
disbursements by Escrow Agent shall be made by checks of Escrow Agent.
10.2 Recorded Documents. Escrow Agent shall cause the County
Recorder of the County to mail Seller's Grant Deed (and each other documents
which are herein expressed to be, or by general usage are, recorded) after
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recordation, to the grantee, beneficiary or person (i) acquiring rights under
said document or (ii) for whose benefit said document was acquired.
10.3 Unrecorded Documents. Escrow Agent shall, at the Close of
Escrow, deliver by certified mail, overnight courier or United States mail (or
will hold for personal pickup, if requested) one (1) copy of each unrecorded
document received hereunder by Escrow Agent to the payee or person (i)
acquiring rights under said document or (ii) for whose benefit said document
was acquired.
10.4 Payment of Funds at Close of Escrow. Escrow Agent shall, at the
Close of Escrow, deliver by wire transfer, in accordance with Seller's
instructions (or will hold for personal pickup, if requested) (i) to Seller,
or order, the cash, plus any proration or other credits to which Seller will
be entitled less any appropriate proration, deposits or other charges, and
(ii) to Buyer, or order, any excess funds theretofore delivered to Escrow
Agent by Buyer.
10.5 Conformed Copies. Escrow Agent shall, at the Close of Escrow,
deliver to Seller and Buyer a copy of the Seller's Grant Deed(s) (conformed to
show recording date) and conformed copies of each document recorded to place
title in the condition required by this Agreement.
ARTICLE 11
REMEDIES
11.1 Liquidated Damages to Seller. If all of the conditions to
Closing for Buyer's benefit have either been satisfied or waived by Buyer by
the Closing Date, and the purchase and sale of the Property described herein
fails to close due to default by Buyer, it is agreed that the amounts released
from Escrow to Seller under this Agreement ("Released Amount") shall be
retained and accepted by Seller as liquidated damages and not as a penalty and
Seller shall be released from its obligation to sell the Property to Buyer,
and Buyer shall be released from its obligation to purchase the Property. It
is agreed that the Released Amount constitutes a reasonable estimate of the
damages to Seller. Buyer and Seller agree that it is impossible or
impractical presently to predict what monetary damages Seller would suffer in
such event. Buyer desires to limit the monetary damages for which Buyer might
be liable hereunder and Buyer and Seller desire to avoid the costs and delays
they would incur if a lawsuit were commenced to collect damages and therefore
agree that the liquidated damages provided hereunder shall constitute Seller's
sole and exclusive remedy hereunder. By the act of an authorized
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representative of each party affixing its initials herein, each party
specifically confirms the accuracy of the above statements and its agreement
with them.
/s/ P.W. /s/ L.J.Y.
Seller's Initials Buyer's Initials
11.2 Specific Performance. If all of the conditions to Closing for
Seller's benefit have either been satisfied or waived by Seller by the Closing
Date, and the purchase and sale of the Property described herein fails to
close due to default by Seller, Buyer shall be entitled to bring an action for
specific performance of Seller's obligations under this Agreement.
ARTICLE 12
ASSIGNABILITY
12.1 Assignment. Neither party shall voluntarily or by operation of
law assign or otherwise transfer any of its rights or obligations under this
Agreement without obtaining the prior written consent of the other party,
which consent may not be unreasonably withheld. Notwithstanding the foregoing
sentence, Buyer shall have the right to assign its rights under this Agreement
without consent of Seller to a corporation, partnership, limited liability
company or other entity in which the beneficial owners of at least 51% of the
equity interests in such entity own at least 51% of the equity interests in
Buyer, provided that Buyer shall remain liable for, and be responsible for the
performance of, any and all liabilities, obligations, representations,
covenants and agreements under this Agreement.
ARTICLE 13
EMINENT DOMAIN AND MATERIAL LOSS
13.1 Eminent Domain. In the event that, prior to the Close of
Escrow, all or any material portion of the Property is taken or appropriated
by any public or quasi-public authority under the power of eminent domain, or
Seller receives actual notice of any pending or threatened condemnation
proceedings, then either Buyer or Seller may terminate this Agreement without
further liability hereunder and the parties shall proceed in accordance with
Section 8.4, and, in such event, any portion of Buyer's Deposit, regardless of
whether or not it has been released from Escrow to Seller, shall be
immediately returned to Buyer, and any condemnation proceeds shall be the sole
property of Seller. If neither Seller nor Buyer elects to terminate this
Agreement in the event of any such taking, or threat of taking, and provided
that all conditions precedent to the Close of Escrow have either been
satisfied or waived, Escrow shall close in accordance with this Agreement, and
Seller shall assign to Buyer all of its right, title and interest in any
condemnation proceeds or award made by the governmental entity.
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13.2 No Material Loss. If, prior to the Close of Escrow, and subject
to the satisfaction or waiver of all conditions precedent in favor of Buyer
and Seller, the Property shall suffer a Material Loss, Buyer shall have the
right to elect, within 30 days of receipt of notice of such Material Loss, (a)
to terminate this Agreement under Section 8.4.1 and receive a return of
Buyer's Deposit or (b) to purchase the Property as provided in this Agreement
and receive an assignment of any insurance proceeds Seller receives, or to
which Seller is or may become entitled, with respect to such Material Loss
upon Seller's receipt of such proceeds. The parties acknowledge and agree in
no event shall the Close of Escrow be extended due to a Material Loss.
Notwithstanding the foregoing, the assignment of any insurance proceeds as
provided herein shall not include any proceeds received for items not related
to the physical condition of the Property, such as proceeds from Seller's
business interruption insurance, if any. For purposes of this Agreement, a
"Material Loss" means a loss resulting from a casualty that either (i)
diminishes the value of the Property in an amount of at least 10% of the
Purchase Price or (ii) results in a loss of at least 10% of the aggregate
square footage of the Land as of the Effective Date.
ARTICLE 14
GENERAL PROVISIONS
14.1 Attorneys' Fees. In the event any action, arbitration,
mediation or other dispute resolution proceeding shall be instituted between
Seller and Buyer in connection with this Agreement, the party prevailing in
such proceeding shall be entitled to recover from the other party all of its
costs of such proceeding, including, without limitation, attorneys' fees and
costs as fixed by the court therein.
14.2 Captions. The captions used herein are for convenience only and
are not a part of this Agreement and do not in any way limit or amplify the
terms and provisions hereof.
14.3 Construction of Agreement. The agreements contained herein
shall not be construed in favor of or against either party, but shall be
construed as if both parties prepared this Agreement.
14.4 Counterparts. This Agreement may be executed in counterparts,
all of which, when taken together, shall constitute a fully executed original.
14.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof
and all prior and contemporaneous agreements, representations, negotiations
and understandings of the parties hereto, oral or written, are hereby
superseded and merged herein. The foregoing sentence shall in no way affect
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the validity of any instruments executed by the parties in the form of the
exhibits attached to this Agreement.
14.6 Exhibits and Schedules. All Exhibits and Schedules attached
hereto are incorporated herein by reference. Any Exhibits or Schedules that
are to be attached to the Agreement after the Effective Date but prior to the
Close of Escrow, shall be initialled by Buyer and Seller on each page and,
once so initialled, shall be sent to Escrow Agent for attachment to this
Agreement.
14.7 Gender and Number. The use herein of (i) the neuter gender
includes the masculine and the feminine and (ii) the singular number includes
the plural, whenever the context so requires.
14.8 Governing Law. This Agreement and the documents in the forms
attached as exhibits hereto shall be governed by and construed under the laws
of the State of California. This Agreement shall be deemed made and entered
into in the County.
14.9 Joint and Several Liability. If any party consists of more than
one person or entity, the liability of each such person or entity signing this
Agreement shall be joint and several.
14.10 Modification. No modification, waiver, amendment, discharge or
change of this Agreement shall be valid unless the same is in writing and
signed by the party against which the enforcement of such modification,
waiver, amendment, discharge or change is or may be sought.
14.11 Real Estate Brokerage Commission. Seller shall pay a real
estate brokerage commission in the amount of $65,200 to Fred Harris upon the
Close of Escrow. Except as provided in the preceding sentence, neither party
is obligated to pay any real estate, brokerage or other commission or fee in
connection with the purchase and sale of the Property. Each party hereby
indemnifies, protects, defends (with legal counsel reasonably acceptable to
the other party) and holds the other party free and harmless from and against
any and all costs and liabilities, including, without limitation, reasonable
attorneys' fees and costs, for causes of action or proceedings which may be
instituted by any broker, agent or finder, licensed or otherwise, claiming
through, under or by reason of the conduct of such party in connection with
this transaction.
14.12 No Partnership or Joint Venture. Seller or Buyer shall not, by
virtue of this Agreement, in any way or for any reason be deemed to have
become a partner of the other in the conduct of its business or otherwise, or
a joint venturer. In addition, by virtue of this Agreement there shall not be
deemed to have occurred a merger of any joint enterprise between Buyer and
Seller.
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14.13 Notice and Payments. Any notice to be given or other document to
be delivered by any party to the other or others hereunder, and any payments
from Buyer to Seller, may be delivered in person or by facsimile transmission
(provided that a confirming copy is sent by mail or overnight delivery as
herein specified) to an officer of any party, or may be deposited in the
United States mail, duly certified or registered, return receipt requested,
with postage prepaid, or by Federal Express or other similar overnight
delivery service, and addressed to the party for whom intended, as follows:
To Seller at its business office:
Paradise Valley Communities No. 1
529 East South Temple
Salt Lake City, Utah 84102
Attention: Patricia A. Wood
Facsimile No.: (801) 524-1751
With a copy to:
K. Michael Garrett, Esq.
Duckor Spradling & Metzger
401 West A Street, Suite 2400
San Diego, California 92101
Facsimile No.: (619) 231-6629
To Buyer at its business office:
The Forecast Group, L.P.
10670 Civic Center Drive
Rancho Cucamonga, California 91730
Facsimile No.: (909) 980-7305
With a copy to:
General Counsel
c/o The Forecast Group, L.P.
10670 Civic Center Drive
Rancho Cucamonga, California 91730
Facsimile No.: (909) 987-8958
To Escrow Agent:
Chicago Title Company
604 Empire Street
Fairfield, California 94533
Attention: Ms. Sandy Rigby
Facsimile No: (707) 425-4810
Any party hereto may from time to time, by written notice to the other,
designate a different address which shall be substituted for the one above
specified. Unless otherwise specifically provided for herein, all notices,
payments, demands or other communications given hereunder shall be in writing
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and shall be deemed to have been duly given and received (i) upon personal
delivery, or (ii) as of the third business day after mailing by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as set forth above, or (iii) the immediately succeeding Business Day
after deposit with Federal Express or other similar overnight delivery system.
14.14 Remedies Cumulative. All rights and remedies of Buyer and
Seller contained in this Agreement shall be construed and held to be
cumulative.
14.15 Severability. In the event that any phrase, clause, sentence,
paragraph, section, article or other portion of this Agreement shall become
illegal, null or void or against public policy, for any reason, or shall be
held by any court of competent jurisdiction to be illegal, null or void or
against public policy, the remaining portions of this Agreement shall not be
affected thereby and shall remain in force and effect to the fullest extent
permissible by law.
14.16 Successors and Assigns. Subject to the restrictions and
prohibitions on assignment set forth in Article 12, each and all of the
covenants and conditions of this Agreement shall inure to the benefit of and
shall be binding upon the successors-in-interest, assigns, and legal
representatives of the parties hereto. As used in the foregoing, "successors"
shall refer to the parties' interest in the Property and to the successors to
all or substantially all of their assets and to their successors by merger or
consolidation.
14.17 Waiver. No waiver by Buyer or Seller of a breach of any of the
terms, covenants or conditions of this Agreement by the other party shall be
construed or held to be a waiver of any succeeding or preceding breach of the
same or any other term, covenant or condition herein contained. No waiver of
any default by Buyer or Seller hereunder shall be implied from any omission by
the other party to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect a default other
than as specified in such waiver. The consent or approval by Buyer or Seller
to or of any act by the other party requiring the consent or approval of the
first party shall not be deemed to waive or render unnecessary such party's
consent or approval to or of any subsequent similar acts by the other party.
14.18 Gender and Number. In this Agreement (unless the context
requires otherwise), the masculine, feminine and neuter genders and the
singular and the plural include one another.
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14.19 Time of the Essence. Time is of the essence of each and every
provision of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
SELLER:
PARADISE VALLEY COMMUNITIES
NO. 1, a California
general partnership
By: HomeFed Communities, Inc.,
a California corporation,
General Partner
By: /s/ Patricia A. Wood
Patricia A. Wood,
President
By: HomeFed Resources
Corporation, a California
corporation, General Partner
By: /s/ Patricia A. Wood
Patricia A. Wood,
President
BUYER:
THE FORECAST GROUP, L.P.,
a California limited partnership
By: FORECAST HOMES, INC., a
California corporation, General
Partner
By: /s/ Larry J. Young
Its: Division President
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CONSENT OF ESCROW AGENT
The undersigned Escrow Agent hereby agrees to (i) accept the foregoing
Agreement, (ii) be Escrow Agent under said Agreement and (iii) be bound by said
Agreement in the performance of its duties as Escrow Agent; provided, however,
the undersigned shall have no obligations, liability or responsibility under (i)
this Consent or otherwise unless and until said Agreement, fully signed by the
parties, has been delivered to the undersigned or (ii) any amendment to said
Agreement unless and until the same shall be accepted by the undersigned in
writing.
Dated: October 3, 1996 (the "Opening of the Escrow")
Chicago Title Company
By: /s/ Terri Piper
Its: CSEO
<PAGE>
LIST OF EXHIBITS
Exhibit A. . . . . . . . . . . . . . . .Legal Description of Land
Exhibit B . . . . . . . . . . . . . . . . . . Property Documents
Exhibit C. . . . . . . . . . . . . . General Conditions of Escrow
Exhibit D. . . . . . . . . . . .Certificate of Non-Foreign Status
Exhibit E. . . . . . . . . . . . . . . . . . . . . .Grant Deed(s)
<PAGE>
EXHIBIT A
Legal Description of Land
ALL THE REAL PROPERTY SITUATED IN THE CITY OF FAIRFIELD, COUNTY OF SOLANO, STATE
OF CALIFORNIA, DESCRIBED AS FOLLOWS:
LOTS 1 THROUGH 75, AS SHOWN ON THAT CERTAIN MAP ENTITLED: "FINAL MAP OF
PARADISE VALLEY NORTH UNIT NO. 3, BEING ALL OF PARCEL 4 AS SHOWN ON THE PARCEL
MAP FILED IN BOOK 34 OF PARCEL MAPS, PAGE 8, SOLANO COUNTY RECORDS," FILED JUNE
11, 1991 IN THE OFFICE OF THE RECORDER OF SOLANO COUNTY IN BOOK 60 OF MAPS, AT
PAGE 82, SOLANO COUNTY RECORDS, AND AS AMENDED BY THAT CERTAIN CERTIFICATE OF
CORRECTION FOR SUBDIVISIONS RECORDED SEPTEMBER 23, 1991 IN BOOK 1991 AS
INSTRUMENT NO. 1991-00069160, SOLANO COUNTY RECORDS.
APN'S: 167-511-010 THROUGH 060; 167-511-080 THROUGH 340; 167-512-010
THROUGH 200; 167-513-010 THROUGH 140; 167-514-010 THROUGH 080
<PAGE>
EXHIBIT B
Unit 3
Property Documents
- - Rough Grading and Erosion Plans dated March 1990 (6 copies)
- - Final Map Unit 3 dated July 1989 (6 copies), recorded on June 11,
1991, Solano County Recorder
- - Improvement Plans for Unit 3 dated July 1989 (6 copies)
- - Development Agreement dated July 20, 1988
- - First Amendment to Development Agreement dated September 15, 1994 (not
yet fully executed)
- - Second Amendment to Development Agreement (not yet dated or fully
executed)
- - Covenants, Conditions, and Restrictions dated August 25, 1995
- - Anderson Consulting Group Report dated September 15, 1994
- - Department of Real Estate Public Report dated September 1, 1995
- - Letter to City of Fairfield regarding acceptance of improvements dated
May 28, 1996
- - Unapproved Plans for the Paradise Valley Recreation Facility
- - Cost Sharing Agreement dated October 20, 1989
- - Agreement with City of Fairfield regarding construction of
recreational facility dated August 31, 1995
- - Utility Deposit Balances dated May 31, 1996
- - Paradise Valley Master Association documents dated September 1995
- - Paradise Valley Master Association Bylaws dated August 21, 1995
- - Information regarding improvement bonds and maintenance obligations
for Unit 3
<PAGE>
EXHIBIT C
General Conditions of Escrow
<PAGE>
GENERAL PROVISIONS
1. The phrase "close of escrow" (for COE) as used in this
escrow means the date on which documents are recorded,
unless otherwise specified.
2. Recordation of any instruments delivered through this
escrow, if necessary or proper for the issuance of the
policy of title insurance called for, is authorized.
3. No examination or insurance as to the amount or payment of
personal property taxes is required unless specifically
requested.
4. You and any of your affiliates or employees are authorized
to use the information and documents in this escrow for any
purpose. You are further authorized to furnish to any
broker or lender identified with this transaction or anyone
acting on behalf of such broker or lender, any instructions,
amendments, statements, or notices of cancellation given in
connection with this escrow.
5. All written notices, communications, change of instructions
and documents are required to be delivered timely at the
office of Chicago Title Company as set forth herein.
6. All funds received in this escrow shall be deposited with
other escrow funds in one or more escrow (demand) accounts
of Chicago Title Company in any state or national bank. The
parties to this escrow understand that the escrow accounts
you maintain with the depository institutions contribute to
your value as a customer of these institutions which, in
turn, may make available to Chicago Title Company an array
of bank services, accommodations or other benefits. You
shall have no obligation to account for the value realized
by Chicago Title Company from these services, accommodations
or other benefits. All disbursements shall be made by your
check, unless otherwise instructed. You shall not be
responsible for any delay in closing if funds received by
escrow are not available for immediate withdrawal. Chicago
Title Company may, at its option, require concurrent
instructions from all principals prior to release of any
funds on deposit in this escrow.
7. If demand to cancel is submitted after the Time Limit Date,
any principal so requesting you to cancel this escrow shall
file notice of demand to cancel in your office in writing.
You shall within three (3) working days thereafter mail by
certified mail one copy of such notice to each of the other
principals at the address stated in this escrow. Unless
written objection thereto is filed in your office by a
principal within fifteen (15) calendar days after the date
of such mailing, you are instructed to cancel this escrow.
If this is a sale escrow, you may return the lender's papers
and/or funds upon lender's demand.
8. In the event that this escrow is canceled, any fees or
charges due Chicago Title Company including cancellation
fees and any expenditures incurred or authorized shall be
paid from funds on deposit unless otherwise specifically
agreed to or determined by a court of competent
jurisdiction. Upon payment thereof, return documents and
monies to the respective parties depositing same, or as
ordered by the court, and void any executed instruments.
9. If there is no written activity by a principal to this
escrow within any six-month period after the Time Limit Date
set forth herein, Chicago Title Company may, at its option,
terminate its agency obligation and cancel this escrow,
returning all documents, monies or other items held, to the
respective parties entitled thereto, less any fees and
charges as provided herein.
10. If, for any reason, funds are retained or remain in escrow
after the closing date, you may deduct therefrom a
reasonable charge as custodian, of not less than $25.00 per
month, unless otherwise specified.
11. In the event that you should receive or become aware of
conflicting demands or claims with respect to this escrow,
or the rights of any of the parties hereto, or any money or
property deposited herein, you shall have the absolute right
at your option to discontinue any or all further acts until
such conflict is resolved to your satisfaction.
12. In the event that any Offer to Purchase, Deposit Receipt, or
any other form of Purchase Agreement is deposited in this
escrow, it is understood that such document will be
effective only as among the parties signing said document.
You as escrow holder are not to be concerned with the terms
of such document and are relieved of all responsibility in
connection therewith. You are to be concerned only with the
directives specifically set forth in these escrow
instructions and amendments thereto. Further, you are not
to be concerned or liable for items designated as
"memoranda" in these escrow instructions nor with any other
agreement or contract between the parties.
13. You are released from and shall have no liability,
obligation or responsibility with respect to (a) withholding
of funds pursuant to Section 1445 of the Internal Revenue
Code of 1986 as amended, and to Sections 18662 and 18668 of
the California Revenue and Taxation Code, (b) advising the
parties as to the requirements of said Section 1445, (c)
determining whether the transferor is a foreign person or a
non-resident under such Section, nor (d) obtaining a
nonforeign affidavit or other exemption from withholding
under said Sections nor otherwise making any inquiry
concerning compliance with such Sections by any party to the
transaction.
14. The parties hereto, by execution of these instructions
acknowledge that the escrowholder assumes no responsibility
or liability whatsoever for the supervision of any act or
the performance of any condition which is a condition
subsequent to the closing of this escrow.
15. In the absence of instructions to the contrary, you are
hereby authorized to utilize wire services, overnight, next
day, or other expedited delivery services (as opposed to the
regular U.S. Mail) and to charge the respective party's
account accordingly.
16. If you pay a demand to reconvey a revolving line of credit
or equityline deed of trust, you are hereby instructed on my
behalf and for my benefit, to request that the lender
issuing said demand cancel said revolving line or equityline
of credit.
17. You are authorized to destroy or otherwise dispose of any
and all documents, papers, instructions, correspondence and
other material pertaining to this escrow at the expiration
of six (6) years from the close of escrow or cancellation
thereof, without liability and without further notice.
IMPORTANT NOTICE
Except for wire transfers, funds remitted to this escrow are
subject to availability requirements imposed by Section 12413.1
of the California Insurance Code. CASHIER'S, CERTIFIED or
TELLER'S checks, payable to CHICAGO TITLE COMPANY are generally
available for disbursement on the next business day following
the date of deposit.
Other forms of payment may cause extended delays in the closing
of your transaction pursuant to the requirements imposed by
State Law.
(Wire transfer information available upon request)
ALL PARTIES TO THIS ESCROW ACKNOWLEDGE THAT CHICAGO TITLE COMPANY
DOES NOT PROVIDE LEGAL ADVICE NOR HAS IT MADE ANY INVESTIGATION,
REPRESENTATIONS OR ASSURANCES WHATSOEVER REGARDING THE LEGAL
ASPECTS OR COMPLIANCE OF THIS TRANSACTION WITH ANY TAX,
SECURITIES OR ANY OTHER STATE OR FEDERAL LAWS. IT IS RECOMMENDED
THAT THE PARTIES OBTAIN INDEPENDENT LEGAL COUNSEL AS TO SUCH
MATTERS.
<PAGE>
EXHIBIT D
CERTIFICATE OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code of 1986, as amended ("Code"),
provides that a transferee (buyer) of a U.S. real property interest must
withhold tax if the transferor (seller) is a foreign person. Sections 18805 and
26131 of the California Revenue and Taxation Code provide that a transferee
(buyer) of a California real property interest must withhold tax if withholding
is required by Section 1445 of the United States Internal Revenue Code.
To inform The Forecast Group, L.P. ("Transferee"), that withholding of
tax under Section 1445 of the Code is not required upon disposition of certain
real property to the Transferee by Paradise Valley Communities No. 1, a
California general partnership, ("Transferor"), the undersigned hereby
represents and certifies the following on behalf of the Transferor:
1. The undersigned is the duly qualified and acting officer of the
Transferor;
2. The Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations), but rather is a corporation formed
under the laws of one of the United States;
3. The Transferor's U.S. employer identification number is
52-1671038;
4. The Transferor's address is 529 East South Temple, Salt Lake City,
Utah 84102-1089;
5. The Transferor understands that this certification may be
disclosed to the Internal Revenue Service and/or the California Franchise Board
by the Transferee and that any false statement contained herein could be
punished by fine, imprisonment, or both.
<PAGE>
Under penalty of perjury, the undersigned declares that the undersigned
hasexamined this certification and to the best of its knowledge and belief it is
true, correct, and complete.
Dated:_______________, 1996 TRANSFEROR:
PARADISE VALLEY COMMUNITIES NO. 1,
a California general partnership
By: HomeFed Communities, Inc.,
a California corporation,
General Partner
By: ________________
Patricia A. Wood,
President
By: HomeFed Resources
Corporation, a California
corporation, General Partner
By: ________________
Patricia A. Wood,
President
<PAGE>
EXHIBIT E
Grant Deed(s)
[To Be Prepared and Attached Prior to Close of Escrow]
<PAGE>
PARADISE VALLEY UNIT 4
OPTION TO PURCHASE REAL PROPERTY AND ESCROW INSTRUCTIONS
BETWEEN
PARADISE VALLEY COMMUNITIES NO. 1
("Seller")
AND
THE FORECAST GROUP , L.P.
("Buyer")
<PAGE>
PARADISE VALLEY UNIT 4
OPTION TO PURCHASE REAL PROPERTY AND ESCROW INSTRUCTIONS
THIS OPTION TO PURCHASE REAL PROPERTY AND ESCROW INSTRUCTIONS
("Agreement") is made and effective as of October 3, 1996 by and between
Paradise Valley Communities No. 1, a California general partnership
("Seller"), and The Forecast Group , L.P., a California limited partnership
("Buyer"), with reference to the facts set forth below.
A. Seller is the owner of that certain land situated in the City of
Fairfield, County of Solano, State of California, more particularly described
in Exhibit A attached hereto and incorporated herein ("Land"). The Land is a
portion of a residential subdivision ("Subdivision") consisting of four units,
or neighborhoods. The Land consists of one unit or neighborhood, which is
referred to herein as "Unit 4." Unit 4 consists of partially developed Land,
which has been subdivided, pursuant to the "Subdivision Map," defined in
Section 1.22 of this Agreement, into 83 single-family residential lots, 81 of
which will be sold to Buyer. The term "Lots" refers to the single-family
residential lots located in Unit 4 that are specifically described in Exhibit
A, attached hereto. Unit 4 also includes certain infrastructure improvements
and amenities, as described in the Subdivision Map and related improvement
plans and specifications described in Exhibit B, attached hereto
("Improvements"). The Lots and Improvements are not complete.
B. Buyer has entered into the Paradise Valley Unit 1 Second Closing
Purchase Agreement and Escrow Instructions dated October 3, 1996 ("Unit 1
Second Closing Purchase Agreement"), pursuant to which Buyer has agreed or
obtained an option to purchase from Seller certain single-family residential
lots located on land near or adjacent to the Lots and comprising a portion of
the Subdivision. Buyer desires to obtain an option to purchase the Property
(as defined herein) and Seller desires to grant to Buyer an option to purchase
the Property in accordance with the terms and provisions set forth below.
NOW, THEREFORE, in consideration of the recitals set forth above, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as set forth below.
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ARTICLE 1
DEFINED TERMS
Terms used in this Agreement with their initial letters capitalized and
not otherwise defined shall have the meanings set forth below.
1.1 Agreement. The term "Agreement" shall mean this Option to
Purchase Real Property and Escrow Instructions between Seller and Buyer.
1.2 Approved Exceptions. The term "Approved Exceptions" shall mean
those exceptions to title that are approved in accordance with this Agreement.
1.3 Business Day. The term "Business Day" shall mean any day other
than a Saturday, Sunday or legal holiday in the State of California. All
periods of time described in this Agreement that are not expressly measured by
Business Days shall be measured by calendar days.
1.4 Buyer. The term "Buyer" shall mean The Forecast Group , L.P., a
California limited partnership.
1.5 CLTA Owner's Title Policy. The term "CLTA Owner's Title Policy"
shall mean the California Land Title Association ("CLTA") owner's policy of
title insurance to be issued by the Title Company upon the Close of Escrow
pursuant to the terms of this Agreement.
1.6 Cash. The term "cash" shall mean: (i) currency of the United
States of America, (ii) cashier's check(s) currently dated and payable to
Escrow Agent or Seller, as required under this Agreement, drawn and paid
through a California banking or savings and loan institution, tendered to
Escrow Agent or Seller, as required under this Agreement one (1) Business Day
before funds are required to be delivered under this Agreement, or (iii) an
amount credited by wire transfer into Escrow Agent's or Seller's bank account,
as required under this Agreement.
1.7 Close of Escrow. The term "Close of Escrow" shall mean the
consummation of the purchase of the Property by Buyer from Seller and the
recordation of Seller's Grant Deed(s) in accordance with the terms and
provisions of this Agreement.
1.8 Closing Date. The term "Closing Date" shall mean the date on
which the closing will be held for the sale of the Property as set forth in
Section 8.1 of this Agreement.
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1.9 County. The term "County" shall mean the County of Solano, in
the State of California.
1.10 Effective Date. The term "Effective Date" shall mean October 3,
1996, the date on which this Agreement is effective and deemed to have been
made.
1.11 Escrow. The term "Escrow" shall mean the escrow opened by
Escrow Agent pursuant to the terms of this Agreement.
1.12 Escrow Agent. The term "Escrow Agent" shall mean Chicago Title
Company, 604 Empire Street, Fairfield, California 94533 ("Chicago Title").
1.13 Feasibility Review Period. The term "Feasibility Review Period"
shall mean the period of time which commences on the Effective Date, and
terminates at midnight on May 1, 1998.
1.14 Governmental Action. The term "Governmental Action" shall mean
(a) any order of a court of competent jurisdiction, and/or (b) any enactment,
by the initiative or referendum process or otherwise, of any Governmental
Agencies (as defined below) affecting the Property, either directly or
indirectly, including, but not limited to, limitation on the number of permits
or licenses that can be issued, declaration of policy, resolution, ordinance,
statute, regulation, or any other enactment of any Governmental Agency (as
defined below) and irrespective of whether the orders or enactments listed
immediately above contain the words "moratorium," "moratoria" or similar
words.
1.15 Governmental Agencies. The term "Governmental Agencies" shall
mean any local, county, state and/or federal governmental or quasi-governmental
agencies, authorities or regulatory bodies and any public or
private utility companies having jurisdiction over the Property.
1.16 Opening of Escrow. The term "Opening of Escrow" shall mean the
date Escrow Agent executes the Consent of Escrow Agent attached hereto, which
consent shall be executed by Escrow Agent upon delivery of this Agreement to
Escrow Agent.
1.17 Preliminary Report. The term "Preliminary Report" shall mean
the Preliminary Title Report dated June 14, 1996, issued by the Title Company
to be reviewed by Buyer during the Feasibility Review Period.
1.18 Property Documents. The term "Property Documents" shall mean
the documents delivered by Seller to Buyer in connection with its feasibility
studies pursuant to Section 4.1 of this Agreement. The Property Documents are
listed in Exhibit B, attached hereto.
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1.19 Property. The term "Property" shall mean the Land and the
Subdivision Map and the Lots to the extent completed and any public or private
entitlements, maps, utility deposits, plans, soils reports, environmental
reports, marketing studies, development agreements, permits and similar items
that relate to the development, sale and use of the Lots as single-family
residential building lots.
1.20 Purchase Price. The term "Purchase Price" shall mean the total
consideration to be paid by Buyer to Seller for the purchase of the Property
as set forth in Article 2 of this Agreement.
1.21 Seller. The term "Seller" shall mean Paradise Valley
Communities No. 1, a California general partnership.
1.22 Subdivision Map. The term "Subdivision Map" shall mean the
Subdivision Map of Paradise Valley North Unit No. 4, recorded on February 27,
1995, in Book 65 of Maps, at Page 48, et. seq., in the Official Records of
Solano County.
1.23 Title Company. The term "Title Company" shall mean Chicago
Title.
ARTICLE 2
GRANT OF OPTIONS AGREEMENT OF PURCHASE AND SALE
2.1 Grant of Option. In consideration of Buyer's entering into the
Purchase Agreement and Buyer's delivery of $1,000 cash ("Option Payment") to
Seller, Seller hereby grants to Buyer the right and option to purchase and
acquire the Property at the Purchase Price and upon the terms and conditions
hereinbelow set forth. The option granted herein shall expire at midnight on
May 1, 1998 (the "Expiration Date").
2.2 Purchase Price. The purchase price ("Purchase Price") for the
Property is Three Million Six Hundred Ten Thousand Six Hundred Fifty and
00/100 Dollars ($3,610,650).
2.3 Payment of Purchase Price. The Purchase Price shall be paid in
cash upon the Close of Escrow. The Option Payment shall be credited against
the Purchase Price.
2.4 Assumption of Liabilities. Upon the terms and subject to the
conditions contained in this Agreement, Buyer shall assume, effective as of
the time of day on the Closing Date that Escrow Agent telephonically or in
writing notifies Seller and Buyer that Escrow has closed, Seller's obligations
under the Property Documents with respect to the Property purchased under this
Agreement, which include, without limitation, the obligation to complete the
Lots and any necessary Improvements in accordance with the Subdivision Map and
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all applicable documents, instruments, codes, ordinances, regulations and
permits.
ARTICLE 3
EXERCISE OF OPTION;
OPEN AND CLOSE OF ESCROW; DELIVERY OF DOCUMENTS
3.1 Exercise of Option. Buyer shall exercise the option to purchase
the Property under this Agreement by delivering to Seller, on or before the
Expiration Date, a written notice of Buyer's exercise of the option to
purchase the Property under this Agreement ("Notice of Exercise"). Buyer
shall have the right to exercise the option to purchase the Property under
this Agreement if, and only if, at the time of Buyer's delivery of the Notice
of Exercise, (i) Buyer is not then in default under this Agreement and (ii)
Buyer has closed the escrow, and acquired the lots and property upon the
Second Closing with respect to Unit 1, under the Unit 1 Second Closing
Purchase Agreement. If the Notice of Exercise is not delivered to Seller on
or before the Expiration Date, Buyer's option to purchase the Property and
this Agreement shall immediately terminate upon the Expiration Date. Upon any
such termination of the option to purchase the Property, the Buyer will
execute, acknowledge and deliver to the Seller a quitclaim deed and such other
documentation as Seller may determine to be reasonable and necessary in order
to evidence the termination of any interest of Buyer in the Property.
3.2 Opening of Escrow. Upon Buyer's timely delivery to Seller of
the Notice of Exercise, Buyer and Seller shall open Escrow by depositing with
Escrow Agent a fully executed original of this Agreement for use as escrow
instructions, and Escrow Agent shall execute the Consent of Escrow Agent
("Consent") which appears at the end of this Agreement and deliver a fully
executed Consent to Buyer and Seller. Seller shall also deposit the Option
Payment into Escrow upon the opening of Escrow. Escrow Agent's general
conditions ("General Conditions") are attached hereto as Exhibit C and
incorporated herein by reference to the extent they are not inconsistent with
the provisions of this Agreement. If there is any inconsistency between the
provisions of the General Conditions and this Agreement, the provisions of
this Agreement shall control. If Escrow Agent requires additional
instructions, the parties agree to make any deletions, substitutions and
additions as the parties shall mutually approve, as long as such deletions,
substitutions or additions do not materially alter the terms of this
Agreement.
3.3 Buyer's Deliveries. Buyer shall, at least one (1) Business Day
prior to the Close of Escrow (unless required to be delivered at an earlier
date under the terms of this Agreement), deliver to Escrow Agent each of the
following:
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3.3.1 Purchase Price. Cash in the amount of the Purchase
Price, less the Option Payment;
3.3.2 Documents. Fully executed and, where appropriate,
notarized counterparts of the documents required to be executed by Buyer under
this Agreement;
3.3.3 Prorations, Fees and Costs. The amount, if any,
required of Buyer under Article 9 of this Agreement entitled "Prorations, Fees
and Costs" and any other amounts payable upon the Close of Escrow under any
other provisions of this Agreement; and
3.3.4 General. Such other documents, instruments and
certificates as Seller may reasonably require to carry out the intent of this
Agreement; provided, however, that Buyer shall not be obligated to incur any
financial liability or obligation in connection with the furnishing of any such
documents, instruments or certificates.
3.4 Seller's Deliveries. Seller shall, at least one (1) Business
Day prior to the Close of Escrow (unless required to be delivered at an
earlier date under the terms of this Agreement), deliver to Escrow Agent each
of the following:
3.4.1 Certificate of Non-Foreign Status. Prior to the Close
of Escrow, Seller shall execute and deposit into Escrow a Certificate of Non-
Foreign Status certifying that Seller is a non-foreign person in the form
attached hereto as Exhibit D and incorporated herein ("Certificate of Non-
Foreign Status");
3.4.2 Grant Deeds. Prior to the Close of Escrow, Seller
shall execute, acknowledge and deposit into Escrow Grant Deed(s) in the form
attached hereto as Exhibit E; and
3.4.3 General. Such other documents, instruments and
certificates as Buyer may reasonably require to carry out the intent of this
Agreement; provided, however, that Seller shall not be obligated to incur any
financial liability or obligation in connection with the furnishing of any
such documents, instruments or certificates.
ARTICLE 4
FEASIBILITY REVIEW
4.1 Feasibility Review Period; Delivery of Property Documents.
During the Feasibility Review Period, Buyer shall analyze the feasibility of
its purchase and use of the Property. Buyer is solely responsible for any and
all costs incurred by Buyer in connection with its review and/or
investigations of the matters set forth in this Article 4. Seller has
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<PAGE>
delivered to Buyer the Property Documents. During the Feasibility Review
Period, Buyer shall review and analyze the Property Documents to determine
their individual and collective impact on the Property and its purchase and
use by Buyer.
4.1.1 Review of Preliminary Report. Seller has caused to be
provided to Buyer a Preliminary Report issued by the Title Company
("Preliminary Report"), together with legible copies of all recorded documents
described in the Preliminary Report. Buyer shall have the right to review and
approve the Preliminary Report during the Feasibility Review Period. If any
title exceptions are recorded against the Property before the Close of Escrow
in addition to those specified in the Preliminary Report, Escrow Agent shall
cause the Title Company to issue a supplemental preliminary report
("Supplemental Report"). Buyer shall have until the expiration of the
Feasibility Review Period with respect to any title exceptions shown in the
Preliminary Report, and five (5) Business Days after receipt of any
Supplemental Report, to review the title exceptions shown therein and to
deliver to Seller notice of approval or disapproval of any title exceptions
disclosed in any such report. Buyer's delivery of the Notice of Approval
described in Section 4.3 shall be deemed approval of the exceptions to title
shown on the Preliminary Report and any Supplemental Report issued as of the
date of such Notice of Approval. Any title exceptions approved by Buyer are
referred to herein as "Approved Exceptions." If any title exceptions are
specifically disapproved, and Seller elects, within five (5) Business Days
after the date of Buyer's disapproval, not to cure the disapproved item, then
Buyer shall have five (5) Business Days after the receipt of Seller's notice
of election not to cure the disapproved item to waive its prior disapproval.
If Buyer does not deliver notice of its election to waive its prior
disapproval, then the disapproved and uncured item will be deemed disapproved.
If a title exception is disapproved and uncured, Buyer may terminate the
Escrow by delivering a written notice of termination to Seller and the Escrow
Agent. Upon such termination, any deposits theretofore paid to Seller or
Escrow Agent (regardless of whether such deposits were released to Seller)
shall be immediately returned to Buyer, and this Agreement shall be
terminated. Seller shall thereupon be released from its obligation to sell
the Property to Buyer, and Buyer shall be released from any obligation to
purchase the Property.
4.1.2 Governmental Actions. Buyer shall review and consider
the impact on the Property of any and all applicable governmental ordinances,
rules and regulations, and evaluate the effect of any pending or threatened
Governmental Actions pertaining to the Property.
4.1.3 Studies and Investigations. Buyer shall conduct such
independent investigations, studies and tests as it deems necessary or
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appropriate concerning Buyer's proposed use, sale, development and/or the
suitability of the Property for Buyer's intended purposes. Such
investigations may include, without limitation, soils and engineering tests,
hazardous studies, investigations concerning the availability of the approvals
required from any Governmental Agencies for Buyer's proposed use of the
Property, investigations regarding the existence on the Property of any
threatened or endangered species, and of any archaeological artifacts on the
Property, the imposition or increase of any fees, charges or exactions by any
Governmental Agencies and such economic feasibility and marketing studies as
Buyer deems appropriate.
4.1.4 Physical Inspection. During the Feasibility Review
Period, Buyer shall have the right to inspect and approve of the physical
condition of the Property and shall conduct any soil, hazardous waste or
engineering studies with respect to the Property as Buyer may deem necessary
or appropriate. All such studies and inspections shall be conducted by Buyer
at its sole expense.
4.2 Additional Information from Seller. During the Feasibility
Review Period, Seller shall provide Buyer with such Additional Information (as
hereinafter defined) as Buyer reasonably may determine to be necessary to
complete its investigation of the Property, and Seller shall, and shall cause
its agents, employees and consultants to, respond to questions posed by Buyer
with respect to the Property. As used herein, the term "Additional
Information" shall mean and refer to information in the possession and/or
control of Seller concerning (i) the Property and (ii) material changes in
information and documents previously provided to Buyer by Seller during the
Feasibility Review Period.
4.3 Satisfaction of Feasibility Review. At any time during the
Feasibility Review Period, Buyer shall have the right to terminate this
Agreement if Buyer disapproves of any aspect of the Property or the
feasibility of Buyer using the Property as Buyer intends. If Buyer approves
of the Property and elects to continue this Agreement beyond the Feasibility
Review Period, Buyer shall, prior to expiration of the Feasibility Review
Period, deliver notice of such election ("Notice of Approval") to Seller and
Escrow Agent. In such event, the terms and provisions of this Agreement shall
continue in full force and effect, subject to the provisions of Section 4.1.1
regarding disapproved and uncured title exceptions shown in any Supplemental
Report. The parties acknowledge and agree that the continued effectiveness of
this Agreement shall be conditioned upon Buyer's delivery of a Notice of
Approval and that Buyer's delivery of a Notice of Approval shall be deemed to
be its approval of all aspects of the Property, including, without limitation,
title issues, with the exception of matters specifically set forth in this
Agreement for which Buyer has continuing rights of approval after the
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Feasibility Review Period. Buyer's failure to deliver its Notice of Approval
before expiration of the Feasibility Review Period shall be deemed to be
Buyer's disapproval of the Property. If no Notice of Approval has been
delivered by the expiration of the Feasibility Review Period, or within the
period described in Section 4.1.1 with respect to any title exception shown in
any Supplemental Report that is disapproved and uncured, this Agreement shall
upon such expiration immediately terminate, and Escrow Agent shall return all
funds, less applicable Escrow cancellation charges, and documents to the
parties who deposited them. Seller shall thereupon be released from its
obligation to sell the Property to Buyer, and Buyer shall be released from any
obligation to purchase the Property. Buyer shall also deliver to Seller,
without warranty, any documents related to the Property which Buyer has
created during the Feasibility Review Period.
ARTICLE 5
CONDITIONS PRECEDENT TO CLOSE OF ESCROW
5.1 Subject to Satisfaction or Waiver. The Closing of the purchase
and sale described in this Agreement and the obligations of the parties under
this Agreement shall be subject to satisfaction or waiver (by the party in
whose favor the condition precedent has been established) of all the
conditions precedent set forth below.
5.1.1 Title Policy. Escrow Agent shall be unconditionally
committed to procure from the Title Company the CLTA Owner's Title Policy for
the Property with a liability limit in the amount of the Purchase Price
insuring fee title vested in Buyer. Buyer shall take title to the Property
subject only to: (a) Non-delinquent general, special and supplemental taxes,
bonds and assessments, including Mello-Roos bonds, if any; (b) any matters set
forth in the printed form portion of the CLTA Owner's Title Policy; (c) the
Approved Exceptions; and (d) any items caused or permitted to be placed of
record by Buyer as of the Close of Escrow.
5.1.2 Seller's Performance. Seller shall have duly performed
each and every undertaking and agreement to be performed by it hereunder prior
to the Close of Escrow.
5.1.3 Buyer's Performance. Buyer shall have duly performed
each and every undertaking and agreement to be performed by it hereunder prior
to the Close of Escrow.
5.1.4 Closing Under Purchase Agreement. Buyer shall have
closed escrow under the Purchase Agreement and acquired the Property described
therein.
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5.1.5 Improvement Bonds. In accordance with Section 6.7,
Buyer shall have replaced the existing improvement bonds affecting the Lots
with improvement bonds obtained by Buyer and shall have obtained a release of
Seller with respect to any liability for such replaced improvement bonds.
5.2 Failure of Conditions Precedent. The conditions precedent in
Sections 5.1.1 and 5.1.2 are for Buyer's benefit and can be waived only by
Buyer. The conditions precedent in Sections 5.1.3, 5.1.4 and 5.1.5 are for
Seller's benefit and can be waived only by Seller. In the event that any of
the conditions precedent set forth above is neither satisfied nor waived by
the Closing Date, the party for whose benefit the condition has been created
may terminate the Escrow and this Agreement by giving a written notice of
termination to the other party and Escrow Agent, specifying the reason for
termination and the condition precedent that has not been satisfied. Upon
receipt of such notice of termination, Escrow Agent shall return any funds
that have been deposited in Escrow to the person who made such deposit, less
applicable Escrow cancellation charges, and any documents to the parties who
deposited them. If Buyer terminates the Escrow and this Agreement because a
condition precedent set forth in Section 5.1.1 or 5.1.2 is not satisfied,
Seller immediately shall return to Buyer any funds theretofore disbursed to
Seller from the Escrow. Seller shall thereupon be released from its
obligation to sell the Property to Buyer, and Buyer shall be released from its
obligation to purchase the Property.
5.3 Copy of Documents to Other Party. Each party will, concurrently
with its delivery to Escrow Agent of any documents described in this Article
5, deliver a copy of the same to the other party.
ARTICLE 6
COVENANTS AND AGREEMENTS
6.1 No Concern. Escrow Agent shall have no concern with, liability
or responsibility for, this Article.
6.2 Additional Escrow Instructions. Buyer and Seller covenant and
agree that they will execute any additional escrow instructions not
inconsistent with the terms of this Agreement as shall be reasonably required
by Escrow Agent.
6.3 Cooperation. Buyer and Seller acknowledge that it may be
necessary to execute documents other than those specifically referred to
herein in order to complete the acquisition of the Property as provided
herein. Both Buyer and Seller hereby agree to cooperate with each other by
executing such other documents or taking such other action as may be
reasonably necessary to complete this transaction in accordance with the
intent of the parties as evidenced in this Agreement.
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6.4 Entry Upon Property. After execution of this Agreement, Buyer
and its designated agents and independent contractors shall have the right to
enter upon the Property to conduct surveys, soils tests, physical inspections,
investigations and studies so long as Buyer has provided prior reasonable
notice of such entry to Seller and such activities will not interfere with
Seller's ownership and maintenance of the Property. Seller and Seller's
agents shall reasonably cooperate with Buyer, provided that such
investigations and studies shall be at the sole cost and expense of Buyer.
Buyer agrees to repair any damage caused by Buyer or its agents or independent
contractors to the Property and further agrees to indemnify, protect, defend
(with legal counsel acceptable to both Buyer and Seller) and hold Seller
harmless from and against any costs, expenses, losses, attorneys' fees and
liabilities (including, without limitation, claims of mechanics' liens)
incurred or sustained by Seller either prior or subsequent to the Close of
Escrow as a result of the conduct of Buyer, its agents, or independent
contractors under this Section 6.4. The covenants contained in this Section
6.4 shall survive the Close of Escrow or earlier termination of this
Agreement.
6.5 Indemnities of Buyer. Buyer agrees that it will protect,
defend, indemnify and hold Seller harmless from and against all actions,
causes of action, suits, claims, costs, losses, penalties, damages,
liabilities and expenses of any kind whatsoever, including reasonable
attorneys' fees ("Claims"), based upon or arising out of: (i) any Claim for
personal injury or property damage occurring on or about the Property after
the Closing Date or in connection with Buyer's or its agents' or independent
contractors' access to the Property prior to the Closing Date; (ii) any Claims
related to construction defects, soil subsidence or other similar claims
related to the Land, the Lots or the Improvements or any other improvements of
any kind made thereto or constructed thereon; (iii) any other Claim arising
out of Buyer's ownership or operation of the Property after the Closing Date.
6.6 Indemnities of Seller. Seller agrees that it will protect,
indemnify, defend and hold Buyer harmless from and against all Claims based
upon or arising out of: (i) any claim for personal injury or property damage
occurring on or about the Property prior to the Closing Date (except those
resulting from Buyer's access to the Property prior to the Closing Date); and
(ii) any liability or obligation which Buyer is not obligated to assume under
this Agreement. Notwithstanding the foregoing sentence, Seller shall not be
obligated to protect, defend, indemnify or hold Buyer harmless from any Claims
related to construction defects, soil subsidence or other similar claims
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related to the Land (except to the extent it is not transferred to Buyer under
this Agreement), the Lots or the Improvements or any other improvements of any
kind made thereto or constructed thereon.
6.7 Improvement Bonds. Prior to the Close of Escrow, Buyer will
obtain and provide improvement bonds for the Lots and related Improvements,
deliver to Seller evidence of such bonds and obtain Seller's release under any
bonds applicable to the Lots or Improvements.
6.8 Recreational Facility. Seller shall construct a recreational
facility, as described in the plans therefor included in the Project
Documents, upon the issuance of a building permit for the sale of the 351st
dwelling unit in the Paradise Valley development (exclusive of any building
permits for the NCROC project). Buyer shall provide Seller quarterly reports
indicating the number of closings in any given quarter to facilitate Seller's
compliance with this requirement.
6.9 Cost Sharing Agreement. Buyer acknowledges that Seller has
assumed certain obligations under that certain Paradise Valley Infrastructure
Cost Sharing Agreement dated October 20, 1989 ("Cost Sharing Agreement") with
Arcadia Homes and Winncrest Development. This Cost Sharing Agreement provides
for the completion of all infrastructure, common amenities, landscaping and
other similar items on parcels at the Paradise Valley project. Seller shall
remain responsible for the completion of its responsibilities under the Cost
Sharing Agreement with respect to the Property. Buyer covenants and agrees
(i) to cooperate in, and not to interfere with, the full and complete
implementation of the Cost Sharing Agreement and (ii) to supply Seller with
any information on actual or estimated costs of improvements as may be
requested and required by Seller for reporting purposes under the Cost Sharing
Agreement.
6.10 Water and Sewer Line Reimbursements. Buyer acknowledges that
Seller is currently working with the City of Fairfield on reimbursements for
increasing the size of various water and sewer lines. Any reimbursements for
infrastructure, including the water and sewer lines, provided by Seller shall
be the sole property of Seller, and Buyer, promptly after receipt, shall
deliver such reimbursement payments to Seller if they are received by Buyer
after the Close of Escrow.
6.11 Pacific Gas & Electric Deposits. Seller shall retain all
Pacific Gas & Electric deposits, applicable to Unit 4.
6.12 Transfer of Entitlements. Seller shall cooperate with Buyer and
execute, deliver, acknowledge and record such documents, instruments and
certificates as Buyer may reasonably require to effect the transfer of any
entitlements applicable to the Land, the Lots and the Improvements from the
City of Fairfield or any other Governmental Agency to Buyer.
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6.13 Confidentiality. The parties hereto agree that they shall
maintain in confidence and not disclose any information, including, without
limitation, the Purchase Price and the price per Lot, related to this
Agreement, the Land, the Lots, the Improvements or any other Property without
the prior written consent of the other party to this Agreement. The preceding
sentence shall not prevent either party from disclosing the terms and
conditions of this Agreement and any and all information regarding the Land,
the Lots, the Improvements and the Property to the parties' respective counsel
and Governmental Agencies, such as the Securities Exchange Commission, having
jurisdiction over either party.
6.14 Completion of Lots. Buyer acknowledges that the Lots and
Improvements are not complete. Buyer covenants and agrees to complete the
Lots and the related Improvements in accordance with the Subdivision Map and
any and all applicable documents, instruments, codes, ordinances, regulations
and permits.
6.15 Completion of Lots 42 and 43. Buyer acknowledges that Seller is
obligated to transfer two finished single-family residential lots in Unit 4 to
Mr. and Mrs. Roland and to Ms. Anderson. The single-family residential lots
that are to be transferred are referred to on the Subdivision Map as Lots 42
and 43. Buyer covenants and agrees to complete the lots and related
improvements in accordance with the Subdivision Map and the standards set
forth in Section 6.14, above, on behalf of Seller and to notify Seller in
writing when Lots 42 and 43 and the related Improvements are complete. Upon
completion of Lots 42 and 43, Seller shall reimburse Buyer for the cost of
such completion and the Improvements related thereto. Buyer shall provide
Seller an estimate of the costs of completing such Lots and the related
Improvements prior to commencement of any work thereon. Such estimate shall
be consistent with the costs incurred by Buyer in completing the Lots other
than 42 and 43.
6.16 Status of Buyer as Declarant; Annexation of Lots. Upon the
Close of Escrow, Seller shall record in the County and deliver to Buyer a
certificate, as required under Section 2.11 of that certain Master Declaration
of Covenants, Conditions and Restrictions of Paradise Valley, which was
recorded in the Office of the County Recorder of Solano County, State of
California, on August 25, 1995, Serial No. 95-51486 ("CC&Rs"), designating
Buyer as a "Declarant," as defined in the CC&Rs, with respect to the Lots.
Buyer will undertake, with Seller's reasonable cooperation, the responsibility
of preparing documentation for annexation of the Lots under the CC&Rs and
taking such other steps, including, without limitation, obtaining from the
California Department of Real Estate a Subdivision Public Report pertaining to
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the sale of the Lots, as Buyer may determine to be necessary or appropriate to
effectively develop, market, improve and sell the Lots.
6.17 Possession. Possession of the Property shall be delivered by
Seller to Buyer on the Closing Date upon recordation of the Grant Deed(s).
6.18 Survival of Covenants and Agreements. The covenants and
agreements set forth in Sections 6.5, 6.6, 6.8, 6.9, 6.10, 6.12, 6.13, 6.14,
6.15 and 6.16. of this Agreement shall survive the Close of Escrow.
ARTICLE 7
ACKNOWLEDGMENTS AND REPRESENTATIONS
7.1 Seller's Representations.
7.1.1 No Rights to Acquire Property. No person, firm or
entity other than Buyer has any rights in, or right to acquire, the Property
or any part thereof, and as long as this Agreement remains in force, Seller
will not, without Buyer's prior written consent, lease, transfer, mortgage,
pledge, or convey, its interest in the Property, or any portion thereof, nor
any right therein, or grant any right or option to anyone to effect any such
transaction.
7.1.2 Organization. Seller is a general partnership duly
organized and validly existing under the laws of the State of California with
full power to enter into this Agreement.
7.1.3 Authority. The execution and delivery of this
Agreement have been duly authorized and approved by all requisite partnership
action, and the consummation of the transactions contemplated hereby will be
duly authorized and approved by all requisite partnership action of Seller.
7.1.4 FIRPTA Affidavit. Seller is not a foreign corporation,
foreign partnership, foreign trust or foreign estate (as those terms are
defined in the Internal Revenue Code and the Treasury Regulations promulgated
thereunder) but rather a partnership formed under the laws of one of the
United States. Seller understands and agrees that the certification made in
this Section 7.1.4 may be disclosed to the Internal Revenue Service by Buyer
and that any false statement contained herein could be punished by fine,
imprisonment or both.
7.1.5 Latent Defects. Seller has no actual knowledge of any
latent defects on, in, under or above the Land, the Lots or the Improvements
(to the extent completed as of the date of this Agreement. For purposes of
this representation, the actual knowledge of Seller shall mean the actual
knowledge of only Patricia A. Wood and no other person.
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7.2 Buyer's Representations.
7.2.1 Organization. Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the State
of California with full power to enter into this Agreement.
7.2.2 Authority. The execution and delivery of this
Agreement have been duly authorized and approved by all requisite partnership
action of Buyer and the consummation of the transactions contemplated hereby
will be duly authorized and approved by all requisite partnership action of
Buyer.
7.3 Purchase "As-Is"; Limitation of Liability.
7.3.1 Buyer acknowledges that (i) the Lots and related
Improvements are not complete, (ii) except for Section 7.1.5, Seller is not
making and has not made any warranties or representations, express or implied,
as to the legal, physical and/or financial condition now or in the future of
the Land, the Lots, the Improvements or any Property, and (iii) Buyer is
buying the Property in an "as-is" condition based solely on Buyer's own
studies and investigations.
7.3.2 Buyer acknowledges that Seller shall have no liability
for any latent or patent defects discovered upon the Property following the
Close of Escrow.
7.3.3 Buyer confirms, acknowledges and agrees that no
officer, director, employee or representative of Seller or Seller's partners
(whether or not such individual has signed this Agreement on behalf of Seller)
makes any express or implied representation or warranty of any kind or nature
whatsoever concerning the Land, the Lots, the Improvements or any of the
Property. Buyer further acknowledges, confirms and agrees that any liability
with respect of this Agreement and the transactions contemplated herein shall
result in the liability of Seller or Seller's general partners only and not
any individual officer, director, employee or representative of Seller or
Seller's partners. Buyer therefore confirms, acknowledges and agrees that
Buyer may seek recourse only against Seller or Seller's general partners for
any liability arising out of or in connection with this Agreement and the
transactions contemplated hereby.
7.4 Survival. The representations made by Seller in Sections 7.1.1,
7.1.2, 7.1.3, 7.1.4 and 7.1.5, and by Buyer in Sections 7.2.1 and 7.2.2, and
the acknowledgments and covenants of Buyer in Sections 7.3.1, 7.3.2 and 7.3.3
of this Agreement shall survive the Close of Escrow.
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ARTICLE 8
THE CLOSE OF ESCROW
8.1 Close of Escrow. If Buyer timely and properly exercises its
option to purchase the Property under this Agreement, Escrow shall close on
the date that is thirty (30) days after the date upon which Buyer delivers the
Notice of Exercise described in Section 3.1 of this Agreement ("Closing
Date").
8.2 Closing Procedure. Escrow Agent shall close the Escrow on or
before the Closing Date by (i) recording Seller's Grant Deed(s) and such other
documents as may be necessary to procure the Title Policy and satisfy the
terms and conditions of this Agreement and (ii) delivering funds and documents
as set forth in Article 10 entitled "Recordation and Distribution of Funds and
Documents" WHEN AND ONLY WHEN each of the following requirements has been
satisfied:
8.2.1 Funds and Instruments. All funds and instruments
required pursuant to Articles 2 and 3 have been delivered to Escrow Agent.
8.2.2 Satisfaction of Conditions Precedent. Each of the
conditions precedent set forth in Section 5.1 has been, or upon such closing
shall be, satisfied as provided for in Section 5.1.
8.2.3 Recordation. Escrow Agent shall have recorded the
documents deposited into Escrow for recordation in the Official Records of the
County.
8.3 Earlier Closing. If all of the conditions set forth in Sections
8.2.1 and 8.2.2 are satisfied at a date earlier than the Closing Date, Escrow
Agent shall close the Escrow at such earlier date provided Escrow Agent
obtains the written consent of Buyer and Seller to do so.
8.4 Termination of Escrow. If Escrow Agent cannot close the Escrow
on or before the Closing Date, it will, nevertheless, close the Escrow when
all conditions have been satisfied or waived as provided for in this
Agreement, notwithstanding that one or more of such conditions has not been
timely performed, unless (i) a notice of termination has theretofore been
delivered to Escrow Agent in accordance with the provisions of Section 5.2,
13.1 or 13.2, or (ii) after the Closing Date and prior to the Close of Escrow,
Escrow Agent receives a written notice to terminate the Escrow and this
Agreement from a party who, at the time such notice is delivered, is not in
default hereunder. The right to terminate the Escrow and this Agreement under
the provisions of clause (ii) of this Paragraph 8.4 shall be optional, not
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mandatory; no delay in the giving of such notice shall affect the rights
hereunder of the party giving the same.
8.4.1 Notice of Termination. Escrow Agent shall have no
liability or responsibility for determining whether or not a party giving a
notice of termination is or is not in default hereunder. Within two (2)
working days after receipt of such notice from one party, Escrow Agent shall
deliver one copy of such notice to the other party. Unless written objection
to termination of the Escrow is received by Escrow Agent within ten (10) days
after Escrow Agent so delivers such notice, (i) Escrow Agent shall forthwith
terminate the Escrow and return all documents, funds or other items held by it
to the party depositing same, except that Escrow Agent may retain such
documents and other items usually retained by escrow agents in accordance with
standard escrow termination procedures and practices, and (ii) each party
shall forthwith pay to Escrow Agent one-half of Escrow Agent's reasonable
escrow termination charges. Notwithstanding the foregoing provisions of this
Section 8.4.1, Escrow Agent may (i) retain any funds on deposit with it until
such time as its Escrow termination charges are paid in full and/or (ii)
deduct from any cash held by it sufficient funds to pay for its Escrow
termination charges in full. If written objection to the termination of the
Escrow is delivered to Escrow Agent within such 10-day period, Escrow Agent is
authorized to hold all funds and instruments delivered to it in connection
with the Escrow and may, in Escrow Agent's sole discretion, take no further
action until otherwise directed either by the parties' mutual written
instructions or final order of a court of competent jurisdiction.
8.4.2 Return of Deposits. If the Escrow is terminated under
either Section 13.1 or Section 13.2 or as a result of Seller's default under
or breach of this Agreement, Seller shall return to Buyer any funds disbursed
from the Escrow to Buyer prior to the termination of the Escrow.
ARTICLE 9
PRORATIONS, FEES AND COSTS
9.1 Prorations. Escrow Agent will prorate as of the Close of Escrow
between the parties, in cash, county, city and special district (if any) real
property taxes and assessments for the Property based on the latest
information available to Escrow Agent.
9.2 Thirty Day Month. All prorations and/or adjustments called for
in this Agreement are to be made on the basis of a thirty (30) day month,
unless otherwise specifically instructed in writing.
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9.3 Seller's Fees and Costs. Seller shall pay (i) one-half of
Escrow Agent's escrow fee, (ii) usual Seller's document-drafting and recording
charges, (iii) the title insurance premium for the CLTA Owner's Title Policy
and any endorsements reasonably requested by Buyer's lender, and (iv) the
County Documentary Transfer Tax in the amount determined by Escrow Agent and
the County Recorder.
9.4 Buyer's Fees and Costs. Buyer shall pay (i) one-half of Escrow
Agent's escrow fee, (ii) usual Buyer's document-drafting and recording charges
and (iii) the additional premium for an American Land Title Association (ALTA)
title insurance policy, if Buyer desires that Title Company issue such a
policy.
9.5 Escrow Cancellation Charges Due to a Default. Notwithstanding
the provisions of Sections 9.3 and 9.4 above, if Escrow fails to close due to
Seller's default, Seller shall pay all Escrow cancellation charges. If Escrow
fails to close due to Buyer's default, Buyer shall pay all Escrow cancellation
charges. If Escrow fails to close for any reason other than the foregoing,
Buyer and Seller shall each pay one-half of any Escrow cancellation charges.
"Escrow cancellation charges" means all fees, charges and expenses incurred by
Escrow Agent, including all expenses incurred in connection with issuance of
the Preliminary Report and other title matters.
ARTICLE 10
RECORDATION AND DISTRIBUTION OF FUNDS AND DOCUMENTS
10.1 Disbursements. Except as provided in Section 10.4, below, all
disbursements by Escrow Agent shall be made by checks of Escrow Agent.
10.2 Recorded Documents. Escrow Agent shall cause the County
Recorder of the County to mail Seller's Grant Deed (and each other documents
which are herein expressed to be, or by general usage are, recorded) after
recordation, to the grantee, beneficiary or person (i) acquiring rights under
said document or (ii) for whose benefit said document was acquired.
10.3 Unrecorded Documents. Escrow Agent shall, at the Close of
Escrow, deliver by certified mail, overnight courier or United States mail (or
will hold for personal pickup, if requested) one (1) copy of each unrecorded
document received hereunder by Escrow Agent to the payee or person (i)
acquiring rights under said document or (ii) for whose benefit said document
was acquired.
10.4 Payment of Funds at Close of Escrow. Escrow Agent shall, at the
Close of Escrow, deliver by wire transfer, in accordance with Seller's
instructions (or will hold for personal pickup, if requested) (i) to Seller,
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or order, the cash, plus any proration or other credits to which Seller will
be entitled less any appropriate proration, deposits or other charges, and
(ii) to Buyer, or order, any excess funds theretofore delivered to Escrow
Agent by Buyer.
10.5 Conformed Copies. Escrow Agent shall, at the Close of Escrow,
deliver to Seller and Buyer a copy of the Seller's Grant Deed(s) (conformed to
show recording date) and conformed copies of each document recorded to place
title in the condition required by this Agreement.
ARTICLE 11
REMEDIES
11.1 Liquidated Damages to Seller. If all of the conditions to
Closing for Buyer's benefit have either been satisfied or waived by Buyer by
the Closing Date, and the purchase and sale of the Property described herein
fails to close due to default by Buyer, it is agreed that the amounts released
from Escrow to Seller under this Agreement ("Released Amount") shall be
retained and accepted by Seller as liquidated damages and not as a penalty and
Seller shall be released from its obligation to sell the Property to Buyer,
and Buyer shall be released from its obligation to purchase the Property. It
is agreed that the Released Amount constitutes a reasonable estimate of the
damages to Seller. Buyer and Seller agree that it is impossible or
impractical presently to predict what monetary damages Seller would suffer in
such event. Buyer desires to limit the monetary damages for which Buyer might
be liable hereunder and Buyer and Seller desire to avoid the costs and delays
they would incur if a lawsuit were commenced to collect damages and therefore
agree that the liquidated damages provided hereunder shall constitute Seller's
sole and exclusive remedy hereunder. By the act of an authorized
representative of each party affixing its initials herein, each party
specifically confirms the accuracy of the above statements and its agreement
with them.
/s/ P.W. /s/ L.J.Y.
Seller's Initials Buyer's Initials
11.2 Specific Performance. If all of the conditions to Closing for
Seller's benefit have either been satisfied or waived by Seller by the Closing
Date, and the purchase and sale of the Property described herein fails to
close due to default by Seller, Buyer shall be entitled to bring an action for
specific performance of Seller's obligations under this Agreement.
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ARTICLE 12
ASSIGNABILITY
12.1 Assignment. Neither party shall voluntarily or by operation of
law assign or otherwise transfer any of its rights or obligations under this
Agreement without obtaining the prior written consent of the other party,
which consent may not be unreasonably withheld. Notwithstanding the foregoing
sentence, Buyer shall have the right to assign its rights under this Agreement
without consent of Seller to a corporation, partnership, limited liability
company or other entity in which the beneficial owners of at least 51% of the
equity interests in such entity own at least 51% of the equity interests in
Buyer, provided that Buyer shall remain liable for, and be responsible for the
performance of, any and all liabilities, obligations, representations,
covenants and agreements under this Agreement.
ARTICLE 13
EMINENT DOMAIN AND MATERIAL LOSS
13.1 Eminent Domain. In the event that, prior to the Close of
Escrow, all or any material portion of the Property is taken or appropriated
by any public or quasi-public authority under the power of eminent domain, or
Seller receives actual notice of any pending or threatened condemnation
proceedings, then either Buyer or Seller may terminate this Agreement without
further liability hereunder and the parties shall proceed in accordance with
Section 8.4, and, in such event, any portion of Buyer's Deposit, regardless of
whether or not it has been released from Escrow to Seller, shall be
immediately returned to Buyer, and any condemnation proceeds shall be the sole
property of Seller. If neither Seller nor Buyer elects to terminate this
Agreement in the event of any such taking, or threat of taking, and provided
that all conditions precedent to the Close of Escrow have either been
satisfied or waived, Escrow shall close in accordance with this Agreement, and
Seller shall assign to Buyer all of its right, title and interest in any
condemnation proceeds or award made by the governmental entity.
13.2 No Material Loss. If, prior to the Close of Escrow, and subject
to the satisfaction or waiver of all conditions precedent in favor of Buyer
and Seller, the Property shall suffer a Material Loss, Buyer shall have the
right to elect, within 30 days of receipt of notice of such Material Loss, (a)
to terminate this Agreement under Section 8.4.1 and receive a return of
Buyer's Deposit or (b) to purchase the Property as provided in this Agreement
and receive an assignment of any insurance proceeds Seller receives, or to
which Seller is or may become entitled, with respect to such Material Loss
upon Seller's receipt of such proceeds. The parties acknowledge and agree in
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no event shall the Close of Escrow be extended due to a Material Loss.
Notwithstanding the foregoing, the assignment of any insurance proceeds as
provided herein shall not include any proceeds received for items not related
to the physical condition of the Property, such as proceeds from Seller's
business interruption insurance, if any. For purposes of this Agreement, a
"Material Loss" means a loss resulting from a casualty that either (i)
diminishes the value of the Property in an amount of at least 10% of the
Purchase Price or (ii) results in a loss of at least 10% of the aggregate
square footage of the Land as of the Effective Date.
ARTICLE 14
GENERAL PROVISIONS
14.1 Attorneys' Fees. In the event any action, arbitration,
mediation or other dispute resolution proceeding shall be instituted between
Seller and Buyer in connection with this Agreement, the party prevailing in
such proceeding shall be entitled to recover from the other party all of its
costs of such proceeding, including, without limitation, attorneys' fees and
costs as fixed by the court therein.
14.2 Captions. The captions used herein are for convenience only and
are not a part of this Agreement and do not in any way limit or amplify the
terms and provisions hereof.
14.3 Construction of Agreement. The agreements contained herein
shall not be construed in favor of or against either party, but shall be
construed as if both parties prepared this Agreement.
14.4 Counterparts. This Agreement may be executed in counterparts,
all of which, when taken together, shall constitute a fully executed original.
14.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof
and all prior and contemporaneous agreements, representations, negotiations
and understandings of the parties hereto, oral or written, are hereby
superseded and merged herein. The foregoing sentence shall in no way affect
the validity of any instruments executed by the parties in the form of the
exhibits attached to this Agreement.
14.6 Exhibits and Schedules. All Exhibits and Schedules attached
hereto are incorporated herein by reference. Any Exhibits or Schedules that
are to be attached to the Agreement after the Effective Date but prior to the
Close of Escrow, shall be initialled by Buyer and Seller on each page and,
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once so initialled, shall be sent to Escrow Agent for attachment to this
Agreement.
14.7 Gender and Number. The use herein of (i) the neuter gender
includes the masculine and the feminine and (ii) the singular number includes
the plural, whenever the context so requires.
14.8 Governing Law. This Agreement and the documents in the forms
attached as exhibits hereto shall be governed by and construed under the laws
of the State of California. This Agreement shall be deemed made and entered
into in the County.
14.9 Joint and Several Liability. If any party consists of more than
one person or entity, the liability of each such person or entity signing this
Agreement shall be joint and several.
14.10 Modification. No modification, waiver, amendment, discharge or
change of this Agreement shall be valid unless the same is in writing and
signed by the party against which the enforcement of such modification,
waiver, amendment, discharge or change is or may be sought.
14.11 Real Estate Brokerage Commission. Seller shall pay a real
estate brokerage commission in the amount of $108,300 to Fred Harris upon the
Close of Escrow. Except as provided in the preceding sentence, neither party
is obligated to pay any real estate, brokerage or other commission or fee in
connection with the purchase and sale of the Property. Each party hereby
indemnifies, protects, defends (with legal counsel reasonably acceptable to
the other party) and holds the other party free and harmless from and against
any and all costs and liabilities, including, without limitation, reasonable
attorneys' fees and costs, for causes of action or proceedings which may be
instituted by any broker, agent or finder, licensed or otherwise, claiming
through, under or by reason of the conduct of such party in connection with
this transaction.
14.12 No Partnership or Joint Venture. Seller or Buyer shall not, by
virtue of this Agreement, in any way or for any reason be deemed to have
become a partner of the other in the conduct of its business or otherwise, or
a joint venturer. In addition, by virtue of this Agreement there shall not be
deemed to have occurred a merger of any joint enterprise between Buyer and
Seller.
14.13 Notice and Payments. Any notice to be given or other document to
be delivered by any party to the other or others hereunder, and any payments
from Buyer to Seller, may be delivered in person or by facsimile transmission
(provided that a confirming copy is sent by mail or overnight delivery as
herein specified) to an officer of any party, or may be deposited in the
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United States mail, duly certified or registered, return receipt requested,
with postage prepaid, or by Federal Express or other similar overnight
delivery service, and addressed to the party for whom intended, as follows:
To Seller at its business office:
Paradise Valley Communities No. 1
529 East South Temple
Salt Lake City, Utah 84102
Attention: Patricia A. Wood
Facsimile No.: (801)524-1751
With a copy to:
K. Michael Garrett, Esq.
Duckor Spradling & Metzger
401 West A Street, Suite 2400
San Diego, California 92101
Facsimile No.: (619)231-6629
To Buyer at its business office:
The Forecast Group , L.P.
10670 Civic Center Drive
Rancho Cucamonga, California 91730
Facsimile No.: (909)980-7305
With a copy to:
General Counsel
c/o The Forecast Group , L.P.
10670 Civic Center Drive
Rancho Cucamonga, California 91730
Facsimile No.: (909)987-8958
To Escrow Agent:
Chicago Title Company
604 Empire Street
Fairfield, California 94533
Attention: Ms. Sandy Rigby
Facsimile No.: (707)425-4810
Any party hereto may from time to time, by written notice to the other,
designate a different address which shall be substituted for the one above
specified. Unless otherwise specifically provided for herein, all notices,
payments, demands or other communications given hereunder shall be in writing
and shall be deemed to have been duly given and received (i) upon personal
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delivery, or (ii) as of the third business day after mailing by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as set forth above, or (iii) the immediately succeeding Business Day
after deposit with Federal Express or other similar overnight delivery
system.
14.14 Remedies Cumulative. All rights and remedies of Buyer and
Seller contained in this Agreement shall be construed and held to be
cumulative.
14.15 Severability. In the event that any phrase, clause, sentence,
paragraph, section, article or other portion of this Agreement shall become
illegal, null or void or against public policy, for any reason, or shall be
held by any court of competent jurisdiction to be illegal, null or void or
against public policy, the remaining portions of this Agreement shall not be
affected thereby and shall remain in force and effect to the fullest extent
permissible by law.
14.16 Successors and Assigns. Subject to the restrictions and
prohibitions on assignment set forth in Article 12, each and all of the
covenants and conditions of this Agreement shall inure to the benefit of and
shall be binding upon the successors-in-interest, assigns, and legal
representatives of the parties hereto. As used in the foregoing, "successors"
shall refer to the parties' interest in the Property and to the successors to
all or substantially all of their assets and to their successors by merger or
consolidation.
14.17 Waiver. No waiver by Buyer or Seller of a breach of any of the
terms, covenants or conditions of this Agreement by the other party shall be
construed or held to be a waiver of any succeeding or preceding breach of the
same or any other term, covenant or condition herein contained. No waiver of
any default by Buyer or Seller hereunder shall be implied from any omission by
the other party to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect a default other
than as specified in such waiver. The consent or approval by Buyer or Seller
to or of any act by the other party requiring the consent or approval of the
first party shall not be deemed to waive or render unnecessary such party's
consent or approval to or of any subsequent similar acts by the other party.
14.18 Gender and Number. In this Agreement (unless the context
requires otherwise), the masculine, feminine and neuter genders and the
singular and the plural include one another.
14.19 Time of the Essence. Time is of the essence of each and every
provision of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above-written.
SELLER:
PARADISE VALLEY COMMUNITIES
NO. 1, a California
general partnership
By: HomeFed Communities, Inc.,
a California corporation,
General Partner
By: /s/ Patricia A. Wood
Patricia A. Wood,
President
By: HomeFed Resources
Corporation, a California
corporation, General Partner
By: /s/ Patricia A. Wood
Patricia A. Wood,
President
BUYER:
THE FORECAST GROUP, L.P.,
a California limited partnership
By: FORECAST HOMES, INC., A
California corporation, General Partner
By: /s/ Larry J. Young
Its: Division President
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CONSENT OF ESCROW AGENT
The undersigned Escrow Agent hereby agrees to (i) accept the foregoing
Agreement, (ii) be Escrow Agent under said Agreement and (iii) be bound by said
Agreement in the performance of its duties as Escrow Agent; provided, however,
the undersigned shall have no obligations, liability or responsibility under (i)
this Consent or otherwise unless and until said Agreement, fully signed by the
parties, has been delivered to the undersigned or (ii) any amendment to said
Agreement unless and until the same shall be accepted by the undersigned in
writing.
Dated: October 3, 1996 (the "Opening of the Escrow")
Chicago Title Company
By: /s/ Terri Piper
Its: CSEO
<PAGE>
LIST OF EXHIBITS
Exhibit A. . . . . . . . . . . . . . . .Legal Description of Land
Exhibit B . . . . . . . . . . . . . . . . . . Property Documents
Exhibit C. . . . . . . . . . . . . . General Conditions of Escrow
Exhibit D. . . . . . . . . . . .Certificate of Non-Foreign Status
Exhibit E. . . . . . . . . . . . . . . . . . . . . .Grant Deed(s)
<PAGE>
EXHIBIT A
Legal Description of Land
ALL THE REAL PROPERTY SITUATED IN THE CITY OF FAIRFIELD, COUNTY OF SOLANO, STATE
OF CALIFORNIA, DESCRIBED AS FOLLOWS:
LOTS 1 THROUGH 41, 44 THROUGH 82, AS THE SAME ARE SHOWN ON THAT CERTAIN MAP
ENTITLED: "FINAL MAP OF PARADISE VALLEY NORTH, UNIT NO. 4, COUNTY OF SOLANO,
FAIRFIELD, CALIFORNIA," WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE
RECORDER OF SOLANO COUNTY, CALIFORNIA ON FEBRUARY 27, 1995 IN BOOK 65 OF MAPS,
AT PAGE 48.
APN'S: 167-521-010 THROUGH 110; 167-522-010 THROUGH 140; 167-523-010
THROUGH 040; 167-524-010 THROUGH 120; 167-531-010 THROUGH 030;
167-532-020 THROUGH 080; 167-533-010 THROUGH 090; 167-534-010
THROUGH 100; 167-535-010 THROUGH 100
<PAGE>
EXHIBIT B
Unit 4
Property Documents
- - Rough Grading and Erosion Plans dated March 1990 (6 copies)
- - Final Map Unit 3 dated December 1990 (6 copies), recorded February 27,
1995, Solano County Recorder
- - Improvement Plans for Unit 4 dated December 1990 (6 copies)
- - Development Agreement dated July 20, 1988
- - First Amendment to Development Agreement dated September 15, 1994 (not
yet fully executed)
- - Second Amendment to Development Agreement (not yet dated or fully
executed)
- - Covenants, Conditions, and Restrictions dated August 25, 1995
- - Anderson Consulting Group Report dated September 15, 1994
- - Department of Real Estate Public Report dated September 1, 1995
- - Letter to City of Fairfield regarding acceptance of improvements dated
May 28, 1996
- - Unapproved Plans for the Paradise Valley Recreation Facility
- - Cost Sharing Agreement dated October 20, 1989
- - Agreement with City of Fairfield regarding construction of recreational
facility dated August 31, 1995
- - Utility Deposit Balances dated May 31, 1996
- - Paradise Valley Master Association documents dated September 1995
- - Paradise Valley Master Association Bylaws dated August 21, 1995
- - Information regarding improvement bonds and maintenance obligations for
Unit 4
<PAGE>
EXHIBIT C
General Conditions of Escrow
<PAGE>
GENERAL PROVISIONS
1. The phrase "close of escrow" (for COE) as used in this
escrow means the date on which documents are recorded,
unless otherwise specified.
2. Recordation of any instruments delivered through this
escrow, if necessary or proper for the issuance of the
policy of title insurance called for, is authorized.
3. No examination or insurance as to the amount or payment of
personal property taxes is required unless specifically
requested.
4. You and any of your affiliates or employees are authorized
to use the information and documents in this escrow for any
purpose. You are further authorized to furnish to any
broker or lender identified with this transaction or anyone
acting on behalf of such broker or lender, any instructions,
amendments, statements, or notices of cancellation given in
connection with this escrow.
5. All written notices, communications, change of instructions
and documents are required to be delivered timely at the
office of Chicago Title Company as set forth herein.
6. All funds received in this escrow shall be deposited with
other escrow funds in one or more escrow (demand) accounts
of Chicago Title Company in any state or national bank. The
parties to this escrow understand that the escrow accounts
you maintain with the depository institutions contribute to
your value as a customer of these institutions which, in
turn, may make available to Chicago Title Company an array
of bank services, accommodations or other benefits. You
shall have no obligation to account for the value realized
by Chicago Title Company from these services, accommodations
or other benefits. All disbursements shall be made by your
check, unless otherwise instructed. You shall not be
responsible for any delay in closing if funds received by
escrow are not available for immediate withdrawal. Chicago
Title Company may, at its option, require concurrent
instructions from all principals prior to release of any
funds on deposit in this escrow.
7. If demand to cancel is submitted after the Time Limit Date,
any principal so requesting you to cancel this escrow shall
file notice of demand to cancel in your office in writing.
You shall within three (3) working days thereafter mail by
certified mail one copy of such notice to each of the other
principals at the address stated in this escrow. Unless
written objection thereto is filed in your office by a
principal within fifteen (15) calendar days after the date
of such mailing, you are instructed to cancel this escrow.
If this is a sale escrow, you may return the lender's papers
and/or funds upon lender's demand.
8. In the event that this escrow is canceled, any fees or
charges due Chicago Title Company including cancellation
fees and any expenditures incurred or authorized shall be
paid from funds on deposit unless otherwise specifically
agreed to or determined by a court of competent
jurisdiction. Upon payment thereof, return documents and
monies to the respective parties depositing same, or as
ordered by the court, and void any executed instruments.
9. If there is no written activity by a principal to this
escrow within any six-month period after the Time Limit Date
set forth herein, Chicago Title Company may, at its option,
terminate its agency obligation and cancel this escrow,
returning all documents, monies or other items held, to the
respective parties entitled thereto, less any fees and
charges as provided herein.
10. If, for any reason, funds are retained or remain in escrow
after the closing date, you may deduct therefrom a
reasonable charge as custodian, of not less than $25.00 per
month, unless otherwise specified.
11. In the event that you should receive or become aware of
conflicting demands or claims with respect to this escrow,
or the rights of any of the parties hereto, or any money or
property deposited herein, you shall have the absolute right
at your option to discontinue any or all further acts until
such conflict is resolved to your satisfaction.
12. In the event that any Offer to Purchase, Deposit Receipt, or
any other form of Purchase Agreement is deposited in this
escrow, it is understood that such document will be
effective only as among the parties signing said document.
You as escrow holder are not to be concerned with the terms
of such document and are relieved of all responsibility in
connection therewith. You are to be concerned only with the
directives specifically set forth in these escrow
instructions and amendments thereto. Further, you are not
to be concerned or liable for items designated as
"memoranda" in these escrow instructions nor with any other
agreement or contract between the parties.
13. You are released from and shall have no liability,
obligation or responsibility with respect to (a) withholding
of funds pursuant to Section 1445 of the Internal Revenue
Code of 1986 as amended, and to Sections 18662 and 18668 of
the California Revenue and Taxation Code, (b) advising the
parties as to the requirements of said Section 1445, (c)
determining whether the transferor is a foreign person or a
non-resident under such Section, nor (d) obtaining a
nonforeign affidavit or other exemption from withholding
under said Sections nor otherwise making any inquiry
concerning compliance with such Sections by any party to the
transaction.
14. The parties hereto, by execution of these instructions
acknowledge that the escrowholder assumes no responsibility
or liability whatsoever for the supervision of any act or
the performance of any condition which is a condition
subsequent to the closing of this escrow.
15. In the absence of instructions to the contrary, you are
hereby authorized to utilize wire services, overnight, next
day, or other expedited delivery services (as opposed to the
regular U.S. Mail) and to charge the respective party's
account accordingly.
16. If you pay a demand to reconvey a revolving line of credit
or equityline deed of trust, you are hereby instructed on my
behalf and for my benefit, to request that the lender
issuing said demand cancel said revolving line or equityline
of credit.
17. You are authorized to destroy or otherwise dispose of any
and all documents, papers, instructions, correspondence and
other material pertaining to this escrow at the expiration
of six (6) years from the close of escrow or cancellation
thereof, without liability and without further notice.
IMPORTANT NOTICE
Except for wire transfers, funds remitted to this escrow are
subject to availability requirements imposed by Section 12413.1
of the California Insurance Code. CASHIER'S, CERTIFIED or
TELLER'S checks, payable to CHICAGO TITLE COMPANY are generally
available for disbursement on the next business day following
the date of deposit.
Other forms of payment may cause extended delays in the closing
of your transaction pursuant to the requirements imposed by
State Law.
(Wire transfer information available upon request)
ALL PARTIES TO THIS ESCROW ACKNOWLEDGE THAT CHICAGO TITLE COMPANY
DOES NOT PROVIDE LEGAL ADVICE NOR HAS IT MADE ANY INVESTIGATION,
REPRESENTATIONS OR ASSURANCES WHATSOEVER REGARDING THE LEGAL
ASPECTS OR COMPLIANCE OF THIS TRANSACTION WITH ANY TAX,
SECURITIES OR ANY OTHER STATE OR FEDERAL LAWS. IT IS RECOMMENDED
THAT THE PARTIES OBTAIN INDEPENDENT LEGAL COUNSEL AS TO SUCH
MATTERS.
<PAGE>
EXHIBIT D
CERTIFICATE OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code of 1986, as amended ("Code"),
provides that a transferee (buyer) of a U.S. real property interest must
withhold tax if the transferor (seller) is a foreign person. Sections 18805 and
26131 of the California Revenue and Taxation Code provide that a transferee
(buyer) of a California real property interest must withhold tax if withholding
is required by Section 1445 of the United States Internal Revenue Code.
To inform The Forecast Group, L.P. ("Transferee"), that withholding of
tax under Section 1445 of the Code is not required upon disposition of certain
real property to the Transferee by Paradise Valley Communities No. 1, a
California corporation, ("Transferor"), the undersigned hereby represents and
certifies the following on behalf of the Transferor:
1. The undersigned is the duly qualified and acting officer of the
Transferor;
2. The Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations), but rather is a corporation formed
under the laws of one of the United States;
3. The Transferor's U.S. employer identification number is
52-1671038;
4. The Transferor's address is 529 East South Temple, Salt Lake City,
Utah 84102-1089;
5. The Transferor understands that this certification may be
disclosed to the Internal Revenue Service and/or the California Franchise Board
by the Transferee and that any false statement contained herein could be
punished by fine, imprisonment, or both.
<PAGE>
Under penalty of perjury, the undersigned declares that the undersigned
has examined this certification and to the best of its knowledge and belief it
is true, correct, and complete.
Dated:_________________, 1996 TRANSFEROR:
PARADISE VALLEY COMMUNITIES NO. 1,
a California general partnership
By: HomeFed Communities, Inc.,
a California corporation,
General Partner
By: ________________
Patricia A. Wood,
President
By: HomeFed Resources
Corporation, a California
corporation, General Partner
By: ________________
Patricia A. Wood,
President
<PAGE>
EXHIBIT E
Grant Deed(s)
[To Be Prepared and Attached Prior to Close of Escrow]
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE BODY OF THE ACCOUMPANYING FORM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<CASH> 1,562
<SECURITIES> 70
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 21,442
<CURRENT-LIABILITIES> 0
<BONDS> 26,371
0
0
<COMMON> 100
<OTHER-SE> (5,400)
<TOTAL-LIABILITY-AND-EQUITY> 21,442
<SALES> 4,862
<TOTAL-REVENUES> 5,010
<CGS> 5,104
<TOTAL-COSTS> 5,104
<OTHER-EXPENSES> 942
<LOSS-PROVISION> 1,017
<INTEREST-EXPENSE> 2,331
<INCOME-PRETAX> (4,384)
<INCOME-TAX> 51
<INCOME-CONTINUING> (4,435)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,435)
<EPS-PRIMARY> (.44)
<EPS-DILUTED> (.44)
</TABLE>
