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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 10, 1998
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United Investors Realty Trust
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(Exact Name of Registrant as Specified in its Charter)
Texas 0-23833 76-0265701
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
5847 San Felipe, Suite 850
Houston, TX 77057
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 781-2860
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N.A.
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition if Assets
On May 27, 1998, United Investors Realty Trust (the "Registrant") acquired
the Big Curve Shopping Center located in Yuma, Arizona (the "Property"). The
Property was purchased pursuant to a Contract of Sale dated March 23, 1998
through a wholly owned subsidiary controlled by the Trust. The Property, an
approximately 126,400 square foot community shopping center, located in Yuma,
Arizona, was purchased from Dermot Big Curve, LLC for $8,850,000. The asset was
acquired with available cash of $2,884,870.66 and by taking title subject to an
existing loan having a principal balance outstanding on the date of closing of
$5,965,129.34. Interest on this loan is payable at the rate of 9.19% per annum.
This loan matures on October 1, 2006 and may be prepaid on or after October 1,
2000 with a yield maintenance based penalty with a minimum of one percent of the
then outstanding principal balance. The Registrant intends to continue to
operate the Property as a shopping center.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements.
It is impractical to provide the required financial statements
Big Curve shopping center at this time. The required financial
statements of the Big Curve shopping center will be filed by
amendment as soon as practicable, but not later than August
11, 1998.
(b) Pro Forma Financial Information.
It is impracticable to provide the required pro forma
financial information for Big Curve shopping center at this
time. The required pro forma financial information of the Big
Curve shopping center will be filed by amendment as soon as
practicable, but not later than August 11, 1998.
(c Exhibits.
The Exhibits to this report are listed on the Exhibit Index
set forth elsewhere herein.
SIGNATURES
Pursuant To the requirements of Section 13 or 15(d) 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, on June , 1998.
UNITED INVESTORS REALTY TRUST
By: /s/ Daniel M. Jones, III
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Daniel M. Jones, III
Chief Financial Officer
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UNITED INVESTORS REALTY TRUST
EXHIBIT INDEX
Number and Description of Exhibit
10.28 Contract of Sale between Dermot Big Curve, LLC. And United Investors
Realty Trust dated March 23, 1998.
10.29 Promissory Note dated as of September 20, 1996 made by Dermot Big
Curve, LLC to Liberty Mortgage Acceptance Corporation, as beneficiary
in the principal amount of $6,072,000.
CONTRACT OF SALE
between
DERMOT BIG CURVE, LLC
SELLER
AND
UNITED INVESTORS REALTY TRUST
BUYER
pertaining to the sale and purchase of
Big Curve Shopping Center
Yuma, Arizona
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CONTRACT OF SALE
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This Contract of Sale (the "Contract") is made and entered into by and
between DERMOT BIG CURVE, LLC an Arizona limited liability company, having its
principal office at 110 Fifteenth Street, Del Mar, California 92014 ("Seller"),
and UNITED INVESTORS REALTY TRUST, a Texas real estate investment trust having
its principal office at 5847 San Felipe, Suite 850, Houston, Texas 77057
("Buyer").
ARTICLE I
DEFINED TERMS
1.1 Definitions. As used herein, the following terms shall have the
meanings set forth below:
"Anchor Tenant" means any Tenant at the Project listed on Exhibit "J"
attached hereto.
"Business Day" means any day other than a Saturday or Sunday on which
Federal Savings Banks in Yuma, Arizona are open for business.
"Closing" means consummation of the purchase of the Project by Buyer from
Seller in accordance with the terms and conditions of Article VIII.
"Closing Date" means the date specified in Section 8.1 on which the Closing
will be held.
"Contract Date" means the later of the two dates set forth immediately
above each of the signatures of the parties hereto, on the signature page
hereof.
"Delivery Date" means the date specified in Section 5.2(a).
"Earnest Money Deposit" means the moneys deposited by Buyer in escrow with
the Title Company at the time and in the amount specified in Section 3.2. ,
"Improvements" means the neighborhood shopping center (the "Shopping Center")
known as Big Curve Shopping Center (excluding the Albertsons, Western Warehouse
and Michaels parcels), containing approximately 126,402 square feet of improved
retail space, located in Yuma, Arizona, the fixtures and other improvements now
or hereafter situated upon the tract of land described on Exhibit "A".
"Inspection Period" means the period commencing on the Contract Date and
ending 30 days thereafter.
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"Land" means that certain tract of land located in Yuma County, Arizona,
and being more fully described on Exhibit "A", together with all rights
appurtenant thereto.
"Leases" means all currently effective leases for space in the
Improvements, including all amendments and modifications thereto and any and all
other agreements with Tenants.
"Permitted Exceptions" means those exceptions or conditions that affect or
may affect title to the Project that are approved or deemed to be approved by
Buyer in accordance with Section 4.3 or Section 4.4.
"Personal Property" means (a) all tangible personal property owned by
Seller and located on, attached to, and used in connection with, the operation
of the Real Property (but not including any tangible personal property owned or
leased by Tenants), (b) Seller's interest in all personal property leases,
licenses, permits, plans, studies, and utility arrangements with respect to the
Real Property, (c) Seller's interest in all service, maintenance, management or
other contracts relating to the ownership or operation of the Real Property, and
(d) Seller's interest in all warranties and guaranties, if any, relating to the
Real Property.
"Project" means, collectively, the Real Property, the Leases, and the
Personal Property for the Shopping Center.
"Purchase Price" means the total consideration to be paid by Buyer to
Seller for the purchase of the Project.
"Real Property" means the Land and the Improvements for the Shopping
Center.
"Rent Roll" means a schedule for the Project identifying the Tenants at the
Project and providing certain information with respect to the Leases in
accordance with Section 5.2 (a)(i).
"Tenants" means those persons holding rights as tenants of the Shopping
Center.
"Title Company" means Chicago Title Insurance Company, whose address is
3703 Camino Del Rio South, Suite 100, San Diego, California 92108, Attention:
Kathy Robinson, Escrow Officer.
"Trade Name" means the name "Big Curve Shopping Center", as well as any
other name utilized in conjunction with the operation of the Project.
1.2 Other Defined Terms. Certain other defined terms shall have the
respective meanings assigned to them elsewhere in this Contract.
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ARTICLE II
AGREEMENT OF PURCHASE AND SALE
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On the terms and conditions stated in this Contract, Seller hereby agrees
to sell and convey to Buyer, and Buyer hereby agrees to purchase and acquire
from Seller, the Project.
ARTICLE III
PURCHASE PRICE
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3.1 Purchase Price. The Purchase Price (herein so called) to be paid by
Buyer to Seller equals Eight Million Nine Hundred Thousand and No/100 Dollars
($8,900,000.00). The Purchase Price, net of all prorations set forth in this
Contract, shall be payable to Seller as follows:
(a) $150,000.00, as an earnest money deposit (the "Earnest Money
Deposit"), shall be deposited by Buyer in cash or by cashier's check or
wire transfer of cash credit with Title Company simultaneously upon Buyer's
execution of this Contract and shall be paid to Seller at Closing;
(b) Approximately $5,977,122.00 shall be paid by Buyer to Seller in
the form of Buyer's assumption of the existing promissory note and deed of
trust on the Project (the "Existing Loan"), in favor of Liberty Mortgage
Acceptance Corporation or its successors or assigns (the "Existing
Lender"), in accordance with Section 3.3 below; and
(c) The remainder of the Purchase Price (which shall be adjusted based
on the actual amount of the Existing Loan at Closing) shall be deposited by
Buyer in cash or by wire transfer of cash credit with Title Company on or
before to the Closing Date and shall be paid to Seller at Closing.
3.2 Earnest Money Deposit. The Earnest Money Deposit shall be invested in
short-term commercial paper having a maturity of thirty (30) days or less and
rated P-1 by Moody's Investor Service, Inc. or A-1 by Standard & Poor's Corp.,
or in some other interest-bearing investment acceptable to the Buyer and Seller.
All interest earned thereon shall become part of the Earnest Money Deposit. If
the purchase and sale hereunder are consummated in accordance with the terms and
conditions hereof, the Earnest Money Deposit shall be applied to the Purchase
Price at the Closing. After expiration of the Inspection Period, the Earnest
Money Deposit shall be non-refundable to Buyer.
3.3 Assumption of Existing Loan. Buyer understands that the sale
transaction contemplated herein is contingent upon Buyer qualifying and being
approved by Existing Lender for the assumption of the Existing Loan and upon
Seller being released from all obligations and liability thereunder. Buyer shall
pay all application fees, assumption fees, title insurance premiums and all
other costs, fees and expenses relating to the assumption of the Existing Loan,
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regardless of whether the Closing occurs. Buyer agrees to provide to Existing
Lender, within five (5) days after the date hereof, that information listed on
Exhibit "B" hereto with respect to the assumption of the Existing Loan.
Thereafter, Buyer will provide any other information Existing Lender deems
pertinent to the financial condition of Buyer within five (5) days after
Existing Lender requests such information and in the format required by Existing
Lender. Buyer agrees that Existing Lender may determine the suitability of
Buyer's creditworthiness based upon standards that Existing Lender determines
are appropriate. Existing Lender may seek any other information it deems
necessary or required from any source Existing Lender may choose. Buyer
understands that if such information is not provided in the 5-day periods
described above, Seller shall have the right to terminate this Agreement
immediately upon notice to Buyer and Escrow Agent. Buyer's obligation to pay all
fees, costs and expenses associated with the assumption of the Existing Loan
shall survive the Closing or any termination of this Agreement.
3.4 Escrow Instructions. The parties shall deliver to Title Company an
executed copy of this Contract, which shall constitute the sole instructions to
Title Company. Buyer and Seller may elect, in their sole discretion, to execute
preprinted escrow instructions; provided that in the event of any conflict
between the preprinted escrow instructions and the provisions of this Contract,
the provisions of this Contract shall control.
ARTICLE IV
TITLE AND SURVEY AND INSPECTION
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4.1 Title Commitment. Within three (3) days after the Contract Date, Seller
shall order, at its sole cost and expense, a current commitment for Title
Insurance for the Project (the "Title Commitment"), which Title Commitment shall
be furnished to Buyer. The Title Commitment shall contain the express commitment
of the Title Company to issue a standard coverage ALTA owner's title insurance
policy to the extent permitted by Arizona law for the Project, which shall
otherwise be in form and content satisfactory to Buyer. The Title Commitment
shall be accompanied by legible copies of all instruments that create or
evidence title exceptions affecting the Real Property.
4.2 Survey. Within three (3) days after the Contract Date, Seller shall
deliver to Buyer the existing survey for the Project in its possession. The
existing survey is the survey dated as of September 4, 1996, prepared by
Nicklaus Engineering, Inc. for the Project (as may be updated, the "Survey").
Buyer shall be responsible for any updates to the Survey requested by Buyer or
Existing Lender.
4.3 Review of Title Commitment and Survey. Buyer shall have until the
expiration of the Inspection Period (the "Title Review Period") in which to
review the Title Commitment and the Survey and give written notice to Seller
specifying Buyer's objections to any matters shown on the Title Commitment or
Survey, if any, that would materially and adversely affect Buyer's contemplated
use of the Project as a retail shopping center or to which Existing Lender
objects (the "Objections"). Any Objections shall specify in reasonable detail
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the manner in which any matter materially and adversely affects Buyer's
contemplated use of the Project or to which Existing Lender objects. If Buyer
shall fail to give written notice of Objections to Seller prior to the
expiration of the Title Review Period, then Buyer shall be deemed to have
approved the condition of title and all exceptions to title shown on the Title
Commitment and Survey shall be deemed to be Permitted Exceptions.
4.4 Seller's Obligation to Cure; Buyer's Right to Terminate. If Buyer shall
have timely notified Seller in writing of Objections to the Title Commitment or
Survey, then Seller may, but shall not be obligated to, at any time prior to the
expiration of the Inspection Period (the "Cure Period"), give written notice
("Seller's Title Cure Notice") to Buyer of Seller's intention to satisfy the
Objections prior to the Closing Date. If Seller fails to timely give Buyer the
Seller's Title Cure Notice, then Buyer shall have the option, on or before the
expiration of the Inspection Period, to either (i) waive the unsatisfied
Objections, in which event those unsatisfied Objections shall become Permitted
Exceptions, or (ii) terminate this Contract, in which event the Earnest Money
Deposit shall be returned to Buyer and Seller and Buyer shall have no further
obligations, one to the other, with respect to the subject matter of this
Contract, except as otherwise set forth herein. If Buyer does not terminate this
Contract before the Inspection Period, then Buyer shall be deemed to have waived
the unsatisfied Objections, in which event they shall become Permitted
Exceptions.
4.5 Title Policies. At the Closing, Title Company shall issue to Buyer a
standard coverage ALTA owner's title insurance policy (the "Owner's Title
Policy"). The Owner's Title Policy shall insure that Buyer has good and
indefeasible fee simple title to the Project, subject only to the Permitted
Exceptions. The Owner's Title Policy shall contain no exceptions, other than (i)
rights of tenants in possession, as tenants only, (ii) visible and apparent
easements as shown on the Survey, and (iii) Permitted Exceptions. The basic
premium for the ALTA standard coverage shall be paid by Seller or, at Buyer's
option, the cost of the Owner's Title Policy shall be credited against the
Purchase Price, in which event the requirement for title insurance shall be
waived. At Buyer's option and cost, Title Company shall deliver an extended
coverage policy, together with such endorsements as Buyer may require, so long
as the Closing is not delayed and Buyer pays the incremental increase to the
premium for such policy. The tax exception shall be limited to taxes for the
year of Closing and subsequent years not yet due and payable and subsequent
assessments for prior years due to change in land usage or ownership.
4.6 Inspection.
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(a) Buyer shall have the right during the Inspection Period, to
conduct, and Buyer shall be responsible for, such examinations, studies,
tenant credit checks, appraisals, inspections, engineering, environmental
and insurance underwriting tests and investigations (the "Inspections") of
the Project and the assumption of the Existing Loan as Buyer may deem
advisable. Buyer shall comply with all federal, state and local laws which
in any way relate to the Inspection. Such Inspections shall include,
without limitation, review of current operating statements, operating
statements for the prior calendar year, current rent roll, true copies of
the latest real estate tax bills, true and complete
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copies of all service contracts affecting the Project, and any and all
other contracts and agreements relating to the Project. Buyer's conduct
upon the Project shall not disrupt the normal operation of the business
upon the Project at any time, and Buyer shall promptly restore the Project
after any such entry. Buyer shall, on demand by Seller, defend, hold
harmless, reimburse and indemnify Seller from, for, of and against any and
all direct and indirect, known and unknown, obligations, actions,
liabilities, judgments, claims, demands, losses, including consequential
losses, damages, costs, including costs of defense, expenses and fees
(including reasonable attorneys' fees and costs) arising from or relating
to the Inspections or any restoration of the Project, except to the extend
arising directly from the gross negligence or wilful misconduct of Seller.
Buyer's indemnification obligations set forth herein shall survive the
Closing and any termination of this Contract. Seller shall reasonably
cooperate with Buyer in making available the Project for Buyer's
Inspections, including any and all non-confidential books and records
relating thereto in Seller's possession. Buyer may also reinspect the
Project prior to Closing to verify that the Project has remained in the
same physical shape, ordinary wear and tear excepted, as the Project was
during the Inspection Period, subject to all the conditions and obligations
of Buyer set forth above with respect to the initial Inspection.
(b) If Buyer determines, in Buyer's sole and absolute discretion, that
the Project is not suitable for Buyer's contemplated purposes, then Buyer
shall be entitled to terminate this Contract by written notice delivered to
Seller and Title Company at any time on or before the expiration of the
Inspection Period. If Buyer fails to notify Seller and Escrow Agent prior
to the expiration of the Inspection Period that the Project is suitable for
Buyer's contemplated purposes and Buyer intends to continue with this
Contract, then Buyer shall be deemed to have terminated this Contract
pursuant to this Section. In the event of such termination by Buyer, the
Earnest Money Deposit shall be refunded to Buyer and the parties hereto
shall have no further obligations to each other under this Contract except
as otherwise set forth in this Contract. After expiration of the Inspection
Period, the Earnest Money Deposit shall be non-refundable to Buyer. If
Buyer fails to consummate this transaction, Buyer shall promptly deliver to
Seller true and current copies of all data, reports, analyses, pro formas,
test results, studies and other non-confidential documents generated by the
Inspection or otherwise in Buyer's possession pertaining to the Project.
ARTICLE V
REPRESENTATIONS, WARRANTIES, COVENANTS,
AND AGREEMENTS OF SELLER
5.1 Representations and Warranties of Seller. Seller's representations and
warranties set forth in this Contract are true and correct in all material
respects as of the Contract Date and will be true and correct in all material
respects on the Closing Date except as otherwise disclosed to Buyer. Such
representations and warranties shall survive the Closing for a period of six (6)
months only and shall not be merged therein. Seller hereby represents and
warrants to Buyer as follows:
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(a) Seller has the full right, power, and authority to sell and convey
to Buyer the Project as provided in this Contract and to carry out Seller's
obligations hereunder, and all requisite action necessary to authorize
Seller to enter into this Contract and to carry out Seller's obligations
hereunder has been, or on the Closing Date will have been, taken.
(b) To Seller's knowledge, there are no adverse or other parties in
possession of the Project, or of any part thereof as lessees, tenants at
sufferance, or trespassers, except Tenants referenced in the Rent Roll to
be delivered pursuant to Section 5.2(a)(i).
(c) The Service Contracts (as defined in Section 5.2(a)(v) below),
Leases and other agreements delivered to Buyer pursuant to this Contract
constitute all contracts, leases or agreements affecting the Project (and
the ownership and use thereof). To Seller's knowledge, the Ownership
Documents delivered pursuant to Section 5.2(a) herein are true and correct
copies of the originals and no other amendments or modifications exist
thereto.
(d) The executed Leases, which are to be delivered by Seller to Buyer
at Buyer's principal office in accordance with the terms of this Contract,
are true and correct copies of all the Leases. No Leases shall be further
modified or amended without the prior written consent of Buyer, which
consent shall not be unreasonably withheld. Except as reflected on the
current Rent Roll to be delivered to Buyer pursuant to the provisions of
Section 5.2(a)(i) below, no Tenant has given Seller notice of its intention
to vacate its leased premises prior to the end of the primary term (or any
current renewal or extended term). To Seller's knowledge, all of the Leases
are in full force and effect without current default by Seller or the
respective Tenants, except as otherwise disclosed to Buyer.
(e) To Seller's knowledge, the Rent Roll and Service Contracts
delivered by Seller to Buyer are true and correct in all material respects
and there are no omissions of any material facts relating thereon.
(f) To Seller's knowledge, Seller has not received any written notice
that the Project is in violation of any applicable laws, rules, regulations
or ordinances.
(g) To Seller's knowledge, Seller has not received any written notice
of any pending condemnation action with respect to all or any portion of
the Project.
(h) To Seller's knowledge, there is no pending litigation affecting
the Project other than as incurred in the normal course of business and
with respect to which Seller's insurance underwriter is responsible, except
as disclosed to Buyer prior to the expiration of the Inspection Period.
(i) Seller is not a foreign person or entity pursuant to the Foreign
Investment in Real Property Tax Act or the Tax Reform Act of 1986, and
Buyer is not obligated to withhold any portion of the Purchase Price for
the benefit of the Internal Revenue Service.
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As used herein, the term "Seller's knowledge" shall mean the current, actual
knowledge of Rebekah Brown, an officer of the manager of Seller, without any
imputation of knowledge or any duty of inquiry whatsoever.
5.2 Covenants and Agreements of Seller. Seller covenants and agrees with
Buyer as follows:
(a) Within ten (10) business days following the Contract Date (the
"Delivery Date"), Seller shall deliver or make available during the
Inspection Period to Buyer the following items to the extent in Seller's
possession or control (the "Ownership Documents") with respect to the
Project:
(i) Current Rent Roll, accounts receivable report, amortization
of fees and commissions and operating statements for the Project,
which shall set forth with respect to each Tenant the following;
(A) the name and street or unit number of the Tenant;
(B) the term of the Tenant's Lease, its commencement and
expiration dates, any renewal terms or extensions and the base
rent and percentage rent, if any, payable thereunder;
(C) the amount of monthly base rent and the percentage
amount of percentage rent, if any, payable by and portion of the
Project's CAM and real estate taxes and insurance premiums
recoverable from each Tenant and any other payments for which
such Tenant is liable;
(D) amount of prepaid rent and the amount of refundable
security and other deposits due under the Lease and held by
Landlord;
(E) the amount of any ongoing Lease commission obligations,
if any, and to whom such commission is owed and copies of all
brokerage commission agreements relating to the Leases;
(F) any uncured defaults and the amounts of any unpaid
rents, percentage rents, and other payments past due thereunder;
(G) the amount of any offsets or credits against rental, if
any; and
(H) any concessions granted to the Tenant, including,
without limitation, free rent, rental rebates or credits, lease
take-over arrangements, cash payments, and moving allowances;
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(ii) Copies of any engineering reports, soil reports or current
certificates of occupancy for the Project;
(iii) A schedule setting forth property and liability insurance
coverage on or affecting the Project and the current premiums therefor
together with a brief summary of all claims made against the Project's
insurance policies since January 1, 1996;
(iv) Copy of the most recent or current real estate and personal
property tax bills or other documentation showing the amount of
current real property taxes and the assessed value of the Project;
(v) Copies of all existing service, maintenance, operations, and
management and other contracts relating to the management, operation
or maintenance of the Project (the "Service Contracts"), and any
commission agreements affecting the Project;
(vi) Copies of operating income and expense statements with
respect to the Project for calendar years 1996 and 1997 and for
year-to-date 1998;
(vii) A brief summary of all capital expenditures for the Project
for the calendar years 1996 and 1997 and for year-to-date 1998; and
(viii) True and complete copies of all Leases, including all
amendments, extensions and modifications thereof.
All materials delivered by Seller to Buyer pursuant to this Section 5.2(a) shall
be held in confidence by Buyer and disclosed only to its attorneys, accountants,
and prospective lenders and securities underwriters and their respective
attorneys. If the parties fail to consummate the transaction described herein
for any reason other than the Seller's default, Buyer shall return to Seller all
materials delivered by or on behalf of Seller pursuant to or in connection with
this Contract.
(b) From the Contract Date until the Closing Date, Seller undertakes
and agrees, with respect to the Project, that it will:
(i) Operate and maintain the Project as currently operated in its
current condition and in accordance with all applicable laws;
(ii) Following the expiration of the Inspection Period, not
terminate or modify any Lease or commence any judicial action against
any Tenant other than in the normal course of business without the
prior written consent of Buyer, which consent shall not be
unreasonably withheld;
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(iii) Following the expiration of the Inspection Period, not
execute any new lease or agree to the terms of any lease renewal
without the prior written consent of the Buyer, which consent shall
not be unreasonably withheld;
(iv) Promptly notify Buyer in writing of any notice received from
a Tenant of its election to vacate its leased premises or terminate
its Lease, or of any election by Seller to terminate any Lease or
commence any judicial action against any Tenant;
(v) Not sell, exchange, transfer, assign, convey or encumber or
otherwise dispose of all or any part of the Project or any interest
therein except with respect to a 1031 exchange as set forth in Section
12.9, nor shall Seller remove any Personal Property unless Seller
shall replace the removed items with similar items of comparable
quality;
(vi) Maintain the Project in its existing condition, subject to
normal wear and tear;
(vii) There will be no rental or other concessions of any nature
granted to any Tenant other than those set forth in the Leases and on
the Rent Roll delivered to Buyer pursuant to Section 5.2 (a)(i),
above;
(viii) Not, without the prior written consent of the Buyer, which
consent shall not be unreasonably withheld, enter into or modify any
Service Contracts which are not terminable without cause on or before
the Closing Date; or
(ix) Not, without the prior written consent of Buyer, which
consent shall not be unreasonably withheld, consent to any assignment
or sublease or other encumbrance by a Tenant of its interest, or any
part thereof, in its Lease, except as may be permitted or required by
the terms of the Lease.
5.3 Agreements Concerning Existing Loan.
(a) Seller agrees to reasonably cooperate with Buyer, at no cost or
liability to Seller, in connection with Buyer's assumption of the Existing
Loan as set forth herein.
(b) Buyer agrees to pay to Existing Lender any transfer fee or other
costs charged by Existing Lender, in connection with its agreement and
consent to permit the transfer of the Project to the Buyer as set forth
herein.
(c) Seller shall not, at any time, either prior to or after Closing,
alter, renew, rearrange, restructure or refinance any indebtedness
evidenced by the Existing Loan or modify the Existing Loan or any
instrument securing the Existing Loan, without the prior written consent of
Buyer; and Seller shall neither accept nor request any extension,
postponement, indulgence or forgiveness of the Existing Loan or the
indebtedness evidenced thereby, without the prior written consent of Buyer.
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ARTICLE VI
REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS OF BUYER
6.1 Buyer represents, warrants, covenants, and agrees with, Seller as of
the Contract Date, that Buyer has the full right, power, and authority to
purchase the Project from Seller as provided in this Contract and to carry out
Buyer's obligations under this Contract, and all requisite action necessary to
authorize Buyer to enter into this Contract and to carry out Buyer's obligations
hereunder has been, or on the Closing Date will have been, taken.
6.2 No Contracts. Buyer represents, warrants, covenants, and agrees with,
Seller, as of the Contract Date, that Buyer is not a party to any contracts or
other obligations for the sale, exchange or transfer of the Project or any
portion thereof.
6.3 "AS IS" Condition. Except as otherwise specifically set forth herein,
Buyer acknowledges and agrees that Seller makes no representations and
warranties, express or implied, including, without limitation, any warranties of
habitability, good and workmanlike construction, suitability and fitness for
intended purpose, with respect to any aspect of the Project. Buyer is purchasing
the Project strictly in "AS IS" condition. Buyer accepts and agrees to bear all
risks regarding all attributes and conditions, latent or otherwise of the
Project. Buyer has made or will make prior to the Closing its own inspection and
investigation of the Project and surrounding area, including, without
limitation, its subsurface, soil, engineering and other conditions and
requirements, whether there are any eminent domain or other public or
quasi-public takings of the Project contemplated, and all zoning and regulatory
matters pertinent to the Project and to the present use or occupancy of the
Project. Buyer is entering into this Contract and purchasing the Project based
upon its own inspection and investigation and not in reliance on any statement,
representation, inducement or agreement of Seller except as specifically
provided herein. Buyer agrees that neither Seller nor anyone acting on behalf of
Seller has made any representation, guarantee or warranty whatsoever, either
written or oral, concerning the Project except as specifically set forth herein.
Any engineering data, soils reports, or other information that Seller or any
other party may have delivered to Buyer, including without limitation the
Ownership Documents, is furnished without any representation or warranty
whatsoever. Except as otherwise specifically set forth herein, Seller shall have
no responsibility, liability or obligation following the Closing relating to any
conditions whatsoever respecting in any way the Project, and Buyer hereby
releases Seller, its officers, directors, employees and agents with respect to
such conditions. In particular, but without in any way limiting the foregoing,
Buyer hereby releases Seller from any and all responsibility, liability and
claims for or arising out of the presence on or about the Project or any
property in the vicinity of the Project (including in the soil, air, structures
and surface and subsurface water) of materials, wastes or substances that are or
become regulated under, or that are or become classified as toxic or hazardous,
under any Environmental Law, including, without limitation, petroleum, oil,
gasoline or other petroleum products, byproducts or waste. As used herein,
"Environmental Law" shall mean, as amended and in effect from time to time, any
federal, state or local statute, ordinance, rule, regulation, judicial decision,
or the judgment or decree of a governmental authority, arbitrator or other
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private adjudicator by which Buyer or the Project is bound, pertaining to
health, industrial hygiene, occupational safety or the environment, including,
without limitation, the Comprehensive Environmental Response, Compensation &
Liability Act of 1980, the Resource, Conservation & Recovery Act of 1976, and
the Arizona Environmental Quality Act, Title 49, Arizona Revised Statutes, and
all rules adopted and guidelines promulgated pursuant to the foregoing.
ARTICLE VII
CONDITIONS PRECEDENT TO PERFORMANCE
7.1 Conditions Precedent to Buyer's Obligations. Buyer shall not be
obligated to consummate the transaction described in this Contract unless:
(a) Seller shall have furnished or caused to be furnished or made
available to Buyer all of the items required to be furnished by Seller
under Section 5.2(a);
(b) Seller shall have performed in all material respects all of the
agreements, covenants and obligations contained in this Contract to be
performed or complied with by Seller on or prior to the Closing Date;
(c) All representations and warranties made by Seller hereunder shall
be true, complete and accurate in all material respects as of the Closing
Date; and
(d) Tenant Estoppel Certificates in the form attached hereto as
Exhibit "I" or such other form as required in each of the Leases shall have
been received by Buyer from (i) all of the Anchor Tenants, and (ii) at
least 75% (by square footage at the Project), of all Tenants at the
Project, which Estoppel Certificates shall confirm the information set
forth on the Rent Roll delivered (A) as part of the Ownership Documents, as
modified to reflect any non-substantive changes thereto, or (B) with
respect to Tenants who have executed new leases since the Contract Date, as
reflected on the Rent Roll to be delivered in connection with the Closing;
and as to the remaining 25% of the Tenants, either Tenant Estoppel
Certificates in the form required in the applicable Leases have been
received by Buyer or Seller has certified to Seller's knowledge the same
information set forth in such Estoppel Certificates as to such remaining
Tenants.
(e) No Anchor Tenant shall have filed a petition under any section of
the Bankruptcy Code, as amended, and no Anchor Tenant shall have ceased
operations in its space at the Project or shall have notified Seller in
writing of its intention to do so.
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7.2 Conditions Precedent to Seller's Obligations. Seller shall not be
obligated to consummate the transaction described in the Contract unless:
(a) The assumption of the Existing Loan by Buyer representing a
portion of the Purchase Price hereunder pursuant to Section 3.1 above and
the release of Seller from all obligations and liability thereunder; and
(b) Buyer shall have performed in all material respects all of the
agreements, covenants and obligations contained in this Contract to be
performed or complied with by Seller on or prior to the Closing Date; and
(c) All representations and warranties made by Seller hereunder shall
be true, complete and accurate in all material respects as of the Closing
Date.
ARTICLE VIII
CLOSING
8.1 Date and Place of Closing. The Closing (herein so called) of this
transaction shall take place at the offices of the Title Company on or before
twenty (20) days after the end of the Inspection Period (the "Closing Date").
8.2 Items to be Delivered at or Prior to the Closing.
(a) Seller. At the Closing, Seller shall deliver or cause to be
delivered to Buyer or the Title Company, the following items fully executed
and acknowledged where so indicated by all necessary parties in respect to
the Project:
(i) A Special Warranty Deed, duly executed and acknowledged by
Seller, in the form of Exhibit "C";
(ii) The original Leases, or, if any original Leases are not
available, copies of any such Leases certified by Seller as being
true, correct and complete;
(iii) Duplicate originals of an assignment and assumption of
leases (the "Assignment of Leases") in the form attached hereto as
Exhibit "D", duly executed by Seller;
(iv) A bill of sale and assignment in the form, attached hereto
as Exhibit "E", duly executed by Seller;
(v) Duplicate originals of an assignment and assumption of
Service Contracts (the "Assignment of Service Contracts") in the form
or substantially the form, attached hereto as Exhibit "F", duly
executed by Seller;
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(vi) An affidavit, in the form, or substantially in the form,
attached as Exhibit "G", in compliance with Section 1445 of the
Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder, stating under penalty of perjury the Seller's
United States identification number and that Seller is not a "foreign
person" as that term is defined in Section 1445, duly executed and
acknowledged by Seller;
(vii) A notice of sale in the form, or substantially in the form,
attached hereto as Exhibit "H", (the "Tenant Notice Letter") for each
of the Tenants, duly executed by Seller and Buyer;
(viii) All keys or other access devices in the possession of
Seller or its agents to all locks located at the Project;
(ix) Originals of all Service Contracts, plans, governmental
approvals, and other contracts and agreements in Seller's possession
relating to the ownership and operation of the Project;
(x) A certificate by Seller that the representations and
warranties of Seller set forth in this Contract are true and correct
as of the Closing Date, except as otherwise disclosed to Buyer with
respect to any matters beyond Seller's control;
(xi) Letters to all utility companies advising of the change of
ownership of the Project;
(xii) An Affidavit of Real Property Value; and
(xiii) Any other items reasonably requested by the Title Company
as administrative requirements for consummating the Closing.
At the Closing, Buyer shall have the right to copy all non-confidential books
and records in Seller's possession pertaining to the operation of the Project
for the calendar years 1996 and 1997 and for year-to-date 1998.
(b) Buyer. At the Closing, Buyer shall deliver or cause to be
delivered to Seller or the Title Company, the following items:
(i) The cash sum required by Section 3.1;
(ii) All documents necessary for Buyer's assumption of the
Existing Loan;
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(iii) Duplicate originals of the Assignment of Leases duly
executed by Buyer;
(iv) Duplicate originals of the Assignment of Service Contracts
duly executed by Buyer;
(v) Appropriate evidence of authorization reasonably satisfactory
to Seller and the Title Company for the consummation of the
transaction contemplated by this Contract;
(vi) A certificate by Buyer that the representations and
warranties of Buyer set forth in this Contract are true and correct as
of the Closing Date;
(vii) An Affidavit of Real Property Value; and
(viii) Any other items reasonably requested by the Title Company
as administrative requirements for consummating the Closing.
8.3 Adjustments at Closing. Notwithstanding anything to the contrary
contained in this Contract or applicable law, the provisions of this Section 8.3
shall survive the Closing. All income and obligations attributable to days
preceding the Closing Date shall be allocated to Seller, and all income and
obligations attributable to days from and after the Closing Date shall be
allocated to Buyer. Without limitation upon the foregoing, the following items
shall be adjusted or prorated between Seller and Buyer as set forth below:
(a) Ad valorem and personal property taxes relating to the Project for
the calendar year in which the Closing occurs shall be prorated between
Seller and Buyer as of the Closing Date based upon taxes actually paid by
Seller for the calendar year in which the Closing occurs, if Seller has
paid such taxes prior to Closing, and otherwise upon the ad valorem and
personal property taxes due assuming payment in December of the year of
Closing. If the actual amount of taxes for the calendar year in which the
Closing shall occur is not known as of the Closing Date, the proration
shall be based on the amount of taxes due and payable with respect to the
Project using the latest assessed value and tax rate. All other assessments
affecting the Project, if any, assessed prior to Closing Date, shall be
paid by the Seller and if assessed after the Closing Date, shall be paid by
the Buyer.
(b) Base rents, escalation or reimbursement payments for real estate
and personal property taxes, insurance premiums, CAM or other operating
expenses and charges, payable with respect to the Project for the then
current month shall be prorated as of the Closing Date. Percentage rents
for each Tenant obligated therefor shall be prorated on the basis of the
number of days lapsed during the Tenant's percentage rent period as of the
Closing Date and not on the basis of the amount of the Tenant's sales which
accrued during the current percentage rent period as of the Closing Date.
If the actual amount of percentage rents for the period in which Closing
shall occur is not known as of the Closing Date, the proration shall be
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estimated based on the amount of percentage rents that were due and payable
during the previous percentage rent period, and shall be adjusted between
the parties post-Closing to reflect the actual amounts at the end of the
current percentage rent period. The obligation of the parties to adjust,
post-Closing, the percentage rents shall survive the Closing and any
amounts owed shall be paid by the party responsible therefor within ten
(10) days after written demand therefor has been made. With respect to any
Tenant who owes rents and other charges which at Closing are past due
("Delinquent Tenant"), such past due rents and other charges
("Delinquencies") shall not be prorated. Buyer shall use good faith efforts
to collect such Delinquencies, if any, and Buyer shall remit such
Delinquencies to Seller immediately as and when collected by Buyer,
provided, however, that any payment received by Buyer from a Delinquent
Tenant may be applied first to any rents or other sums that are past due by
such Delinquent Tenant from and after the Closing Date. The right to
receive and collect all rents and profits, delinquent or otherwise, shall
be assigned by Seller to Buyer at Closing, subject to any adjustment for
percentage rents as set forth above.
(c) All other income and ordinary operating expenses of the Project,
including, without limitation, public utility charges, maintenance,
management, and other service charges, and all other normal operating
charges shall be prorated at the Closing effective as of the Closing Date
based upon the best available information. The obligation of the parties to
adjust, post-Closing, and any operating expenses as of the Closing Date,
shall, to the extent unknown or not provided for at Closing, survive the
Closing and shall be paid by the party responsible therefor within ten (10)
days after written demand therefor has been made. Such demand shall include
a copy of the invoice(s) for which payment or reimbursement is sought.
8.4 Deferred Leasing Commissions. The amount of any unpaid leasing
commissions payable on account and over the term of existing Leases shall either
be paid by Seller or treated as a credit to Buyer. Commissions payable on
account of Leases which are subject to renewal at the option of the Tenant and
with respect to which the options have not been exercised prior to the Closing
Date shall not be covered by the preceding sentence and shall be paid by Buyer.
Buyer shall pay to Seller in cash at Closing, in addition to the Purchase Price,
the unamortized portion of all commissions and tenant improvement costs and
expenses paid by Seller for any new Lease executed after the Contract Date,
based on the amortization of such commissions and costs and expenses over the
term of the new Lease.
8.5 Cash. All cash on hand and in any operating or other accounts on the
Closing Date shall belong to Seller and Buyer shall receive a credit for all
refundable security deposits under the Leases as of the Closing Date.
8.6 Possession. Possession of the Project shall be delivered to Buyer by
Seller at the Closing, subject to the rights of the Tenants.
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8.7 Costs of Closing. Each party shall be responsible for paying the legal
fees of its counsel in negotiating, preparing, and closing the transaction
contemplated by this Contract. Seller shall pay for the cost of the title policy
premium for a standard ALTA coverage. Buyer shall pay the balance of the Owner's
Title Policy premium (including the premium for endorsements required by Buyer),
and for the cost of its own, surveying, engineering and environmental
inspections. All sales, transfer, excise, transaction, privilege, documentary
stamp or similar taxes or fees, and all recording costs and similar closing
costs shall be paid by Buyer in connection with the sale and purchase of the
Project under the terms hereof. The parties shall split the cost of any title
company escrow fees. Any other expenses that are incurred by either party that
are expressly identified herein as being the responsibility of a particular
party shall be paid by such party. All other expenses shall be allocated between
the parties in the customary manner for sales of commercial real properties
similar to the Project which are located in Yuma, Arizona.
8.8 Provisions of Article VIII to Survive Closing. The provisions of this
Article VIII shall survive the Closing.
ARTICLE IX
DEFAULTS AND REMEDIES
9.1 Default by Buyer. If Buyer defaults hereunder, actual damages to Seller
will be difficult to calculate but Buyer and Seller agree that the amount of the
Earnest Money designated above is a reasonable approximation thereof.
Accordingly, if Buyer defaults, Seller shall be entitled to terminate this
Contract and immediately upon such termination by Seller, Title Company shall
pay to Seller, as Seller's sole remedy, the Earnest Money Deposit. If, however,
Buyer contests or opposes Seller's right to collect the Earnest Money Deposit or
fails to cooperate with Seller in collecting same from Title Company and Buyer
is not the prevailing party in the subsequent proceedings, Seller shall also be
entitled to the additional remedies provided for in Sections 9.3 and 9.4 below.
Nothing contained in this Section shall prevent Seller from enforcing Buyer's
obligations and liabilities which survive a termination of this Contract.
9.2 Default by Seller. If Seller defaults hereunder, then Buyer may, as
Buyer's sole and exclusive remedy for such default, either (i) bring an action
against the Seller for specific performance of the Seller's obligations under
this Contract, or (ii) terminate this Contract by giving written notice thereof
to Seller and the Title Company at or prior to the Closing Date, whereupon the
Title Company shall deliver the Earnest Money Deposit (including the interest
earned thereon) to Buyer and thereafter neither party hereto shall have any
further rights or obligations hereunder, except as otherwise set forth herein.
If Buyer institutes proceedings for specific performance, the date of entry of
final judgment on the complaint for specific performance is referred to herein
as the "Judgment Date." If Buyer is the prevailing party in its action for
specific performance on the Judgment Date, the parties shall proceed to Closing
in accordance with the provisions of this Contract. The Closing Date, for
purposes of this paragraph, shall be that day on which all applicable appeal
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periods have expired. If Seller is the prevailing party in such proceedings on
the Judgment Date, this Contract shall automatically terminate, Title Company
shall pay the Earnest Money Deposit to Seller, and the parties shall have no
further obligations to each other under this Contract except as otherwise
specifically set forth in this Contract. In the event Seller conveys or
hypothecates the Project to a third party in violation of the terms hereof,
Buyer shall have the right to prosecute an action for damages against Seller in
an amount not to exceed Buyer's actual, out-of-pocket costs and expenses
incurred in connection with the negotiation and enforcement of this Contract and
the Inspection of the Project. In no event shall Buyer be entitled to seek any
punitive, consequential, special or indirect damages from Seller with respect to
any matter arising out of or in connection with this Contract and Buyer hereby
waives any and all rights to seek such damages.
9.3 Costs and Fees. If either party hereto breaches any term of this
Contract, the breaching party agrees to pay the non-breaching party all
reasonable attorneys' fees, expert witness fees, investigation costs, costs of
tests and analysis, travel and accommodation expenses, deposition and trial
transcript costs, court costs and other costs and expenses incurred by the
non-breaching party in enforcing this Contract or preparing for legal or other
proceedings, at the trial or appellate level, whether or not such proceedings
are instituted. If any legal or other proceedings are instituted, the party
prevailing in any such proceeding shall be paid all of the aforementioned costs,
expenses and fees by the other party, and if any judgment is secured by such
prevailing party, all such costs, expenses, and fees shall be included in such
judgment, attorneys' fees to be set by the court and not by the jury.
9.4 Default Interest. If any monies become payable by one party to the
other pursuant to this Contract and are not paid when due then all sums unpaid
shall bear interest at the then highest lawful contractual rate from the due
date or, if there is no maximum rate then in existence, at the per annum rate
equal to the greater of (i) 18%, or (ii) 3% in excess of that rate announced
from time to time by Bank One, Arizona, NA, or its successors, as its "prime
rate." The rate provided for in (ii) above shall change together with and be
effective on the date of any change in said "prime rate."
9.5 Waiver. Excuse or waiver of the performance by the other party of any
obligation under this Contract shall only be effective if evidenced by a written
statement signed by the party so excusing. No delay in exercising any right or
remedy shall constitute a waiver thereof, and no waiver by Seller or Buyer of
the breach of any covenant of this Contract shall be construed as a waiver of
any preceding or succeeding breach of the same or any other covenant or
condition of this Contract.
9.6 Earnest Money. In the event either Seller or Buyer becomes entitled to
the Earnest Money Deposit upon cancellation of this Contract in accordance with
its terms, such party may deliver a letter of instruction to the Title Company
directing disbursement of the Earnest Money Deposit to the party entitled
thereto. The party delivering such notice to the Title Company shall
concurrently deliver a copy of the notice to the other party hereto. Upon the
expiration of three (3) business days after its receipt of the letter of
instructions, the Title Company may deliver the Earnest Money Deposit to the
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party as specified in the letter of instructions unless, within such three (3)
business day period, the Title Company shall have received a written objection
to such delivery from the other party hereto. In such event, the Title Company
shall not deliver the Earnest Money Deposit to either party unless it has a
written authorization to do so signed by both parties or a court order has been
issued by a court of competent jurisdiction to deliver the Earnest Money Deposit
to one of the parties hereto. The Title Company may deposit the Earnest Money
Deposit into a court of competent jurisdiction and thereafter shall have no
further interest in or responsibility for this Contract or for the Earnest Money
Deposit.
ARTICLE X
BROKERAGE COMMISSIONS
10.1 Amount. If, and only if Closing occurs, Seller hereby agrees to pay a
real estate brokerage commission to Voit Commercial Brokerage (the "Broker")
pursuant to a separate agreement between Seller and Broker. Broker shall be
responsible for cooperating brokerage agreements with CB Commercial.
10.2 Indemnity. Seller hereby represents and warrants to Buyer that it has
not contacted or entered into any agreement with any real estate broker, agent,
finder, or any other party in connection with this transaction other than as
identified in Section 10.1, and that Seller has not taken any action which would
result in any real estate broker's, finder's, or other fees or commissions being
due or payable to any other party with respect to the transaction contemplated
hereby except as set forth above. Buyer hereby represents and warrants to Seller
that Buyer has not contracted or entered into any agreement with any real estate
broker, agent, finder, or other party in connection with this transaction, other
than as identified in Section 10.1, and that Buyer has not taken any action
which would result in any real estate broker's, finder's, or other fees or
commissions being due or payable to any other party with respect to the
transaction contemplated hereby. Each party hereby indemnifies and agrees to
hold the other party harmless from any loss, liability, damage, cost, or expense
(including, but not limited to, reasonable attorneys' fees) resulting to the
other party by reason of a breach of the representation and warranty made by
such party in this Section 10.2. The indemnities set forth in this Section 10.2
shall survive the Closing.
ARTICLE XI
CASUALTY OR CONDEMNATION
11.1 Damage or Destruction. Prior to Closing, Seller shall bear the risk of
loss to the Project. Seller shall not be liable to Buyer in any way if there is
any damage or destruction (due to fire or other casualty) to the Project prior
to Closing. Seller, however, shall elect, by delivering written notice to Buyer
and Title Company within fifteen (15) days after such damage or destruction, to
either: (a) repair said damage or destruction, or (b) assign to Buyer all
insurance proceeds, or rights thereto, payable as a result of such damage or
destruction and Buyer shall receive a credit for any deductible amount under the
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insurance coverage. If Seller fails to deliver the notice to Buyer and Title
Company within the 15-day period, Seller shall be deemed to have elected option
(b). If Seller elects option (a), then Seller shall exercise reasonable
diligence in making such repairs and shall restore the Project to an equal or
better condition than existed prior to such damage and destruction. If such
repair is effected prior to the Closing Date, Closing shall occur on the terms
and conditions provided for herein. If such repair cannot be effected prior to
the Closing Date, the Closing Date shall be extended, for a period not to exceed
sixty (60) days, to the day after such repairs are completed. If Seller elects
option (b), then the parties shall proceed to Closing with no reduction in the
Purchase Price and Buyer shall receive a credit for any deductible amount under
the insurance coverage. If Seller elects or is deemed to have elected option (b)
and the total damage and destruction exceeds five percent (5%) of the Purchase
Price, Buyer shall have the right to terminate this Contract by written notice
to Seller and the Title Company on or before the earlier of (i) the Closing
Date, or (ii) ten (10) days after Seller elects or is deemed to have elected
option (b).
11.2 Condemnation. Seller shall not be liable to Buyer in any way if there
is a condemnation (or sale in lieu thereof) of the Project prior to Closing.
Seller shall elect, by delivering written notice to Buyer and Title Company
within fifteen (15) days after Seller receives an offer of award from the
condemning authority, to either (a) terminate this Contract, or (b) proceed to
Closing, subject to the provisions set forth below. If Seller fails to deliver
the notice to Buyer and Title Company within the 15-day period, Seller shall be
deemed to have elected option (b). If Seller elects, or is deemed to have
elected option (b), then Closing shall occur with no reduction in the Purchase
Price. At Closing, Seller shall (i) pay to Buyer through escrow any condemnation
proceeds received by Seller with respect to the Project, less reasonable fees,
costs and expenses incurred by Seller in connection therewith; and (ii) assign
to Buyer all of Seller's right, title and interest in and to any future
condemnation proceeds with respect to the Project, less reasonable fees, costs
and expenses incurred by Seller in connection therewith. If Seller elects or is
deemed to have elected option (b) and the condemned area constitutes more than
twenty percent (20%) of the gross leasable area of the Project as determined in
accordance with industry standards, Buyer shall have the right to terminate this
Contract by written notice to Seller and the Title Company on or before the
earlier of (i) the Closing Date, or (ii) ten (10) days after Seller elects or is
deemed to have elected option (b). If this Agreement is terminated pursuant to
this Section, the Earnest Money Deposit shall be refunded to Buyer and the
parties shall have no further obligations to each other under this Contract,
except as otherwise set forth in this Contract.
ARTICLE XII
MISCELLANEOUS
12.1 Notices. All notices, demands, requests, and other communications
required or permitted hereunder shall be in writing, and shall be deemed to be
delivered on receipt if delivered by hand, overnight delivery, or by facsimile,
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or whether actually received or not, three (3) days after having been deposited
in a regularly maintained receptacle for the United States mail, registered or
certified, return receipt requested, postage prepaid, addressed as follows:
If to Seller: Dermot Big Curve, LLC
110 Fifteenth Street
Del Mar, California 92014
Attn: Ms. Rebekah Brown
Telephone: (619) 793-2577
Telecopy: (619) 793-0855
With Copy to: Streich Lang, P.A.
Renaissance One
Two North Central Avenue
Phoenix, Arizona 85004-2391
Attn. David L. Johnson
Telephone: (602) 229-5609
Telecopy: (602) 420-5109
If to Buyer: United Investors Realty Trust
5847 San Felipe
Suite 850
Houston, Texas 77057
Attention: Randall Keith
Chief Operating Officer
Telephone: (713) 781-2858
Telecopy: (713) 268-6005
With a Copy to: Lewis H. Sandler, Esq.
United Investors Realty Trust
8080 North Central Expressway
Suite 500
Dallas, Texas 75206
Telephone: (214) 360-3665
Telecopy: (214) 360-3696
James, Goldman & Haugland, P.C.
Attn: Merton B. Goldman, Esq.
8th Floor Texas Commerce Bank Bldg.
201 East Main
El Paso, Texas 79901
Telephone: (915) 532-3911
Telecopy: (915) 541-6440
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12.2 Governing Law. This Contract is being executed and delivered, and is
intended to be performed, in the State of Arizona, and the laws of Arizona shall
govern the validity, construction, enforcement, and interpretation of this
Contract.
12.3 Entirety and Amendments. This Contract embodies the entire agreement
between the parties and supersedes all prior agreements and understandings, if
any, relating to the Project, and may be amended or supplemented only by an
instrument in writing executed by the party against whom enforcement is sought.
12.4 Parties Bound. This Contract shall be binding upon and inure to the
benefit of Seller and Buyer, and their respective heirs, personal
representatives, successors and permitted assigns, but shall not inure to the
benefit of another party.
12.5 Saturday, Sunday or Legal Holiday. If any date set forth in this
Contract for the performance of any obligation by Buyer or Seller or for the
delivery of any instrument or notice should be on other than a Business Day, the
compliance with such obligations or delivery shall be deemed acceptable on the
next following Business Day.
12.6 Time is of the Essence. It is expressly agreed by Seller and Buyer
that time is of the essence with respect to this Contract.
12.7 Exhibits. The Exhibits which are referenced in, and attached to, this
Contract are incorporated in, and made a part of, this Contract for all
purposes.
12.8 Attorney's Fees. If either party hereto shall be required to employ an
attorney to enforce or defend the rights of such party hereunder, the prevailing
party shall be entitled to recover its reasonable attorney's fees and costs.
12.9 1031 Exchange. Buyer acknowledges that Seller may wish to perform an
"exchange" pursuant to Section 1031 of the Internal Revenue Code and Buyer
agrees to cooperate with Seller and execute any documents necessary to
effectuate such exchange, subject to the following terms and conditions:
(a) Buyer shall not be required to take title to any property other
than the Project;
(b) Such exchange shall be at Seller's sole cost and expense; and
(c) There shall be no delay in the dates of performance hereunder as a
result of such exchange.
12.10 Utility Refunds. No agreements or contracts in existence at the
Closing relating to utility refunds or deposit returns are included in the
Purchase Price provided for in this Contract, and Buyer shall have no right,
title or interest therein or in any monies now or hereafter due Seller
thereunder. All refunds, credits and discounts of any nature received by or
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accruing to the benefit of Buyer at any time after the Closing relative to the
Project or any part thereof or to any utility for any part of the Project that
were earned or agreed to prior to Closing shall be immediately remitted by Buyer
to Seller in cash. Notwithstanding the foregoing, all amounts deposited with
vendors regularly delivering inventory and supplies to the Project shall, at
Buyer's election, (i) remain on deposit, and such amounts shall be purchased by
Buyer in cash through escrow at Closing, or (ii) be returned to Seller by such
vendors.
12.11 Confidentiality. Neither Buyer nor Title Company shall disclose the
terms or existence of this Contract or make, authorize, consent to or confirm
any announcement of the transaction evidenced hereby prior to the Closing or any
termination of this Agreement without the prior written consent of Seller.
12.12 Expiration of Offer. The execution by one party hereto and delivery
to the other party hereto of an executed counterpart of this Contract shall
constitute an offer to sell or purchase the Project, as may be the case, upon
the terms stated herein. If a counterpart of this Contract executed by one party
hereto without modification is not received by the other party hereto within
three (3) business days after the time and date of the execution by the first,
as indicated below, the offer contained in this Contract shall be null and void.
12.13 Multiple Counterparts. This Contract may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement, and either of the parties hereto may execute this Contract by signing
any such counterpart.
12.14 Severability. If any provision of this Contract shall, for any
reason, is held to violate any applicable law, and so much of this Contract is
held to be unenforceable, then the invalidity of such specific provision shall
not be held to invalidate any other provision of this Contract which shall
remain in full force and effect.
12.15 Assignment. Buyer shall have no right to assign its interest
hereunder without the prior written consent of Seller, and any such assignment
without Seller's consent shall be void at Seller's option. If Buyer is a
corporation, partnership or trust, the transfer or assignment of any stock,
interest or beneficial interest in such corporation, partnership or trust in
excess of forty-nine percent (49%) shall be deemed an assignment within the
meaning of this paragraph. Seller shall not unreasonably withhold its consent to
an assignment by Buyer of its interest hereunder to a wholly-owned subsidiary of
Buyer, provided that the assigning party shall remain liable for all obligations
of Buyer hereunder.
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<PAGE>
EXECUTED by Buyer on the ______ day of ___________, 1998.
BUYER: UNITED INVESTORS REALTY TRUST, a Texas
real estate investment trust
By: /s/ Randall Keith
------------------------------
Randall Keith,
Chief Operating Officer
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<PAGE>
EXECUTED by Seller on the ______ day of ____________, 1998.
SELLER: DERMOT BIG CURVE, LLC, an Arizona
limited liability company
By: DICKEY REALTY, LTD., a California
corporation, its manager
By:______________________________
Name:____________________________
Title:___________________________
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<PAGE>
Receipt of a fully executed copy of the Contract and a check, subject to
collection for the Earnest Money Deposit received this _________day of
_________________1998.
TITLE COMPANY: CHICAGO TITLE INSURANCE COMPANY
By:______________________________
Name:____________________________
Title:___________________________
-26-
PROMISSORY NOTE
$6,072,000 00 September 20, 1996
FOR VALUE RECEIVED, Dermot Big Curve, LLC, an Arizona Limited Liability
Company, having its principal place of business at 110 Fifteenth Street, Del
Mar, California 95814 (hereinafter referred to as "Maker"), promises to pay to
the order of Liberty Mortgage Acceptance Corporation, a California corporation
at its office at 400 Capitol Mall, Suite 2300, Sacramento, California 95814
(hereinafter referred to as "Payee"), or at such place as the holder hereof may
from time to time designate in writing, the principal sum of SIX MILLION SEVENTY
TWO THOUSAND AND NO/100 DOLLARS ($6,072,000 00) in lawful money of the United
States of America with interest thereon to be computed from the date of this
Note at the Applicable Interest Rate (as hereinafter defined), and to be paid in
installments as follows:
1. On the date hereof, (a) a payment of interest only in the
amount of $17,050.52 with respect to, and on account of, the period
commencing on the date hereof and ending on, and including, the last
day of the month in which this Note is executed, and (b) a payment of
$51,748.34 on account of the payment otherwise due on the first day of
the second full calendar month following the date hereof (or on the
first day of the first full calendar month following the date hereof,
in the event that the date of this Note is the first day of a calendar
month) to be applied (i) to the payment of interest computed at the
Applicable Interest Rate, and (ii) the balance applied toward the
reduction of the principal sum;
2. A constant payment of $51,748 34, on the first day of
November, 1996 and on the first day of each calendar month thereafter
up to and including the first day of September, 2006; each of such
payments to be applied (a) to the payment of interest, in arrears,
computed at the Applicable Interest Rate, and (b) the balance toward
the reduction of the principal sum; and
3. The balance of said principal sum and all interest thereon
shall be due and payable on the first day of October, 2006 (the
"Maturity Date").
Interest on the principal sum of this Note shall be calculated on the basis
of a three hundred sixty (360) day year composed of twelve (12) months of thirty
(30) days each except that interest due and payable for a period less than a
full month shall be calculated by multiplying the actual number of days elapsed
in such period by a daily rate based on said 360 day year.
The term "Applicable Interest Rate" as used in this Note shall mean from
the date of this Note through and including the Maturity Date, a rate of nine
and nineteen hundredths percent (9.19%) per annum.
<PAGE>
Other than as expressly set forth in numbered paragraphs 1 and 2 above, all
payments made hereunder shall be applied first to late payment charges or other
sums owed to Payee, next, to accrued interest, and then to principal, or in such
other order or proportion as Payee, in Payee's sole, absolute and subjective
discretion., may elect from time to time.
Maker agrees to an effective rate of interest that is the rate stated above
plus any additional rate of interest resulting from any other charges in the
nature of interest paid or to be paid by or on behalf of Maker, or any benefic
received or to be received by Payee, in connection with this Note.
1. Events of Default. The whole of the principal sum of this Note, together
with all interest accrued and unpaid thereon and all other sums due under the
Deed of Trust (as hereinafter defined), the Other Security Documents (as
hereinafter defined) and this Note (all such sums hereinafter collectively
referred to as the "Debt") shall, without notice, become immediately due and
payable at the option of Payee if any payment required in this Note is not paid
within five (5) days of the date when due or on the happening of any other
default, after the expiration of any applicable notice and grace periods, herein
or under the terms of the Deed of Trust (each, an "Event of Default"). All of
the terms, covenants and conditions contained in the Deed of Trust and the Other
Security Documents are hereby made part of this Note to the same extent and with
the same force as if they were fully set forth herein. In the event that it
should become necessary to employ counsel to collect all or any portion or the
Debt or to protect or foreclose the security hereof, Maker also agrees to pay to
Payee its attorneys' fees and expenses for the services of such counsel, whether
or not suit be brought, together with all court costs, and the same shall be
deemed a part of the Debt and shall be secured by the Deed of Trust and the
Other Security Documents. In the event of legal proceedings, court costs and
attorneys' fees shall be set by the court and not by a jury.
2. Prepayment. The principal balance of this Note may not be prepaid, in
whole or in part, prior to the commencement of the Fourth (4th) Loan Year
(hereinafter defined). Provided no Event of Default has occurred and is
continuing, the principal balance of this Note may be prepaid, in whole but not
in part, on any scheduled payment date under this Note after the commencement of
the fourth (4th) Loan Year upon not less than sixty (60) days' prior written
notice to Payee specifying the scheduled payment date on which prepayment is to
be made (the "Tender Date") and upon payment of (a) interest accrued and unpaid
on the principal balance of this Note to and including the Tender Date, (b) all
other sums then due under this Note, the Deed of Trust and the Other Security
Documents, and (c) a prepayment consideration (the "Premium") as provided and
determined below. In no event, however, shall a Premium be payable with respect
to a prepayment, in full, of the principal balance of this Note received during
the one hundred eighty (180)-day period immediately preceding, and including,
the Maturity Date (the "Refinance Period").
If any notice of prepayment is given, the principal balance of this Note
and the other sums required under the immediately preceding paragraph shall be
due and payable on the Tender Date. Payee shall not be obligated to accept any
prepayment of the principal balance of this Note unless (a) the payment is
accompanied by the required Premium and all other sums required under the
immediately preceding paragraph and (b) the prepayment is made on the applicable
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<PAGE>
Tender Date. If, for any reason, the principal balance of this Note is paid on a
date other than a scheduled payment date, in addition to the amounts due and
payable hereunder, the Maker shall pay interest accrued and unpaid on the
principal balance of this Note to and including the first day of the calendar
month immediately following the Tender Date.
In connection with a prepayment of the whole principal balance of this Note
as permitted under the terms of this Note, Maker shall pay a Premium equal to
the greater of (a) the present value of the Income Difference (as hereinafter
defined), or (b) one percent (1%) of the unpaid principal balance of this Note
immediately preceding such prepayment.
The "Income Difference" is hereby defined, and shall be calculated, as
follows:
(A) Calculate the total amount of interest (the "Interest Income")
that would accrue to Payee on account of the principal balance of this Note
at the Applicable Interest Rate between the Tender Date and the last day of
the Yield Maintenance Period (as hereinafter defined); then
(B) Calculate the total amount of investment income (the "Investment
Income") that would be earned by Payee from the Tender Date through the
last day of the Yield Maintenance Period if the principal balance of this
Note as of the Tender Date were invested in United States Government
general issue Treasury Securities at the Comparable Treasury Rate (as
hereinafter defined) during the Yield Maintenance Period, and such
investment called for a series of monthly interest payments at that rate
throughout the Yield Maintenance Period; then
(C) Calculate the difference, if any, between the Investment Income
and the Interest Income during the Yield Maintenance Period (the "Income
Difference") by subtracting the Investment Income from the Interest Income;
then
(D) If the Income Difference is a positive number, the Premium shall
be an amount equal to the present value of the Income Difference as of the
Tender Date, based on (i) a stream of monthly interest payments
corresponding to the stream of payments comprising the Income Difference,
and (ii) a discount rate equal to the Comparable Treasury Rate and trading
closest to par.
The "Yield Maintenance Period" means the period of time beginning as of the
Tender Date, and ending on the Maturity Date. The "Comparable Treasury Rate"
means the rate of interest which is equal to the average yield (determined by
Payee as of the date which is seven (7) days prior to the Tender Date) on then
generally available United States Government general issue Treasury Securities
maturing nearest to the ending date of the Yield Maintenance Period.
If, following the occurrence of any Event of Default, Maker shall tender
payment of an amount sufficient to satisfy the Debt at any time prior to a sale
of the Mortgaged Property (as defined in the Deed of Trust), either through
foreclosure or the exercise of the other remedies available to Payee under the
Deed of Trust, such tender by Maker shall be deemed to be a voluntary prepayment
under this Note in the amount tendered and Maker shall, in addition to the
entire Debt, also pay to Payee a sum equal to the Premium.
-3-
<PAGE>
Maker acknowledges and agrees that such Premium represents a reasonable and
fair estimate of compensation for the loss that Payee may sustain from the
prepayment of this Note. Maker acknowledges and agrees that it has no right to
prepay this Note without paying the Premium except as specifically provided
hereinafter and Maker specifically acknowledges and agrees that it shall be
liable for the Premium upon any acceleration of this Note in accordance with its
terms at any time, in addition to the principal amount and all outstanding
interest, fees, penalties and other sums due hereunder, under the Deed of Trust
or under any of the Other Security Documents.
The Premium provided above shall be due, to the extent permitted by
applicable law, under any and all circumstances where all or any portion of this
Note is paid prior to the Maturity Date, whether such prepayment is voluntary or
involuntary, even if such prepayment results from Payee's exercise of its rights
upon Maker's default and acceleration of the maturity date of this Note
(irrespective of whether foreclosure proceedings have been commenced), and shall
be in addition to any other sums due hereunder, under the Deed of Trust or under
any of the Other Security Documents.
If Payee elects to apply condemnation proceeds or casualty proceeds as a
full or partial prepayment of the outstanding principal amount of this Note,
such application shall be without payment of a Premium, unless, however, an
Event of Default, or an event which, with notice and/or the passage of time, or
both, would constitute an Event of Default, has occurred, in which event the
applicable Premium shall be due and payable based upon the amount of the
prepayment.
For purposes of this Note, the term "Loan Year" shall mean a period of
twelve (12) full consecutive calendar months. The first Loan Year shall commence
on the first (1st) day of the first (1st) full calendar month after the date
hereof or, if the date hereof is the first (1st) day of a calendar month, on the
date hereof, and end on the day immediately preceding the day that is the first
anniversary of the date on which the first (1st) Loan Year commences. Each Loan
Year after the first (1st) Loan Year shall commence on the date following the
last day of the immediately preceding Loan Year and shall continue for a period
of twelve (12) full consecutive calendar months.
3. Default Rate. Maker does hereby agree that if Maker shall fail to pay in
full any payment of interest, or of principal and interest, or of any other fee,
penalty, sum or amount under this Note, the Deed of Trust, or any of the Other
Security Documents, for five (5) days (other than the prepayment of principal
and interest due on the Maturity Date), Payee shall be entitled to receive and
Maker shall pay interest on the entire unpaid principal sum at the rate per
annum equal to the lesser of (i) 4% above the Applicable Interest Rate or (ii)
the maximum rate allowed by applicable law (the "Default Rate"); provided,
however, that if no maximum legal rate is specified by applicable law, the
Default Rate shall be 4% above the Applicable Interest Rate. The Default Rate
shall be computed from the first (1st) day after the payment was due (regardless
of any right to cure or the five (5) day period referred to above) until all
such late payments have been received by Payee and, if any of such late payments
are made after any applicable grace and/ cure periods, accepted by Payee as
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<PAGE>
reinstating the Debt. This charge shall be added to the Debt and shall be deemed
secured by the Deed of Trust and the Other Security Documents. This clause,
however, shall not be construed as an agreement or privilege to extend the date
of the payment of any portion of the Debt, nor as a waiver of any other right or
remedy accruing to Payee by reason of the occurrence of any Event of Default.
4. Security for Note. This Note is secured, inter alia, by the Deed of
Trust and the Other Security Documents. The term "Deed of Trust" as used in this
Note shall mean the Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing dated the date hereof given by Maker, for the use
and benefit of Payee covering the fee simple estate of Maker in certain premises
located in Yuma County, State of Arizona (the "Mortgaged Property"), as more
particularly described therein and intended to be duly recorded in said county.
The term "Other Security Documents" as used in this Note shall mean any and all
of the documents other than this Note or the Deed of Trust now or hereafter
executed by Maker and/or others and by or in favor of Payee, which wholly or
partially secure or guarantee payment of this Note or are otherwise executed
and/or delivered in connection with this Note.
5. Late Charge. If any sum payable under this Note, the Deed of Trust, or
any of the Other Security Documents is not paid within five (5) days after the
date on which it is due, Maker shall pay to Payee upon demand an amount equal to
the lesser of five percent (5%) of such unpaid sum or the maximum amount
permitted by applicable law (provided, however, that if no maximum amount is
specified by applicable law, such amount shall be five (5) percent) to defray
the expenses incurred by Payee in handling and processing such delinquent
payment and to compensate Payee for the loss of the use of such delinquent
payment and such amount shall be secured by the Deed of Trust and Other Security
Documents. Maker acknowledges that it would be extremely difficult or
impracticable to determine Payee's actual damages resulting from any late
payment or default, and such late charge and the Default Rate are reasonable
estimates of those damages and do not constitute a penalty.
6. Limitation on Recourse. Subject to the terms of this Note, and of the
Deed of Trust and the Other Security Documents, Maker's liability for the Debt
shall be limited to the full extent of the security for the payment of this
Note, being all those properties, rights and interests described in or created
by the Deed of Trust and Other Security Documents, which properties, rights and
interests include, without limitation, all income, rents, issues and profits of
such properties, all funds of Maker held by Payee pursuant to the Deed of Trust
and Other Security Documents and all insurance proceeds and condemnation
proceeds or awards to which Payee shall be entitled pursuant to the Deed of
Trust and Other Security Documents. Except as provided below, (1) no attachment,
levy, execution or other writ of process shall be sought or issued upon any
property of Maker other than such properties, rights and interests described in
or created by the Deed of Trust and Other Security Documents, and (2) if an
Event of Default shall occur, any judicial proceedings brought by Payee against
-5-
<PAGE>
Maker shall be limited to the preservation, enforcement and foreclosure of the
liens, rights and security interests provided for in and established by the Deed
of Trust and Other Security Documents or at any time hereafter securing the
Debt, except with respect to the liabilities described below in this Paragraph.
Payee hereby agrees that, if there is a foreclosure of the liens, rights and
security interests securing the payment of this Note, by foreclosure, power of
sale or otherwise, no judgment for any deficiency upon the Debt shall be sought
or obtained by Payee against Maker except as otherwise provided in this
Paragraph. Notwithstanding the foregoing, Maker shall be fully and personally
liable to Payee and Payee may pursue any and all remedies hereunder or under the
Deed of Trust or Other Security Documents, at law, in equity, or otherwise, for
all losses, damages, costs and expenses (including, without limitation,
attorneys' fees) whatsoever as a result of: (a) the failure to pay any taxes,
assessments, mechanic's liens, materialmen's lien or other charges which could
create liens or encumbrances on any portion of the property described in the
Deed of Trust and Other Security Documents which would be senior to the liens of
the Deed of Trust or Other Security Documents and are payable or accrue or are
applicable to periods prior to foreclosure under the Deed of Trust or Other
Security Documents, including, without limitation, the amount of said taxes,
assessments, mechanic's liens, materialmen's liens and other charges; (b) fraud,
gross negligence, willful misconduct or material misrepresentation by Maker, any
guarantor, endorser or other person responsible for payment of the Debt (a
"Guarantor"), or any of their respective principals, officers, employees or
agents, or the intentional failure of Maker, Guarantor, or any of their
respective principals, officers, employees or agents to disclose any material
fact in connection with the loan evidenced by this Note; (c) the misapplication
or conversion by Maker, Guarantor, or any of their respective principals,
officers, employees or agents of (i) any insurance proceeds paid under any
insurance policies (or paid as a result of any other claim or cause of action
against any person or entity) by reason of any loss, damage or destruction
relating to all or any portion of the Mortgaged Property, (ii) any proceeds,
awards or other amounts received in connection with the condemnation or other
taking in lieu of condemnation of all or any portion of the Mortgaged Property,
(iii) the amount of Rents (as defined in the Deed of Trust) collected following
an Event of Default, including without limitation,. the recovery of all such
amounts, or (iv) Rents collected for more than one month in advance; (d) any
breach of or default under the provisions of Sections 34 or 35 or 57 of the Deed
of Trust, or any indemnification of any items under the provisions of Sections
37(f) to 37(i) inclusive of the Deed of Trust; (e) the failure to pay any
Premium to Payee when due hereunder; (f) any waste committed on the Mortgaged
Property, damage to all or any portion of the Mortgaged Property as a result of
the intentional misconduct or gross negligence of Maker, Guarantor or any of
their respective principals, officers, employees or agents, or any removal of
any portion of the Mortgaged Property in violation of the terms of the Deed of
Trust or Other Security Documents; and (g) any security deposits collected with
respect to the Mortgaged Property which are not delivered to Payee upon a
foreclosure of the Mortgaged Property or deed in lieu thereof, except to the
extent any such security deposits are applied in accordance with the terms and
conditions of any of the Leases (as defined in the Deed of Trust) prior to the
occurrence of the Event of Default that gave rise to such foreclosure or deed in
lieu thereof. In addition, Maker shall be personally liable for the entire Debt,
and Payee may pursue any and all remedies hereunder or under the Deed of Trust
or Other Security Documents, at law, in equity or otherwise upon a breach or
default of or under the provisions of Section 10, or an Event of Default under
Section 21.12, of the Deed of Trust and for any default, breach, act or failure
described at clause (b) of the immediately preceding sentence prior to the
funding by Payee of the loan evidenced by this Note (Maker's personal recourse
obligations under this sentence, together with those recourse obligations set
forth in items (a) - (g) of the immediately preceding sentence, are hereinafter
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<PAGE>
referred to as the "Recourse Obligations"). Nothing in this Paragraph shall be
deemed to (A) be a release, reduction or impairment of this Note or of the liens
and security interests created pursuant to the provisions of the Deed of Trust
and any of the Other Security Documents; (B) be a release, reduction or
impairment of any of Payee's rights and remedies set forth in the Deed of Trust
or Other Security Documents, at law, in equity, by statute, or regulation or
otherwise; (C) limit, impair or prejudice the rights of Payee or constitute a
waiver as to any conditions of the Note, the Deed of Trust or Other Security
Documents or limit, impair or prejudice the rights of Payee or constitute a
waiver of the right to secure a deficiency judgment against any person or entity
who is now, or who may hereafter be liable for the payment of the Debt; (D)
limit, impair or prejudice the rights of Payee to secure a judgment against the
parties to that certain Guaranty (as defined in the Deed of Trust) or
Environmental Indemnity Agreement (as defined in the Deed of Trust) and seek the
collection thereof; or (E) prohibit Payee from naming Maker or any of its
successors and assigns or any person holding by, under or through them as
parties to any actions, suits or proceedings initiated by Payee to foreclose the
lien of the Deed of Trust or the Other Security Documents or otherwise realize
upon any other lien or security interest created in any other collateral given
to secure the Debt.
Notwithstanding anything to the contrary in this Note, the Deed of Trust or
any of the Other Security Documents, Payee shall not be deemed to have waived
any right which Payee may have under Section 506(a), 506(b), 1111(b) or any
other provisions of the U.S. Bankruptcy Code to file a claim for the full amount
of the Debt or to require that all collateral shall continue to secure all of
the Debt owing to Payee in accordance with this Note, the Deed of Trust and the
Other Security Documents.
7. No Oral Modifications. This Note may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any act or failure to
act on the part of Maker or Payee, but only by an agreement in writing signed by
the party against whom enforcement of any such modification, amendment, waiver,
extension, change, discharge or termination is sought.
8. Liability. If Maker consists of more than one person or entity, the
obligations and liabilities of each such person or entity shall be joint and
several.
9. Waivers. Maker and all others who may become liable for the payment of
all or any part of the Debt do hereby severally waive presentment and demand for
payment, notice of dishonor, protest, notice of protest and notice of
non-payment, notice of intent to accelerate the maturity hereof (and of such
acceleration) and, except as specifically provided herein, in the Deed of Trust
or in any of the Other Security Documents, any other notice.
10. Authority. Maker (and the undersigned representative of Maker)
represents that Maker has full power, authority and legal right to execute,
deliver and perform its obligations pursuant to this Note, the Deed of Trust and
the Other Security Documents and that this Note, the Deed of Trust and the Other
Security Documents constitute valid and binding obligations of Maker.
-7-
<PAGE>
11. Governing Laws. This Note shall be governed and construed in accordance
with the laws of the State in which the Mortgaged Property is located (excluding
the choice of law rules thereof) and the applicable laws of the United States of
America.
12. Severability. Whenever possible, each provision of this Note shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision or part of any provision of this Note shall for any reason
be held invalid, illegal or unenforceable, in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision or the
remaining part of any effective provision of this Note, and this Note shall be
construed as if such invalid, illegal, or unenforceable provision or part
thereof had never been contained herein, but only to the extent of its
invalidity, illegality, or unenforceability. To the extent permitted by
applicable law, the parties hereto hereby waive any provision of law that
renders any provision or part of any provision hereof invalid, illegal or
unenforceable.
13. Time of the Essence. Time is of the essence as to the performance of
Maker's obligations hereunder.
14. Remedies Cumulative. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies which Payee has
hereunder, under the Deed of Trust, or under the Other Security Documents or
would otherwise have at law, in equity, by statute, or regulation or otherwise.
The failure of Payee to insist upon strict performance of any term hereof shall
not be deemed to be a waiver of any term of this Note.
15. WAIVER OF JURY TRIAL. MAKER HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY
OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY
FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD
TO THIS NOTE, THE DEED OF TRUST AND THE OTHER SECURITY DOCUMENTS, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY MAKER, AND IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. PAYEE IS HEREBY AUTHORIZED TO
FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY MAKER.
16. Notices. Any notice, demand, statement, request or consent made
hereunder shall be in writing and shall be deemed given when postmarked,
addressed and mailed by first class mail to the address, as set forth above, of
the party to whom such notice is to be given, or to such other address as Maker
or Payee, as the case may be, shall in like manner designate in writing.
17. Character of Loan. Maker represents that the proceeds of the Loan shall
be used for business or commercial purposes and not for personal, family or
household purposes.
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<PAGE>
18. Unconditional Payments. To the extent that Maker makes any payment or
Payee receives any payment or proceeds for Maker's benefit, which are
subsequently invalidated, declared to be fraudulent or preferential, or are set
aside or required to be repaid to a trustee, debtor in possession, receiver,
custodian or any other party under any bankruptcy law, common law or equitable
cause, then, to such extent, the obligations of Maker hereunder intended to be
satisfied as a result of such payment shall be revived and continue as if such
payment or proceeds had not been received by Payee.
19. No Waivers by Payee. The failure of Payee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Note. Payee may waive any Event of Default without waiving any other prior
or subsequent Event of Default. Payee may remedy any Event of Default without
waiving the Event of Default remedied. Neither the failure by Payee to exercise,
nor the delay by Payee in exercising, any right, power or remedy upon any Event
of Default shall be deemed to be a waiver of such Event of Default or as a
waiver of the right to exercise any such right, power or remedy at a later date.
No notice to nor demand on Maker in any case shall of itself entitle Maker to
any other or further notice or demand in similar or other circumstances.
Acceptance by Payee of any payment in an amount less than the amount due on any
of the Debt shall be deemed an acceptance on account only and shall not waive or
in any way affect the existence of an Event of Default or Payee's right to
collect the balance of the Debt. Maker shall not be relieved of Maker's
obligations hereunder by reason of (a) the failure of Payee to comply with any
request of Maker or any Guarantor to take any action to foreclose the Deed of
Trust or otherwise enforce any of the provisions thereof or of this Note or the
Other Security Documents, (b) the release, regardless of consideration, of the
whole or any part of the Mortgaged Property, or of any Guarantor, (c) any
agreement or stipulation by Payee extending the time of payment or otherwise
modifying or supplementing the terms of this Note, the Deed of Trust or the
Other Security Documents and (d) the failure, inability or delay of Payee to
enforce any right or remedy under any Other Security Document. Payee may resort
for the payment of the Debt to any other security held by Payee in such order
and manner as Payee, in its discretion, may elect. Payee may take action to
recover the Debt, or any portion thereof, or to enforce any covenant hereof
without prejudice to the right of Payee thereafter to foreclosure of the Deed of
Trust or the Other Security Documents, or otherwise exercise any right or remedy
available under applicable law or in equity. The rights and remedies of Payee
under this Deed of Trust, the Other Security Documents, applicable law or equity
shall be separate, distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of Payee shall be construed as an election to
proceed under any one provision therein to the exclusion of any other provision.
Payee shall not be limited exclusively to the rights and remedies therein stated
but shall be entitled to every right and remedy now or hereafter afforded at law
or in equity.
20. General Provisions. The terms and provisions hereof shall be binding
upon and inure to the benefit of Maker and Payee and their respective heirs,
executors, legal representatives, successors, successors-in-title and assigns,
whether by voluntary action of the parties or by operation of law. As used
herein, the terms "Maker" and "Payee" shall be deemed to include their
respective heirs, executors, legal representatives, successors,
successors-in-title and assigns, whether by voluntary action of the parties or
by operation of law. All personal pronouns used herein, whether used in the
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<PAGE>
masculine, feminine or neuter gender, shall include all other genders. All
singular nouns shall include the plural, and vice versa, and shall be read as
the context requires. Titles of sections are for convenience only and in no way
define, limit, amplify or describe the scope or intent of any provisions hereof.
This Note, the Deed of Trust and the Other Security Documents contain the entire
agreements between the parties hereto relating to the subject matter hereof and
thereof and all prior agreements relative hereto and thereto which are not
contained herein or therein are superseded and terminated.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, Maker has duly executed this Note the day and year
first above written.
WITNESS: MAKER:
- ------- -----
________________________________ Dermot Big Curve, LLC, an Arizona
limited liability company
By: Dickey Realty Ltd., a
California corporation, its
Managing Member
By:/s/ William P. Dickey
-----------------------
Name: William P. Dickey
Title: President
Pay to the order of____________________________________________________________,
without recourse.
_________________________________________
By:______________________________________
Name:
Title:
CERTIFICATE OF ACKNOWLEDGMENT
State of California ) On September 18, 1996 before me, Barry P. Wick
------------------ ----------------------
)SS. (date) (name and title of officer)
County of San Diego ) Notary Public , personally appeared William P. Dickey,
-------------
President of Dickey Realty, Ltd., personally known
to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged
to me that he/she/they executed the same in his/her/
their authorized capacity(ies), and that by his/her/
their signature(s) on the instrument the person(s),
or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Barry P. Wick
--------------------------------------------------
Barry P. Wick
Notary's Signature
