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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 11, 1999
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N'TANDEM TRUST
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(Exact name of registrant as specified in its charter)
CALIFORNIA 0-21470 33-610944499
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(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6160 SOUTH SYRACUSE WAY, GREENWOOD VILLAGE, COLORADO 80111
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(Address of principal executive offices) (Zip Code)
(303) 741-3707
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(Registrant's telephone number, including area code)
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Item 2: Acquisition or Disposition of Assets
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On May 11, 1999, N'Tandem Trust, a California business trust (the "Trust"),
through its limited partnership subsidiary, N'Tandem Properties, L.P., acquired
Southpointe Village, a manufactured home community containing 282 homesites
located in Albuquerque, New Mexico (the "Acquired Property"), from Shaw,
Mitchell and Mallory Limited Partnership, a New Mexico limited partnership,
pursuant to an Agreement of Purchase and Sale. The terms of the Agreement of
Purchase and Sale were determined through arms-length negotiations between the
seller and Chateau Communities, Inc., a publicly-held real estate investment
trust, which currently holds 9.8% of the Trust's outstanding common shares of
beneficial interest, ("Chateau"). Pursuant to an Assignment of Purchase between
N'Tandem Properties, L.P. and Chateau, N'Tandem Properties, L.P. was assigned
Chateau's right to purchase the Acquired Property.
The purchase price for the Acquired Property was $6,200,000, of which
$6,044,800 was borrowed from Chateau pursuant to a note entered into between the
parties. This note bears interest at 1% per annum above the prime rate
established by Bank One, N.A.
In determining the purchase price paid for the Acquired Property, the
purchaser considered, among other things, the historical and expected cash flow
from the Acquired Property, the nature of the occupancy trends and terms of the
leases in place, current operating costs and taxes, the physical condition of
the Acquired Property, the potential to increase its cash flow and other
factors. The Trust also considered the capitalization rates of recently sold
manufactured home communities in the same geographic area as the Acquired
Property. No independent appraisals were preformed in connection with the
acquisition of the Acquired Property.
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
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(a) Financial Statements:
As of the date of this report, it is impracticable for the Trust
to file the required financial statements with respect to the
Acquired Property. Accordingly, such required financial statements
will be filed as soon as they are available, but in no event later
than 60 days after the date on which this report must be filed.
(b) Pro Forma Financial Information:
As of the date of this report, it is impracticable for the Trust
to file the required pro forma financial information with respect
to the Acquired Property. Accordingly, such required pro forma
financial information will be filed as soon as it is available,
but in no event later than 60 days after the date on which this
report must be filed.
(c) Exhibits:
Purchase agreement dated April 23, 1999, by and between Shaw,
Mitchell and Mallory Limited Partners and Chateau Communities,
Inc.
Assignment of Purchase Agreement dated May 11, 1999, by and
between N'Tandem Properties, L.P. and Chateau Communities, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
N'TANDEM TRUST
Dated: May 20, 1999 By: /s/Gary P. McDaniel
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Gary P. McDaniel
Trustee
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PURCHASE AGREEMENT
SOUTH POINTE
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THIS PURCHASE AGREEMENT ("Agreement") is made as of the Effective Date
(defined below) by and between Chateau Communities, Inc., a Maryland corporation
("Buyer") and Shaw, Mitchell and Mallory Limited Partners, a New Mexico limited
partnership ("Sellers").
RECITALS:
This Agreement is based upon the following recitals:
WHEREAS, Seller owns a manufactured housing community consisting of Two Hundred
Eighty-Two (282) developed homesites (the "Community") located in Bernalillo
County, New Mexico, legally described on Exhibit A attached hereto, together
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with all improvements, easements, air, mineral and riparian rights and all
tenements, hereditaments, privileges and appurtenances belonging or in any way
appertaining thereto (the "Property"); and
WHEREAS, Seller wishes to sell the Property and Buyer wishes to acquire the
Property, upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, it is agreed as follows:
1. SALE OF PROPERTY
1.1 On the terms and subject to the conditions set forth in this Agreement,
Seller hereby agrees to sell to Buyer, and Buyer hereby agrees to purchase from
Seller, the Property and all of Seller's right, title and interest in and to the
following items related thereto:
1.2 As used herein, the term "Community" shall include all direct or indirect
right, title and interest of the Seller in and to:
(a) The manufactured housing community known as South Pointe Mobile Home
Village containing 282 developed sites and approximately 44.5640 acres;
(b) The real estate described on Exhibit A and all buildings and
improvements located thereon owned directly or indirectly by the Seller,
together with all easements, air, mineral and riparian rights and all
tenements, hereditaments, privileges and appurtenances thereto belonging or in
any way appertaining thereto (collectively the "Property");
(c) The fixtures and all equipment and personalty located on or about
the Property owned by Seller (or the leasehold interest in such property which
is leased by the Seller) which is used in the operation and management of the
Community, as more particularly described in Schedule 1.2(c)(1) (the "Personal
Property").
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(d) Any rights of the Seller pertaining to the Property in and to any
land lying in the bed of any street, road or avenue, open or proposed, at the
foot of or adjoining the Community to the center line thereof, if any;
(e) Any intangible personal property used in connection with or arising
out of the ownership of the Community other than cash or cash equivalents or
any accounts receivables attributable to the period preceding the Closing Date
(as defined herein);
(f) Any pending or future award made in condemnation or to be made in
lieu thereof, and any unpaid award for damages to the Community;
(g) Any rights of the Seller pertaining to the Property in and to any
appurtenant easements, whether or not of record, strips and rights-of-way
abutting, adjacent, contiguous or adjoining the Community;
(h) Any right, title and interest, if any, in any trade names or
trademarks associated with the Community, including, without limitation, the
Community name of "Southpointe Mobile Home Village" and any derivative
thereof;
(i) All leases, licenses, or other permission to occupy any portion of
the Property (the "Leases"), together with all rentals and other monetary
items payable by tenants or occupants of the Community to the extent such
rentals and other monetary items relate to periods after the Closing Date and
all security, damage or other deposits associated with such Leases;
(j) Except to the extent prohibited by applicable law, all licenses,
permits and franchises issued by any State, Federal or local municipal
authorities, relating to the use, maintenance or operation of the Community;
(k) All plans and specifications in possession of the Seller relating to
the construction or development of any existing common areas, site work,
utilities and any other non-tenant owned improvements on any of the Property
and all unexpired assignable claims, warranties, guaranties and sureties
received by the Seller in connection with the construction or improvement of
or on the Property;
(l) All contracts or other agreements for services or maintenance
relating to the Community; and
2. PURCHASE PRICE
2.1 The purchase price for the Community ("Purchase Price") shall be Six
Million Two Hundred Thousand and 00/100 ($6,200,000.00) Dollars inclusive of the
Deposit (as hereinafter defined) and subject to any adjustments and prorations
as set forth herein. The Purchase Price shall be payable in cash at Closing.
2.2 Deposit. Buyer has delivered an earnest money non-refundable deposit in
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cash in the amount of Fifty Thousand ($50,000.00) Dollars to First American
Title Insurance Company, Attn: Kathy Carrillo, (the "Escrow Agent") whose
address is 2601 Louisiana N.E., Albuquerque, New Mexico 87110 to be held by
Escrow Agent (such deposit and any interest thereon is hereinafter referred to
as the "Deposit").
3. TITLE, SURVEY AND INSPECTION MATTERS
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3.1 Seller agrees, at its sole cost and expense to furnish Buyer as soon as
possible, but in no event later than five (5) days after the date of execution
of this Agreement by Seller, the following:
(a) A commitment from the Escrow Agent (the "Title Company") for a
policy of title insurance (Form NM6), with the appropriate
commitment from the Title Company to delete standard exceptions upon
satisfaction of certain conditions, for the Property (the
"Commitment") in the amount of the Purchase Price (or such lesser
amount as Buyer may elect) and legible copies of all documents
listed as exceptions in Schedule B, Part II, attached thereto. At
the Closing, the Title Company shall, as a condition of closing
hereunder, issue a policy of title insurance (the "Title Policy")
for the Community in the amount of the Purchase Price (or such
lesser amount as Buyer may elect) containing no exception to
coverage other than as shown on the Commitment with such
endorsements as Buyer may reasonably require, including without
limitation (to the extent available in New Mexico), a Contiguity
Endorsement, 3.1 Zoning Endorsement, Survey Endorsement, Access
Endorsement, "Permitted Transfer Endorsement", and Environmental
Protection Lien Endorsement (ALTA 8.0/8.1). Buyer shall have three
(3) business days following receipt of the Commitment (including
Schedule B, Part II documents) and Survey (as hereinafter defined)
to object to title or the content of the Commitment. If objection to
title or the Commitment is made, or if Buyer requests endorsements
to the Commitment to satisfy itself, Seller shall use reasonable
efforts to remedy the claimed defects and to deliver a revision of
the Commitment satisfactory to the Buyer; provided, however, that
Seller shall be under to obligation to incur any additional expense
to correct any such objections or claimed defects. At Closing, Buyer
may request that the Title Company update the Commitment as of the
Closing Date and endorse the Commitment with Buyer as the insured
owner, without standard exceptions (to the extent permitted by the
Title Company) and to Buyer's satisfaction with such other
endorsements as reasonably required by Buyer. For purposes of this
Agreement, "Permitted Encumbrances" shall be all liens, claims,
encumbrances, easements or other restrictions on title disclosed in
the Commitment and not objected to by Buyer or which have otherwise
been accepted by Buyer. Seller shall be responsible for the cost of
the Commitment and the cost of the basic Title Policy for the
Property, and Buyer shall be responsible for the cost of all
additional coverage and all endorsements thereto.
(b) The recertified ALTA survey (the "Survey") of the Property dated
February 15, 1999 prepared by Precision Surveys, Inc., a land
surveyor licensed under the laws of the State of New Mexico and
certified to Buyer and the Title Company. The Survey shall show the
location of all improvements, structures, boundaries, easements,
right-of-ways, restrictions, covenants and encroachments and be
sufficient to allow the Title Company to delete the standard
exceptions from the Commitment and the Title Policy. The Survey
shall also certify as to the total acreage contained within the
Property. Buyer shall have three (3) business days from receipt of
the Survey to notify Seller in writing of any objection thereto. If
the Survey is for any reason unacceptable to Buyer, Seller shall use
reasonable efforts to deliver a revision of the Survey satisfactory
to Buyer.
(c) Any and all of the materials described in Sections 1.2(i) through
(l) above which are in Seller's possession. If Buyer fails to close,
it shall promptly return all such materials to Seller.
3.2 Buyer, at its sole cost and expense, may obtain the following:
(a) a Phase I environmental audit of the Property (the
"Environmental Report") and any additional environmental reports. In the event
that Buyer is not satisfied, in its sole
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discretion, with the environmental condition of the Property as disclosed in
the Environmental Report, Buyer may terminate this Agreement by providing
written notice to Seller within the Investigation Period (hereinafter
defined).
3.3 Within five (5) days from the date hereof, the Seller shall make
available to Buyer such information as is necessary to allow Buyer to verify the
Seller's title to personal property so as to allow Buyer to obtain, at its sole
cost and expense, financing statement and fixture filing searches by the
Secretary of State and County where the Community is located. All financing
statements and fixture filings affecting the Community or any of the personal
property being transferred hereunder including, without limitation, any mobile
homes, shall be discharged at or before the Closing at Seller's cost.
3.4 Seller has provided the following information or will make such
information available to Buyer for inspection or copying (if same exists) at the
Community's office within five (5) days from the date hereof:
(a) A copy of the real and personal property tax assessments, if any, and
tax bills with respect to the Community since 1996 along with any notices
received by Seller regarding potential changes in the amount of taxes to be
paid.
(b) Copies of all written Leases, lease amendments, letter agreements and
any proposed or pending leases, and any other documentation material to the
Leases, including concession agreements.
(c) Copies of any, maintenance and repair contracts, and any service or
supply contracts or agreements related to the Community together with a copy
of any notice of default received by Seller thereunder within the twelve (12)
months prior to the Effective Date.
(d) A schedule of salaries of all persons employed at the Community, if
any, including any union welfare fund or other contributions, special or
regular bonuses, social security, any accrued vacation time or pay and all
other related payments and a copy of each current employee's salary history,
if available.
(e) Any surveys, aerial photographs, topographic drawings, site plans,
site utility plans, "as built" blueprints, existing architectural and
engineering plans and specifications for the Community (including, without
limitation, underground utility, sewage treatment plant specifications and
well water specifications) and copies of any documentation relating to
planning or zoning commission approvals, in each case, to the extent in
Seller's possession or reasonably available to Seller.
(f) Any environmental, soil borings reports, asbestos studies, wetland
studies, engineering reports or other studies or reports in the Seller's
possession or reasonably available to it concerning the physical condition and
operation of the Community.
(g) A rent roll, in the form maintained by Seller, along with access to
all other information retained in Seller's file regarding each Tenant of the
Community.
(h) Copies of the last two (2) years of all billings for insurance and
utilities including applicable supporting documentation establishing and
copies of paid receipts and invoices for all items relating to taxes,
insurance and utilities in the Community, to the extent in the possession of
Seller.
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(i) All permits for any aspect of the operations of the Community,
including, without limitation, swimming pools, and waste water treatment and
private water supply facilities, if applicable.
(j) Current community rules and regulations for the Community, if any.
(k) Copies of any reports in Seller's possession concerning any termite,
heating, plumbing, gas or electrical inspections conducted since 1996.
(l) Copies of FHA/VA approvals, if any.
3.5 During the period from the Effective Date through and until 5:00
o'clock p.m. local time on the fourteenth (14th) day thereafter (the
"Investigation Period"), Buyer shall, at Buyer's sole cost and expense, make all
inspections, studies or investigations desired by Buyer with respect to the
Community, including but not limited to (i) examination of all physical aspects
of the Community, including obtaining soils and other investigations and reports
concerning the physical condition of the Property, (ii) investigating all
zoning, code and all governmental requirements concerning the Community, (iii)
obtaining any desired environmental assessments and reports concerning the
Community, (iv) investigating the availability to the Community of all utilities
including water, sewer, gas, cable, electricity and telephone, (v) determining
the feasibility of Buyer's intended use of the Community, and (vi) reviewing
copies of any pertinent reports and other documents concerning the Community in
Seller's possession. Buyer and its authorized agents, employees or
representatives shall be entitled to enter upon the Community at all reasonable
times prior to the expiration of the Investigation Period, upon prior notice to
Seller and accompanied by a representative of Seller if required by Seller,
during the Investigation Period if this Agreement is not earlier terminated;
provided, however, that there shall be no interference with the business of
Seller or the residents of the Community, and Buyer shall restore the Property
to as near the same condition as it existed immediately prior to the conducting
of any such inspection, study or investigation as is reasonably practicable
immediately upon completion of each such inspection, study or investigation.
Buyer shall not permit any liens or encumbrances to be asserted against the
Property in connection with or as a result of such inspections, studies or
investigations. Buyer shall indemnify, defend and hold Seller, and Seller's
partners, agents, employees and representatives, and the Property, harmless of,
from and against any and all losses, liabilities, costs, expenses (including,
without limitation, reasonable attorneys' fees and costs of court), damages,
liens, claims (including, without limitation, mechanics' or materialmen's liens
or claims of liens), actions and causes of action arising from or relating to
the entry by Buyer (or Buyer's agents, employees, contractors or
representatives) upon the Community, whether to test, study, investigate or
inspect the Community pursuant to this Section 3.5 or otherwise, except only to
the extent caused by the gross negligence or willful misconduct of Seller. If,
within the Investigation Period, Buyer shall in Buyer's sole discretion be
dissatisfied with any aspect of the Community , or shall decide for any other
reason not to proceed with the transaction contemplated under this Agreement,
then Buyer, as its sole and exclusive remedy, may terminate this Agreement by
giving written notice thereof to Seller (with a copy to the Title Company) prior
to the expiration of the Investigation Period. If Buyer does not terminate this
Contract prior to the expiration of the Investigation Period, Buyer shall be
deemed to have waived any right Buyer may have to terminate this Agreement
pursuant to this Section 3.5. Notwithstanding anything to the contrary set forth
in this Contract, the covenants, agreements and indemnities of Buyer in this
Section 3.5 shall expressly survive the Closing or the termination of this
Agreement.
3.6 All information delivered to or obtained by Buyer during or prior to
the Investigation Period concerning the Property is and shall remain the
property of Seller and shall be considered confidential
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proprietary information of Seller, not to be disclosed to any third parties
except as expressly provided hereinafter. Notwithstanding the foregoing, except
as otherwise set forth below, Buyer may disclose such information to Buyer's
attorneys, accountants and other agents and affiliates reasonably necessary for
the consummation of the transaction contemplated herein and to no other person
without Seller's written consent, which consent shall not be unreasonably
withheld or delayed; provided, however, that Buyer shall control the
dissemination of such information to assure that any recipient preserves the
confidential nature of the information. Copies of any information compiled or
obtained by Buyer from sources other than Seller concerning the Property
(excluding proprietary business plans, work product and projections) shall be
delivered to Seller immediately upon termination of this Agreement. The
foregoing obligations shall survive termination of this Agreement.
4. CLOSING
4.1 Subject to the conditions to Closing as set forth in Section 9, the
Closing shall take place at 10:00 a.m. Albuquerque time on the next business day
following the expiration of the Investigation Period as same is defined in
Section 3.5 hereof (the "Closing Date) at the office of the Title Company.
4.2 At the Closing, Seller shall take the following actions:
(a) execute and deliver a special warranty deed (the "Deed") conveying
good and marketable title to the Property, which title is free and clear of
all liens, claims and encumbrances, other than Permitted Encumbrances, and
otherwise in a condition to enable the Title Company to issue the New Mexico
form of ALTA owner's title insurance policy subject only to the Permitted
Encumbrances and in the form described in Section 3.1(a) and without standard
exceptions, which can permissibly be deleted by the Title Company under New
Mexico regulations;
(b) furnish an affidavit stating that Seller is not a "foreign person"
within the meaning of IRC Section 1445(f)(3);
(c) execute and deliver an itemized list and an appropriate affidavit,
sufficient to permit the Title Company to delete the standard exception for
mechanic liens on the Title Policy, that there are no claims which may give
rise to mechanics' liens on the Property;
(d) execute a letter (in form acceptable to Seller) to all tenants
introducing Buyer as the new owner of the Community and directing them to make
further payments of rent to Buyer at a place designated by Buyer;
(e) execute and deliver an assignment of any and all condemnation awards
and any unpaid award for damages relating to the Property, if applicable;
(f) execute and deliver an assignment, and the original copies of, any
and all leases or other occupancy agreements to which the Community or any
part thereof is subject and all rents to become due thereunder subsequent to
the Closing and any security deposits made pursuant thereto; provided,
however, that Buyer shall assume no obligation for claims of tenants for
damages to persons or properties arising prior to the Closing or for any other
damage or liability whatsoever which arose prior to the Closing;
(g) execute and deliver an assignment to Buyer of any and all service,
maintenance or other contracts or agreements relating to the Community which
are assignable and which Buyer has elected to assume, and all warranties,
indemnifications, and guarantees of performance relating to the Property
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and other rights, if any, concerning suppliers, laborers, materialmen,
contractors or subcontractors, to the extent that the same are assignable by
Seller;
(h) pay the cost of the Commitment and the cost of the basic owner's
policy (excluding the cost of additional coverage and endorsements to the
Title Policy), and any other costs which are incurred by Seller incident to
Seller's obligations pursuant to this Agreement;
(i) cause the termination of any management agreements affecting the
Community;
(j) deliver a certificate certifying that to the current actual knowledge
of Seller's representative, all representations and warranties made by Seller
are true and correct on the date of the Closing and that all conditions to
Closing have occurred or been satisfied;
(k) execute and deliver a Bill of Sale to transfer to Buyer the Personal
Property including the execution and delivery of all titles for any mobile
home units, if any, or any vehicles which are being transferred to Buyer in
connection herewith, properly endorsed by Seller with all liens released.
Such titles shall be free and clear of all liens and encumbrances and Seller
shall be responsible for any sales tax related to the transfer of same to
Buyer;
(l) execute and deliver a closing statement (the "Closing Statement")
setting forth the adjustments and prorations provided for hereunder, including
pursuant to Section 2 and Section 6 hereof;
(m) execute and deliver a Rent Roll for the Community updated and
certified by Seller as of the Closing Date;
(n) pay all transfer and recording taxes and recording fees including
without limitation city, county and state transfer taxes, if any, related to
the transfer of the Property from Seller to Buyer including, without
limitation any sales tax related to the transfer of any mobile homes from
Seller to Buyer;
(o) provide Buyer the following documents: a Certificate of Limited
Partnership for Seller, a good standing certificate for Seller, documentation,
reasonably satisfactory to Buyer, evidencing the authority of signator to bind
Seller in connection with the transaction contemplated herein and a certified
copy of the Partnership Agreement for Seller; and
(p) execute and deliver any other documents as are reasonably necessary
to evidence the transaction contemplated hereby.
4.3 At the Closing, Buyer shall deliver the following:
(a) the Purchase Price, as adjusted pursuant to Section 5;
(b) an execute and deliver the Closing Statement;
(c) deliver a certificate certifying that to the current actual knowledge
of Buyer's representatives all representations and warranties made by Buyer
are true and correct on the date of Closing and that all conditions to Closing
have occurred or been satisfied;
(d) pay its share of any costs which are Buyer's pursuant to this
Agreement; and
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(e) any other documents as are reasonably necessary to evidence the
transaction contemplated hereby.
5. PRORATION OF ITEMS
5.1 All real and personal property taxes (whether or not payable in
installments) with respect to the Community shall be prorated in accordance with
local custom and practice in the area where the Community is located among the
Seller and Buyer as of the Closing Date. Any tax bill which is required to be
prorated pursuant to this Section 5.1, and which has not yet been received by
the Closing Date will be determined by using the current years assessment and
prior years tax rate; however if the current years assessment is not available
then such estimate will be the prior years tax bill. Such tax proration shall
be final. Any special assessments with respect to the Community which become
due and payable after the Closing Date shall be paid by Buyer. Any special
assessments with respect to the Community which become due and payable on or
before the Closing Date, shall be paid by the Seller. Special assessments that
are payable in installments shall be paid by Seller through the Closing and by
Buyer after the Closing Date.
5.2 All operating expenses ("Operating Expenses") of the Community, including
but not limited to, utility costs, water, maintenance, taxes, insurance, service
and management fees, if any, shall be prorated among Seller and Buyer.
Operating Expenses attributable to the period prior to the Closing Date shall be
allocated to Seller and Operating Expenses attributable to the period on and
after the Closing Date shall be allocated to Buyer.
Seller shall receive a credit for the last bill for gas utility service paid
by Seller, which gas utility bills are paid to the gas utility company by Seller
and then billed in arrears to tenants for their proportionate shares. Such
credit shall be offset in the amount, if any, of tenant payments received in
respect of the gas utility charges for the applicable month. Water charges are
absorbed by Seller. Seller does not collect prepayments of additional rent to
cover taxes, insurance, utilities or other operating costs and expenses of the
Real Property.
5.3 Buyer shall receive a credit against the Purchase Price for all
liquidated costs, charges, liabilities or obligations of any nature which are
attributable to on or prior to the Closing Date and remain unpaid as of the
Closing Date and Seller shall receive a credit for any liquidated costs,
charges, liabilities or obligations of any nature which have been paid by the
Seller and are attributable to the period after the Closing Date.
5.4 All rents and other income (including, without limitation, any cable
t.v., income, sewer and irrigation fees and rental brokerage income) with
respect to the Community shall be prorated as of the Closing Date and those
rents attributable to the period prior to the Closing Date shall be allocated to
Seller and those rents attributable to the period on or after the Closing Date
shall be allocated to Buyer. Any rent received shall be deemed to apply to the
most current rent due from a tenant (with the month in which the payment is
received being deemed the "most current"). Delinquent rents will not be
prorated and Buyer has no obligation to collect them but will reimburse Seller
for any collected. Such reimbursement shall to be delivered no later than
thirty (30) days after receipt. Buyer shall receive a credit against the
Purchase Price for all security deposits of tenants at the Community, inclusive
of any accrued but unpaid interest owed to any tenants.
5.5 All other charges or receipts which would be customarily prorated in the
locale of Community shall be prorated as of the Closing Date. The parties
hereto shall make any post closing adjustments and payments necessary to give
effect to the provisions and intent of this Article 5.
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5.6 Buyer shall pay all customary and reasonable closing costs charged by the
Title Company (e.g. escrow fees, charges for attending the closing and wiring
fees) in connection with the Closing of the transaction contemplated by this
Agreement.
6. REPRESENTATIONS AND WARRANTIES
6.1 Seller represents and warrants to Buyer that as of the date hereof, and
as of the Closing Date:
(a) Seller is a duly formed limited partnership, existing and in good
standing under the laws of the State of formation, has full power and
authority to own its properties and to carry on its business as now conducted,
and is in good standing and duly qualified to conduct business in New Mexico.
(b) Seller has power and authority to enter into this Agreement and to
consummate the transactions contemplated herein. This Agreement and all other
agreements or documents to be executed by Seller pursuant hereto are or shall
be as of the Closing Date, as the case may be, duly executed and delivered by
Seller and be valid, binding and enforceable in accordance with their
respective terms. Neither the execution of this Agreement nor the
consummation of the transactions contemplated herein will (i) to the current
actual knowledge of Seller, constitute or cause a breach or violation of or
require a consent under any agreement to which Seller is bound, including but
not limited to, any right of first refusal or option to purchase granted to a
third party, which might prevent the consummation of the transaction
contemplated herein or which might bind Seller, subsequent to the consummation
of this Agreement, (ii) to the current actual knowledge of Seller, cause a
lien or other encumbrance to attach to the Community, or result in the
acceleration of or the right to accelerate any obligation under any material
agreement or the termination of the right to terminate any material license,
franchise, lease, permit, approval or agreement to which Seller is a party, or
require a consent of any person to prevent such breach, default, violation,
lien, encumbrance, acceleration, right or termination which have not been
obtained or (iii) give rise to any other rights, at law or by agreement, that
would give rise to any rights of first refusal or prevent the consummation of
the transaction contemplated herein. Seller has the complete and unrestricted
power to sell, assign and deliver to Buyer unencumbered title to the Property.
At the Closing there will be no restrictions upon the vesting in Buyer of
title to the Property owned by the Seller, free and clear of liens,
encumbrances and other claims of any kind whatsoever, and such title shall
then vest in Buyer. Buyer acknowledges that Seller has disclosed that (i)
Seller previously contracted with another party for the purchase and sale of
the Community (the "Prior Contract"), (ii) the Prior Contract was terminated
on January, 1999, (iii) Seller and the purchaser under the Prior Contract
engaged in negotiations regarding the possible reinstatement of the Prior
Contract until shortly before the Effective Date, (iv) when Seller ultimately
refused to reinstate the Prior Contract, the purchaser under the Prior
Contract insinuated that some effort would be made to assert legal rights,
although no direct threat of litigation was made, and (v) while Seller
believes that the purchaser under the Prior Contract has no enforceable legal
right with respect to the Property, Seller has no control over whether such
purchaser will seek to interfere with the right of Seller to sell the Property
to another party.
(c) The Community, as of the date of this Agreement, has 282 developed
sites. To the current actual knowledge of Seller, the developed pad sites and
the Community are in full compliance with all applicable zoning ordinances,
all terms and conditions of any site plan or planned unit development
approvals, and any other laws, rules or regulations (including any laws, rules
or regulations governing wetlands) and Seller has all licenses and permits
necessary for operation of the Community as a manufactured housing community
with all amenities (i.e swimming pool, tennis court) currently located at the
Community. Buyer acknowledges that Seller has been in the process of
preparing a revised form of lease agreement for the Community, modified to
bring the leases into full compliance
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with all current statutory requirements (there presently exist some deviations
from requirements), and has discontinued this process in anticipation of the
imminent sale of the Community with the understanding that the purchaser of
the Community would prefer to introduce its own form of lease agreement after
purchase to cure any compliance issues, and to make other changes which may be
desired.
(d) No approval of or filing with any federal, state or local court,
authority or administrative agency is necessary to authorize the execution and
delivery of this Agreement by the Seller or the consummation of the
transaction contemplated herein.
(e) The Community is served by utilities, including water, sewage, gas,
waste disposal, electricity, cable television and telephone and Seller has no
current actual knowledge of any inadequacies with respect to such utilities.
(f) To Seller's current actual knowledge the Property (i) has not been
used to handle, treat, store or dispose of asbestos, PCB's, ureaformaldhyde or
any hazardous or toxic waste or substance, in violation of applicable law and
(ii) has not otherwise been materially contaminated, tainted or polluted,
(including, without limitation, contamination of soils, groundwater and
surface waters located on, in or under property adjacent to such premises)
with pollutants or other substances which contamination may give rise to a
clean-up obligation under any federal, state or local law, rule, regulation or
ordinance or the common law. To Seller's current actual knowledge, all wastes
have been utilized, stored and disposed of, whether hazardous or not, in
material compliance with all applicable local, state and federal laws and
regulations so as not to result in material contamination of the Property
including, without limitation, soil, groundwater and surface water located on,
in or under such Property and the Property is free from any material
environmental contamination of any kind.
(g) Seller has good and marketable title to the Property and all assets
used in the operation or management of the Community and the Property and all
such assets are free and mechanics' liens or any other liens that might bind
the Property and/or the Community clear of all liens and encumbrances except
for the Permitted Exceptions and any liens to be released at Closing.
(h) The Community is not subject to any judgment, order, writ, injunction
or decree of any court or governmental instrumentality which might prohibit
the consummation of the transaction contemplated herein or have a material
adverse effect on the Community. There is no claim, litigation or proceeding
pending there is no claim, litigation or proceeding threatened or
investigation pending against the Community which might prohibit the
consummation of the transaction contemplated herein or have an adverse effect
on the Community, all to the current actual knowledge of Seller (Buyer,
however, acknowledging the disclosures set forth in the Section 6.1(b) above).
Buyer acknowledges that Seller has disclosed the terms and conditions of, and
has furnished Buyer copies of, those four (4) certain Enforcement Agreements
executed by and between Seller, the United States Department of Housing and
Urban Development and four complainant parties in HUD cases numbered 06-98-
0881-8, 06-98-0678-8, 06-98-0599-8 and 06-98-0741-8.
(i) To the current actual knowledge of Seller, neither the whole nor any
portion of the Community is subject, directly or indirectly, to any
governmental decree or order to be sold, condemned, expropriated or otherwise
taken by any public authority, nor are there any existing facts or conditions,
to Seller's current actual knowledge which might give rise to any forced sale,
condemnation, expropriation or other taking.
(j) To the current actual knowledge of Seller, the Community is not
currently subject to and Seller has not received any written notice of any
planned or commenced public improvements which
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may result in special assessments against the Community. Buyer acknowledges
that in connection with the obtaining of development approvals for the
property currently owned by Seller which abuts the western boundary of the
Property ("Tract "A"), which abutting property is described as Tract "A" of
the Plat of Tracts "A" and "B", Lands of Shaw, Mitchell, Mallory Partnership,
dated November 1998, and recorded on January 22, 1999 as Document No.
1999008790 in Book 99C, Page 14 of the real property records of Bernalillo
County, New Mexico (the "Plat"), the City of Albuquerque has required the
creation of a public drainage easement in the southwest corner of the Property
having an area of 87,229 square feet, as created and described on the Plat,
and that within the drainage easement a drainage detention pond and related
improvements be constructed (the "Drainage Facilities") to accept storm
drainage flows from the Property so that outflows from the detention pond will
be transmitted to a drainage pond to be constructed on Tract "A". It is
contemplated that outflows from Tract A will eventually be transmitted to City
of Albuquerque storm sewers by way of certain off-site drainage improvements,
to be constructed under agreements between the purchaser of Tract "A" and the
City of Albuquerque. Seller has been informed by its engineer that the only
responsibility of the owner of the Property concerning drainage is the
completion of the Drainage Facilities. Seller will provide Buyer access to
Seller's engineer during the Investigation Period to provide any additional
information desired regarding the foregoing. Buyer understands, agrees and
acknowledges that upon Closing of this Agreement, Buyer (or its successor in
title) will become responsible to complete and pay for the Drainage
Facilities, and to defend, indemnify and hold harmless Seller, and its
partners, representatives, employees and agents, from and against any claim,
loss or expense related to the failure of Buyer or its successor in title to
complete and pay for the Drainage Facilities.
(k) To Seller's current actual knowledge, the Community is not located in
a "flood plain" or "floodway" or any area requiring flood insurance, nor are
there any areas designated as "wetlands".
(l) The Rent Roll attached as Schedule 6.1(l) hereto (including all
---------------
information required to be included pursuant to Section 3.4(g) hereof) and
made a part hereof is true, complete and correct in all material respects.
(m) Other than as set forth on the Rent Roll, there is no direct or
indirect economic terms and conditions, including any rent concessions or
rebates affecting any tenant lease or limiting increases in rents, and to
Seller's current actual knowledge, there are no provisions of applicable law
that will limit or otherwise affect the rent payable under the Leases or any
increase in such rents.
(n) Seller has made available to Buyer true and correct copies of all
written Leases which are identified on the Rent Roll. There are no amendments
or modifications to such Leases either written or oral, except for amendments
or modifications in writing, copies of which have been furnished to Buyer and
identified. The Leases are in full force and effect. To Seller's current
actual knowledge, except as set forth on Schedule 6.1(n), there are no
---------------
material defaults under the Leases and the Leases are fully assignable to
Buyer by the Seller in connection with the sale of the Community.
(o) Attached hereto as Schedule 6.1(o) is a true and correct list of all
---------------
management, leasing, service, employment and other contracts or agreements of
every kind and nature affecting the Community ("Contracts"), together with any
amendments thereto.
(p) To Seller's current actual knowledge, none of the information
prepared and provided by Seller, pursuant hereto or any of the representations
and warranties set forth in this Section 6.1, contain any untrue statement of
material fact or fail to state a material fact necessary to make the
statements contained therein, in light of the circumstances in which they were
made, not misleading. Notwithstanding the foregoing, Buyer acknowledges that
Seller has disclosed, and Buyer
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understands, the following: the water and sewer expense information for the
Community correctly reflects the actual expense for water and sewer paid by
Seller for the applicable period. However, this information should not be
relied upon to project future water and sewer expenses. Seller recently
discovered that the water flow information used by the City of Albuquerque in
preparing water and sewer bills has been inaccurate, and was understated. The
problem has been corrected, and the City of Albuquerque has completed an
inspection and has stated in writing to Seller that it will not seek any
adjustment or assess any charge for previous understated billings. Seller
expects that future water and sewer bills will be significantly higher,
following the correction of the problem. Estimates of future water and sewer
expenses for Community should not be derived from this past expense
information. Seller has suggested that reasonable estimates might be derived
from reviewing the water and sewer expense information from comparable mobile
home parks in the Albuquerque area.
(q) To Seller's current actual knowledge, no suit, action, or other
proceeding is pending or threatened before any court (including Bankruptcy
Court) or governmental agency (including the appointment of a custodian,
receiver trustee or similar official) affecting the Community, other than any
pending eviction suits which are all disclosed on Schedule 6.1(q) attached
hereto.
(r) To Seller's current actual knowledge, fuel oil has never been used on
the Property (i) for the purpose of providing heat for the individual
manufactured home units from a central location (some individual homes may
have had above ground fuel oil tanks) or (ii) using an underground storage
tank(s) or delivery system.
(s) To Seller's current actual knowledge, the entire Community is zoned
for use as a manufactured housing community and the Community and all
amenities and improvements comply with said zoning.
(t) To Seller's current actual knowledge, there is currently no Community
Prospectus nor has there been a Community Prospectus at any time during
Seller's ownership of the Community.
(u) To Seller's current actual knowledge, the items set forth on Schedule
1.2c (1) represent all personal property necessary for the operation of the
Community as a manufactured housing community.
(v) The Community is served by a public water supply and a public
sanitary sewer system.
(w) To Seller's current actual knowledge, the representations and
warranties of Seller contained in this Agreement and all schedules, exhibits,
certificates and statements and information prepared and furnished to Buyer or
on behalf of Buyer by Seller in connection with the transactions contemplated
hereby are accurate and complete in all material respects, and do not and will
not contain any untrue statement of material fact, or omit to state a material
fact necessary to make the statements herein and therein not misleading in
light of the circumstances in which they were made.
Seller acknowledges and agrees that Buyer's reliance upon the
representations and warranties of Seller contained in this Agreement shall
not be diminished or effected in any way by Buyer conducting and completing a
purchase investigation of the Community, except to the extent that Buyer had
actual knowledge of the breach of such representation or warranty prior to
the Closing Date. When used anywhere in this Agreement, the term "knowledge"
with regard to Seller means the current actual knowledge, without inquiry or
investigation, of Geneva Mitchell, General partner of Seller and Fran
Mandell, the Administrator of the Community, and no other employee or
representative of Seller. Buyer acknowledges that Ms. Mitchell's and Ms.
Mandell's knowledge of
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matters affecting the Community is limited by the nature of their involvement
in the management of the Community. Except as expressly set forth in this
Agreement and all Schedules and Exhibits attached hereto, and except for the
warranty of title in any Warranty Deed to be delivered at Closing, Seller is
not making and expressly disclaims any warranties or representations of any
kind or character, express or implied, with respect to the Community. EXCEPT
AS OTHERWISE SET FORTH IN THIS AGREEMENT, AT THE CLOSING, SELLER SHALL SELL
TO PURCHASER, AND PURCHASER SHALL ACCEPT FROM SELLER, THE PROPERTY, IN ITS
"AS IS" CONDITION, WITH ALL FAULTS, AND WITHOUT WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
USE OR PURPOSE.
6.2 Buyer represents and warrants to the Seller, which representations and
warranties shall be true on the date hereof and as of the Closing Date, as
follows:
(a) Buyer is duly formed, validly existing and in good standing under
the laws of the State of Maryland, has the power and authority to own its
properties and to carry on its business as now conducted, and is in good
standing and duly qualified to conduct business in each of the jurisdictions
in which the ownership or leasing of its properties or the conduct of its
business requires such qualification and where the failure so to qualify would
have a material adverse effect on the financial condition of Buyer taken on a
whole.
(b) Buyer has full power and authority to execute, deliver and perform
this Agreement and to consummate the transactions contemplated herein. This
Agreement has been duly executed and delivered by Buyer and is a valid and
binding obligation of Buyer and is enforceable against it in accordance with
the terms hereof. Neither the execution, delivery or performance of this
Agreement by Buyer nor the consummation of the transactions contemplated
herein by it will constitute or cause a breach or violation of the
organizational documents of Buyer, any agreements to which Buyer is bound,
including but not limited to, any right of first refusal or option to purchase
granted to a third party which might prevent the consummation of the
transactions contemplated herein or which bind Buyer subsequent to the
consummation of this Agreement; cause a lien or other encumbrance to attach to
any of the property of Buyer or result in the acceleration of, or the right to
accelerate, any obligation under any agreement to which it is a party or by
which it is bound or the termination or the right to terminate any license,
franchise, lease, permit, approval or agreement to which it is a party or by
which it is bound, or require the consent of any person to prevent such
breach, default, violation, lien, encumbrance, acceleration or right of
termination which has not been obtained; or give rise to any other rights at
law or by agreement that would give rise to any right of first refusal or
prevent the consummation of the transactions contemplated herein.
(c) To Buyer's current actual knowledge, no approval of, or filing with,
any federal, state or local court, authority or administrative agency is
necessary to authorize the execution, delivery or performance of this
Agreement by Buyer or for the consummation of the transactions contemplated
herein.
(d) To Buyer's current actual knowledge, Buyer is not subject to any
judgment, order, writ, injunction or decree of any court or government
instrumentality which might prohibit the consummation of the transactions
contemplated herein, or have a material adverse effect on Buyer taken as a
whole. There is no claim or any litigation, proceeding or investigation
existing or threatened against Buyer which might prohibit the consummation of
the transactions contemplated herein, or have a material adverse effect upon
Buyer taken as a whole.
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(e) To Buyer's current actual knowledge, none of the documents,
information, and other materials provided by or on behalf of Buyer pursuant
hereto contain any untrue statement of a material fact or fail to state a
material fact necessary to make the statements contained therein, in light of
the circumstances in which they were made, not misleading.
6.3 With the exception of those representations and warranties relating to
environmental matters and any claim of fraud made hereunder, both of which shall
survive for as long as permitted under the applicable law, the representations,
warranties and covenants set forth herein shall survive Closing for a period of
one (1) year.
7. DAMAGE AND CONDEMNATION
Seller shall promptly notify Buyer of any impending or actual condemnation
proceedings against the Community or any portion thereof of which the Seller has
actual notice. If any portion of the Community shall be threatened to be taken
as a result of condemnation proceedings or damaged as a result of fire or other
casualty prior to the Closing, Buyer shall have the right:
(a) To terminate this Agreement by written notice to the Seller within ten
(10) days after receipt of notice of such proceedings or damage, neither party
shall have any further liability hereunder; or
(b) To proceed to Closing as herein provided, agreeing to take the Community
in its then-current condition, and in such event Buyer shall be entitled to
receive all of the condemnation or insurance proceeds payable as a result of
such condemnation or such damage or, at Buyer's option, the Purchase Price shall
be reduced by the amount of such condemnation or insurance proceeds.
8. COVENANTS OF THE SELLER AND BUYER
8.1 From the date of this Agreement until the earlier of (i) the termination
of this Agreement and (ii) the Closing Date, Seller shall conduct the business
of the Community in the ordinary course, and during said period will:
(a) Except in the ordinary course of business, refrain from transferring
any portion of the Community, incurring any indebtedness or creating on the
Community any easements, liens, mortgages, encumbrances or other interest
without the prior written consent of Buyer;
(b) Refrain from entering into any contracts or other commitments
regarding the Community, other than in the ordinary and usual course of
business, without the prior written consent of Buyer;
(c) Continue to maintain and repair the Community and keep it in the same
condition and repair as it was as of the date hereof, and continue all
maintenance and services as heretofore provided;
(d) Comply as in the ordinary course of business with all notices of
violation of laws or municipal ordinances, regulations, orders or requirements
of department of housing, building, fire, labor, health, or other state, city
or municipal departments or other governmental authorities having jurisdiction
against or affecting the Community or the use of operation thereof;
(e) Continue to pay, on or before due, any and all operating expenses
including all real estate and personal property taxes;
(f) Maintain in full force and effect all licenses and permits necessary
for the continued use and operation of the Community;
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(g) Use all reasonable efforts to obtain prior to the Closing Date all
necessary approvals and consents to the transfer and assumption of those
agreements, permits and licenses to be transferred hereunder or for which
consent or approval is required for their continued validity after the
consummation of the transaction contemplated by this Agreement;
(h) Perform all obligations of Seller on a timely basis and without
default, under any Leases, mortgages, notes, Contracts or other agreement
relating to the Community;
(i) Not materially amend, modify or waive any rights under any of the
Leases or enter into any new lease affecting the Community (other than tenant
leases on standard terms and conditions and current market rates) without
Buyer's prior written consent which shall not be unreasonably withheld,
delayed or conditioned;
(j) Promptly advise Buyer of material inaccuracies disclosed by Seller in
any of the information provided Buyer in connection therewith; and
(k) From and after the date hereof, the Seller agrees it shall not, nor
shall any of their representatives or agents, continue or enter into any
discussions or agreements for the sale, of the Community with any party other
than Buyer while this transaction is pending.
8.2 Buyer and Seller represent and warrant that, there is no investment
banker, broker, finder or other intermediary (collectively "Brokers") which has
been retained by, or is authorized to act on behalf of, Seller or Buyer who
might be entitled to any fee or commission upon consummation of the transactions
contemplated herein other than Seller's brokerage arrangement with Bill
Robertson of First Commercial Real Estate Services, Inc. Notwithstanding the
foregoing Buyer agrees to pay all commissions in connection with this
transaction by any Brokers claiming by, through and under Buyer and Buyer shall
indemnify, defend and hold Seller harmless against any and all such claims.
Notwithstanding the foregoing Seller agrees to pay all commissions in connection
with this transaction by any Brokers claiming by, through and under Seller and
Seller shall indemnify, defend and hold Buyer harmless against any and all such
claims.
9. CONDITIONS PRECEDENT TO CLOSE
9.1 Anything to the contrary notwithstanding, Buyer shall have no obligation
to consummate this transaction, unless and until the conditions set forth in
this Section 9.1 have been satisfied or waived by Buyer in writing. Such
conditions precedent are as follows:
(a) The representations and warranties of the Seller contained in this
Agreement or in any agreement or document delivered pursuant hereto shall be
true and correct in all material respects on and as of the Closing Date with
the same effect as if such representations and warranties had been made on and
as of the Closing Date, there shall not have been any material error,
misstatement or omission in any Exhibit, Schedule, or other document delivered
in connection herewith and there shall not have been any material adverse
change in the representations and warranties or schedules thereto;
(b) Seller shall have performed and complied with all agreements and
covenants contained herein to be performed or complied with by them on or
prior to the Closing Date and satisfied all conditions required to be
performed, complied with, or satisfied by them on or prior to the Closing
Date;
(c) No evidence of contamination, other than as set forth in the
Environmental Report, shall have been discovered;
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(d) No suit, action, or other proceeding shall be pending or threatened
before any court (including Bankruptcy Court) or governmental agency
(including the appointment of a custodian, receiver trustee or similar
official) naming the Seller (to the extent any such suit, action or proceeding
would impact the ability of the Seller to perform its obligations or satisfy
the conditions to closing hereunder) as defendant or affecting the Community;
and
(e) No information which is contrary to any representations or warranties
contained herein which were made to Seller's current actual knowledge was
discovered.
9.2 Anything to the contrary notwithstanding, Seller shall have no obligation
to consummate this transaction, unless and until the conditions set forth in
this Section 9.2 have been satisfied by Buyer or waived by Seller in writing.
Such conditions precedent are as follows:
(a) The representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date with the same effect as if such representations and warranties
had been made on and as of the Closing Date, there shall not have been any
material error, misstatement or omission in any Exhibit, Schedule, or other
document delivered by Buyer in connection herewith and there shall not have
been any material adverse change in the representations and warranties or
schedules thereto as a result of the updating of such representations,
warranties or schedules as required by this Agreement;
(b) Buyer shall have performed and complied with all agreements and
covenants contained herein to be performed or complied with by them on or
prior to the Closing Date and satisfied all conditions required to be
performed, complied with, or satisfied on or prior to the Closing Date.
9.3 So long as a party is not in default hereunder, if any condition to such
party's obligation to consummate this transaction has not been satisfied as of
the Closing Date, such party shall (i) terminate this Agreement by delivering
written notice to other party on or before the Closing Date, or (ii) elect to
extend the time for satisfaction of such condition up to a total of ten (10)
business days, or (iii) elect to close notwithstanding the non-satisfaction of
such condition, in which event such party shall be deemed to have waived such
condition. If such party elects to proceed pursuant to clause (ii) above, and
such condition remains unsatisfied after such extension period, then such party
shall, within three (3) business days after the end of such extension period,
elect to proceed pursuant to clause (ii) or (iii) above, and the failure to
timely so elect (time being of the essence with regard thereto) shall
conclusively be deemed to constitute an election pursuant to clause (i) above.
In the event that such party elects to close, notwithstanding the non-
satisfaction of such condition, there shall be no liability on the part of the
other party for breaches of representations and warranties of which the party
electing to close had actual knowledge at the Closing and which were not the
result of the breach of a covenant of such party, notwithstanding any other
provision of this Agreement.
10. DEFAULT
If prior to the Closing Seller fails to perform in accordance with this
Agreement or if any representation or warranty of Seller is materially untrue or
Seller fails to perform one of its covenants, Seller shall be in default. In
the event of a default hereunder by Seller, Buyer may elect to (a) waive such
default or condition precedent and proceed to close; (b) specifically enforce
the terms hereof; or (c) terminate this Agreement, receive the Deposit and
institute an action for the recovery of actual damages sustained by Buyer, such
damages not to exceed in any case the out-of-pocket expenses incurred by Buyer
in the
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negotiation of this Agreement and the inspection and other pre-Closing matters
contemplated under this Agreement, and excluding any consequential, incidental,
punitive, exemplary or other damages of any kind (but including reasonable
attorneys' fees and expenses and costs of court incurred in pursuing such
recovery). Buyer acknowledges that except with respect to the accuracy of the
representations and warranties by Seller as of the date hereof, the obligations
of Seller under Section 9.1(b) and as otherwise specifically provided herein,
Seller is not obligated to satisfy the conditions to Buyer's obligation to close
and Seller acknowledges that, except for the representations and warranties by
Buyer as of the date hereof, the obligations of Buyer under Section 9.2(b), and
as specifically provided herein, Buyer is not obligated to satisfy the
conditions to Seller's obligation to close. In the event Buyer fails to perform
in accordance with this Agreement or if any material representation or warranty
of Buyer is untrue, Buyer shall be in default. In the event of a default
hereunder by Buyer or if any condition to Seller's performance obligations is
not satisfied on or before the Closing, then the Seller may elect to (a) waive
such default or condition precedent and proceed to close; or (b) specifically
enforce the terms of this Agreement, including payment of the Purchase Price, or
(c) terminate this Agreement and retain the Deposit as its sole and exclusive
remedy. In all other cases the Deposit (or the balance thereof) shall be
retained by Seller. The remedies provided for in this Section 10 are the
exclusive remedies available in the event of a default as described in this
Section 10.
11. MISCELLANEOUS
11.1 The covenants and agreements herein contained shall bind and inure to
the benefit of the successors and assignees of the parties hereto; provided,
however, no party to this Agreement may assign this Agreement without the prior
written consent of the other parties hereto. Notwithstanding the foregoing,
Buyer shall have the right to assign its interest in this Agreement to any one
of its affiliates, conditioned upon (i) an assumption in writing by such
affiliate of all obligations of Buyer under the Agreement and (ii) the prompt
giving of written notice to Seller of such assumption and furnishing evidence of
such assumption.
11.2 For purposes of this Agreement, all notices shall be deemed duly given
upon personal delivery, by facsimile to the numbers set forth below or by
overnight mail or three (3) days following deposit into the U.S. Mails, by
certified or registered mail, return receipt requested, and properly posted and
addressed as follows:
If Seller: Shaw, Mitchell and Mallory Limited Partners
c/o First Commercial
One Coronado Place
6201 Uptown Boulevard N.E., Ste. 202
Albuquerque, New Mexico 87110
Facsimile Number: (505) 881-9838
Attention: Bill Robertson
with a copy to: Wiggins, Campbell & Wells
P.O. Box 1308
Albuquerque, New Mexico 87103
Facsimile Number: 505-764-8585
Attention: Lawrence M. Wells, Esq.
If to Buyer: Chateau Communities
6430 S. Quebec
Englewood, CO 80111
Facsimile Number: 303-721-1643
Attention: Mr. Rees Davis
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with a copy to: Timmis & Inman, L.L.P.
300 Talon Centre
Detroit, MI 48207
Facsimile Number: 313-396-4229
ATTENTION: Bradley J. Knickerbocker, Esq.
If to Escrow Agent: First American Title Company
2601 Louisiana N.E.
Albuquerque, NM 87110
Facsimile Number: (505) 884-7523
Attention: Kathy Carrillo
11.3 Time is of the essence of this Agreement.
11.4 Notwithstanding any other term or condition of this Agreement, to the
extent, if at all, (S)56-7-1 NMSA 1978 is applicable to any indemnification
obligation set forth in this Agreement, the agreement to indemnify, defend and
hold harmless set forth herein shall not extend to liability, claims, damages,
losses or expenses, including attorneys' fees, arising out of (a) the
preparation or approval of maps, drawings, opinions, reports, surveys, change
orders, designs or specifications by the indemnitee, or the indemnitee's agents
or employees; or (b) the giving or the failure to give directions or
instructions by the indemnitee, or the indemnitee's agents or employees, or such
giving or failure to give directions or instructions is the primary cause of
bodily injury to persons or damage to property.
11.5 Seller acknowledges that Buyer will have Seller's financial information
audited post-closing. Seller agrees and covenants to make available such
persons and information as are necessary for such audit and to otherwise
cooperate fully with Buyer and its auditors after Closing in conducting said
audit of Seller's financial information in a timely manner.
11.6 This Agreement may not be amended, altered, or modified unless done so
in writing by the person against whom enforcement of any waiver, change,
modification, or discharge is sought.
11.7 Other than with respect to required governmental disclosures or as may
be generally otherwise available to the public and except as otherwise required
by law, each of the parties hereto agree to treat as confidential all financial,
operating and other information which it receives regarding the other, including
any relating to the Community and shall not disclose such information to any
third party, other than representatives, employees, agents, advisors and the
Title Company (all of whom shall be subject to this confidentiality provision).
The provisions of this Section 11.6 shall survive the termination of this
Agreement. In addition, the parties agree not to make any public announcement
or other disclosure of the pending transaction without prior written consent of
the parties hereto.
11.8 This Agreement and the Exhibits and Schedules hereto contain all of the
representations and statements by each party to the other and express the entire
understanding between the parties with respect to the transactions contemplated
hereby. All prior communications concerning the subject matter hereof are
merged in and replaced by this Agreement.
11.9 This Agreement shall be governed by the laws of the State of New
Mexico.
11.10 This Agreement may be executed in counterparts and all counterparts
when so executed shall constitute one and the same Agreement.
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<PAGE>
REMAINDER OF PAGE LEFT INTENIONALLY BLANK
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have each executed this Purchase
Agreement as of the date last set forth below (the "Effective Date").
BUYER:
CHATEAU COMMUNITIES, INC.
Date: April 23, 1999 By: /s/ Rees F. Davis, Jr.
Its: Executive Vice President
SELLER:
SHAW, MITCHELL AND MALLORY LIMITED PARTNERS
Date: April 23, 1999 By: /s/ Geneva Mitchell
Its: General Partner
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<PAGE>
Exhibit A
Legal Description
Tract "B", Plat of Tracts "A" and "B", Lands of Shaw, Mitchell, Mallory
Partnership, dated November 1998, and recorded on January 22, 1999 as Document
No. 1999008790 in Book 99C, Page 14 of the Real Property Records of Bernalillo
County, New Mexico
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<PAGE>
Schedule 1.2(c)(1)
Personal Property
See attached list.
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<PAGE>
Schedule 6.1(l)
Rent Roll
See attached.
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<PAGE>
Schedule 6.1(n)
Lease Defaults
See attached list.
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<PAGE>
Schedule 6.1(o)
Contracts
1. Service contract on office copier.
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<PAGE>
ASSIGNMENT OF PURCHASE AGREEMENT
--------------------------------
THIS AGREEMENT is entered into as of this 11th day of May, 1999 by and between
N'Tandem Properties, L.P., a Maryland limited partnership ("Assignee"), Chateau
Communities, Inc., a Maryland corporation ("Assignor") and Shaw, Mitchell and
Mallory Limited Partners, a New Mexico limited partnership ("Seller").
WHEREAS, Assignor, as Purchaser and Seller entered into that certain Purchase
Agreement, dated April 26, 1999 regarding the purchase and sale of a
manufactured housing community commonly known as Southpointe Manufactured
Housing Community (the "Purchase Agreement"); and
WHEREAS, Assignor desires to assign and Assignee desires to accept said
assignment of Assignor's interest as Purchaser in the Purchase Agreement.
NOW THEREFORE, for One and 00/100 ($1.00) Dollar the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. Assignor hereby assigns all of its right, title and interest as Purchaser
in the Purchase Agreement to Assignee.
2. Assignee accepts the assignment of the Purchase Agreement from Assignor
and agrees to assume all obligations of Assignor under said Purchase Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement on the day first
written above.
Assignee: N'TANDEM PROPERTIES, L.P.
a Maryland limited partnership
By: N'Tandem Trust
Its: General Partner
By: /s/ Gary P. McDaniel
Its: Trustee
Assignor: CHATEAU COMMUNITIES, INC., a Maryland corporation
By: /s/ Rees F. Davis, Jr.
Its: Executive Vice President
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<PAGE>
ACKNOWLEDGMENT AND CONSENT:
SHAW, MITCHELL AND MALLORY LIMITED PARTNERSHIP
a New Mexico limited partnership
By: /s/ Geneva Mitchell
Its: General Partner
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