<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
Commission file number 1-12428
OASIS RESIDENTIAL, INC.
(Exact name of Registrant as specified in its Charter)
NEVADA 88-0297457
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
4041 East Sunset Road, Henderson, Nevada 89014
(Address of Principal Executive Offices)
(702) 435-9800
(Registrant's Telephone Number, Including Area Code)
Indicate by a check mark whether the registrant: (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
YES X NO
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Class Shares Outstanding Date
----- ------------------ ----
Common Stock, $0. 01 par value 16,238,486 August 13, 1997
<PAGE> 2
OASIS RESIDENTIAL, INC.
QUARTERLY REPORT ON FORM 10-Q
CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I - FINANCIAL INFORMATION:
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets as of June 30, 1997
and December 31, 1996 2
Consolidated Statements of Operations for the Three and Six
Months Ended June 30, 1997 and 1996 3
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1997 and 1996 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-12
PART II - OTHER INFORMATION 13
Signatures 14
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
- -------------------------------------------
OASIS RESIDENTIAL, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------- ----------
(Unaudited)
<S> <C> <C>
Real estate assets:
Land $102,454 $ 93,484
Buildings and improvements 604,628 552,500
Furniture and fixtures 43,076 39,515
-------- --------
750,158 685,499
Less accumulated depreciation 62,124 53,049
-------- --------
688,034 632,450
Land held for development 3,917 3,766
Construction in progress 89,172 109,202
-------- --------
Net real estate assets 781,123 745,418
Cash and cash equivalents 2,296 3,397
Restricted cash 3,521 2,976
Investment in and advances to joint venture 8,492 9,574
Deposits on real estate assets 2,357 2,000
Deferred costs and other assets (net of accumulated
amortization of $2,343 and $1,802 at June 30, 1997
and December 31, 1996, respectively) 11,232 11,408
-------- --------
Total assets $809,021 $774,773
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Debt $432,409 $394,274
Resident deposits and prepaid rent 2,474 2,066
Accounts payable and accrued expenses 7,063 6,221
-------- --------
Total liabilities 441,946 402,561
-------- --------
Commitments (Note 2)
Stockholders' equity:
Preferred stock, $2.25 Series A Cumulative Convertible,
$.01 par value, liquidation preference $25 per share,
15,000,000 shares authorized, 4,165,000 shares issued
and outstanding at June 30, 1997 and December 31, 1996 42 42
Common stock, $.01 par value, 100,000,000 shares authorized,
16,238,486 and 16,237,646 shares issued and outstanding at
June 30, 1997 and December 31, 1996, respectively 162 162
Paid-in capital 386,930 386,910
Distributions in excess of net income (20,059) (14,902)
-------- --------
Total stockholders' equity 367,075 372,212
-------- --------
Total liabilities and stockholders' equity $809,021 $774,773
======== ========
</TABLE>
See notes to consolidated financial statements
2
<PAGE> 4
OASIS RESIDENTIAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------------- ------------------------
1997 1996 1997 1996
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue:
Rental income $ 27,024 $ 22,424 $ 52,923 $ 43,483
Other income 1,047 783 1,972 1,476
------------ ----------- ----------- -----------
Total revenue 28,071 23,207 54,895 44,959
------------ ----------- ----------- -----------
Expenses:
Property operating and maintenance 7,788 6,647 15,033 12,776
General and administrative 916 801 1,855 1,633
Real estate taxes 1,446 1,235 2,875 2,385
Interest 6,004 3,450 11,292 6,322
Interest, non-cash (loan fees and costs) 267 276 535 570
Depreciation and amortization 4,551 3,741 9,081 7,261
------------ ----------- ----------- -----------
Total expenses 20,972 16,150 40,671 30,947
------------ ----------- ----------- -----------
Net income 7,099 7,057 14,224 14,012
Less preferred dividend requirement 2,343 2,343 4,686 4,686
------------ ----------- ----------- -----------
Earnings available for common stockholders $ 4,756 $ 4,714 $ 9,538 $ 9,326
============ =========== =========== ===========
Per share amounts:
Earnings available for common stockholders $ 0.29 $ 0.29 $ 0.59 $ 0.57
============ =========== =========== ===========
Dividends declared per common share $ 0.4525 $ 0.435 $ 0.905 $ 0.87
============ =========== =========== ===========
Weighted average number of common
shares outstanding 16,237,904 16,237,646 16,237,775 16,237,646
============ =========== =========== ===========
</TABLE>
See notes to consolidated financial statements
3
<PAGE> 5
OASIS RESIDENTIAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30,
----------------------------
1997 1996
----------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 14,224 $ 14,012
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 9,081 7,261
Amortization of discount on notes payable 11 -
Interest, non-cash (loan fees and costs) 535 570
Changes in assets and liabilities:
Deferred costs and other assets (365) 594
Resident deposits and prepaid rent 408 341
Accounts payable and accrued expenses 842 490
---------- ----------
Net cash provided by operating activities 24,736 23,268
---------- ----------
Cash flows from investing activities:
Purchase of real estate assets (10,955) -
Improvements to real estate assets (4,336) (8,670)
Construction of real estate assets (29,489) (74,214)
Investment in and advances to joint venture 1,082 -
Deposits on real estate assets (357) -
---------- ----------
Net cash used in investing activities (44,055) (82,884)
---------- ----------
Cash flows from financing activities:
Proceeds from debt 39,000 77,000
Principal payments on debt (876) (953)
Increase in restricted cash (545) (473)
Proceeds from issuance of common stock in connection
with the dividend reinvestment program 20 -
Cash dividends paid - preferred stock (4,686) (4,686)
Cash dividends paid - common stock (14,695) (14,126)
---------- ----------
Net cash provided by financing activities 18,218 56,762
---------- ----------
Net decrease in cash and cash equivalents (1,101) (2,854)
Cash and cash equivalents, beginning 3,397 5,970
---------- ----------
Cash and cash equivalents, ending $ 2,296 $ 3,116
========== ==========
Supplemental information:
Cash paid for interest $ 14,451 $ 10,955
========== ==========
</TABLE>
See notes to consolidated financial statements
4
<PAGE> 6
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles applicable to
interim financial information and pursuant to the rules and regulations of
the Securities and Exchange Commission. Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations. However, in the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation have been included. The Company presumes
that users of the interim financial information herein have read or have
access to the audited financial statements for the preceding fiscal year and
that the adequacy of additional disclosure needed for a fair presentation may
be determined in that context. Accordingly, footnote disclosure which would
substantially duplicate the disclosure contained in the Company's 1996 Annual
Report on Form 10-K has been omitted.
The Company capitalizes all direct costs of developing its properties.
Interest is capitalized during development and construction until a property
is completed and ready for occupancy. In computing the amount of interest to
be capitalized for each period, the Company computes the average amount of
development and construction costs incurred on each project and then,
allocates interest costs associated with loans incurred for the purpose of
furthering the Company's development and construction activities. To the
extent that the total development and construction costs exceed the amount of
the construction-related loans, the Company applies its average borrowing
rate on other than construction-related loans to such excess construction
costs to derive the amount of additional capitalized interest. General and
administrative costs are expensed, except for the costs incurred in support
of the Company's construction-focused executives.
2. COMMITMENTS
As of June 30, 1997, the Company was under construction or grading on four
additional multifamily apartment communities totaling 1,563 units (excluding
Oasis Denver West, a 321 unit apartment community, developed as part of a
joint venture agreement) in three markets: Las Vegas, Reno and Denver. The
Company anticipates completing 901 of these units in 1997. The estimated
total investment upon completion of the 901 units scheduled to be completed
in 1997 is $76,600. The estimated total investment for the remaining 662
units will be finalized prior to the commencement of construction. As of June
30, 1997, the Company had expended approximately $70,700 in land acquisition
and development costs on these projects.
3. SUBSEQUENT EVENTS
On July 28, 1997, the Company declared a quarterly dividend for its common
stock of $0.4525 per share. The dividend is to be paid on August 19, 1997 to
stockholders of record on August 8, 1997. The Company announced on July 21,
1997, the declaration of its quarterly dividend of $0.5625 per share on its
Series A Cumulative Convertible Preferred Stock. This preferred stock
dividend is to be paid on August 15, 1997 to stockholders of record on August
1, 1997.
5
<PAGE> 7
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Statements contained or
incorporated by reference in this document that are not based on historical
fact are "forward looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements may be
identified by the use of the forward-looking terminology such as "may",
"will", "expect", "estimate", "anticipate", "continue" or similar terms,
variations of those terms or the negative of those terms. The "Risk Factors"
set forth in the Company's Annual Report on Form 10-K constitute cautionary
statements identifying important factors that could cause actual results to
differ materially from those in the forward-looking statements.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the consolidated
financial statements and notes thereto appearing elsewhere in this Form 10-Q.
RESULTS OF OPERATIONS
Increases in the operating results for the periods discussed below are
primarily the result of increases from period to period in the number of
properties owned and operated. Where applicable, comparisons have been made on
a weighted average per unit basis in order to adjust for such changes in the
number of units owned and operated. In computing the weighted average per unit
amounts, income and expenses of the commercial properties have been
eliminated.
Comparison of the three and six months ended June 30, 1997 to the three and
six months ended June 30, 1996.
The weighted average number of apartment units increased by 1,495 and 1,521
units for the three and six months ended June 30, 1997, respectively, as
compared to the same periods in 1996. These increases were the result of
acquiring 138 apartment units in June 1997 and the development of 1,634 units
since the end of June 1996. The total number of apartment units operated as of
June 30, 1997 and 1996 were 14,241 and 12,469, respectively. The weighted
average number of apartment units for each of the periods were as follows:
Three months ended June 30, 1997 13,879
Three months ended June 30, 1996 12,384
Six months ended June 30, 1997 13,654
Six months ended June 30, 1996 12,133
For the three months ended June 30, 1997, net income increased by $42,000 over
the three months ended June 30, 1996. This increase was due to increased
rental and other income of $4,864,000, as well as a decrease in interest
expense (non-cash), which represents amortization of loan fees and costs, of
$9,000. Offsetting these factors were increases in property operating and
maintenance expenses of $1,141,000, general and administrative expenses of
$115,000, real estate taxes of $211,000, interest expense of $2,554,000, and
depreciation and amortization of $810,000. These increases in revenue and
expenses were primarily the result of operating a greater number of apartment
units during the three months ended June 30, 1997 as compared to the same
period in 1996.
For the six months ended June 30, 1997, net income increased by $212,000 over
the six months ended June 30, 1996. This increase was due to increased rental
and other income of $9,936,000, as well as a decrease in interest expense
(non-cash), which represents amortization of loan fees and costs, of $35,000.
Offsetting these factors were increases in property operating and maintenance
expenses of $2,257,000, general and administrative expenses of $222,000, real
estate taxes of $490,000, interest expense of $4,970,000, and depreciation and
amortization of $1,820,000. These increases in revenue and expenses were
primarily a result of operating a greater number of apartment units during the
six months ended June 30, 1997 as compared to the same period in 1996.
6
<PAGE> 8
PROPERTY OPERATIONS: The following table presents the Company's results of
operations for its multifamily apartment communities (excluding commercial
properties and corporate general and administrative expenses) for the three
and six months ended June 30, 1997 and 1996:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------- -------------------------------
1997 1996 % Change 1997 1996 % Change
------- ------- -------- ------- ------- --------
(In thousands) (In thousands)
<S> <C> <C> <C> <C> <C> <C>
Rental income $26,859 $22,266 21% $52,594 $43,168 22%
Other income 941 726 30% 1,773 1,348 32%
------- ------- -- ------- ------- --
Total income 27,800 22,992 21% 54,367 44,516 22%
------- ------- -- ------- ------- --
Property operating and maintenance 7,747 6,599 17% 14,948 12,692 18%
Real estate taxes 1,435 1,227 17% 2,854 2,364 21%
------- ------- -- ------- ------- --
Total property operating expenses 9,182 7,826 17% 17,802 15,056 18%
------- ------- -- ------- ------- --
Property net operating income,
before interest expense,
depreciation and amortization $18,618 $15,166 23% $36,565 $29,460 24%
======= ======= == ======= ======= ==
</TABLE>
Rental income for the three and six months ended June 30, 1997 increased over
the same periods in 1996 by $4,593,000 and $9,426,000, respectively, primarily
due to the acquisition and development of additional apartment communities.
The weighted average monthly rental income per apartment unit was
approximately $645 and $642 for the three and six months ended June 30, 1997,
respectively, as compared to $599 and $593 for the same periods in 1996,
respectively.
Other income (consisting primarily of nonrefundable security deposits,
application and cleaning fees, laundry and vending income) increased by
$215,000 and $425,000, respectively, for the three and six months ended June
30, 1997, as compared to the same periods in 1996. These increases are
primarily due to the operation of additional apartment communities in 1997 as
compared to 1996.
Property operating and maintenance expenses for the three and six months ended
June 30, 1997, increased over the same periods in 1996 by $1,148,000 and
$2,256,000, respectively. On a weighted average per unit, per month basis,
these expenses increased by $8 for the three and six months ended June
30, 1997, as compared to the same periods in 1996. These increases are
primarily attributable to general increases in utility rates during 1997 and
in the last six months of 1996.
Real estate taxes increased primarily due to the acquisition and development
of additional apartment communities since June 1996. On a weighted average per
unit, per month basis, real estate taxes increased by $1 and $3, respectively,
for the three and six months ended June 30, 1997 as compared to the same
periods in 1996. These increases are primarily due to increases in property
taxes at certain properties for the tax year commencing July 1, 1996. In
Nevada, properties are assessed at their value as of July 1 of each year and,
therefore, properties that are under development as of that date are not
assessed on their full value until July 1 of the following year.
7
<PAGE> 9
"SAME STORE" PORTFOLIO: The following table presents a comparison of the
operating results for the three and six months ended June 30, 1997 as compared
to the three and six months ended June 30, 1996 for the properties that the
Company owned as of December 31, 1995, consisting of 40 apartment communities,
containing 10,959 apartment units:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------------- -------------------------------
1997 1996 % Change 1997 1996 % Change
------- ------- -------- ------- ------- --------
(Dollars in thousands) (Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Rental income $19,901 $19,138 4% $39,702 $38,177 4%
Other income 694 590 18% 1,362 1,116 22%
------- ------- -- ------- ------- --
Total income 20,595 19,728 4% 41,064 39,293 5%
------- ------- -- ------- ------- --
Property operating and maintenance 5,747 5,579 3% 11,356 11,110 2%
Real estate taxes 1,150 1,121 3% 2,298 2,221 3%
------- ------- -- ------- ------- --
Total property operating expenses 6,897 6,700 3% 13,654 13,331 2%
------- ------- -- ------- ------- --
Property net operating income,
before interest expense,
depreciation and amortization $13,698 $13,028 5% $27,410 $25,962 6%
======= ======= == ======= ======= ==
</TABLE>
Rental income for the three and six months ended June 30, 1997 increased over
the same periods in 1996 by $763,000 and $1,525,000, respectively. These
increases are primarily due to an increase in average rental rates. The
weighted average monthly rental income per apartment unit was approximately
$605 and $604 for the three and six months ended June 30, 1997, as compared to
$582 and $581 for the same periods in 1996, respectively.
Other income increased by $104,000 and $246,000 for the three and six months
ended June 30, 1997, respectively, as compared to the same periods in 1996.
These increases are a result of an increase in fees unrelated to rent such as
nonrefundable security deposits, application and cleaning fees and late fees.
Property operating and maintenance expenses increased by $168,000 and $246,000
for the three and six months ended June 30, 1997, respectively. These
increases are primarily due to general increases in utility rates and an
increase in marketing costs.
Real estate taxes increased by $29,000 and $77,000 for the three and six
months ended June 30, 1997, respectively, as compared to the same periods in
1996, primarily due to the re-assessment of certain apartment communities by
the taxing authorities.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities increased by $1,468,000 from
$23,268,000 in the six months ended June 30, 1996 to $24,736,000 in the six
months ended June 30, 1997, primarily due to increases in rental income from
additional properties acquired or developed subsequent to June 30, 1996, an
increase in accounts payable and accrued expenses, and as a result of an
increase in resident deposits and prepaid rent, partially offset by an
increase in deferred costs and other assets.
Net cash used in investing activities decreased by $38,829,000 from
$82,884,000 in the six months ended June 30, 1996 to $44,055,000 in the six
months ended June 30, 1997. During the six months ended June 30, 1996, the
Company had 13 properties under construction, containing 3,766 apartment
units, of which 806 units were completed during the period. During the six
months ended June 30, 1997, the Company had six communities under
construction (excluding Oasis Denver West, a 321 unit apartment community,
being developed as part of a joint venture agreement), comprising 2,238 units
in three markets: Las Vegas, Reno and Denver, of which 675 units were
completed during the period. The Company anticipates completing 901 of these
apartment units in 1997. The estimated total investment upon completion of
the 901 units scheduled to be completed in 1997 is $76,600,000. The estimated
total investment for the remaining 662 apartment units will be finalized
prior to the commencement of construction.
8
<PAGE> 10
The Company funds its development activities through a combination of working
capital and credit facility debt. At June 30, 1997, the Company had available
borrowing capacity under the credit facility of $75,264,000.
Net cash provided by financing activities decreased by $38,544,000 from
$56,762,000 in the six months ended June 30, 1996 to $18,218,000 in the six
months ended June 30, 1997, primarily as a result of lower proceeds from the
issuance of debt in 1997 as compared to 1996.
The Company anticipates meeting its short-term liquidity requirements through
a combination of cash flow retained for investment purposes, cash available
from its credit facility and construction loans plus additional long-term
borrowings. The Company believes that its net cash provided by operations will
be adequate to meet its operating requirements and to pay dividends in
accordance with Real Estate Investment Trust ("REIT") requirements.
The Company expects to meet its long-term liquidity requirements, such as
funds for property acquisition and development activity and the repayment of
debt, through new long-term borrowings and the issuance of additional debt
securities or equity securities. In addition, the Company has a shelf
registration statement with the Securities and Exchange Commission which
covers up to an aggregate of $250,000,000 of debt securities, preferred stock,
depositary stock, common stock and warrants to purchase common stock and
preferred stock which the Company may issue from time to time.
CAPITAL EXPENDITURES
The Company capitalizes the direct and indirect cost of expenditures for the
acquisition or development of apartment communities and replacements and
improvements. Non-revenue generating capital expenditures are those
replacements which recur on a regular basis, but which have estimated useful
lives of more than one year, such as roofing, heating, ventilation and air
conditioning and exterior repainting. Revenue-generating expenditures are
those improvements which enhance the communities net operating income
generating capabilities either through increased rental rates or reduced
operating expenses.
At newly acquired communities, the Company often finds it necessary to upgrade
the physical appearance of the properties and to complete maintenance and
repair work which had been deferred by prior owners. These activities often
result in heavier capital expenditures in the early years of Company
ownership. Some of these expenditures which would normally be considered
non-revenue generating capital expenditures or expensed items are classified
as revenue-generating expenditures until the community is substantially
upgraded to meet the image and quality standards represented by the Oasis
brand name. Upon completion of the rehabilitation process, normal recurring
capital expenditures such as those made for carpet and appliances are expensed
as incurred.
Interest, real estate taxes, and other carrying costs incurred during the
development period of communities under construction are capitalized and, upon
completion of the project, depreciated over the lives of the related assets.
INFLATION
The Company leases apartments to its residents under lease terms generally
ranging from six to twelve months. Management believes that the short-term
lease contracts lessen the impact of inflation by giving the Company the
ability to adjust rental rates to market levels as leases expire. The impact
of recent low rates of inflation have not been significant to the Company's
operations, except for the positive effects that low inflation has had on
reducing the Company's interest cost. Inflation, inflationary expectations and
their effects on interest rates may affect the Company in the future by
changing the underlying value of the Company's real estate assets or by
affecting the Company's costs of financing operations.
9
<PAGE> 11
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In 1997, the Financial Accounting Standards Board (FASB) issued Statements of
Financial Accounting Standards (SFAS) No. 128 "Earnings Per Share" and No. 129
"Disclosure of Information about Capital Structure." These statements are
effective for fiscal years ending after December 15, 1997. The FASB also
issued SFAS No. 130 "Reporting Comprehensive Income" and No. 131 "Disclosures
about Segments of an Enterprise and Related Information." These statements are
effective for fiscal years beginning after December 15, 1997. Management
believes that the adoption of SFAS Nos. 128, 129, 130 and 131 will not have a
material effect on its earnings per share amounts, financial position or
results of operations.
10
<PAGE> 12
The following table sets forth certain information with respect to debt at June
30, 1997.
In connection therewith, as of June 30, 1997, the Company had 9,445 apartment
units plus its headquarters in the commercial center that were unencumbered:
<TABLE>
<CAPTION>
ENCUMBERED NUMBER INTEREST BALANCE
LENDER COMMUNITIES OF UNITS MATURITY RATE JUNE 30, 1997
- ------------------------- ------------------ ------------ -------------- -------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
CREDIT FACILITY DEBT
- --------------------
Wells Fargo Bank Unsecured 09/97(1) LIBOR + 1.25% $ 124,736
----------
NOTES PAYABLE
- -------------
5 year notes payable Unsecured 11/01 6.75% 50,000
7 year notes payable Unsecured 11/03 7.00% 50,000
10 year notes payable Unsecured 11/06 7.25% 50,000
----------
150,000(2)
----------
MORTAGE NOTES PAYABLE
- ---------------------
Lutheran Brotherhood Oasis Club 320 10/98 6.90% 9,002
Teachers Insurance Oasis Del Mar 560 12/02 8.46% 21,598
FNMA-MBS Oasis Greens 432 08/01 8.63% 12,000
FNMA Oasis Hills 184 10/03 7.50% 2,616
FNMA Oasis Landing 144 10/03 7.50% 3,945
Allstate Oasis Paradise I 368 04/08 7.10% 15,702
FNMA-MBS Oasis Plaza 300 08/01 8.63% 6,000
FNMA Oasis Rainbow 232 10/03 7.50% 6,349
FNMA Oasis Topaz 270 12/01 9.50% 6,498
FNMA Oasis Vintage I 336 10/03 7.50% 10,886
Teachers Insurance Various (3) 1,068 12/05 8.13% 39,720
-------- ----------
4,214 134,316
-------- ----------
TAX-EXEMPT BONDS
- ----------------
Bonds Oasis Park 224 01/26 7.29% 7,632(4)
Bonds Oasis Wexford 358 11/25 6.45% 15,928
-------- ----------
582 23,560
-------- ----------
Subtotal 4,796 432,612
-------- ----------
Unamortized discount on
notes payable (203)
-------- ----------
Total 4,796 $ 432,409
======== ==========
</TABLE>
- ---------------------
(1) The Company has the option to extend the maturity of the facility for
one additional year.
(2) $149,797 net after discount.
(3) Communities collateralized are Oasis Bel Air, Oasis Canyon, Oasis
Rose, and Oasis Trails.
(4) $1,090 of the outstanding balance is taxable.
11
<PAGE> 13
CALCULATION OF FUNDS FROM OPERATIONS AND FUNDS AVAILABLE FOR DISTRIBUTION:
The Company considers Funds from Operations ("FFO") to be an appropriate
measure of performance of an equity REIT. FFO, as defined by the National
Association of Real Estate Investment Trusts ("NAREIT"), consists of income
before gains (losses) on investments and extraordinary items (computed in
accordance with generally accepted accounting principles) plus real estate
depreciation and after adjustments for significant non-recurring items, if
any. Funds Available for Distribution ("FAD") is defined as FFO less
non-revenue generating capital expenditures and includes an "addback" to net
income for the amortization of deferred financing costs and depreciation of
non-real estate assets and other amortization. The Company believes that to
facilitate a clear understanding of the Company's operating results, FFO and
FAD should be examined in conjunction with net income and should not be
considered as alternatives to net income as an indication of the Company's
operating performance or as alternatives to cash flow as a measure of
liquidity.
The following table presents the calculation of FFO and FAD:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, 1997 JUNE 30, 1997
------------- -------------
(Dollars in thousands)
<S> <C> <C>
Calculation of Funds from Operations
Net income $ 7,099 $14,224
Depreciation on real estate assets 4,471 8,923
------- -------
FUNDS FROM OPERATIONS $11,570 $23,147
======= =======
Computation of Funds Available for Distribution
Funds from Operations $11,570 $23,147
Add:
Amortization of deferred financing costs 267 535
Depreciation of non-real estate assets 77 152
Other amortization 3 6
Less:
Non-revenue generating capital expenditures 801 1,582
------- -------
FUNDS AVAILABLE FOR DISTRIBUTION $11,116 $22,258
======= =======
</TABLE>
NOTES TO CALCULATION OF FUNDS FROM OPERATIONS AND FUNDS AVAILABLE FOR
DISTRIBUTION
1. The Company generally expenses most recurring non-revenue generating
property expenditures, including carpet and appliance replacements, except
for certain expenditures on acquisition properties where major improvements
are required to bring the property up to the operating standards of the
Oasis portfolio.
2. Non-revenue generating capital expenditures at the communities consist of
replacements and equipment additions that do not enhance the revenue
generating capabilities of the communities.
3. Non-revenue generating capital expenditures at the corporate office consist
primarily of computer and office equipment additions.
12
<PAGE> 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Shareholders was held May 12,
1997.
(1) The Shareholders voted in favor of the election of
Robert V. Jones, Peter L. Rhein and Robert Smith as
Directors.
<TABLE>
<CAPTION>
Broker
Affirmative Negative Abstentions Non-Votes
----------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Robert V. Jones 10,544,593 15,474 0 0
Peter L. Rhein 10,544,593 15,474 0 0
Robert H. Smith 10,544,593 15,474 0 0
</TABLE>
(2) The Shareholders voted in favor of the selection of
Coopers & Lybrand, L.L.P., to serve as the independent
accountants for the Company for the calendar year ending
December 31, 1997.
<TABLE>
<CAPTION>
Broker
Affirmative Negative Abstentions Non-Votes
----------- -------- ----------- ---------
<S> <C> <C> <C>
10,534,108 12,062 13,896 2
</TABLE>
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
Exhibit
No.
-------
10.85 Fourth Modification Agreement to the Amended and Restated
Credit Agreement among the Company, The Lenders, named
therein, Wells Fargo Bank as Administrative Agent, and
Morgan Guaranty Trust Company of New York and Bank One,
Arizona, N.A., dated as of December 18, 1996
10.86 Land Purchase Agreement for Oasis Interlaken by and between
Interlocken, Ltd. and ORI-Colorado, Inc. dated December 24,
1996
10.87 Purchase and Sale Agreement for Oasis Sea Palms by and between
Hutton Development Company, Inc. and the Company dated May 19,
1997
27 Financial Data Schedule
13
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OASIS RESIDENTIAL, INC.
/s/ SCOTT S. INGRAHAM
-------------------------------------- 8-13-97
Scott S. Ingraham
President and Chief Operating Officer
/s/ JOHN M. CLAYTON
-------------------------------------- 8-13-97
John M. Clayton
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
/s/ MARIANNE K. AGUIAR
-------------------------------------- 8-13-97
Marianne K. Aguiar
Vice President and Controller
(Principal Accounting Officer)
14
<PAGE> 16
EXHIBIT INDEX
Exhibit
No.
-------
10.85 Fourth Modification Agreement to the Amended and Restated
Credit Agreement among the Company, The Lenders, named
therein, Wells Fargo Bank as Administrative Agent, and
Morgan Guaranty Trust Company of New York and Bank One,
Arizona, N.A., dated as of December 18, 1996
10.86 Land Purchase Agreement for Oasis Interlaken by and between
Interlocken, Ltd. and ORI-Colorado, Inc. dated December 24,
1996
10.87 Purchase and Sale Agreement for Oasis Sea Palms by and between
Hutton Development Company, Inc. and the Company dated May 19,
1997
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 10.85
Loan No. 6032ZR
FOURTH MODIFICATION AGREEMENT
UNSECURED LOAN
THIS MODIFICATION AGREEMENT ("Agreement") is dated as of December 18, 1996,
entered by and among OASIS RESIDENTIAL, INC., a Nevada corporation ("Company"),
the financial institutions listed on the signature pages hereof ("Lenders") and
Wells Fargo Bank, National Association, as agent for Lenders (in such capacity,
"Administrative Agent"), and Morgan Guaranty Trust Company of New York and Bank
One, Arizona NA, as co-agents for the Lenders (in such capacity, collectively,
"Co-Agents").
R E C I T A L S
A. Pursuant to the terms of an Amended and Restated Credit Agreement between
Company and Lenders dated September 25, 1995 ("Credit Agreement") as
amended from time to time, Lenders made a loan to Company in the principal
amount of TWO HUNDRED MILLION AND NO/100THS DOLLARS ($200,000,000.00)
("Loan"). The Loan is evidenced by promissory notes dated as of the date of
the Credit Agreement and additional notes dated as of September 24, 1996,
executed by Company in favor of Lenders, in the following principal amounts
of the Loan:
Morgan Guaranty Trust Company of New York $35,000,000.00 and
$12,500,000.00;
Bank One, Arizona $35,000,000.00 and $12,500,000.00;
Union Bank $20,000,000.00 and $5,000,000.00;
Dresdner Bank AG $20,000,000.00 and $5,000,000.00;
Wells Fargo Bank, National Association $40,000,000.00 and $15,000,000.00
(collectively, the "Note").
B. The Note and Credit Agreement have been previously amended and modified by
modification agreements dated: February 27, 1996 (the "First
Modification"); July 25, 1996 (the "Second Modification"); and September
24, 1996 (the "Third Modification").
C. The Note, Credit Agreement, this Agreement, the other documents described
in the Credit Agreement as "Loan Documents" together with all modifications
and amendments thereto and any document required hereunder, are
collectively referred to herein as the "Loan Documents".
D. By this Agreement, Company and Lenders intend to modify and amend certain
terms and provisions of the Loan Documents.
NOW, THEREFORE, Company and Lenders agree as follows:
1. CONDITIONS PRECEDENT. The following are conditions precedent to Lenders'
obligations under this Agreement:
1.1 Receipt and approval by Administrative Agent of the executed
originals of this Agreement, and any and all other documents and
agreements which are required pursuant to this Agreement or which
Administrative Agent has requested pursuant to the Loan Documents, in
form and content acceptable to Administrative Agent;
Page 1 of 4
<PAGE> 2
Loan No. 6032ZR
1.2 Reimbursement to Administrative Agent by Company of Administrative
Agent's costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby, including, without
limitation, attorneys' fees, and documentation costs and charges,
whether such services are furnished by Administrative Agent's
employees or agents or by independent contractors; and
1.3 The representations and warranties contained herein are true and
correct.
2. REPRESENTATIONS AND WARRANTIES. Company hereby represents and warrants that
no breach or failure of condition has occurred, or would exist with notice
or the lapse of time or both, under any of the Loan Documents, as modified
by this Agreement, and all representations and warranties herein and in the
other Loan Documents are true and correct, which representations and
warranties shall survive execution of this Agreement.
3. MODIFICATION OF LOAN DOCUMENTS. The Loan Documents are hereby supplemented
and modified to incorporate the following, which shall supersede and
prevail over any conflicting provisions of the Loan Documents:
3.1 Amendment to Definition of "Applicable LIBO Rate Margin." For all new
LIBO Rate Loans, the definition of "Applicable LIBO Rate Margin" set
forth in Section 1.1 of the Credit Agreement, as amended by Second
Modification, is hereby amended and restated to read in its entirety
as follows:
"Applicable LIBO Rate Margin" means as of any date of
determination: (i) 1.25%, if Company's senior unsecured long
term debt obligations are rated at least BBB-/Baa3 by the Rating
Agencies, or (ii) 1.50%, if Company's senior unsecured long term
debt obligations does not satisfy clause (i) of this definition.
The assigned rating of the Company's senior unsecured long term
debt obligations given by at least two of three Rating Agencies
will be used for purposes of determining the Applicable LIBO
Rate Margin."
4. FORMATION AND ORGANIZATIONAL DOCUMENTS. Company has previously delivered to
Administrative Agent all of the relevant formation and organizational
documents of Company, of the partners or joint venturers of Company (if
any), and of all guarantors of the Loan (if any), and all such formation
documents remain in full force and effect and have not been amended or
modified since they were delivered to Administrative Agent. Company hereby
certifies that: (i) the above documents are all of the relevant formation
and organizational documents of Company; (ii) they remain in full force and
effect; and (iii) they have not been amended or modified since they were
previously delivered to Administrative Agent.
5. NON-IMPAIRMENT. Except as expressly provided herein, nothing in this
Agreement shall alter or affect any provision, condition, or covenant
contained in the Loan Documents or affect or impair any rights, powers, or
remedies thereunder, it being the intent of the parties hereto that the
provisions of the Loan Documents shall continue in full force and effect
except as expressly modified hereby.
6. MISCELLANEOUS. This Agreement and the other Loan Documents shall be
governed by and interpreted in accordance with the laws of the State of
Nevada, except if preempted by Federal law. In any action brought or
arising out of this Agreement or the Loan Documents, Company, and the
general partners and joint venturers of Company, hereby consent to the
jurisdiction of any Federal or State Court having proper venue within the
State of Nevada and also consent to the service of process by any means
authorized by Nevada or federal law. The headings used in this Agreement
are for convenience only and shall be disregarded in interpreting the
substantive provisions of this Agreement. Except as expressly provided
otherwise herein, all terms used herein shall have the meaning given to
them in the other Loan Documents. Time is of the
Page 2 of 4
<PAGE> 3
Loan No. 6032ZR
essence of each term of the Loan Documents, including this Agreement. If
any provision of this Agreement or any of the other Loan Documents shall be
determined by a court of competent jurisdiction to be invalid, illegal or
unenforceable, that portion shall be deemed severed therefrom and the
remaining parts shall remain in full force as though the invalid, illegal,
or unenforceable portion had never been a part thereof.
7. INTEGRATION; INTERPRETATION. The Loan Documents, including this Agreement,
contain or expressly incorporate by reference the entire agreement of the
parties with respect to the matters contemplated herein and supersede all
prior negotiations. The Loan Documents shall not be modified except by
written instrument executed by all parties. Any reference to the Loan
Documents in any of the Loan Documents includes any amendments, renewals or
extensions approved by Lender.
8. EXECUTION IN COUNTERPART. This Agreement, and other Loan Documents which
expressly so provide, may be executed in any number of counterparts, each
of which when executed and delivered will be deemed to be an original and
all of which, taken together, will be deemed to be one and the same
instrument.
IN WITNESS WHEREOF, Company, Administrative Agent, Co-Agents and Lenders have
caused this Agreement to be duly executed as of the date first above written.
Page 3 of 4
<PAGE> 4
Loan No. 6032ZR
"LENDERS" "Company"
WELLS FARGO BANK, OASIS RESIDENTIAL, INC.,
NATIONAL ASSOCIATION, individually and as a Nevada corporation
Administrative Agent
By: /s/ MARK D. OSGOOD BY: [SIG]
------------------------------- --------------------------
Mark D. Osgood
Its: Vice President Its: CFO
---------------------
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, individually and as Co-Agent
BY:
-------------------------------
Its:
--------------------------
BANK ONE, ARIZONA NA, individually and as Co-Agent
BY:
-------------------------------
Its:
--------------------------
UNION BANK of California, N.A., formerly known as
Union Bank
BY:
-------------------------------
Its:
--------------------------
DRESDNER BANK AG, LOS ANGELES AGENCY AND
GRAND CAYMAN BRANCH
BY:
-------------------------------
Its:
--------------------------
Page 4 of 4
<PAGE> 5
Loan No. 6032ZR
"LENDERS" "Company"
WELLS FARGO BANK, OASIS RESIDENTIAL, INC.,
NATIONAL ASSOCIATION, individually and as a Nevada corporation
Administrative Agent
By: BY:
------------------------------- --------------------------
Mark D. Osgood
Its: Vice President Its:
---------------------
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, individually and as Co-Agent
BY: MICHAEL M. ERRICHETTI
---------------------------------
Its: VICE PRESIDENT
----------------------------
BANK ONE, ARIZONA NA, individually and as Co-Agent
BY:
-------------------------------
Its:
--------------------------
UNION BANK of California, N.A., formerly known as
Union Bank
BY:
-------------------------------
Its:
--------------------------
DRESDNER BANK AG, LOS ANGELES AGENCY AND
GRAND CAYMAN BRANCH
BY:
-------------------------------
Its:
--------------------------
Page 4 of 4
<PAGE> 6
Loan No. 6032ZR
"LENDERS" "Company"
WELLS FARGO BANK, OASIS RESIDENTIAL, INC.,
NATIONAL ASSOCIATION, individually and as a Nevada corporation
Administrative Agent
By: BY:
------------------------------- --------------------------
Mark D. Osgood
Its: Vice President Its:
---------------------
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, individually and as Co-Agent
BY:
---------------------------------
Its:
----------------------------
BANK ONE, ARIZONA NA, individually and as Co-Agent
BY: [SIG]
-------------------------------
Its: Vice President
--------------------------
UNION BANK of California, N.A., formerly known as
Union Bank
BY:
-------------------------------
Its:
--------------------------
DRESDNER BANK AG, LOS ANGELES AGENCY AND
GRAND CAYMAN BRANCH
BY:
-------------------------------
Its:
--------------------------
Page 4 of 4
<PAGE> 7
Loan No. 6032ZR
"LENDERS" "Company"
WELLS FARGO BANK, OASIS RESIDENTIAL, INC.,
NATIONAL ASSOCIATION, individually and as a Nevada corporation
Administrative Agent
By: BY:
------------------------------- --------------------------
Mark D. Osgood
Its: Vice President Its:
---------------------
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, individually and as Co-Agent
BY:
---------------------------------
Its:
----------------------------
BANK ONE, ARIZONA NA, individually and as Co-Agent
BY:
-------------------------------
Its:
--------------------------
UNION BANK of California, N.A., formerly known as
Union Bank
BY: [SIG]
-------------------------------
Its: Vice President
--------------------------
DRESDNER BANK AG, LOS ANGELES AGENCY AND
GRAND CAYMAN BRANCH
BY:
-------------------------------
Its:
--------------------------
Page 4 of 4
<PAGE> 8
Loan No. 6032ZR
"LENDERS" "Company"
WELLS FARGO BANK, OASIS RESIDENTIAL, INC.,
NATIONAL ASSOCIATION, individually and as a Nevada corporation
Administrative Agent
By: BY:
------------------------------- --------------------------
Mark D. Osgood
Its: Vice President Its:
---------------------
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, individually and as Co-Agent
BY: /s/ MICHAEL M. ERRICHETTI
---------------------------------
Its: VICE PRESIDENT
----------------------------
BANK ONE, ARIZONA NA, individually and as Co-Agent
BY:
-------------------------------
Its:
--------------------------
UNION BANK of California, N.A., formerly known as
Union Bank
BY:
-------------------------------
Its:
--------------------------
DRESDNER BANK AG, NEW YORK BRANCH AND
GRAND CAYMAN BRANCH
BY: /s/ THOMAS J. NADRAMIA
-------------------------------
Its: Vice President
--------------------------
BY: /s/ JOHN S. RUNNION
-------------------------------
Its: Vice President
--------------------------
Page 4 of 4
<PAGE> 1
EXHIBIT 10.86
INTERLOCKEN LAND PURCHASE CONTRACT
TABLE OF CONTENTS
1. PARTIES......................................................... 1
2. REAL PROPERTY................................................... 1
3. INTENT.......................................................... 1
4. EARNEST MONEY DEPOSIT........................................... 1
5. PURCHASE PRICE; PAYMENT......................................... 2
6. TITLE STATUS AND INSURANCE...................................... 2
7. BUYER'S CONSTRUCTION PLANS...................................... 5
8. SUBDIVISION PLAT APPROVALS...................................... 6
9. INSPECTION PERIOD............................................... 7
10. UTILITIES, PUBLIC ROADS AND SITE PREPARATION.................... 9
11. LIMITATIONS ON BUYER'S ACTIVITIES............................... 10
12. CLOSING......................................................... 10
13. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.............. 12
14. DEFAULT......................................................... 14
15. CANCELLATION AND TERMINATION.................................... 15
16. COMMISSIONS..................................................... 16
17. POST-CLOSING OBLIGATIONS........................................ 17
18. RESERVATION OF WATER RIGHTS..................................... 17
19. DENSITY RESTRICTION............................................. 17
20. RELATIONSHIP OF PARTIES......................................... 17
21. COOPERATION..................................................... 17
22. ASSIGNMENT...................................................... 18
23. GENERAL PROVISIONS.............................................. 18
24. ACCEPTANCE BY SELLER............................................ 21
25. INTERSTATE LAND SALES ACT....................................... 21
26. TRADENAMES...................................................... 21
27. CONDEMNATION.................................................... 22
INITIALS:
---------
---------
<PAGE> 2
INTERLOCKEN LAND PURCHASE CONTRACT
This Interlocken Land Purchase Contract ("Contract") is executed by and
between the parties designed below as Seller and Buyer with respect to the sale
and purchase of the Real Property described below subject top, upon and in
accordance with all of the following, and no other, terms, provisions,
covenants, conditions and agreements (collectively "Provisions"):
1. PARTIES. Seller is INTERLOCKEN, LTD., a Colorado limited
partnership. Buyer is ORI-COLORADO, INC., a Nevada corporation.
2. REAL PROPERTY. The Real Property subject to this Contract is
commonly known as 705 El Dorado Boulevard, and is legally described on Exhibit
1 attached hereto and incorporated herein by this reference ("Real Property").
The Real Property consists of 19.505 acres. The Real Property has not yet been
platted, and as such, the Seller will prepare a final subdivision plat ("Plat")
of the Real Property. Upon approval and recording of the Plat, the legal
description of the Real Property shall be as shown and designated on the Plat.
3. INTENT. Seller shall sell and convey the Real Property to Buyer,
and Buyer shall purchase and acquire the Real Property from Seller, in
accordance only with the written provisions of this Contract.
4. EARNEST MONEY DEPOSIT. Upon execution hereof by Buyer, Buyer
shall deposit with National Title, Inc., as agent with authority to bind
Fidelity National Title Insurance Company ("Title Company"), having its office
at 1700 Lincoln Street, Suite 1900, Denver, Colorado 80203, Buyer's promissory
note in the amount of Four Hundred Ninety-Two Thousand Seven Hundred
Eighty-Nine and 92/100 Dollars ($492,789.92) ("Earnest Money Note"), in the
form attached hereto as Exhibit 2 and incorporated herein by this reference.
On or before expiration of the Inspection Period, as hereinafter defined, if
Buyer has delivered the Continuation Notice, as hereinafter defined, Buyer shall
simultaneously deliver to the Title Company $492,789.92. Upon Title Company's
receipt of $492,789.92 from Buyer, the Earnest Money Note shall be deemed null
and void, and Title Company shall return the Earnest Money Note to Buyer. The
Funds delivered by the Buyer under this paragraph, and any interest earned
thereon, are referred to as the "Earnest Money Deposit," and shall be in cash or
by federal funds wire transfer, to be held by the Title Company as earnest money
in accordance with the terms of this Contract and mutually acceptable escrow
Initials:
---------
---------
<PAGE> 3
instructions. In the event Buyer fails to deposit the Earnest Money Note or
any portion of the Earnest Money Deposit as herein provided, this Contract
shall automatically terminate, and neither party shall have any further
obligations hereunder. At such time as the Earnest Money Deposit is delivered
by Buyer as provided in this section, such deposit shall be non-refundable
except in the event of Seller's default, or the failure of any condition to
Closing, and except in the event that the PUD Site Plan is not approved by the
City.
The Earnest Money Deposit shall be held by the Title Company in an
interest bearing account, and all accrued interest that shall accrue thereon
shall be applied against the Purchase Price, as hereinafter defined (unless
Buyer requests that the interest be paid to it and pays the balance of the
Purchase Price at the Closing), or shall be paid to Seller or paid to Buyer as
otherwise provided for in this Contract.
5. PURCHASE PRICE; PAYMENT. Subject to the adjustments referred to
in this paragraph, the Purchase Price of the Real Property to be paid by Buyer
to Seller is Four Million Nine Hundred Twenty-Seven Thousand Eight Hundred
Ninety-Nine and 20/100 Dollars ($4,927,899.20) ("Purchase Price"), based on the
per square foot price of Five and 80/100 Dollars ($5.80). The entire Purchase
Price less the Earnest Money Deposit and accrued interest shall be paid by
Buyer to Seller, through the Title Company, at the Closing, as hereinafter
defined, by federal funds wire transfer. The Purchase Price shall be adjusted
to reflect customary closing costs. The Purchase Price shall be adjusted based
on the final square footage of the Real Property as shown on the Plat, which
shall be the same as shown by the Survey.
6. TITLE STATUS AND INSURANCE.
(a) Title Insurance. Within fifteen (15) days after the date of
mutual execution of this Contract, Seller shall deliver to Buyer and its
attorney a title insurance commitment (the "Title Commitment") with respect to
the Real Property issued by the Title Company committing to insure title to the
Real Property in Buyer's name subject only to the Permitted Exceptions, as
hereinafter defined, in a face amount equal to the Purchase Price, together
with copies of the recorded documents listed as exceptions to title in the
Title Commitment ("Title Documents"). As soon as possible after Closing, as
hereinafter defined, Seller shall cause to be delivered to Buyer, at Seller's
cost and expense, an owner's title insurance policy ("Title Policy") insuring
the title of Buyer to the Real Property in accordance with the Title
Commitment, as
Initials:
---------
---------
2
<PAGE> 4
approved or deemed approved by Buyer, as provided in Section 6(c) hereof.
(b) Survey. Within fifteen (15) days after the date of mutual
execution of this Contract, Seller shall deliver to Buyer a survey of the Real
Property prepared by a surveyor licensed in the State of Colorado, which shall
meet ALTA/ACSM survey requirements for an urban survey, including items 1-4, 8
and 10-11 of Table A and the setback lines ("Survey"). The Survey shall be
certified to Buyer, Buyer's lender (if identified at least ten (10) days prior
to the Closing), Seller and the Title Company in a form reasonably acceptable
to Buyer, and shall disclose and the surveyor shall warrant that the Real
Property is not located within any flood plain area or wetlands. The Survey
shall be updated after the Plat is recorded.
(c) Permitted Exceptions. The "Permitted Exceptions" shall
mean:
(i) those matters of record set forth on the Title
Commitment, and those matters set forth on the Survey or apparent upon an
inspection of the Real Property which are not objected to by Buyer or which are
cured, insured over with Buyer's consent or otherwise approved or deemed
approved as provided in subsections (d) and (e) hereof;
(ii) any easements, restrictions and conditions shown
on the Plat of the Real Property, all provisions set forth in the SA, as
hereinafter defined, and all provisions set forth in the PUD Site Plan, as
hereinafter defined, which have been approved or deemed approved by Buyer
pursuant to this Agreement;
(iii) real property taxes and assessments for the year
of Closing;
(iv) building, zoning and other applicable ordinances
and regulations of the City of Broomfield, County of Boulder, Colorado ("City");
(v) the covenants, conditions, reservations and
restrictions contained in the special warranty deed ("Deed") attached hereto
and incorporated herein by this reference as Exhibit 3;
(vi) such other matters as are caused by Buyer or its
authorized agents; and
Initials:
---------
---------
3
<PAGE> 5
(vii) any other item designated in this Contract as a
Permitted Exception.
(d) Title Commitment Review. Buyer shall have until twenty (20)
days after receipt of the Title Commitment, Title Documents and Survey
("Commitment Review Period") to examine them and to object in writing to any
matters reflected thereon. If the Title Commitment, Title Documents or Survey
show any lien, encumbrance, defect in or objection to title or other matter
which are unacceptable to Buyer ("Defect"), Buyer shall give written notice
thereof ("Defect Notice") to Seller prior to expiration of the Commitment Review
Period unless Buyer is willing to waive the Defect. Buyer's failure to give
Seller the Defect Notice shall constitute Buyer's acceptance of the status of
title of the Real Property.
Within ten (10) days after Buyer's giving any Defect Notice, Seller
and Buyer shall endeavor to mutually agree upon corrective action and the time
period within which such corrective action shall occur, and in the event the
parties are unable to agree upon such corrective action within ten (10) days
after the date of the Defect Notice ("Decision Period"), this Contract shall be
null and void f no further force or effect as provided in Section 16 hereof;
unless prior to expiration of such Decision Period, Buyer gives to Seller a
written notice waiving such Defect.
(e) Deed. Seller shall, at Closing, convey the fee title to
the Real Property to Buyer by the Deed in the form of Exhibit 3 attached
hereto, which shall be a special warranty deed, free and clear of all liens,
encumbrances, easements and restrictions except the Permitted Exceptions.
(f) Master Development. The parties acknowledge and agree
that the Real Property is located within that certain overall development
commonly known as Interlocken Advanced Technology Environment ("Interlocken"),
which is a master planned business park. Ownership of property within
Interlocken is governed by the Interlocken Owner's Association, Inc., a
Colorado non-profit corporation ("Association"), established pursuant to the
Amended and Restated Master Declaration of Covenants, Conditions and
Restrictions for Interlocken recorded in the real property records of Boulder
county, Colorado ("Records") as set forth in the title Commitment (collectively
"Covenants"), the Articles of Incorporation ("Articles") of the Association and
the Bylaws of the Association ("Bylaws"). (The Covenants, Articles, and Bylaws
are hereinafter collectively referred to as the "Governing Documents"). Copies
of all such documents shall be provided to Buyer and its
Initials:
---------
---------
4
<PAGE> 6
attorney within fifteen (15) days after the effective date of this new Contract.
Pursuant to the Covenants, an Architectural Control Committee for
Interlocken (the "ACC") has been created and has adopted the Design Development
and Construction Criteria for Interlocken dated January 1994, and the Signage
and Graphics Criteria dated May 1994 ("Design Criteria"). Buyer acknowledged
that the Real Property is subject to the Governing Documents and the Design
Criteria, and Buyer agrees to comply with all of the terms, conditions and
provisions thereof. Buyer agrees that no representation or warranty has been
made by Seller with respect to the Covenants. Buyer hereby agrees that Seller
may, prior to Closing, make modifications to any of the Governing Documents,
and the ACC may make modifications to the Design Criteria, provided that Seller
advises Buyer of such modifications, and further provided that such
modifications do not result in any present or future material adverse effect
on Buyer, the Real property or the project Buyer intends to build on the Real
Property.
7. BUYER'S CONSTRUCTION PLANS. Buyer shall be solely responsible
for selecting its development team with respect to the design and construction
of improvements upon the Real Property ("Development Team"). Buyer and/or its
Development Team shall be responsible for submitting the required plans pursuant
to the Covenants and the Design Criteria ("Approval Documents") with respect to
Buyer's proposed improvements to be constructed upon the Real Property for
architectural review by the ACC. The documents required pursuant to the Sketch
Plan/Concept Phase, as provided the Design Criteria, shall be submitted to the
ACC within thirty (30) days after the date of mutual execution of this Contract,
the Schematic Design Phase documents, as provided in the Design Criteria, shall
be submitted to the ACC no later than thirty (30) days after the ACC's approval
of the Sketch Plan/Concept Phase, and the Design Development Phase documents, as
provided in the Design Criteria, shall be submitted to the ACC within forty-five
(45) days after the ACC approves of the Schematic Design Phase documents. All
other Approval Documents required pursuant to the Design Criteria must be
submitted to the ACC prior to the commencement of construction, at a time to be
selected in the Buyer's sole discretion. The ACC shall approve or disapprove of
the submittal by Buyer within ten (10) days of such submittal. So long as Buyer
has diligently and in good faith pursues obtaining approval of the Approval
Documents by the ACC and the PUD Site Plan by the City, Buyer shall have the
right to terminate this Agreement and receive a refund of the Earnest Money
Deposit in the event the ACC does not approve any of the Approval Documents or
if Purchaser is unable to
Initials:
_________
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obtain approval of the PUD Site Plan by the City within one hundred twenty
(120) days after the effective date of this Contract.
After the Buyer's Design Development Plans, as defined in the Criteria,
and proposed PUD Site Plan for the Real property ("PUD Site Plan") are approved
by the ACC, Buyer and Seller shall jointly submit the PUD Site Plan to the
City.
Buyer acknowledges that Buyer shall have the sole responsibility to
seek and obtain the approval of the appropriate Approval Documents and the PUD
Site Plan from the City and any other appropriate governing authorities. Seller
agrees, at no cost to Seller, to cooperate with Buyer in Buyer's efforts to
obtain such approval, including without limitation making joint submittals of
the applicable documents to the appropriate governing authorities, and, at
Buyer's request, Seller shall attend any hearings or meetings regarding the
same. Closing hereunder shall be contingent upon approval by the City of the
PUD Site Plan.
8. SUBDIVISION PLAT APPROVALS. On or before thirty (30) days after
the ACC's approval of Buyer's Schematic Design Phase documents, Seller agrees
to prepare, at its cost and expense, and to submit to Buyer for its approval,
which shall not be unreasonably withheld or delayed, the proposed plat for the
Real Property ("Plat"), and an applicable subdivision improvement agreement for
the Real Property ("SA").
Buyer shall have five (5) business days from its receipt of the Plat
and SA to review and approve the same ("Approval Period"). Prior to expiration
of the Approval Period, Buyer shall deliver written notice to Seller of its
acceptance or disapproval of the Plat and SA, and in the event of disapproval,
such notice shall include the specific reasons for disapproval. Failure of
Buyer to notify Seller during the Approval Period shall constitute Buyer's
approval of the Plat and the SA. If Buyer does not approve of the Plat or SA
during the Approval Period, then the parties shall have an additional five (5)
business days to agree upon the form of the Plat and SA. Seller may, but shall
not be required to, revise the Plat and SA to meet Buyer's objections. If the
parties cannot so agree upon the Plat and SA, then Buyer and Seller shall each
have the right to terminate this Contract in accordance with the terms of
Section 15 hereof at any time after the expiration of such five (5) business
day period and prior to reaching an agreement on the Plat and SA.
In the event the Plat and SA are approved by the Buyer, they shall not
be submitted by Seller to the appropriate governmental
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authorities until receipt of the Continuation Notice by Seller and the Earnest
Money Deposit by the Title Company prior to expiration of the Inspection
Period. It shall be a condition to Closing that the Plat which has been
approved or is deemed approved by Buyer be approved by the City ("Final Plat")
prior thereto. If the Final Plat is not approved by the City prior to Closing,
then Buyer and Seller shall each have the right to terminate this Contract in
accordance with the terms of Section 15 hereof.
9. INSPECTION PERIOD.
(a) Right of Inspection. Buyer shall have the right, from the
date of mutual execution of this Contract through and including the date which
is thirty (30) days thereafter (the "Inspection Period"), to obtain approval of
this Contract by Buyer's Board of Directors, at Buyer's sole cost and expense,
to inspect the Real Property, including without limitation, making any and all
investigations and soil, environmental and other tests Buyer deems appropriate,
to examine the Governing Documents, the Design Criteria and all books and
records maintained by Seller relating to the Real Property at such place or
places as said books and records may be located (Seller shall supply Buyer with
a copy of a survey of the Real Property and of the design books; Buyer will
need to request access to remaining materials), and to do a market analysis and
to otherwise determine if the Real Property is suitable for Buyer's purposes;
provided, however, any such inspections on the Real Property shall:
(i) occur only after prior notice to Seller; and
(ii) be conducted in such a manner so as not to
unreasonably interfere with Seller's development activities. All inspections
shall occur at reasonable times agreed upon by Seller and Buyer, and shall be
subject to reasonable rules, regulations, standards and conditions as Seller
may impose.
Prior to entering on the Real Property, Buyer shall obtain liability
insurance of $1,000,000.00 per occurrence naming Seller as an additional
insured, insuring Buyer and Seller against any damages or liabilities which may
occur as a result of Buyer's entering upon the Real Property, and Buyer shall
deliver to Seller evidence of such insurance in form satisfactory to Seller.
Buyer shall not damage, destroy or harm the Real Property in making the
inspections and tests permitted by this Contract, except as may be reasonably
necessary in order to conduct any such tests, and Buyer shall promptly repair
and restore the Real Property as nearly as practicable to its original
condition. Buyer expressly
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acknowledges that nothing in this contract shall authorize Buyer, or any person
dealing with, through or under Buyer, to subject Seller's interest in the Real
Property to any mechanic's or materialman's lien prior to Closing.
Buyer agrees to indemnify, hold harmless and defend Seller and the Real
Property from any liability or damages and Seller from any claim, liability,
loss, damage, cost or expense, including attorneys' fees which Seller may incur
or which may be asserted by reason of any entry on the Real Property by,
through or under Buyer prior to Closing, unless caused by Seller or its
representatives. In the event any mechanic's or materialmen's lien is filed
against the Real Property arising by, through or under Buyer, Buyer shall cause
such lien to be removed and released within thirty (30) days of a lien being
filed against the Real Property. In the event Buyer cannot affect such removal
within said 30-day period, Seller may, at Buyer's expense, with the assistance
of attorneys of Seller's choosing, enter into, defend, prosecute or pursue any
effort or action (whether or not litigation is involved) which Seller deems
necessary to defend itself and the Real Property from all claims or liability
arising by, through or under Buyer, as set forth above.
It is expressly agreed that notwithstanding anything contained herein
to the contrary, in no event will the Earnest Money Deposit be returned to
Buyer until Seller reasonably satisfies itself that Seller is not subject to
any claim, liability, damage, loss, cost or expense as a result of Buyer's
inspection of the Real Property hereunder; provided that if no lien has been
filed and no claim has been asserted within 60 days from the date of the last
work on the Real Property, Seller shall direct the Title Company to return the
Earnest Money Note upon expiration of said 60-day period.
(b) Right of Continuation. In the event Buyer obtains approval
of this Contract from Buyer's Board of Directors and determines that, in
Buyer's sole discretion, the Real Property is suitable for its purposes, Buyer
shall, prior to the expiration of the Inspection Period, give a written notice
of continuation ("Continuation Notice") to Seller and the Title Company with
the delivery to Title Company to be accompanied by the Earnest Money Deposit,
and the Contract shall remain in full force and effect. In the event Buyer
fails to deliver such Continuation Notice and initial Earnest Money Deposit
within the Inspection Period, this Contract shall automatically terminate in
accordance with the provisions of Paragraph 15(b) hereof.
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10. UTILITIES, PUBLIC ROADS AND SITE PREPARATION. Seller or the
Metropolitan District either has or will install all public roads, gas,
electricity, telephone, water, storm sewer and sanitary sewer lines and
landscape amenities (collectively the "Interlocken Infrastructure") as shown on
Exhibit 4 attached hereto and incorporated herein by this reference, without
any cost, directly or indirectly, to Buyer except for the payment of
Metropolitan District's portion of the real property taxes applicable to the
Property, which are assessed to all property owners in Interlocken. The
Interlocken Infrastructure has been or will be constructed to the boundary line
of the Real Property as shown on Exhibit 4. Such Interlocken Infrastructure
shall be completed in a manner which is serviceable by the following dates: (i)
sewer, water, gas, electric and U.S. West Cable conduit shall be installed to
the boundary of the Real Property within ninety (90) days after the Closing
Date; (ii) landscaping amenities shall be completed in a manner which is
serviceable by July 31, 1998; and (iii) the balance of the Interlocken
Infrastructure shall be substantially completed by December 31, 1997. Seller
shall be entitled to receive all refunds and reimbursements from the City,
utility providers and other parties with respect to the installation and
construction of the Interlocken Infrastructure. Buyer acknowledges that it
shall be Buyer's responsibility, at Buyer's sole cost and expense, to arrange
for the installation or extension of the utility lines from the boundary line
into and upon the Real Property, and Buyer shall comply with all requirements
of the ACC and all applicable governing authorities with respect thereto. Buyer
shall also be solely responsible for the payment of the cost of any tap fees,
service fees and other charges of any entities which shall supply domestic
water, irrigation water, sewer, gas, electricity or telephone service to the
Real Property.
Buyer shall be responsible, at Buyer's sole cost and expense, for all
site grading of the Real Property, which must be completed in compliance with
all requirements of the ACC and all applicable authorities.
Buyer acknowledges that Seller has established a water company (the
"Water Company") to provide reclaimed water to irrigate landscaping throughout
Interlocken. The Buyer shall, at Closing, contract with the Water Company,
pursuant to a separate agreement, which shall be on the Water Company's
standard form, to acquire irrigation water service for the Real Property at
rates equal to the rates charged by the City to residential water customers. A
copy of such agreement shall be delivered to Buyer and its attorney at least
fifteen (15) days before the end of the Inspection Period.
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11. LIMITATIONS ON BUYER'S ACTIVITIES. Notwithstanding any provisions
of this Contract, the following limitations shall apply to all acts, actions
and activities of Buyer and any other persons or entities acting for or on
behalf of Buyer with respect to the Real Property, this Contract and the
transaction contemplated hereby; and neither Seller nor Buyer nor any person
acting on behalf of Buyer shall do or cause any of the following acts without
the other party's written discretionary consent:
(a) apply for or attempt by whatever means to persuade any
public officials or Governmental Authority regarding changes in any zoning,
platting or similar matters applicable to the Real Property; provided that
Seller shall be entitled to file the PUD Site Plan and other documents provided
for in this Contract, and Seller shall be entitled to amend the Annexation
Agreement applicable to Interlocken, so long as such amendment does not have a
material adverse impact on Buyer's proposed development, or
(b) prior to Closing, issue any press release or other
announcement to the general public concerning this Contract or the transaction
contemplated hereby, or
(c) record this Contract or any memorandum hereof or any notice
or other document referring hereto or any lis pendens based on or arising from
this Contract in the Records or any other public or governmental agency,
office, department or official, or publish this Contract or any such
memorandum, notice, other document or lis pendens in any newspaper, magazine,
radio or television broadcast or any other medium or post this Contract or any
such memorandum, notice, other document or lis pendens upon the Real Property,
unless Buyer files suit against Seller under this Contract.
12. CLOSING.
(a) Closing. The closing date ("Closing Date") of the sale and
purchase of the Real Property ("Closing") pursuant to this Contract shall be on
the date which is one hundred eighty (180) days after the date of mutual
execution of this Contract unless such date is shortened or extended in
accordance with a mutual written agreement between Seller and Buyer. The
Closing shall take place at the offices of Seller's Counsel, Haligman and
Lottner, or at such other place as the parties may mutually agree. Not later
than 1:00 P.M., Colorado time on the Closing Date, Seller and Buyer shall
execute, acknowledge, if appropriate or required, and deposit with the Title
Company all documents and all funds required from them to effectuate the
Closing, as set forth in subparagraph (b) of this section. The Title Company
shall record, disburse and utilize
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such documents and funds simultaneously with the recording of the Deed
conveying the Real Property to Buyer.
(b) DOCUMENTS AT CLOSING. At Closing, the following documents and
materials shall be delivered by the parties:
(i) settlement closing statements prepared by the Title
Company reflecting appropriate credits and debits to Seller and Buyer in
accordance with the terms of this Contract ("Closing Statements");
(ii) the Deed, duly executed and acknowledged by both Buyer
and Seller in the form attached as EXHIBIT 3, together with the deed
declaration required by Colorado law;
(iii) a certification as to non-foreign status from Seller
to Buyer;
(iv) the payment due from Buyer in accordance with Buyer's
Closing Statement;
(v) a letter reasonably acceptable to Buyer from the Title
Company to Buyer agreeing to issue the Title Policy in accordance with this
Contract;
(vi) written instructions to the Title Company for closing
and recording;
(vii) evidence from both parties of their authority to enter
into this Contract and to consummate the transaction contemplated hereby; and
(viii) such other instruments and documents as may be
necessary or desirable to consummate the transaction contemplated under this
Contract.
(c) PRORATIONS. Real property taxes and assessments and any other
similar charges against the Real Property shall be prorated as of the Closing
Date. If the Closing Date shall occur before the tax rate is fixed for the then
current year, the apportionment of taxes shall be upon the basis of the tax
rate for the immediately preceding year applied to the latest assessed
valuation of the Real Property. All real property taxes and installments of
special taxes or assessments assessed or levied with respect to any period
prior to the Closing Date shall be paid in full by Seller, and all
non-delinquent installments thereof and those assessed or levied with respect
to any period after the
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Closing Date shall be paid by Buyer. Seller shall pay the costs for obtaining
the Survey and the premium for the Title Policy. Seller and Buyer shall each
pay one-half (1/2) of the Title Company's fees, Buyer shall pay recording fees
for the Deed and documentary fees and premiums for special endorsements to the
Title Policy requested by Buyer, except that standard exemptions 1-5 shall be
deleted without cost to either party so long as Seller shall have no obligation
with respect thereto other than to deliver the Survey and a lien affidavit to
the Title Company as to Seller's costs. All other closing costs shall be
allocated between Seller and Buyer in the manner customary in Boulder County,
Colorado.
(d) POST-CLOSING ADJUSTMENTS. All such prorations shall be
subject to post-Closing adjustments as necessary to reflect later relevant
information not available at Closing and to correct any error made at Closing
with respect to such apportionments and the party receiving more than it was
entitled to hereunder shall reimburse the other party hereto in the amount of
such overpayment within thirty (30) days after written demand therefor.
Notwithstanding the foregoing, such apportionments shall be deemed final and
not subject to further post-Closing adjustments if no such adjustments have
been requested after a period of thirty (30) days from such time as all
necessary information is available to make a complete and accurate
determination of such apportionments.
(e) POSSESSION. Actual possession of the Real Property
shall be delivered to Buyer as of the Closing Date, subject to the Permitted
Exceptions.
13. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Seller's Warranties and Covenants. Seller hereby
represents and warrants to Buyer, which representations and warranties shall be
deemed to be restated at Closing, that:
(i) Seller is a limited partnership duly organized
and validly existing under the laws of the State of Colorado and the execution
and delivery by Seller of and Seller's performance under this Contract are
within Seller's powers and have been duly authorized by all requisite action;
(ii) There is no litigation pending or, to the
actual knowledge of Seller, threatened against or with respect to the Real
Property that does or could adversely affect the Real Property or Seller's
ability to consummate this sale;
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(iii) there is no condemnation or similar proceeding
currently pending or, to the actual knowledge of Seller, threatened against the
Real Property;
(iv) an apartment project can be developed on the
Real Property under the Covenants;
(v) Seller is not a "foreign person" as that term
is defined in Section 1445(f) of the Internal Revenue Code of 1986;
(vi) except as otherwise may be specifically
provided for herein, Seller has not made any representations, warranties or
agreements to or on behalf of Buyer as to any matter concerning the Real
Property, the present use thereof or the suitability of Buyer's intended use of
the Real Property; and
(vii) Seller has no actual knowledge of any
environmental contamination of the Real Property other than as such matters are
disclosed in Seller's documentation of the Real Property which is available for
inspection by Buyer, and Seller has not received notice of any violation of any
environmental laws from any Governmental Authorities.
(b) Buyer's Representations, Warranties and Covenants. Buyer
hereby represents and warrants to Seller, which representations and warranties
shall be deemed to be restated at Closing, that:
(i) Buyer is a duly organized and validly existing
corporation under the laws of the State of Nevada, qualified to transact
business in the State of Colorado, and the execution and delivery by Buyer of
and Buyer's performance under this Contract are within Buyer's powers and,
subject to the approval of Buyer's Board of Directors, have been duly
authorized by all requisite action;
(ii) the preparation and submission of the Approval
Documents prior to Closing and the making of inspections and tests during the
Inspection Period are not for Seller's benefit and are solely for the benefit
of Buyer, its lenders, successors and assigns;
(iii) Buyer has made, or will make, its own
independent inspection and investigation of the Real Property and, in entering
into this Contract, Buyer intends to rely solely on such inspection and
investigation of the Real Property and that Buyer is acquiring the Real
Property "AS IS", "WHERE IS." No
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patent or latent physical condition of the Real Property, whether or not now
known or discovered, shall affect the rights of either party hereto, subject to
Buyer's rights under Paragraph 9. No agreement, warranty or representation,
unless expressly contained herein or in the Closing Documents, shall bind
Seller; and
(iv) Buyer shall, in connection with its investigation of
the Real Property during the Inspection Period, inspect the Real Property for
the presence of hazardous waste and hazardous substances, and shall notify
Seller in writing of the results of such inspection, Buyer hereby assuming full
responsibility for such inspections and waiving any claim against Seller
arising from the presence of such materials on the Real Property.
(c) WARRANTY DISCLAIMER. SUBJECT TO PARAGRAPHS 13(A) AND 13(B), BUYER
DOES HEREBY WAIVE AND SELLER DOES HEREBY DISCLAIM ALL WARRANTIES OF ANY KIND OR
TYPE WHATSOEVER WITH RESPECT TO THE REAL PROPERTY, WHETHER EXPRESSED OR
IMPLIED, INCLUDING BY WAY OF DESCRIPTION BUT NOT LIMITATION, THOSE OF
MARKETABILITY, MERCHANTABILITY, HABITABILITY AND USE. Buyer expressly waives
any right of rescission and all claims for damages by reason of any statement,
representation, warranty, promise, or agreement, if any, unless contained in
this Contract, or in the closing documents.
(d) SURVIVAL OF WARRANTIES. The warranties and representations set
forth in this Contract shall be restated at Closing and shall survive Closing
for a period of twelve (12) months only.
14. DEFAULT. In the event of defaults or breaches under or with
respect to this Contract, the parties shall be entitled to the following
remedies:
(a) Buyer's Default.
(i) Liquidated Damages. Should the Buyer default
in the performance of any of the material terms of this Contract, and if Seller
is not then in material default under this Contract; then as Seller's sole and
exclusive remedy, except as provided in Section 14(a)(ii) hereof, the Earnest
Money Deposit may be retained by the Seller as liquidated damages, and in such
event this Contract thereupon shall become null and void, and neither party
shall have any further rights against the other, except as set forth in
Paragraphs 9(a) and Paragraph 15. The amount of the Earnest Money Deposit is
agreed by and between the Seller and the Buyer to be reasonable damages due to
the difficulty and
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inconvenience of ascertaining and measuring actual damages and the uncertainty
thereof; and no other damages, rights or remedies shall in any case be
collectible, enforceable or available to the Seller, other than reasonable
attorneys' fees, but the Seller shall accept said Earnest Money Deposit as the
Seller's total damages and relief; provided, however, that, if appropriate,
Seller shall be entitled to injunctive relief pursuant to Paragraph 14(a)(iv)
hereof.
(ii) INJUNCTIVE RELIEF. Notwithstanding anything set forth
herein to the contrary, if Buyer materially breaches or otherwise materially
defaults with respect to Paragraph 9 or Paragraph 11 of this Contract, Seller
shall be entitled to procure immediate injunctive relief or other appropriate
provisional remedies without notice to Buyer.
(b) SELLER'S DEFAULT. In the event of Seller's default hereunder, the
Buyer shall have the option of:
(i) REFUND OF THE EARNEST MONEY DEPOSIT. Demanding and
receiving the return in full of the Earnest Money Deposit, which sum shall be
paid to the Buyer immediately by Title Company, which shall operate to
terminate this Contract and release Seller from any and all liability
hereunder, or as an alternative,
(ii) SPECIFIC PERFORMANCE. The Buyer may bring an action
for specific performance. No other damages, rights or remedies shall in
anywise be collectible, enforceable or available to the Purchaser other than
reasonable attorneys' fees; provided, however, that in the event that all of
the Interlocken Infrastructure is not completed in a manner which is
serviceable in accordance with the plans approved by the City by the applicable
date set forth herein, the Buyer shall have the right to cause installation of
such incomplete Interlocken Infrastructure and to collect the reasonable
out-of-pocket costs include in connection therewith from Seller.
Neither Seller nor Buyer shall have or be entitled to any grace period
or other opportunity to cure any default or breach under or with respect to
this Contract unless the other party specifically agrees thereto in writing.
15. CANCELLATION AND TERMINATION.
(a) In the event that either Seller or Buyer defaults or breaches
under or with respect to this Contract, the other party may cancel and
immediately terminate this Contract and all duties
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and obligations of the parties hereunder by giving a written notice of
termination ("Termination Notice") to the Title Company, a copy of which
Termination Notice shall be given to the other party.
(b) In addition to the foregoing, in the event Buyer fails to deliver
a Continuation Notice, this Contract shall terminate immediately and all duties
and obligations shall be null and void and of no further force or effect,
except as hereafter provided. Immediately after such termination, the Title
Company shall redeliver all documents and funds theretofore deposited with it
to the party which deposited the same; provided, however, that if this Contract
is cancelled and terminated as a result of any default or breach, then the
parties shall have the rights and remedies set forth in Paragraph 14 above.
Upon cancellation and termination of this Contract as provided in this
Paragraph 15, neither party shall have any further liability whatsoever to the
other, subject to the indemnification provisions of Paragraph 9.
(c) In the even this Contract terminates for any reason, whether by
Buyer or Seller, or as a result of default by either party, all documents and
materials obtained by Buyer and relating to the Real Property, including
without limitation, all reports, tests, surveys, drawings, specifications,
studies, plans (excluding architectural plans and construction drawings for
Buyer's apartment buildings), development materials, letters of intent to
lease, if any, leases, if any, and consultant reports shall, in Seller's
discretion, be assigned and delivered to Seller, and thereafter Seller shall be
the sole owner of such assigned materials and shall have the sole and exclusive
right to use such materials. Furthermore, Buyer shall pay all costs incurred
in having such materials prepared.
16. COMMISSIONS. Seller and Buyer each hereby warrant and represent
to the other that it has not dealt with any real estate broker or salesperson
under circumstances which would entitle such other broker or salesperson to
payment of a commission or fee in connection with this Contract, except that
Buyer has agreed to pay Frederick Ross Company ("Ross") a commission under a
separate agreement, if and only if this sale closes. Each party agrees that
should any claim be made for brokerage commissions or finder's fee by any
broker or finder by, through or on account of any acts of said party or its
representatives, said party will indemnify the other and agree to hold the
other harmless from and against any and all loss, liability, cost, damage and
expense, including reasonable attorneys' fees in connection therewith.
Further, Buyer shall indemnify Seller with respect to all claims made by Ross.
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17. POST-CLOSING OBLIGATIONS. Buyer acknowledges that the Real
Property is located within the boundaries of the Interlocken Consolidated
Metropolitan District (the "Metropolitan District"), and that the Metropolitan
District has been organized to provide certain services as provided in the
service plan for the Metropolitan District.
Buyer hereby acknowledges and confirms that all of the improvements
described in the service plan or other formation documents may or may not be
installed by the Metropolitan District and that no representation or warranty
is or will be made by the Seller with respect thereto, except as specifically
set forth in Section 10 hereof.
Seller hereby informs Buyer that the Real Property may be included in a
financing entity which may be formed by the City for the purpose of maintaining
landscaping along the 96th Street Interchange and U.S. Highway 36 as more
particularly described in the Deed.
18. RESERVATION OF WATER RIGHTS. Buyer hereby acknowledges that the
Seller shall, at Closing, reserve all water rights with respect to the Real
Property as more fully set forth in the Deed.
19. DENSITY RESTRICTION. Buyer hereby covenants and agrees that Buyer
shall be entitled to construct, use, own, and/or maintain on the Real Property,
Gross Floor Area, as defined in the Deed, in an amount not to exceed the
Permitted GFA, as hereinafter defined. For the purposes of this Contract,
"Permitted GFA" shall mean Gross Floor Area equal to the amount of square
footage approved by the ACC to be constructed on the Real Property. The actual
amount of the Permitted GFA shall be set forth in the Deed, provided that in
the event that ACC has not made such determination prior to Closing the Deed
shall provide that the Buyer and the Seller shall record a covenant at the time
such determination is made and that no improvements will be allowed to be
constructed on the Real Property until such covenant is recorded.
20. RELATIONSHIP OF PARTIES. Notwithstanding anything in this
Contract to the contrary, this Contract shall not be construed as making Buyer
or Seller the partner, agent or joint venturer of the other and the parties
shall have no relationship to each other, other than as set forth herein as
vendor and vendee of real property.
21. COOPERATION. The parties agree to reasonably cooperate in the
development and construction of the Real Property and
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Interlocken. The parties further acknowledge that such cooperation is necessary
as a result of the integral nature of the master development plan for
Interlocken, as set forth in the Governing Documents.
22. ASSIGNMENT. Buyer shall not be entitled to assign its rights
and privileges under this Contract without the prior written discretionary
approval of Seller, except to any entity controlled by or under common control
with the original Buyer.
23. GENERAL PROVISIONS.
(a) Seller and Buyer shall execute all additional documents and
do all acts not specifically referred to herein which are reasonably necessary
to effectuate this Contract.
(b) Time is strictly of the essence of this Contract and the
full and complete performance of each and every provision hereof.
(c) This Contract is the entire agreement between Seller and
Buyer pertaining to the subject matter hereof and supersedes any and all prior
negotiations, agreements, understandings and dealings pertaining to the subject
matter hereof, whether written or oral. This Contract has been negotiated at
arms length without either Seller or Buyer acting under any threat, coercion or
duress. Seller and Buyer hereby waive the application of any and all rules of
law respecting the construction of ambiguous provisions which may exist in this
Contract against the party who, or whose attorney or agents, drafted such
provisions.
(d) This Contract and all other documents and instruments
executed in furtherance or effectuation hereof shall inure to the benefit of,
and shall be binding upon, Seller and Buyer and their respective heirs,
beneficiaries, personal representatives, successors, successors in interest and
permitted assigns.
(e) This Contract shall be construed and enforced in accordance
with the substantive laws of the State of Colorado, both statutory and
decisional.
(f) The provisions hereof which require performance after
Closing shall survive the Closing Date and delivery of the Deed hereunder and
shall not be merged therein.
(g) If the Closing Date or any other date set forth in this
Contract is to occur on a holiday or other non-business day,
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or if any period of time set forth in this Contract expires on a holiday or
non-business day, then such closing or expiration date shall be the next
business day thereafter. As used in this paragraph, the terms "holiday" or
"non-business day" shall mean those dates upon which nationally chartered banks
of the United States of America are not open for business.
(h) The acceptance of the Deed by Purchaser at Closing shall be
deemed to be a full performance and discharge of every agreement and obligation
on the part of Seller to be performed pursuant to the provisions of this
Contract, except all post-closing obligations specified in this Contract, as
well as any provisions which are herein specifically stated to survive Closing.
(i) This Contract cannot be changed orally, and no agreement
shall be effective to waive, change, modify or discharge it in whole or in part
unless such agreement is in writing and is signed by the parties against whom
enforcement of any waiver, change, modification or discharge is sought.
(j) In the event of any controversy, claim or dispute between
the parties affecting or relating to the subject matter or performance of this
Contract, the prevailing party shall be entitled to recover from the
non-prevailing party all of its reasonable expenses, including reasonable
attorneys' and accountants' fees.
(k) This Contract may be executed in several counterparts which
may also include telecopy signatures, and all such executed counterparts when
signed by both parties shall constitute the same agreement. It shall be
necessary to account for only one such counterpart in proving this Contract.
(l) If any provision of this Contract is determined by a court
of competent jurisdiction to be invalid or unenforceable, the remainder of this
Contract shall nonetheless remain in full force and effect.
(m) Paragraph headings contained herein are for convenience
only and shall not be considered in interpreting this Contract.
(n) This Contract shall not be binding upon any party hereto
unless and until both Seller and buyer have executed this Contract.
Initials:
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(o) All exhibits to this Contract are incorporated herein and
made a part hereof as if fully set forth herein.
(p) All notices, consents or other instruments or
communications provided for under this Contract shall be in writing, signed by
the party giving the same, and shall be deemed properly given and received (i)
when actually delivered and received, personally, by messenger service or by
fax or telecopy delivery; (ii) on the next business day after deposit for
delivery by an overnight courier service such as Federal Express; and (iii)
three (3) business days after deposited in the mail, by registered or certified
mail. All such notices or other instruments shall be furnished with delivery or
postage charges prepaid addressed to the party at the address given below or
such other address as such party may designate by written notice to the other
party. The addresses of the parties for the purpose of notices shall be as
follows:
If to Seller: Interlocken, Ltd.
350 Interlocken Blvd., Suite 390
Broomfield, Colorado 80021-3470
Attn: General Manager
Fax: (303) 466-2015
Phone: (303) 466-9799
With a copy to: Haligman and Lottner, P.C.
633 17th Street, Suite 2700
Denver, Colorado 80202
Attn: Rick J. Rubin, Esq.
Fax: (303) 292-1300
Phone: (303) 292-1200
If to Buyer: Oasis Residential, Inc.
5251 DTC Parkway, Suite 225
Englewood, Colorado 80111
Attention: Walter Eeds
Fax: (303) 220-1765
Phone: (303 220-8080
With a copy to: Holland and Hart
555 17th Street, Suite 3200
Denver, Colorado 80202
Attn: Jesse B. Heath, Esq.
Fax: (303) 295-8261
Phone: (303) 295-8570
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24. ACCEPTANCE BY SELLER. Seller's agreement to negotiate with Buyer
for the sale of the Real Property shall become void and of no effect unless
Buyer's offer to acquire the Real property, as evidenced by Buyer's execution
of at least three (3) copies of this Contract and delivery thereof to Seller
occurs on or before 5:00 p.m. on December 17, 1996. Thereafter, the offer by
Buyer herein contained shall become void and of no effect whatsoever unless
Seller accepts this Contract by execution thereof and returning an executed copy
to Buyer prior to 11:59 p.m. on December 24, 1996, and upon such execution by
Seller, this Contract, and all provisions hereof, shall be fully and completely
binding upon Seller and Buyer without any further act by either party, the
effective date of this Contract shall be the date upon which Seller executes
this Contract. Otherwise, this Contract shall be automatically null and void
and the Earnest Money Note or the Earnest Money Deposit, as applicable, shall
be returned to Buyer.
25. INTERSTATE LAND SALES ACT. It is the intent of Seller and
acknowledged by Buyer that the sale of the Real Property will be exempt from the
provisions of the Federal Interstate Land Sales Act under the exemption
applicable to the sale or lease of lots (i) to any person who acquires such
lots for the purpose of engaging in the business of constructing residential,
commercial or industrial buildings or for the purpose of resale of such lots to
persons engaged in such business; or (ii) which are zoned by the appropriate
governmental authority for industrial or commercial development, or which is
restricted to such use by a declaration of covenants, conditions and
restrictions, which are recorded in the official records of the appropriate
county. Buyer hereby represents and warrants that Buyer is acquiring the Real
Property for such purposes.
26. TRADENAMES. Buyer may only state that the Real Property is
located in Interlocken for the purpose of providing information as to the
general location of the Real Property in advertisements concerning the Real
Property or concerning Buyer's operations or businesses located on the Real
Property. Except as hereinabove permitted, Buyer agrees that it shall not use or
allow the use of the name "Interlocken," any logo, symbol or other words or
phrases which are names or trademarks used or registered by Seller in any
manner to name, designate, advertise, sell or develop the Real Property or in
any connection with the operations or business located or to be located on the
Real Property without Seller's prior written discretionary permission.
Notwithstanding the
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<PAGE> 23
foregoing, at Closing the Seller shall grant to Buyer a non-exclusive license,
on terms reasonably acceptable to Seller, to use the name "Interlocken" in
Buyer's project name for the development to be constructed on the Real Property.
27. CONDEMNATION. Except as provided in Paragraph 9, risk of loss
with respect to the Property shall remain on Seller until the Closing. If prior
to the Closing Seller receives any notice from any entity that there may be a
taking of all or any part of the Property by condemnation (or in lieu of
condemnation), Seller shall notify Buyer, and Buyer shall have the right to
terminate this Contract and to recover the Earnest Money Deposit, by giving
notice to Seller within ten (10) days after receipt of Seller's notice.
WHEREOF THIS CONTRACT IS EXECUTED AS OF THE DATE SET FORTH BELOW.
BUYER:
ORI-COLORADO, INC., A Nevada
corporation
By: /s/ W. B. EEDS
-------------------------
W. B. Eeds
Its: Executive Vice President
Buyer's Signature Date:
December 17, 1996
Initials:
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22
<PAGE> 24
SELLER:
INTERLOCKEN, LTD., A Colorado
limited partnership
By: BOSWELL PROPERTIES, INC.,
a California corporation,
general partner
By: /s/ JAMES R. LONG
--------------------------
James R. Long
Vice President
Seller's Signature Date:
December 24, 1996
Initials:
_________
_________
23
<PAGE> 25
LIST OF EXHIBITS
EXHIBIT 1 -- Legal Description
EXHIBIT 2 -- Earnest Money Note
EXHIBIT 3 -- Special Warranty Deed
EXHIBIT 4 -- Interlocken Infrastructure
Initials:
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EXHIBIT 1
LEGAL DESCRIPTION
Tract 1 (Exception), Interlocken Filing 6 according to the recorded plat
thereof, Boulder County, Colorado.
Initials:
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_________
<PAGE> 27
EXHIBIT 2
PROMISSORY NOTE
For Value Received, ("Maker"), hereby promises to pay to the order of
INTERLOCKEN, LTD., a Colorado limited partnership ("Holder"), the sum of Four
Hundred Ninety-Two Thousand Three Hundred Ninety-Four and 96/100 Dollars
($492,394.96), pursuant to the terms of a certain Real Estate Purchase Contract
between Maker and Holder, dated ________________, 19__ (the "Contract"). Such
sum shall be due and payable upon Maker's default under the Contract and
interest shall accrue thereafter on said principal sum at the prime rate of
Citibank as publicly quoted and announced form time to time plus five percent
(5%), with each change in such prime rate automatically and immediately
resulting in a change in such default interest rate borne by this promissory
note until, in fact, paid.
This promissory note shall terminate and be null and void upon Maker's
deposit of $492,394.96 (the "Earnest Money Deposit") with National Title
Insurance Company ("Title Company") pursuant to the provisions of the Contract.
No default may occur under this promissory note following Maker's deposit of
the Earnest Money Deposit with Title Company.
Notwithstanding anything in this promissory note to the contrary,
Holder shall give Maker written notice of default under this Promissory Note,
and Maker shall have five (5) business days following receipt of said notice of
default to cure such default.
This promissory note shall be construed and enforced in accordance with
the laws of the State of Colorado.
The undersigned Maker agrees to pay all reasonable costs and expenses,
including attorney fees, incurred by the Holder hereof in connection with any
default herein or in any proceeding to enforce the payment of this note at
trial and all appellate levels.
Maker has executed and delivered this promissory note as of ___________.
OASIS RESIDENTIAL, INC., a Delaware
corporation
By: ___________________________________
Its: __________________________________
Initials:
_________
_________
<PAGE> 28
EXHIBIT 3
SPECIAL WARRANTY DEED
This Special Warranty Deed (this "Deed") is dated this _____ day of
___________, 19__, between INTERLOCKEN, LTD., a Colorado limited partnership
("Grantor"), whose address is 350 Interlocken Boulevard, Suite 390, Broomfield,
Colorado 80021-3470, Attention: General Manager, and ORI-COLORADO, INC., a
Nevada corporation ("Grantee"), whose address is ______________________________.
WITNESSETH, that Grantor, for and in consideration of the sum of
_______________________________________ Dollars ($__________) (the "Purchase
Price") to Grantor in hand paid by Grantee, the receipt whereof is hereby
confessed and acknowledged, has granted, bargained, sold and conveyed, and by
these presents does grant, bargain, sell, convey and confirm unto Grantee, its
successors and assigns forever, all of that certain real property situate,
lying and being in the County of Boulder, State of Colorado, more particularly
described on Exhibit A attached hereto (the "Property"). The street address for
the Property is 705 El Dorado Boulevard, Broomfield, Colorado;
TOGETHER WITH all and singular the hereditaments and appurtenances
thereunto belonging, or in any way appertaining, and the reversion and
reversions, remainder and remainders, rents, issues and profits thereof; and
all the estate, right, title, interest, claim and demand whatsoever of Grantor,
either in law or equity, of, in and to the Property;
SUBJECT to the "Permitted Exceptions," which shall mean:
(i) those matters set forth on Exhibit B attached hereto and
incorporated herein by this reference (exhibit to set forth items ______________
on that certain Title Commitment No. ___________ issued by National Title, Inc.
as agent with authority to bind Fidelity National Title Insurance Company dated
__________________), and those matters apparent upon an inspection of the
Property or any matters set forth on a survey of the Property;
(ii) any easements, restrictions and conditions shown on the plat of
the Property, all provisions set forth in the Subdivision Improvement Agreement
for the Property dated __________________ and recorded on ___________________
at Reception No. ___________ of the Boulder County, Colorado, Records, and all
provisions set forth in the PUD Site Plan for the Property dated
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_______________ and recorded on ________________ at Reception No. _______ of
the Boulder County, Colorado, Records;
(iii) real property taxes and assessments for 19__ and subsequent
years;
(iv) building, zoning and other applicable ordinances and
regulations of the City of Broomfield, County of Boulder, State of Colorado
("City");
(v) the covenants, conditions, reservations and restrictions
hereinafter set forth in this Deed; and
(vi) such other matters as are caused by Grantee or its authorized
agents.
AND SUBJECT FURTHER TO the covenants, conditions and restrictions
hereinafter set forth;
TO HAVE AND TO HOLD the Property with the appurtenances, unto Grantee,
its successors and assigns forever;
AND Grantor, for itself, its successors and assigns, covenants and
agrees to and with Grantee, its successors and assigns, to warrant and forever
defend the quiet and peaceable possession of the Property by Grantee, its
successors and assigns, against every person who lawfully claims the Property
or any part thereof by, through or under Grantor, subject to the Permitted
Exceptions and the covenants, conditions and restrictions herein contained.
ARTICLE I
RESTRICTIONS
1.1 INTENT AS TO RESTRICTIONS. The Property is conveyed and this
conveyance is accepted subject to and upon the following express terms,
covenants, conditions and restrictions (collectively, the "Restrictions"),
which Restrictions are made for the benefit of the Grantor, its successors and
assigns, and for the benefit of lands in the area of City known as Interlocken
Advanced Technology Environment ("Interlocken") which are now or hereafter
owned by Grantor, and its successors and assigns, and which Restrictions impose
a burden on the Property. Execution of this Deed by Grantee shall constitute
the agreement by Grantee, for itself and its successors and assigns, to be
bound by and to comply with the following covenants, conditions and
restrictions.
Initials:
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1.2 LIMITATIONS ON USE OF PROPERTY. Grantee acknowledges that Grantor
is selling the Property in accordance with the overall plan for the development
of Interlocken, and is selling the Property to Grantee primarily in reliance on
Grantee's intents to construct on the Property buildings for use as a rental
apartment complex with appurtenant amenities or, provided that Grantee complies
with the provisions of this Deed, a condominium, townhome or similar ownership
project ("Condominium Project"), neither of which shall consist of more than 340
residential dwelling units ("Use Limitations"). Grantee agrees that during the
"Use Limitation Period," as that term is hereinafter defined, the Property and
the Improvements, as hereinafter defined, shall be used solely in accordance
with the Use Limitations; provided that in no event shall all or any part of the
Property be used as a Condominium Project until the date which is five (5) years
following the date the final certificate of occupancy respecting the Property is
received by Grantee. Further, in no event shall all or any portion of the
Property be used as a Condominium Project until the Property has been excluded
from the Metropolitan District. In the event that the Grantee chooses to convert
the Property to use as a Condominium Project, provided that Grantee has
otherwise complied with the terms of this Deed, Grantor shall use its reasonable
efforts, at no expense to Grantor, to cooperate with Grantee in obtaining
exclusion of the Property from the Metropolitan District. After the expiration
of the Use Limitation Period, the Property and the Improvements may be used for
any purpose permitted under the zoning applicable thereto as contained in the
Criteria, as defined in the Amended and Restated Master Declaration of
Covenants, Conditions and Restrictions for Interlocken recorded on January 24,
1990 at Reception No. 01025034, Film No. 1612 as the same have been and may
hereafter be amended from time to time, including, without limitation, that
certain First Amendment to Amended and Restated Master Declaration of Covenants,
conditions and Restrictions for Interlocken recorded on June 18, 1992 at
Reception No. 1194772 and that certain Second Amendment to Amended and Restated
Master Declaration of Covenants, Conditions and Restrictions for Interlocken
recorded on March 4, 1994 at Reception No. 01402125 (collectively "Covenants").
In the event that Grantor reacquires title to the Property at any time, the Use
Limitations shall be null and void and of no further force or effect from and
after the date title vests in Grantor as aforesaid. At such time, if any, during
the use Limitation Period that Grantee desires to convert all or any portion of
the Property to a Condominium project, the Grantee or its successor shall give
to a Condominium Project, the Grantee or its successor shall give thirty (30)
days' prior written notice to Grantor of Grantee's intention to so use the
Property, and simultaneously with such notice Grantee shall pay to Grantor as
additional consideration for
Initials:
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Grantor's agreement to permit Grantee to use the Property as an Office Building
$______________ [which equals $2.20 multiplied times the gross square feet
contained within the Property], in immediately available funds.
1.3 USE LIMITATION PERIOD. The "Use Limitation Period" shall mean the
period of time commencing on the date of this Deed conveying the Property to
Grantee and expiring thirty (30) years after the date of this Deed.
1.4 ACCEPTANCE OF IMPROVEMENTS AND PLANS. The "Improvements" shall
mean the building or buildings, sidewalks, parking lots, signs, and all other
improvements to be constructed upon the Property by Grantee. "Approval
Documents" shall mean all documents and information required, pursuant to the
Covenants, to be submitted to the Architectural Control Committee ("ACC") of
the Interlocken Owner's Association, Inc., a Colorado not-for-profit
corporation ("Association"), for approval prior to commencement of construction
of any Improvements. To the extent Grantee has not previously received full
acceptance of the Approval Documents by the ACC, or to the extent Grantee has
made any changes to its previously accepted Approval Documents, Grantee shall
submit its Approval Documents to the ACC at least thirty (30) days prior to the
time Grantee desires to have the ACC's acceptance of the same. Grantee agrees
not to commence any construction of Improvements until such time as Grantee has
received the ACC's full written acceptance of the Approval Documents, which
acceptance shall be withheld or granted in accordance with the terms of the
Covenants. The ACC may also require such changes to the Approval Documents as
may be necessary in order to comply with architectural guidelines applicable to
the Property. Grantee agrees not to materially amend or make any substantial
changes to any Approval Documents which have been previously accepted by the
ACC without obtaining the ACC's prior written acceptance thereto, including,
without limitation, any such changes requested by governmental authority.
1.5 OBTAINING GOVERNMENTAL APPROVALS. Grantee agrees to obtain, prior
to commencement of construction of any Improvements, all permits, licenses,
certificates, consents and any other approvals necessary or required pursuant to
any law, ordinance, resolution, order, rule or regulation of any governmental
authority having jurisdiction over the property and the development thereof
("Governmental Approvals") in order for Grantee to construct the facilities and
Improvements to be constructed on the Property. The Governmental Approvals
shall be deemed to include, but not be limited to, building approvals by the
City. The Grantee shall not
Initials:
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<PAGE> 32
obtain any Governmental Approvals until it has obtained written approval of the
Approval Documents from the ACC.
1.6 CONSTRUCTION OF THE IMPROVEMENTS. Grantee agrees to Commence
Construction, as defined below, of the Improvements as identified in the
Approval Documents and as approved by the ACC pursuant to the covenants, on or
before sixty (60) days from the date of this Deed ("Commencement Deadline") and
to proceed with construction of the Improvements diligently and in a good and
workmanlike manner until completion in accordance with all governmental
requirements and with the Approval Documents as approved by the ACC, and such
Improvements shall be completed within thirty (30) months after Grantee has
Commenced Construction thereof. In no event shall Grantee build the
Improvements in separate phases. Accordingly, there shall be no more than a
thirty (30) day gap of time between completion of one building or group of
buildings and the commencement and diligent construction and completion of
another building or set of buildings until the completion of all Improvements.
1.7 COMMENCEMENT OF CONSTRUCTION. Grantee shall be deemed to have
"Commenced Construction" of the Improvements at such time as Grantee has
completed grading of the Property in accordance with the Approval Documents
accepted by the ACC.
1.8 REPURCHASE OPTION. In the event that the "Repurchase Event," as
hereinafter defined, occurs, Grantor shall have the right to repurchase the
Property from Grantee upon the terms and conditions as hereinafter set forth
(the "Repurchase Option").
1.9 REPURCHASE EVENT. The "Repurchase Event" shall mean the Grantee
shall not have obtained all required Governmental Approvals in order to
Commence Construction of the Improvements on or before the Commencement
Deadline, or prior to the date notice is given under Section 1.10.
1.10 EXERCISE OF REPURCHASE OPTION. Grantor shall have the right to
exercise the Repurchase Option because of Grantee's failure to meet the
Commencement Deadline by giving Grantee written notice at any time during the
period of time commencing on the Commencement Deadline and expiring three (3)
months thereafter. If such notice shall not be so given by Grantor to Grantee
on or before the expiration of the period as aforesaid, Grantor's right to
exercise the Repurchase Option shall thereupon cease and terminate.
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1.11 RESTORATION IF REPURCHASE. In the event that Grantor exercises
the Repurchase Option, Grantee shall, at its sole cost and expense, promptly
remove those portions of the Improvements which Grantor's independent engineer
determines to be unusable in connection with the future development of the
Property.
1.12 REPURCHASE OPTION PRICE. The "Repurchase Option Price" shall
mean the original Purchase Price, plus the actual out-of-pocket reasonable
costs incurred by Grantee in connection with the construction of the
Improvements on the Property, excluding the cost of any Improvement which
Grantor determines to be unusable and excluding any financing costs and all
developer and/or development fees.
1.13 CLOSING IF REPURCHASE. Within sixty (60) days after Grantor gives
notice of the exercise of the Repurchase Option, Grantee shall tender to
Grantor Grantee's Special Warranty Deed for the property to be exchanged for a
U.S. bank cashier's check from Grantor in the amount of the Repurchase Option
Price. Grantee shall deliver title to the Property to Grantor at the closing
of the Repurchase Option in the same condition (including the Permitted
Exceptions, except any that arise out of Grantee's actions other than those
excepted below) as when delivered by Grantor to Grantee, except as to
non-delinquent property taxes and assessments for the year of said closing, and
which taxes and assessments shall be prorated between Grantor and Grantee to
the date of such closing, so that Grantee bears such taxes and assessments for
the period of its ownership of the Property, and except for utility easements
and similar rights created in connection with the construction of the
Improvements, provided that such easements and rights do not, in Grantor's
reasonable determination, have a material adverse impact upon the future use of
the Property. Grantee agrees to pay all costs and expenses for such closing,
including the base premium for a standard title insurance policy in the amount
of the Repurchase Option Price, insuring that title to the Repurchase Property
is vested in Grantor.
1.14 EVIDENCING EXPIRATION OF REPURCHASE OPTION. In the event Grantee
meets the Commencement Deadline prior to the time Grantor exercises the
Repurchase Option for Grantee's failure to meet the commencement Deadline, or
in the event Grantor fails to exercise the Repurchase Option within the time
and in he manner set forth above, Grantor agrees, upon Grantee's written
request, to deliver promptly to Grantee a duly executed and acknowledged
release, releasing Grantor's right to exercise the Repurchase Option.
Initials:
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_________
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<PAGE> 34
1.15 FORCE MAJEURE. In the event that Grantee is unable to meet the
Commencement Deadline because of delays from causes beyond the reasonable
control of the Grantee, such as, but not limited to, acts of God, strikes, work
stoppages, unavailability of or delay in receiving labor or materials, defaults
by contractors or subcontractors, weather conditions, or fire or other
casualty, then the date by which the Grantee shall be required to meet the
Commencement Deadline, and the date by which Grantor shall be required to
exercise the Repurchase Option because of Grantee's failure to meet such
Commencement Deadline, shall be extended for a period of time equal to the
length of said delay or delays; provided, however, that in no case shall the
date by which Grantor is required to exercise the Repurchase Option be extended
pursuant to this Section to a date later than three (3) years after the
Commencement Deadline.
1.16 ANTI-SPECULATION PROVISION - EARLY TRANSFER BY GRANTEE. A
"Transfer" by Grantee of the Property shall occur in the event that, prior to
the date Grantee shall have Commenced Construction of the Improvements (a)
Grantee sells or exchanges the Property or any portion thereof, or (b) Grantee
enters into a land lease of the Property or any portion thereof for a term
which, together with any options to renew or extend the term, shall exceed 10
years. In the event of a Transfer by Grantee to any party whatsoever (other
than transfer to a "Permitted Transferee," as hereinafter defined), Grantee
agrees to pay to Grantor, on the date of closing of such Transfer, 100% of the
amount by which the consideration for such sale, the exchange value for such
exchange, or the consideration given for such lease, exceeds the Purchase Price
and architectural, engineering and consulting fees and costs of governmental
permits and fees paid by Grantee (but not by Grantor, if any) with respect to
the Property ("Resale Rights"). "Permitted Transferee" shall mean any of the
following entities: (1) any entity controlled by, controlling, or under common
control with (a) Grantee; (b) any affiliate of Grantee; or (c) any officer,
director or shareholder of Grantee, its affiliates; or (2) any transferee of
Grantee's entire interest in the Property at a bona fide foreclosure sale
pursuant to a bona fide mortgage or deed of trust encumbering the Property or
pursuant to a bona fide deed in lieu of foreclosure of any such mortgage or deed
of trust so long as such foreclosure sale or deed in lieu of foreclosure is not
intended as an artifice or device to avoid the Resale Rights; or (3) a
developer who is engaged by Grantee to construct a "Build to Suit" facility on
the Real Property. A bona fide foreclosure sale by an affiliate of Grantee or a
bona fide deed in lieu of foreclosure to an affiliate of Grantee shall not be
deemed an artifice or device to avoid the Resale Rights if the loan secured by
the relevant
Initials:
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<PAGE> 35
mortgage or deed of trust was a bona fide loan. No action by Grantee in
connection with Grantee's obtaining financing for development of the Property
shall be deemed a Transfer as defined herein (so long as any transfer in
connection with such financing is not intended as an artifice or device to
avoid the Resale Rights).
1.17 FUTURE IMPROVEMENTS. Grantee agrees not to make any additions
or changes to the exterior of any Improvements, and not to construct or cause
to be constructed upon the Property any additional structure, building, sign,
landscaping, driveway or other improvement except in accordance with the terms
of the Covenants
1.18 FLOOR AREA ALLOWANCE. Grantee hereby covenants and agrees that
Grantee shall be entitled to construct, use, own and/or maintain on the
Property, Gross Floor Area, as hereinafter defined, in an amount not to exceed
the Permitted GFA, as hereinafter defined. For the purposes hereof, "Permitted
GFA" shall mean the amount of _________ square feet of Gross Floor Area. [the
number to be inserted into the blank shall be equal to the amount of square
footage approved by the ACC to be constructed on the Property. If the ACC has
not made such determination prior to the execution of this Deed, the foregoing
sentence shall be deleted and the following sentences shall be inserted in the
deed in lieu thereof: The number of square feet of Gross Floor Area which is
the Permitted GFA shall be equal to the amount of square footage approved by
the ACC to be constructed on the Property. Such number has yet to be
determined. At such time as the ACC makes such determination, the Grantor and
the Grantee shall record a Covenant setting forth the permitted GFA for the
Property. No Improvements will be constructed on the Property until such
covenant is recorded.] For the purposes hereof, the term "Gross Floor Area"
shall mean the sum in square feet of all horizontal floors located within the
finished surface of the outside walls of the main portion of any structure
built for temporary or permanent use, and all projections or extensions
thereof, including but not limited to, accessory buildings, and enclosed malls
now or hereafter constructed on the Property, including basement areas and
exclusive of garage space, porches, balconies, atriums and mechanical
penthouses. Grantee agrees that no part or portion of the Permitted GFA shall
be transferable by Grantee to or usable on any property other than the Property
without the prior written consent of Grantor. The parties hereby expressly
acknowledge and agree that the definition of Gross Floor area set forth herein
may differ from other definitions of gross floor area or gross building area
that Grantee may be required to use for purposes of submission of
Initials:
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_________
3-8
<PAGE> 36
its Approval Documents for any new development of the Property to the ACC, or
to the City, for building permit purposes, but that any such difference shall
not affect or in any way modify or alter the applicability to the Property of
the definition of Gross Floor Area set forth herein, for the purposes set forth
herein, including, but not limited to, the calculation of whether a particular
planned proposal for any new development of the Property exceeds the Permitted
GFA. If Grantee requests, and Grantor, in its sole discretion, permits the
construction, installation or maintenance of Gross Floor Area on the Property
in excess of the Permitted GFA, Grantor may require payment to Grantor of
additional consideration, as determined by Grantor, as a condition to such
permission.
1.19 RESERVATION OF EXCESS DEVELOPMENT RIGHTS. "Excess Development
Rights" shall mean the right to construct, install or maintain Gross Floor Area
on the Property in excess of the Permitted GFA as defined in Section 1.18.
Grantor hereby excepts and reserves to itself, its successors and assigns, all
Excess Development Rights with respect to the Property, together with the right
to use or assign the right to use such Excess Development Rights on any other
property in Interlocken or annexed by Grantor into Interlocken in accordance
with the terms of the Covenants. Grantee, for itself, its successors and
assigns, covenants and agrees to cooperate and execute any further instruments
which may hereafter be necessary or desirable to permit the use of the Excess
Development Rights on such other property or properties.
1.20 DISTRICTS. Grantee acknowledges that the Property is located
within the boundaries of the Interlocken Consolidated Metropolitan District
(the "Metropolitan District"), and that the Metropolitan District has been
organized to provide certain services as provided in the service plan for the
Metropolitan District. Grantee agrees to be bound by and to comply with the
terms, conditions and standards imposed by the Metropolitan District, whether
pursuant to its service plan, or rules, regulations and standards, or
otherwise, and to pay to the Metropolitan District all fees, expenses and
security, if any, including, but not limited to, all levies, taxes, charges,
surcharges and assessments (whether considered taxes, developer fees or user
fees) as may be assessed from time to time by the Metropolitan District.
Grantee hereby acknowledges and confirms that all of the improvements described
in the service plan or other formation documents may or may not be installed by
the Metropolitan District and that no representation or warranty is or will be
made by the Grantor with respect thereto.
Initials:
_________
_________
3-9
<PAGE> 37
Grantee further acknowledges that from and after the date hereof, the
Grantee shall fully cooperate with and cause its successors and assigns to
cooperate fully with Grantor or the City in connection with any efforts of the
Grantor or the City to obtain inclusion of Interlocken, including the Property,
in any financing entity, which is formed for the purpose of maintaining the
landscaping along the 96th Street Interchange and United States Highway 36
(collectively the "Landscape Entity"). Such cooperation shall include, but
shall not be limited to, the execution and delivery of any and all necessary
and required documentation to form and include the Property in any Landscape
Entity.
1.21 ENVIRONMENTAL INDEMNITY. Grantee agrees to indemnify and hold
Grantor harmless from and against any and all loss, cost, damage, expense or
liability, including, without limitation, reasonable attorney's fees, incurred
by or asserted against Grantor resulting from any failure by Grantee to comply
with any environmental laws relating to the Property except that the Grantee
shall have no liability hereunder for a violation of any environmental laws
arising in any period of time prior to Grantee acquiring or after Grantee
transfers title to the Property. Grantor shall have the right to defend itself
in any action, suit or proceeding commenced against Grantor as a result of
Grantee's violation of or failure by Grantee to comply with the provisions of
this Section, with attorneys chosen by Grantor, and Grantee agrees to pay to
Grantor all reasonable attorneys' fees and other reasonable costs in connection
therewith incurred by Grantor.
1.22 NO RESUBDIVISION OF PROPERTY. Grantee agrees that Grantee will
not attempt to subdivide the Property or obtain subdivision approval from any
governmental authority having jurisdiction over the Property, and the
development thereof, without the prior written approval of Grantor. This
provision shall not apply to a conversion to a Condominium Project provided
that Grantee otherwise complies with this Deed.
1.23 REZONINGS. Grantee agrees that Grantee will not obtain, or seek
to obtain, rezoning approval of the Property from any governmental authority
having jurisdiction over the Property, or the development thereof, including,
but not limited to, any amendment to the Criteria with respect to the Property,
without obtaining the prior written approval of Grantor.
1.24 RIGHT OF FIRST REFUSAL. From and after the date hereof, Grantor
shall have a right of first refusal (the "Right") in the
Initials:
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3-10 ---------
<PAGE> 38
event that Grantee decides to accept a bona fide unaffiliated third-party offer
(the "Offer") to purchase the Property or any interest therein on conditions
identical to those upon which Grantee is willing to sell the Property, subject
to the conditions of this paragraph. Grantee will forward a true and correct
copy of said Offer to Grantor, together with notice ("Right Notice") in writing
that Grantee is willing to accept such Offer. Grantor will have thirty (30)
business days from receipt of said Right Notice to exercise the Right and agree
to purchase the property or such interest therein on the terms set forth in such
offer, and the closing shall take place within sixty (60) days of Grantor's
exercise of the Right. If Grantor agrees in writing within said thirty (30)
business day period to purchase the Property on such terms and conditions as
provided in the Right Notice, a contract for the sale and purchase of the
Property or such interest therein will be entered into within fifteen (15) days
by and between Grantee and Grantor. If Grantor does not agree to purchase the
Property or such interest therein on such terms and conditions then, and in such
event, Grantee may sell the Property or such interest therein to the third party
in accordance with the terms and conditions set forth in such offer; provided,
however, that this shall be a continuing Right and shall be binding upon the
successors and assigns of Grantee so that when such third-party purchasers
decide to sell the Property, Grantor shall have the right with respect to such
subsequent sales. In the event Grantor does not exercise its Right, Grantee
shall be free to complete the proposed sale of the Property so long as such
transaction is completed in accordance with the terms and provisions set forth
in the Right Notice and there is no reduction in the purchase price; and
provided that such Right shall continue to be binding upon Grantee's successors
and assigns. If Grantee desires to change the terms upon which it desires to
sell the property or any interest therein previously offered to Grantor, it may
do so only after giving a new Right Notice to Grantor.
ARTICLE 2
RESERVATIONS
2.1 RESERVATION OF WATER RIGHTS. Grantor hereby reserves the
right, title and interest in and to all water and water rights, both tributary
and non-tributary, reservoirs, ditches and well rights and effluent, used on or
in connection with the Property, whether adjudicated or unadjudicated, and
including, without limitation, all water court applications, state engineer
filings, well registration statements and well permits and any and all well
equipment or other equipment for the storage, treatment or distribution of
water on or in connection with the Property
Initials:
_________
_________
3-11
<PAGE> 39
(collectively "Water Rights"). Grantee agrees that it will not object to the
withdrawal, abstraction or appropriation of any underground tributary or
non-tributary waters underlying the surface of the Property and to the extent
that consent may be required by Colorado law for extraction or appropriation of
such Water Rights, the consent is hereby deemed given. Grantee agrees that it
shall include a similar obligation on the part of any grantee in any subsequent
conveyances of all or any part of the Property to Third Party Purchasers, and
that such Third Party Purchasers shall assume all obligations of Grantee
pursuant to this paragraph and shall agree to execute all necessary documents
in connection therewith. Notwithstanding the foregoing, Grantor agrees that in
the exercise of its reserve rights, Grantor's activity shall not cause material
disturbance of or material damage to the surface of the Property or any
improvements thereon. Further, notwithstanding the foregoing to the contrary,
the Grantor shall have the right to drill for and extract water from certain
select portions of the Property, the locations of which are to be reasonably
determined by Grantor with Grantee's written consent which shall not be
unreasonably withheld and Grantor shall have the right as a portion of the
reservation created by this paragraph to reserve such easements as are
reasonably necessary for the foregoing purposes. The parties agree that Grantor
shall have the right to grant to third parties the same rights to use the Water
Rights as Grantor has reserved in this paragraph subject to the limitations set
forth herein. The foregoing Water Rights reservation is not intended in any
respect to affect Grantee's right to obtain domestic water utilities for the
Property.
ARTICLE 3
DEFAULT AND ENFORCEMENT
3.1 DEFAULT BY GRANTEE. A "Default by Grantee" shall exist if Grantee
breaches or fails to comply with any Restriction in this Deed applicable to
Grantee, and such breach or failure to comply shall continue for a period of
thirty days after notice thereof by Grantor to Grantee, provided in accordance
with Section 4.3, or, if such breach or failure to comply cannot be reasonably
cured within such 30-day period, if Grantee shall not in good faith commence to
cure such breach or failure to comply with said 30-day period or shall not
diligently proceed therewith to completion; provided, however, that Grantor
shall not be obligated to give notice or provide an opportunity to cure to
Grantee under this Section before Grantor shall be entitled to exercise the
Repurchase option in accordance with the foregoing provisions.
Initials:
_________
_________
3-12
<PAGE> 40
3.2 REMEDIES. In the event of a Default by Grantee, Grantor shall
have the right to prosecute a proceeding at law or in equity against the person
or persons who have violated or are attempting to violate any of the
Restrictions of this Deed to enjoin or prevent them from so doing, to cause
said violation to be remedied, or to recover damages for said violation. Every
remedy allowed by law or in equity against an owner, either public or private,
shall be applicable against every such result.
ARTICLE 4
GENERAL
4.1 NO IMPLIED WAIVER. No failure by Grantor to insist upon the
strict performance of any Restriction contained in this Deed, no failure by
Grantor to exercise any right or remedy under this Deed, and no acceptance of
full or partial payment during the continuance of any Default by Grantee shall
constitute a waiver of any such Restriction or waiver of any such right or
remedy or a waiver of any such Default by Grantee.
4.2 DURATION. The covenants, conditions and restrictions contained
in this Deed shall operate and be effective until the later of (a) 99 years
after the date hereof, or (b) such time as neither Grantor nor its successors
and assigns, are any longer engage din the development of Interlocken, except
that the Use Limitations shall operate and be effective only during the Use
Limitation Period.
4.3 NOTICES. All notices, consents or other instruments or
communications provided for under this Deed, including, but not limited to, any
notice of a Default by Grantee, shall be in writing, signed by the party giving
the same and shall be deemed properly given and received when actually
delivered and received or three business days after mailed, if sent by
registered or certified mail, postage prepaid, addressed to the party to
receive the notice, at the address set forth for the party in the first
paragraph of this Deed, or at such other address as either party may notify the
other of in writing. Any notice, consent or other instruments or
communications, including, but not limited to, any notice of a Default by
Grantee, sent to Grantee shall also be, at Grantee's request or the lender's
request, sent to any lender with an interest in the Property at the address
provided by notice to Grantor.
4.4 BINDING EFFECT. This Deed shall be binding upon and insure to
the benefit of the parties hereto and their respective successors and assigns.
The Restrictions contained in this Deed
Initials:
_________
_________
3-13
<PAGE> 41
shall be construed as covenants running with the Property, and every person
who now or hereafter owns or acquires any right, title, estate or interest in
or to the Property is and shall be conclusively deemed to have consented to and
to have agreed to every Restriction contained in this Deed, whether or not any
reference to the Restrictions is contained in the instrument by which such
person acquires an interest in the Property.
4.5 CAPTIONS FOR CONVENIENCE. All headings and captions used herein
are for convenience only and are of no meaning in the interpretation or effect
of this Deed.
4.6 APPLICABLE LAW. This Deed shall be interpreted and enforced
according to the laws of the State of Colorado.
4.7 EXHIBITS INCORPORATED. All exhibits to this Deed are
incorporated herein and made a part hereof as if fully set forth herein.
4.8 TIME OF THE ESSENCE. Time is of the essence with respect to the
performance required under this Deed.
4.9 COSTS OF LEGAL PROCEEDINGS. In the event either party
institutes legal proceedings with respect to this Deed, the prevailing party
shall be entitled to recover, in addition to any other relief to which it is
entitled, its costs and expenses incurred in connection with such legal
proceedings, including, without limitation, reasonable attorneys' fees.
4.10 COMPLIANCE WITH LAWS. Grantee agrees that, in performing its
obligations under this Deed, Grantee shall comply with all applicable laws,
rules, regulations, ordinances and orders of any governmental authority having
jurisdiction, subject, however, to Grantee's rights to reasonably contest such
laws.
4.11 NO THIRD-PARTY BENEFICIARIES. None of the terms, conditions or
covenants contained in this Deed shall be deemed to be for the benefit of any
person other than Grantor and Grantor, and its successors and assigns
specifically designated as such in writing, and no other person shall be
entitled to reply hereon in any manner.
4.12 COOPERATION. The parties agree to fully cooperate in the
development and construction of the Property and Interlocken. The parties
further acknowledge that such cooperation is necessary as a result of the
integral nature of the master development plan for Interlocken, as set forth in
the Covenants, the Article of
Initials:
_________
_________
3-14
<PAGE> 42
Incorporation of the Association, and the Bylaws of the Association.
IN WITNESS WHEREOF, Grantor and Grantee have executed this Special
Warranty Deed as of the day and year first above written.
GRANTOR:
INTERLOCKEN, LTD., a Colorado
limited partnership
By: BOSWELL PROPERTIES, INC., a
California corporation,
general partner
By: ___________________________
James R. Long,
Vice President
GRANTEE:
ORI-COLORADO, INC., a Delaware
corporation
By: __________________________________
Its: _________________________________
STATE OF COLORADO )
) ss.
COUNTY OF ______________________ )
The foregoing instrument was acknowledged before me this _____ day of
____________________, 1996, by James R. Long as Vice President of Boswell
Properties, Inc., a California corporation, as general partner of INTERLOCKEN,
LTD., a Colorado limited partnership.
Witness my hand and official seal.
My commission expires: _____________________________.
________________________________________
Notary Public
Initials:
_________
_________
3-15
<PAGE> 43
STATE OF COLORADO )
) ss.
COUNTY OF ______________________ )
The foregoing instrument was acknowledged before me this _____ day of
____________________, 1996, by _____________ as ______________ of ORI-COLORADO,
INC., a Delaware corporation.
Witness my hand and official seal.
My commission expires: _____________________________.
________________________________________
Notary Public
Initials:
_________
_________
3-16
<PAGE> 44
EXHIBIT A
LEGAL DESCRIPTION
Initials:
_________
_________
<PAGE> 45
EXHIBIT B
PERMITTED EXCEPTIONS
Initials:
_________
_________
<PAGE> 46
EXHIBIT 4
INTERLOCKEN INFRASTRUCTURE
Initials:
_________
_________
<PAGE> 47
EXHIBIT 4
[MAP ILLUSTRATION]
<PAGE> 1
EXHIBIT 10.87
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
<PAGE> 2
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
TABLE OF CONTENTS
Paragraph
Number Page
- --------- ----
1. Purchase and Sale........................................ 2
2. Purchase Price........................................... 2
3. Payment of Purchase Price................................ 2
4. Escrow................................................... 2
5. Condition of Title....................................... 2
6. Title Policy............................................. 3
7. Conditions to Close of Escrow............................ 3
8. Deposits by Seller....................................... 6
9. Deposits by Buyer........................................ 7
10. Costs and Expenses....................................... 7
11. Prorations............................................... 7
12. Disbursements and Other Actions by Escrow Holder......... 9
13. Covenants of Seller...................................... 9
14. Seller's Representations and Warranties.................. 10
15. Buyer's Representations and Warranties................... 13
16. Remedies................................................. 13
17. Damage or Condemnation Prior to Closing.................. 14
18. Notices.................................................. 15
19. Brokers.................................................. 16
20. Legal Fees............................................... 16
21. Assignment; Exchange..................................... 16
22. Miscellaneous............................................ 16
SIGNATURES............................................................ 18
EXHIBITS
- --------
Exhibit "A" -- Legal Description of the Land
Exhibit "B" -- Rent Roll
Exhibit "C" -- Grant Deed
Exhibit "D" -- Tenant Lease Agreement
Exhibit "E" -- Assignment of Contracts and Assumption Agreement
Exhibit "F" -- Bill of Sale
Exhibit "G" -- Transferor's Certification of Non-Foreign Status
Exhibit "H" -- General Assignment Agreement
<PAGE> 3
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
TO: Chicago Title Company Escrow No: 7305124-M19
16969 Von Karman Avenue Escrow Officer: Lorri Beasley
Irvine, California 92714 Title Order No: 7305124-M19
Title Officer: Bill Rush
THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW
INSTRUCTIONS ("Agreement") is made and entered into as of this ____ day of
__________, 199_, by and among OASIS RESIDENTIAL, INC., a Nevada corporation
("Buyer"), HUTTON DEVELOPMENT CO., INC., a California corporation ("Seller"),
and NEWPORT MESA PARTNERS, a California limited partnership ("Prior Owner")
with respect to the following:
R E C I T A L S:
A. Seller desires to sell and convey or cause to convey to Buyer
the following:
1. That certain real property located in the City of Costa
Mesa, County of Orange, State of California, commonly known as the Sea Palms
Village Apartments located at 1850 Whittier Avenue, which is described on
Exhibit "A" attached hereto (the "Land"), together with one hundred thirty
eight (138) apartment units located thereon, containing in the aggregate
approximately one hundred twenty-two thousand nine hundred (122,900) square
feet of leasable space, associated parking areas, and all other improvements
located thereon (the "Improvements");
2. All of Seller's interest in all rights, privileges,
easements and appurtenances benefiting the Land and/or the Improvements,
including, without limitation, all mineral and water rights and all easements,
rights-of-way and other appurtenances used or connected with the beneficial use
or enjoyment of the Land and/or the Improvements (the Land, the Improvements
and all such rights, privileges, easements and appurtenances are sometimes
collectively hereinafter referred to as the "Real Property");
3. All of Prior Owner's interest as lessor in all leases
covering the Land and the Improvements (said leases, together with any and all
amendments, modifications or supplements thereto, are hereinafter referred to
collectively as the "Leases" and are identified in the "Rent Roll" [as defined
in Paragraph 7(a)(ii)(G) hereof] attached hereto as Exhibit "B");
4. All personal property, equipment, supplies and fixtures
(collectively, the "Personal Property") owned by Prior Owner and used or useful
in the operation of the Real Property; and
5. All of Prior Owner's interest in any intangible property
used or useful in connection with the foregoing, including, without limitation,
all trademarks, trade names (including, without limitation, the right to use
the name "Sea Palms Village Apartments"), goodwill, contract rights,
warranties, guaranties, licenses, permits, entitlements, governmental approvals
and certificates of occupancy which benefit the Real Property and/or the
Personal Property (the "Intangible Personal Property"). The Real Property, the
Personal Property, Seller's interest as lessor under the Leases and the
Intangible Personal Property are sometimes collectively hereinafter referred to
as the "Property."
B. Seller desires to sell the Property to Buyer and Buyer desires
to purchase the Property from Seller upon the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Buyer agree that the
terms and conditions of this Agreement and the instructions to Chicago Title
Company ("Escrow Holder") with regard to the escrow ("Escrow") created pursuant
hereto are as follows:
1. Purchase and Sale. Seller hereby agrees to sell the Property
to Buyer, and Buyer hereby agrees to purchase the Property from Seller, upon
the terms and conditions herein set forth.
<PAGE> 4
2. Purchase Price. The purchase price ("Purchase Price") for the
Property (to be paid entirely to Seller) shall be Ten Million Nine Hundred
Fifty Thousand Dollars ($10,950,000).
3. Payment of Purchase Price. The Purchase Price for the Property
shall be payable by Buyer as follows:
(a) Deposit. Within five (5) business days following the
"Opening of Escrow" (as defined in Paragraph 4(a) hereof), Buyer shall deposit
or cause to be deposited with Escrow Holder in cash, by a certified or bank
cashier's check made payable to Escrow Holder or by a confirmed wire transfer
of funds, the sum of Fifty Thousand Dollars ($50,000) (the "Deposit"). Upon
Escrow Holder's receipt of the Deposit, Escrow Holder shall immediately invest
it in an interest bearing account of a federally insured bank or savings and
loan association acceptable to Buyer. The Deposit and all interest thereon
shall be fully refundable to Buyer if the contingencies set forth in Paragraphs
7(a)(i), (ii), (iii) and (iv) hereof are not satisfied or waived by Buyer on
or before the expiration of the "Contingency Period" (as defined in Paragraph
7(a)(ii) hereof). Upon satisfaction or waiver of such contingencies and the
expiration of the Contingency Period, Buyer shall deposit or cause to be
deposited with Escrow Holder an additional One Hundred Thousand Dollars
($100,000) which sum, along with the initial Fifty Thousand Dollar Deposit
shall be referred to herein as the "Deposit." The Deposit shall be
nonrefundable other than in the event the Close of Escrow fails to occur as a
result of the Seller's action or inaction. The Deposit and all interest which
shall accrue thereon shall be applied to the payment of the Purchase Price upon
the "Close of Escrow" (as defined in Paragraph 4(b) hereof), or refunded to
Buyer in the event this Agreement and the Escrow is cancelled for any reason
other than a default by Buyer hereunder.
(b) Closing Funds. At least one (1) day prior to the Close of
Escrow, Buyer shall deposit or cause to be deposited with Escrow Holder, in
cash, by a certified or bank cashier's check made payable to Escrow Holder or
by a confirmed wire transfer of funds, the balance of the Purchase Price, plus
or minus Buyer's share of closing costs, prorations and charges payable
pursuant to this Agreement.
4. Escrow.
(a) Opening of Escrow. For purposes of this Agreement,
the Escrow shall be deemed opened on the date Escrow Holder shall have received
a fully executed original or originally executed counterparts of this Agreement
from Buyer, Seller and Prior Owner (such date being referred to hereinafter as
the "Opening of Escrow"). Escrow Holder shall notify Buyer, Seller and Prior
Owner in writing of the date Escrow is opened. Buyer, Seller and Prior Owner
agree to execute, deliver and be bound by any reasonable or customary
supplemental escrow instructions of Escrow Holder or other instruments as may
reasonably be required by Escrow Holder in order to consummate the transaction
contemplated by this Agreement. Any such supplemental instructions shall not
conflict with, amend or supersede any portions of this Agreement. To the
extent of any conflict or inconsistency between such supplemental instructions
and this Agreement, this Agreement shall control.
(b) Close of Escrow. For purposes of this Agreement, the
"Close of Escrow" shall be the date that the grant deed, the form of which is
attached hereto as Exhibit "C" (the "Grant Deed"), conveying the Real Property
to Buyer, is recorded in the Official Records of Orange County, California (the
"Official Records"). Unless extended in writing by Buyer and Seller or unless
extended pursuant to the terms and provisions of Paragraph 7(a)(ii) hereof, the
Close of Escrow shall occur on or before June 3, 1997 (the "Closing Date").
Seller shall deliver possession of the Property to Buyer upon the Close of
Escrow, subject only to the "Approved Condition of Title" (as defined in
Paragraph 5 below), the Leases and the Contracts which are identified in
Exhibit "B" and Exhibit "E" respectively.
5. Condition of Title. It shall be a condition to the Close of Escrow
for Buyer's benefit that title to the Real Property be conveyed to Buyer by
Seller by the Grant Deed subject only to the following approved condition of
title ("Approved Condition of Title"):
(a) a lien to secure payment of real estate taxes, not
delinquent;
(b) the lien of supplemental taxes assessed pursuant to
Chapter 3.5 commencing with Section 75 of the California Revenue and Taxation
Code ("Code"), but only to the extent that such supplemental taxes are
attributable to the transaction contemplated by this Agreement. Seller shall be
responsible for, and shall indemnify, protect, defend (with counsel chosen by
Buyer) and hold harmless Buyer and the Real Property from and against any and
all supplemental taxes assessed pursuant to the Code, to the extent that such
taxes relate to events (including, without limitation, any changes in ownership
and/or new construction) occurring prior to the Close of Escrow.
-2-
<PAGE> 5
(c) matters affecting the Real Property created by or with
the written consent of Buyer;
(d) exceptions which are disclosed by the Report described
in Paragraph 7(a)(i) hereof and which are approved or deemed approved by Buyer
in accordance with such Paragraph 7(a)(i); and
(e) the Leases.
Seller covenants and agrees that during the term of the Escrow, it will
not cause or permit title to the Real Property to differ from the Approved
Condition of Title described in this Paragraph 5. Any liens, encumbrances,
encroachments, easements, restrictions, conditions, covenants, rights,
right-of-way or other matters affecting the Approved Condition of Title which
may appear of record or be revealed after the date of the Report described in
Paragraph 7(a)(i) below shall also be subject to Buyer's approval and must be
eliminated or ameliorated by Seller to Buyer's satisfaction prior to the Close
of Escrow as a condition to the Close of Escrow for Buyer's benefit.
6. TITLE POLICY. Title shall be evidenced by the willingness of
the "Title Company" (as defined in Paragraph 7(a)(i) hereof) to issue its ALTA
Extended Coverage (Form B-1970) Owner's Policy of Title Insurance ("Title
Policy") in the amount of the Purchase Price, showing title to the Real
Property vested in Buyer, subject only to the Approved Condition of Title.
7. CONDITIONS TO CLOSE OF ESCROW.
(a) CONDITIONS TO BUYER'S OBLIGATIONS. The Close of Escrow
and Buyer's obligation to consummate the transaction contemplated by this
Agreement are subject to the satisfaction of the following conditions (or
Buyer's written waiver thereof, it being agreed that Buyer may waive in writing
any or all of such conditions) for Buyer's benefit on or prior to the dates
designated below for the satisfaction of such conditions. In the event Buyer
terminates this Agreement and the Escrow due to the nonsatisfaction of any such
conditions, then Buyer shall be entitled to the immediate return of the Deposit
and all interest accrued thereon:
(i) TITLE. Buyer shall have approved the legal
description of the Land and any matters of title as disclosed by the following
documents (collectively, the "Title Documents") which are to be prepared (other
than the "Survey" described below) at Seller's sole cost and expense and to be
delivered to Buyer (other than the "Survey" described below) at Seller's sole
cost and expense: (A) a standard preliminary title report dated on or after
the date of this Agreement issued by Chicago Title Company (the "Title
Company") with respect to the Real Property, as such report may be amended or
supplemented from time to time to reflect additional title matters or survey
exceptions (the "Report"); (B) legible copies of all documents, whether
recorded or unrecorded, referred to in the Report; (C) a color-coded map
plotting all easements disclosed by the Report; and (D) an ALTA as-built survey
of the Real Property prepared by a licensed engineer or surveyor (the
"Survey"). Seller shall cause the Title Documents (including any existing
Survey) to be delivered to Buyer within five (5) days after the Opening of
Escrow.
Buyer shall have until May 14, 1997 (the "Title
Approval Date") to give Seller and Escrow Holder written notice ("Buyer's Title
Notice") of Buyer's disapproval or conditional approval of the legal
description or any matters shown in or disclosed by the Title Documents.
The failure of Buyer to give Buyer's Title Notice on or
before the Title Approval Date shall be deemed to constitute Buyer's approval
of the respective matters relating hereto. If Buyer disapproves or
conditionally approves any of the foregoing matters, Seller may, within five
(5) days after its receipt of Buyer's Title Notice, elect to eliminate or
ameliorate to Buyer's reasonable satisfaction such disapproved or conditionally
approved matters. Within such five (5) day period, Seller shall give Buyer
written notice (which shall hereinafter be referred to as "Seller's Title
Notice") of those disapproved or conditionally approved matters, if any, which
Seller covenants and agrees to either eliminate from the Title Policy as
exceptions to title to the Property or to ameliorate to Buyer's reasonable
satisfaction by the Closing Date as a condition to the Close of Escrow for
Buyer's benefit. If Seller does not elect in Seller's Title Notice to eliminate
or ameliorate any disapproved or conditionally approved matters as provided
above, or if Buyer disapproves, in Buyer's reasonable discretion, Seller's
Title Notice, then Buyer shall have the right, by a writing delivered to Seller
and Escrow Holder prior to the Closing Date, to (A) waive its prior
disapproval, in which event said disapproved matter(s) shall be deemed
approved, or (B) terminate this Agreement and the Escrow created pursuant
hereto, in which event the Deposit and all interest accrued thereon shall be
immediately returned to the Buyer, and this Agreement, the Escrow and the
rights and obligations of the parties hereunder shall terminate. If Seller
fails to timely deliver Seller's Title Notice, then Seller will be deemed to
have elected to eliminate or ameliorate to Buyer's satisfaction any disapproved
<PAGE> 6
or conditionally approved matters set forth in Buyer's Title Notice on or
before the Close of Escrow. Seller shall be deemed to have eliminated or
ameliorated, to Buyer's reasonable satisfaction, any disapproved or
conditionally approved matter by obtaining one (1) or more title endorsements
reasonably satisfactory to Buyer. Seller's failure to timely deliver the
Seller's title notice shall be deemed to be Seller's election not to eliminate
any disapproved or conditionally approved matter. Notwithstanding anything to
the contrary contained in this Agreement, Buyer hereby disapproves all liens
evidencing monetary encumbrances (other than liens for non-delinquent real
property taxes) and Seller agrees to cause all such liens to be eliminated at
Seller's sole cost and expense (including all prepayment penalties and charges)
prior to or concurrently with the Close of Escrow.
(ii) REVIEW AND APPROVAL OF DOCUMENTS AND
MATERIALS. Seller has caused to be delivered to Buyer previous to execution of
this Agreement, the documents and materials respecting the Property set forth
below (the "Documents and Materials"). From the Opening of Escrow until 5 p.m.
Pacific Time on May 14, 1997 (the "Contingency Period"), Buyer shall have the
right to review and approve or disapprove, in its sole and absolute discretion,
any or all of the Documents and Materials. The failure of Buyer to disapprove
any of the Documents and Materials on or before the expiration of the
Contingency Period shall be deemed to constitute Buyer's approval thereof.
Buyer shall treat all Documents and Materials as confidential and Buyer shall
not reproduce or disclose the Documents and Materials to any third party except
Buyer's lender and/or any authorized agents.
(A) ZONING COMPLIANCE; PERMITS. Evidence
that the Property complies with any and all applicable governmental ordinances,
rules and regulations, including, but not limited to, zoning and building
regulations, and any and all other governmental approvals (such as approved
building permits, building inspection approvals and certificates of occupancy)
and/or authorizations pertaining to the Property;
(B) IMPROVEMENT PLANS. Complete "as-built"
plans, drawing and specifications relating to all of the Improvements;
(C) AGREEMENTS. Legible copies of any and
all insurance policies, broker listing agreements, construction contracts,
management contracts, maintenance contracts, service contracts, reciprocal
easement agreements, if any, utility will-serve letters and any other contracts
or agreements affecting or relating to the leasing, ownership, operation,
maintenance, construction or development of the Property, including, without
limitation, copies of all warranties with respect thereto (collectively, the
"Contracts");
(D) PERSONAL PROPERTY LIST. A detailed
list ("Personal Property Schedule") of all personal property, including,
without limitation, any and all fixtures, equipment and tools owned by Seller
and used on or in connection with the Property, which are to be conveyed to
Buyer at Close of Escrow pursuant to the Bill of Sale described in paragraph
8(f) below, together with a copy of all warranties and guaranties applicable
thereto. Said list shall reflect any and all security interests in said
personal property, and Seller shall cause, at Seller's sole cost and expense,
said personal property to be released from any such security interests at the
Close of Escrow;
(E) TAX STATEMENTS. Legible copies of the
most recently issued bills for all real property taxes and all personal property
taxes payable with respect to the Real Property, or any portion thereof;
(F) LEASES. True, correct and complete
copies of any and all Leases and all amendments thereto, and copies of any and
all documents, agreements and other writings referenced therein affecting the
Leases (including, without limitation, lease guaranties and tenant improvement
contracts), as well as copies of any letters of intent or other correspondence,
pending lease agreements, or the like, which relate to any potential leases
with respect to the Real Property. Seller shall also deliver to Buyer any and
all financial information concerning the lessees under the Leases which are in
Seller's possession or control or which can otherwise be readily obtained by
Seller from said lessees or any other person or entity;
(G) RENT ROLL. A current schedule ("Rent
Roll") prepared and delivered by Seller to Buyer, which shall reflect:
(1) the name of each of the lessees
("Lessees") under the Leases and the space occupied by each of the Lessees;
(2) the amount of any security
deposits and rental concessions, nonrefundable deposits and prepaid rent from
each Lessee, the amount of monthly rent, the rental rate per square foot per
month, the amount of additional rent, the amount of taxes, insurance and
<PAGE> 7
reimbursable expenses paid and to be paid by each Lessee (including common area
maintenance charges) and any and all applicable increases thereto (CPI increase
and the like);
(3) the amount of all actual
collections and scheduled rent; and
(4) the commencement date, the
termination date and the term (in months) for each of the Leases, and a
description of any extension or renewal options therein;
(H) MONTHLY OPERATING STATEMENTS. Copies of
all monthly operating statements for the prior twenty-four (24) months;
(I) SOILS AND ENGINEERING REPORTS. All
existing and available soils, environmental and building reports and
engineering data pertaining to the Real Property or any portion thereof and any
and all architectural studies, grading plans, topographical maps and similar
data respecting the Real Property;
(J) MAPS. Any and all tentative, parcel
and/or final maps and any other governmentally approved or processed documents
relative to the subdivision of the Land ("Maps");
(K) DELINQUENCY REPORTS. Complete copies of
all aged delinquency reports for the prior twenty-four (24) months, which sets
forth the names of all Lessees that were delinquent during such time period in
the payment of any amounts owing pursuant to any of the Leases, together with
the amounts and the period of such delinquencies;
(L) UTILITY BILLS. Copies of all utility
bills for the prior six (6) months; and
(M) QUALIFICATION GUIDELINES. The standard
tenant qualification guidelines governing all new tenants.
(iii) INSPECTIONS AND STUDIES. On or before the
expiration of the Contingency Period, Buyer shall have the right to approve or
disapprove, in Buyer's sole and absolute discretion, the results of any and all
inspections, investigations, tests and studies, including, without limitation,
investigations with regard to zoning, building codes and other governmental
regulations, architectural inspections, engineering tests, economic feasibility
studies and soils, seismic and geologic reports, as well as toxic and
environmental reports with respect to the Property, inspections of all or any
portion of the Improvements (including, without limitation, structural,
mechanical and electrical systems, roofs, pavement, landscaping and public
utilities), and any other physical inspections and/or investigations as Buyer
may elect to make or obtain. The failure of Buyer to disapprove said results on
or prior to the expiration of the Contingency Period shall be deemed to
constitute Buyer's approval thereof.
During the term of this Escrow, Buyer, its agents,
consultants, contractors and subcontractors shall have the right to enter upon
the Property (subject to the Leases) to conduct or make any and all inspections
and tests (including, without limitation, environmental assessments of the Real
Property) as may be necessary or desirable in Buyer's sole and absolute
discretion. Buyer hereby indemnifies and holds Seller and the Property harmless
from and against any and all costs, losses, damages or expenses arising out of
or resulting from such entry by Buyer.
In the event this Agreement is cancelled for any reason
except Seller's default, Buyer shall promptly deliver to Seller (at no cost to
Seller) photocopies of all reports, tests, investigations and studies
undertaken by buyer during the Contingency Period.
(iv) MARKET STUDY. On or before the expiration of
the Contingency Period, Buyer shall have the right to approve or disapprove, in
Buyer's sole, absolute and subjective discretion, the results of any market
study of the Property prepared by or for Buyer. Said market study may include,
without limitation, comparisons of the Leases to leases in other projects in the
area in which the Property is located, current market vacancies, buildings
under construction or planned, historical demand for lease space, and any other
market information that Buyer deems necessary, in buyer's sole, absolute and
subjective discretion. The cost of any market study of the Property prepared by
Buyer or at Buyer's direction shall be borne by Buyer.
(v) REPRESENTATIONS, WARRANTIES AND COVENANTS OF
SELLER. Seller shall have duly performed each and every covenant and agreement
to be performed by Seller pursuant to this
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Agreement and Seller's representations, warranties and covenants set forth in
Paragraph 14 hereof shall be true and correct as of the Closing Date.
(vi) NO MATERIAL CHANGES. At the Closing Date, there
shall have been no material adverse changes in the physical or financial
condition of the Property from and after the Opening of Escrow. For purposes of
this Agreement, there shall be deemed to have occurred a material adverse
change in the physical or financial condition of the Property in the event a
loss or circumstance occurs which reduces the value of the Property in an
amount in excess of Fifty Thousand Dollars ($50,000).
(vii) RENT ROLL. The Rent Roll, as updated to the
Closing Date, certified as to its accuracy and executed by Seller, does not
materially differ from the Rent Roll delivered by Seller to Buyer pursuant to
Paragraph 7(a)(ii) hereof.
(viii) DEPOSITS. Seller shall have made all deposits
with Escrow Holder required of Seller pursuant to the provisions of Paragraph
8 of this Agreement.
(ix) LEASES. As of the Close of Escrow, all of the
Leases approved by Buyer pursuant to Paragraph 7(a)(ii) hereof shall be in full
force and effect and shall not have been modified or amended except in the
normal course of business and any modification or amendment not in the normal
course of business will be subject to Buyer's consent.
(b) CONDITIONS TO SELLER'S OBLIGATIONS. For the benefit of
Seller, the Close of Escrow shall be conditioned upon the timely performance by
Buyer of all of the obligations required by the terms of this Agreement to be
performed by Buyer (or Seller's waiver thereof, it being agreed that Seller may
waive such condition). Buyer's representations, warranties and covenants set
forth in this Agreement shall be true and correct as of the Closing Date.
8. DEPOSITS BY SELLER. At least one (1) business day prior to the
Close of Escrow, Seller shall deposit or cause to be deposited with Escrow
Holder the following documents and instruments:
(a) GRANT DEED. The Grant Deed conveying the Real Property
to Buyer, duly executed as appropriate by Seller, acknowledged and in
recordable form in the form attached hereto as Exhibit "C";
(b) LEASES. The original Leases and lease guaranties and
financial information and any letters of intent, pending lease agreements, or
the like, which relate or potentially relate to any space leases of the
Improvements and which have been approved by Buyer in accordance with Paragraph
7(a) hereof;
(c) TENANT LEASE ASSIGNMENT. Tenant Lease Assignment
("Assignment of Leases"), duly executed by Prior Owner, in the form attached
hereto as Exhibit "D", pursuant to which Seller shall assign to Buyer all f
Prior Owner's right, title and interest in and to the Leases;
(d) CONTRACTS. Any and all original Contracts and all
warranties related thereto, if any, approved by Buyer in accordance with
Paragraph 7(a) hereof;
(e) ASSIGNMENT OF CONTRACTS AND ASSUMPTION AGREEMENT.
Assignment of Contracts and Assumption Agreement ("Assignment of Contracts"),
duly executed by Seller, in the form attached hereto as Exhibit "E", pursuant
to which Prior Owner shall assign to Buyer all of Prior Owner's right, title
and interest in, under and to the Contracts and any and all warranties relative
thereto;
(f) BILL OF SALE. Bill of Sale ("Bill of Sale"), duly
executed by Prior Owner, in the form attached hereto as Exhibit "F", conveying
all of Prior Owner's right, title and interest in and to the Personal Property;
(g) RENT ROLL. The Rent Roll, updated as of the Close of
Escrow, certified as to its accuracy and executed by Prior Owner, together with
a list of Lessees whose rent and/or other charges is/are past due as of such
date;
(h) TENANT LETTER. A letter signed by Prior Owner,
addressed to each of the Lessees under the Leases advising the Lessees of the
sale herein to Buyer, and the assignment of such Lessees' security deposits to
Buyer and directing that all future rent payments and other charges are to be
forwarded to Buyer at an address to be supplied by Buyer.
<PAGE> 9
(i) Transferor's Certification of Non-Foreign Status. The
Transferor's Certification of Non-Foreign Status in the form attached hereto as
Exhibit "G", duly executed by Seller ("Firpta Certificate");
(j) Withholding Exemption Certificate. A Withholding
Exemption Certificate, California Form 590, certifying that Seller is exempt
from withholding under California law due to the fact that Seller resides or
has a permanent place of business in California ("Form 590").
(k) Permits, Entitlements and the Like. Any and all buildings
and development permits, certificates of occupancy, utility will serve letters,
use permits and other governmental approvals and/or entitlements relative to
the Property.
(l) General Assignment. General Assignment ("General
Assignment"), duly executed by Prior Owner, in the form attached herein as
Exhibit "H", conveying all of Prior Owner's right, title and interest in and to
the Intangible Personal Property; and
(m) Other Instruments. Such other instruments and documents
as are described in Paragraph 22(b) herein.
9. Deposits by Buyer. Buyer shall deposit or cause to be deposited
with Escrow Holder the funds which are to be applied towards the payment of the
Purchase Price in the amounts and at the times designed in Paragraph 3 above
(as reduced by the Prorations and credits hereinafter provided). In addition,
Buyer shall deposit with Escrow Holder prior to the Close of Escrow the
following documents and instruments:
(a) Assignment of Leases. Counterpart of the Assignment of
Leases, duly executed by Buyer;
(b) Assignment of Contracts. Counterpart of the Assignment of
Contracts, duly executed by Buyer;
(c) General Assignment. Counterpart of the General
Assignment, duly executed by Buyer; and
(d) Other Instruments. Such other instruments and documents
as are described in Paragraph 22(b) herein.
10. Costs and Expenses. The cost and expense of the Title Policy
attributable to CLTA coverage shall be paid by Seller. The cost and expense
attributable to any extended coverage or endorsements shall be paid by Buyer.
The escrow fee of Escrow Holder shall be shared equally by Seller and Buyer.
Seller shall pay all documentary transfer taxes payable in connection with the
recordation of the Grant Deed. Buyer and Seller shall pay, respectively, the
Escrow Holder's customary charges to buyers and sellers for document drafting,
recording and miscellaneous charges. If, as a result of no fault of Buyer or
Seller, Escrow fails to close, Buyer and Seller shall share equally all of
Escrow Holder's fees and charges.
11. Prorations. The following prorations between Seller and Buyer
shall be made by Escrow Holder computed as of the Close of Escrow:
(a) Taxes. Real and personal property taxes and assessments
on the Property shall be prorated on the basis that Seller is responsible for
(i) all such taxes for the fiscal year of the applicable taxing authorities
occurring prior to the "Current Tax Period" (as hereinafter defined) and (ii)
that portion of such taxes for the Current Tax Period determined on the basis of
the number of days which have elapsed from the first day of the Current Tax
Period to the Close of Escrow, inclusive, whether or not the same shall be
payable prior to the Close of Escrow. The phrase "Current Tax Period" refers
to the fiscal year of the applicable taxing authority in which the Close of
Escrow occurs. In the event that as of the Close of Escrow the actual tax
bills for the year or years in question are not available and the amount of
taxes to be prorated as aforesaid cannot be ascertained, then rates and assessed
valuation of the previous year, with known changes, shall be used, and when the
actual amount of taxes and assessments for the year or years in question shall
be determinable, then such taxes and assessments will be reprorated between the
parties to reflect the actual amount of such taxes and assessments.
(b) Rentals. Rentals and other payments payable by tenants,
licensees, concessionaires and other persons using or occupying the Property
or any part thereof, if any, for or in connection with such use or occupancy
(including, without limitation, fixed monthly rentals, additional rentals,
percentage rentals, escalation rentals, retroactive rentals, operating cost
pass-throughs, common
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<PAGE> 10
area maintenance charges, and other sums and charges payable by the Lessees
under the Leases [collectively, "Rentals"]) shall be prorated as of the Close
of Escrow.
(i) Delinquent Rentals. Rentals are delinquent when
payment thereof is due on or prior to the Close of Escrow but has not been made
by the Close of Escrow. Delinquent rentals shall be prorated between Buyer and
Seller as of the Close of Escrow but not until they are actually collected by
Buyer. Buyer shall have the right to collect any delinquent rentals, but shall
not have the obligation to do so. After the Close of Escrow, Seller shall not
take any action against a Lessee owing delinquent rentals. Seller shall not be
entitled to any rentals received from Lessees after the Close of Escrow unless
such Lessees are current in their rental obligations for periods occurring from
and after the Close of Escrow. Delinquent rentals collected by the Buyer, net
of the costs of collection (including attorneys' fees), shall be applied first
against any amount currently due and then to amounts most recently overdue. For
purposes hereof, "amounts currently due" shall include amounts which would be
due for a month which is to commence within ten (10) days after receipt of such
amounts. Buyer agrees that any payments due to Seller as a result of collected
delinquent rentals shall be payable upon receipt thereof.
(ii) Operating Cost Pass-Throughs, Etc. Operating cost
pass-throughs, additional rentals and other retroactive rental escalations,
sums or charges, payable by Lessees which accrue as of the Close of Escrow but
are not then due and payable, shall be prorated as of the Close of Escrow;
provided, however, no payment thereof shall be made to Seller unless and until
Buyer collects same from the Lessees. Buyer shall have the right to collect
such amounts, but shall not have the obligation to do so. When and if Buyer
collects such operating cost pass-throughs, percentage rentals or other
retroactive rental escalations, sums or charges from a Lessee, such amounts,
net of the costs of collection, shall be applied first to payment(s) most
recently due, and Seller shall be due an amount equal to all such operating
cost pass-throughs, or other retroactive rental escalations, sums or charges,
accruing prior to the Close of Escrow. Payments of such prorated amounts
collected by Buyer shall be made to Seller upon receipt and shall be
accompanied by a report showing how same was calculated and such supporting
documentation as Seller reasonably requests.
(c) Security Deposits. Buyer shall be credited and Seller shall
be charged with any security deposits and advanced rentals in the nature of
security deposits made by the Lessees under the Leases, if any. Buyer shall
also be credited and Seller shall be charged for all operating cost
pass-throughs paid by such tenants and held by Seller in reserve for the
benefit of the tenants for the repair and/or improvement of the Property.
Seller hereby agrees that it will not during the term of this Escrow or upon
the Close of Escrow apply any security deposits toward any delinquent rental
payments, or any other amounts, due under any Leases.
(d) Operating Expenses. All utility service charges for
electricity, heat and air conditioning service, other utilities, elevator
maintenance, common area maintenance, taxes other than real estate taxes such
as rental taxes, other expenses incurred in operating the Property that Seller
customarily pays, and any other costs incurred in the ordinary course of
business or the management and operation of the Property, shall be prorated on
an accrual basis. Seller shall pay all such expenses that accrue prior to the
Close of Escrow and Buyer shall pay all such expenses accruing on the Close of
Escrow and thereafter. Seller and Buyer shall obtain billings and meter
readings as of the Close of Escrow to aid in such prorations.
(e) Capital Expenditures. All capital and other improvements
(including labor and materials) which are performed or contracted for by Seller
at or prior to the Close of Escrow will be paid by the Seller without
contribution or proration from Buyer.
(f) Insurance. The premium(s) for the insurance maintained by
Seller shall be prorated between Buyer and Seller as of the Close of Escrow if
such insurance is assumable, and Seller consents to the assignment to Buyer of
such insurance by giving written notice thereof to Buyer and Escrow Holder
prior to the Close of Escrow.
(g) Contracts. Amounts payable under those Contracts which
Buyer has elected to assume shall be prorated on an accrual basis. Seller shall
pay all amounts due thereunder which accrue prior to the Close of Escrow and
Buyer shall pay all amounts accruing on the Close of Escrow and thereafter.
Seller shall pay in full all amounts due under any Contracts which Buyer has
elected not to assume.
(h) Employee Compensation. Payroll, F.I.C.A., accrued vacation
and sick pay, contributions to employee-medical or pension funds, any employee
benefits, employee-related taxes and any amounts payable under Employment
Contracts for the period prior to the Close of Escrow shall be paid in full by
Seller at or prior to the Close of Escrow and Seller hereby indemnifies and
holds Buyer harmless from any claims respecting same.
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At least one (1) business day prior to the Close of Escrow, the parties shall
agree upon all of the prorations to be made and submit a statement to Escrow
Holder setting forth the same. In the event that any prorations, apportionments
or computations made under this Paragraph 11 shall require final adjustment,
then the parties shall make the appropriate adjustments promptly when accurate
information becomes available and either party hereto shall be entitled to an
adjustment to correct the same. Any corrected adjustment or proration shall be
paid in cash to the party entitled thereto.
12. DISBURSEMENTS AND OTHER ACTIONS BY ESCROW HOLDER. Upon the
Close of Escrow, Escrow Holder shall promptly undertake all of the following in
the following manner:
(a) PRORATIONS. Prorate all matters referenced in Paragraph 11
based upon the statement delivered into Escrow signed by the parties;
(b) RECORDING. Cause the Grant Deed (with documentary transfer
tax information to be affixed after recording) and any other documents which
the parties hereto may mutually direct, to be recorded in the Official Records
in the Official Records in the order directed by the parties;
(c) FUNDS. Disburse from funds deposited by Buyer with Escrow
Holder towards payment of all items (including, without limitation, the
Purchase Price) chargeable to the account of Buyer pursuant hereto in payment
of such costs and disburse the balance of such funds, if any, to Buyer;
(d) DOCUMENTS TO SELLER. Deliver to Seller counterparts of the
Assignment of Leases, the Assignment of Contracts and the General Assignment
executed by Buyer;
(e) DOCUMENTS TO BUYER. Deliver to Buyer originals of the
Leases, the Contracts, the Bill of Sale, the Seller's Certificate(s), the
Firpta Certificate, the Form 590, and counterparts of the Assignment of Leases,
the Assignment of Contracts and the General Assignment appropriately executed
by Seller, the approved form of letter described in Paragraph 8(h) above
addressed to the Lessees advising them of this transaction and any other
documents which are to be delivered to Buyer hereunder, and, when issued, the
Title Policy; and
(f) TITLE POLICY. Direct the Title Company to issue the Title
Policy to Buyer.
13. COVENANTS OF SELLER. Seller and Prior Owner hereby covenant
with Buyer, as follows:
(a) From and after the date of this Agreement, Seller and Prior
Owner shall not, without the prior written consent of Buyer, which consent
Buyer may withhold in its reasonable discretion, enter into any lease, rental
agreement, maintenance contract, service contract, listing agreement or any
other contract affecting or relating to the Property or any portion thereof
which will survive the Close of Escrow or will otherwise affect the use,
operation or enjoyment of the Property after the Close of Escrow, except in the
normal course of business and pursuant to current management practices in
Seller's reasonable determination and discretion;
(b) All insurance policies carried by Seller or Prior Owner with
respect to the Property and in effect as of the date of this Agreement shall
remain continuously in full force and effect from the date of this Agreement
through the day upon which the Close of Escrow occurs;
(c) From and after the date of this Agreement, Seller and Prior
Owner shall not amend, modify, alter or supplement any Contract or Lease which
is approved by Buyer pursuant to Paragraph 7(a) hereof without Buyer's
approval, which shall not be unreasonably withheld or delayed, except in the
normal course of business and pursuant to current management practices in
Seller's reasonable determination and discretion. Further, Seller shall
terminate on or before the Close of Escrow any Contract which is terminable
without penalty and which Buyer disapproves in accordance with Paragraph 7(a)
hereof;
(d) From the date of this Agreement until the Close of Escrow,
Prior Owner shall (i) operate and manage the Property in its current condition
and in accordance with Seller's current management practices, (ii) maintain all
present services and amenities, (iii) maintain the Property in good condition,
repair and working order, (iv) keep on hand sufficient materials, supplies,
equipment and other personal property for the efficient operation and
management of the Property in a first-class manner, (v) perform when due, and
otherwise comply with, all of Seller's obligations and duties under the Leases
and Contracts approved by Buyer in accordance with Paragraph 7(a), and (vi)
maintain the Property in accordance with all applicable laws, ordinances, rules
and regulations affecting the Property. None of the Personal Property shall be
removed from the Real Property, unless replaced by unencumbered personal
property of equal or greater utility and value. All Personal Property and
Intangible Personal Property shall be conveyed to Buyer by Prior Owner at the
Close of Escrow in its "AS-IS" condition without warranty of any kind by Prior
Owner;
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<PAGE> 12
(e) After the date of this Agreement, Seller or Prior Owner
shall not alienate, lien, encumber or otherwise transfer all or any portion of
the Property (other than to Buyer at the Close of Escrow);
(f) Seller shall promptly notify Buyer of any change in any
condition with respect to the Property or of any event or circumstance which
makes any representation or warranty of Seller to Buyer under this Agreement
materially untrue or misleading, and of any covenant of Seller under this
Agreement which Seller will be incapable of performing or less likely to
perform; and
(g) Buyer shall notify Seller of any change in the
condition or circumstance with respect to the Property which makes any
representation or warranty of Seller materially untrue or misleading.
14. SELLER'S REPRESENTATIONS AND WARRANTIES. In consideration of
Buyer entering into this Agreement and as an inducement to Buyer to purchase
the Property, Seller makes the following covenants, representations and
warranties, each of which is material and is being relied upon by the Buyer
(and the continued truth and accuracy of which shall constitute a condition
precedent to Buyer's obligations hereunder):
(a) REPRESENTATIONS REGARDING SELLER'S AUTHORITY.
(i) Seller has the legal power, right and authority
to enter into this Agreement and the instruments referenced herein, and to
consummate the transactions contemplated hereby:
(ii) All requisite action (corporate, trust,
partnership or otherwise) has been taken by Seller in connection with the
entering into this Agreement, the instruments referenced herein, and the
consummation of the transaction contemplated hereby. No consent of any
partner, shareholder, trustee, trustor, beneficiary, creditor, investor,
judicial or administrative body, governmental authority or other party is
required;
(iii) The individuals executing this Agreement and
the instruments referenced herein on behalf of Seller and the partners of
Seller, if any, have the legal power, right, and actual authority to bind
Seller to the terms and conditions hereof and thereof;
(iv) Reserved;
(v) Neither the execution and delivery of this
Agreement and the documents and instruments referenced herein, nor the
incurrence of the obligations set forth herein, nor the consummation of the
transaction contemplated herein, nor compliance with the terms of this
Agreement and the documents and instruments referenced herein conflict with or
result in the material breach of any terms, conditions or provisions of, or
constitute a default under, any bond, note, or other evidence of indebtedness
or any contract, indenture, mortgage, deed of trust, loan, partnership
agreement, lease or other agreement or instrument to which Seller is a party or
affecting the Property;
(b) THREATENED ACTIONS. To Seller's actual knowledge, there
are no pending actions, suits, arbitrations, claims or proceedings, at law, in
equity or otherwise, affecting, or which may affect, all or any portion of the
Property or in which Seller is or will be a party by reason of Seller's
ownership of the Property, including, but not limited to, judicial, municipal or
administrative proceedings in eminent domain, collection actions, alleged
building code violations, health and safety violations, federal, state or local
agency actions regarding environmental matters, lease disputes, federal
environmental protection agency or zoning violations, employment discrimination
or unfair labor practices, or worker's compensation, personal injuries or
property damages alleged to have occurred at the Real Property or by reason of
the condition or use of or construction on the Real Property. Seller is not
aware of the existence of any threatened or contemplated actions, claims or
proceedings or of the existence of any facts which might give rise to any such
actions, claims or proceedings;
(c) COMPLIANCE WITH LAW. To Seller's actual knowledge, all
applicable laws, ordinances, rules, requirements, regulations, building codes
and environmental rules of any governmental agency, body or subdivision thereof
bearing on the Property and the construction of the Improvements have been
complied with.
(d) AGREEMENTS. To Seller's actual knowledge, there are no
agreements (whether oral or written) affecting or relating to the right of any
party with respect to the possession of the Property, or any portion thereof,
which are obligations which will affect the Property or any portion thereof
subsequent to the recordation of the Grant Deed as set forth in the Leases and
the Contracts provided to and approved by Buyer in accordance with Paragraph
7(a)(ii) hereof, or as may be reflected in the Approved Condition of Title;
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(e) DOCUMENTS TRUE. To Seller's actual knowledge, all
documents delivered by Seller to Buyer pursuant to this Agreement are true,
accurate, correct and complete copies of originals and any and all information
prepared by Seller or at Seller's direction and supplied to Buyer by Seller in
accordance with Paragraph 7(a) hereof are true, accurate, correct and
complete;
(f) CONTRACTS. To Seller's actual knowledge, there are no
maintenance contracts, service contracts or any other contracts (whether oral
or written) affecting or relating to the Real Property which will survive the
Close of Escrow except as approved by Buyer in accordance with Paragraph
7(a)(ii) hereof. At the Close of Escrow, there will be no outstanding contracts
entered into by Seller for the construction or repair of any Improvements which
have not been fully paid for, and Seller shall cause to be discharged all
mechanics' and materialmen's liens arising from any labor or materials
furnished to the Real Property prior to the Close of Escrow;
(g) NO OTHER DOCUMENTS. To Seller's actual knowledge, the
documents delivered by Seller to Buyer pursuant to Paragraph 7(a)(ii) above are
all of the documents known by Seller to exist relative to the leasing, use,
ownership, maintenance, management and construction on or of the Property.
Seller has not assigned its rights thereunder to any other person, firm or
entity and no further consent is necessary or required to make the Assignment
of Leases, the Assignment of Contracts, the General Assignment and the Bill of
Sale effective;
(h) HAZARDOUS WASTES. To Seller's actual knowledge, there
is no asbestos or materials containing asbestos incorporated into any of the
Improvements. The Real Property is not in violation of any federal, state or
local law, ordinance or regulation relating to industrial hygiene or to the
environmental conditions on, under or about the Land or the Improvements
including, but not limited to, soil and groundwater condition. Seller further
represents and warrants to Seller's actual knowledge that, except as set forth
in Exhibit "K" attached hereto, neither Seller nor, to Seller's actual
knowledge, any third party has used, generated, manufactured, stored or
disposed of on, under or about the Real Property or transported to or from the
Real Property any flammable explosives, radioactive materials, hazardous
wastes, toxic substances or related materials ("Hazardous Materials"). For
purposes of this subparagraph, the term Hazardous Materials shall include, but
not be limited to, asbestos, petroleum and any petroleum by-products, urea
formaldehyde, foam insulation, polychlorinated biphenyls, and any other
substance which is a "Hazardous Substance" under California Health and Safety
Code Section 25316 and in the regulations adopted and publications promulgated
pursuant to said statute and any amendments thereto;
(i) NO NOTICES. Seller has received no notice of (i) any
change contemplated in any applicable laws, ordinances or restrictions, (ii)
any judicial or administrative action, (iii) any action by adjacent landowners,
or (iv) natural or artificial conditions upon the Real Property which would
prevent, impede, limit or render more costly Buyer's contemplated use of the
Real Property of any portion thereof;
(j) LICENSES AND PERMITS. To Seller's actual knowledge, (i)
all licenses, approvals, permits and certificates from all governmental or
quasi-governmental authorities with jurisdiction over the Real Property or from
private parties necessary for the construction and development of the
Improvements, and for the use and operation of the Real Property, were obtained
prior to such construction, development, use and operation, and are currently
possessed by Seller, (ii) the Improvements have been constructed in accordance
with (A) all such approvals, licenses, permits and certificates, (B) accepted
standards of good materials and workmanship, (C) all covenants, conditions,
restrictions, easements and agreements of any kind or nature affecting the Real
Property, and (D) the "as-built" plans and specifications delivered to Buyer
pursuant to Paragraph 7(a) above, and (iii) any conditions to any licenses,
approvals, permits and certificates for the construction and development of the
Improvements have been satisfied. Seller has obtained all easements and
rights-of-way (including proof of dedication) required from all governmental
authorities having jurisdiction over the Real Property or from private parties
for the present use and operation of the Real Property and to assure vehicular
and pedestrian ingress to and egress from the Real Property at all access
points currently being used;
(k) TAXES. To Seller's actual knowledge, other than the
amounts disclosed by the tax bills delivered to Buyer by Seller, no other real
property taxes or assessments have been or will be assessed against the Real
Property for the current tax year. Seller has no knowledge, and Seller has
received no notice to the contrary, of any special assessments or charges which
have been levied against the Real Property or which will result from work,
activities or improvements done to the Real Property by Seller. Seller has no
knowledge and Seller has received no notice to the contrary of any intended
public improvements which would result in any charge being levied against, or
in the creation of any lien upon, the Real Property or any portion thereof;
(l) UTILITIES. To Seller's actual knowledge, the
Improvements are connected to and served by water, solid waste and sewage
disposal, drainage, telephone, gas, electricity and other utility equipment
facilities and services required by law and which are adequate for the
contemplated use
-11-
<PAGE> 14
and operation of the Real Property, or any portion thereof, and which are
installed and connected pursuant to valid permits and are in full compliance
with all governmental authorities with jurisdiction. To Seller's actual
knowledge, no fact or condition exists which would result in the termination or
impairment in the furnishing of utility services to the Improvements prior to
the Closing Date. Seller has not received any notice from any Lessee indicating
that any of such facilities are inadequate or are not in good operating
condition;
(m) STRUCTURAL, MECHANICAL AND ELECTRICAL DEFECTS. To
Seller's actual knowledge, there are no physical or mechanical defects or
deficiencies in the condition of the Real Property, including, but not limited
to, the roofs, exterior walls or structural components of the Improvements and
the heating, air conditioning, plumbing, ventilating, utility, sprinkler and
other mechanical and electrical systems, apparatus and appliances located on
the Real Property or in the Improvements and all such items are in good
operating condition and repair;
(n) OPTIONS. To Seller's actual knowledge, there do not exist
any rights of first refusals or options to purchase the Property;
(o) SOILS DEFECTS. To Seller's actual knowledge, there are no
defects or conditions of the soil which will impair the present use and
operation of the Real Property, or any portion thereof;
(p) RENT ROLL AND LEASES. To Seller's actual knowledge, the
Rent Roll attached hereto as Exhibit "B" is true, correct, accurate and
complete;
(q) RESERVED;
(r) INSURANCE NOTICES. Seller has not received any notice
from any of Seller's insurance carriers or any insurance carrier of any Lessee
of any defects or inadequacies in the Real Property, or any portion thereof,
which would adversely affect the insurability of the Real Property or the cost
of any such insurance. There are no pending insurance claims with respect to
all or any portion of the Real Property;
(s) FIRPTA; CALIFORNIA WITHHOLDING. Seller is not a foreign
person within the meaning of Section 1445(f)(3) of the Internal Revenue Code of
1986, and Seller will furnish the Firpta Certificate to Buyer prior to the
Close of Escrow in accordance with the terms and provisions of Paragraph 8(i)
hereof. Seller is a resident of or has a permanent place of business in
California and no withholding of any portion of the Purchase Price is necessary
under California law relative to Seller being a non-resident of California; and
(t) RESERVED.
As used herein, the term "to Seller's actual knowledge" shall
mean the actual knowledge of C. J. Felix without any duty to inquire or
investigate with no constructive or inferred knowledge attributable to Mr.
Felix. Buyer acknowledges that Seller purchased the Property from Prior Owner,
who subsequently leased back the Property and has been managing and operating
the Property on Seller's behalf. Furthermore, Prior Owner has maintained all
books and records for the Property and all Documents and Materials have been
supplied from the Prior Owner to Buyer. Except to the extent of any written
representations and warranties contained in this Agreement, Buyer is purchasing
the Property on an "AS IS" basis without representation or warranty by Seller
or Prior Owner. Except to the extent of third party claims for personal injury
arising out of events occurring during the term of the Prior Owner's or
Seller's ownership of the Property, respectively, Buyer, from and after the
Close of Escrow, hereby waives, releases, remises, acquits and forever
discharges Seller, the Prior Owner, their respective directors, officers,
shareholders, employees, and agents, and their respective heirs, successors,
personal representatives and assigns of and from any and all actions, suits,
legal or administrative orders or proceedings, demands, actual damages,
punitive damages, loss, costs, liabilities and expenses (including without
limitation attorneys' and consultants' fees) which concern or in any way relate
to the Property.
Upon the Close of Escrow, Seller's warranties shall be of no
further force or effect.
15. BUYER'S REPRESENTATIONS AND WARRANTIES. In consideration of
Seller entering into this Agreement as an inducement to Seller to sell the
Property, Buyer makes the following covenants, representations and warranties,
each of which is material and is being relied upon by Seller (in the continued
truth and accuracy of which will constitute condition precedent to Seller's
obligations hereunder:
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<PAGE> 15
(a) REPRESENTATIONS REGARDING BUYER'S AUTHORITY.
(i) Buyer has the legal power, right and authority
to enter into this Agreement and the instruments referenced herein, and to
consummate the transaction contemplated hereby;
(ii) All requisite action (corporate, trust,
partnership or otherwise) has been taken by Buyer in connection with the
entering into this Agreement, the instruments referenced herein, and the
consummation of the transaction contemplated hereby. No consent of any partner,
shareholder, trustee, trustor, beneficiary, creditor, investor, judicial or
administrative body, governmental authority or other party is required;
(iii) The individuals executing this Agreement and
the instruments referenced herein on behalf of Buyer and the partners of Buyer,
if any, have the legal power, right, and actual authority to bind Buyer to the
terms and conditions hereof and thereof;
(iv) Neither the execution and delivery of this
Agreement and the documents and instruments referenced herein, nor the
incurrence of the obligations set forth herein, nor the consummation of the
transaction contemplated herein, nor compliance with the terms of this
Agreement and the documents and instruments referenced herein conflict with or
result in the material breach of any terms, conditions or provisions of, or
constitute a default under, any bond, note, or other evidence of indebtedness
or any contract, indenture, mortgage, deed of trust, loan, partnership
agreement, lease or other agreement or instrument to which Buyer is a party.
(b) "AS-IS." Buyer hereby acknowledges that Seller
purchased the Property from Newport Mesa Partners, a California limited
partnership (the "Prior Owner") who subsequently leased back the Property and
has been managing and operating the Property on Seller's behalf. Further, Buyer
acknowledges that the Prior Owner maintains all books and records for the
Property and all documents and materials have been supplied from the Prior
Owner to the Seller, who has in turn delivered the Documents and Materials to
Buyer. Except to the extent of any written representations and warranties
contained in this Agreement, Buyer is purchasing the Property on an "AS-IS"
basis without representation or warranty by Seller.
16. REMEDIES.
(a) LIQUIDATED DAMAGES. PROVIDED BUYER HAS NOT ELECTED TO
TERMINATE THIS AGREEMENT PURSUANT TO ANY OF BUYER'S RIGHTS TO DO SO CONTAINED
HEREIN, IF AFTER THE EXPIRATION OF THE CONTINGENCY PERIOD BUYER COMMITS A
DEFAULT UNDER THIS AGREEMENT AND THE CLOSE OF ESCROW FAILS TO OCCUR SOLELY BY
REASON OF SUCH DEFAULT, THEN ESCROW HOLDER MAY BE INSTRUCTED BY SELLER TO
CANCEL THE ESCROW AND SELLER SHALL THEREUPON BE RELEASED FROM ITS OBLIGATIONS
HEREUNDER. BUYER AND SELLER AGREE THAT BASED UPON THE CIRCUMSTANCES NOW
EXISTING, KNOWN AND UNKNOWN, IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO
ESTABLISH SELLER'S DAMAGE BY REASON OF BUYER'S DEFAULT. ACCORDINGLY, BUYER AND
SELLER AGREE THAT IT WOULD BE REASONABLE AT SUCH TIME TO AWARD SELLER
"LIQUIDATED DAMAGES" EQUAL TO THE AMOUNT OF THE DEPOSIT PREVIOUSLY PLACED INTO
ESCROW BY BUYER PURSUANT TO PARAGRAPH 3 HEREOF.
SELLER AND BUYER ACKNOWLEDGE AND AGREE THAT THE FOREGOING
AMOUNT IS REASONABLE AS LIQUIDATED DAMAGES AND SHALL BE SELLER'S SOLE AND
EXCLUSIVE REMEDY IN LIEU OF ANY OTHER RELIEF, RIGHT OR REMEDY, AT LAW OR IN
EQUITY, TO WHICH SELLER MIGHT OTHERWISE BE ENTITLED BY REASON OF BUYER'S
DEFAULT UNDER THIS AGREEMENT. ACCORDINGLY, IF BUYER COMMITS A DEFAULT UNDER
THIS AGREEMENT AND THE CLOSE OF ESCROW FAILS TO OCCUR SOLELY BY REASON OF SUCH
DEFAULT, SELLER MAY INSTRUCT THE ESCROW HOLDER TO CANCEL THE ESCROW, WHEREUPON
SELLER SHALL BE RELIEVED FROM ALL LIABILITY HEREUNDER, AND, PROMPTLY FOLLOWING
ESCROW HOLDER'S RECEIPT OF SUCH INSTRUCTION, ESCROW HOLDER SHALL (i) CANCEL THE
ESCROW, AND (ii) DISBURSE TO SELLER THE DEPOSIT. WITHOUT LIMITING THE FOREGOING
PROVISIONS OF THIS PARAGRAPH, SELLER WAIVES ANY AND ALL RIGHTS WHICH SELLER
OTHERWISE WOULD HAVE HAD UNDER CALIFORNIA CIVIL CODE SECTION 3389 TO
SPECIFICALLY ENFORCE THIS AGREEMENT. IF THE CLOSE OF ESCROW FAILS TO OCCUR FOR
ANY REASON OTHER THAN BUYER'S DEFAULT UNDER THIS AGREEMENT, THEN ESCROW HOLDER
SHALL IMMEDIATELY RETURN TO BUYER THE DEPOSIT, TOGETHER WITH ALL INTEREST
ACCRUED THEREON. SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND
UNDERSTAND THE PROVISIONS OF THIS
-13-
<PAGE> 16
PARAGRAPH 16 AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS
TERMS.
Seller's Initials Buyer's Initials
/s/ initials /s/ initials
------------ ------------
(b) BUYER'S REMEDIES. Buyer and Seller hereby
agree that, if the sale contemplated by this Agreement is not completed as
herein provided by reason of any default of Seller hereunder, then in addition
to the return of the Deposit and all interest accrued thereon, Buyer shall be
entitled to pursue any remedy available under this Agreement or available at
law or in equity, including, without limitation, the right to specifically
enforce this Agreement.
17. DAMAGE OR CONDEMNATION PRIOR TO CLOSING.
(a) In the event that prior to the Close of Escrow,
the Real Property, or any portion thereof, is destroyed or materially damaged,
Buyer shall have the right, exercisable by giving written notice to Seller
within fifteen (15) days after receipt of written notice of such damage or
destruction, either to terminate this Agreement, in which event the Deposit and
all interest accrued thereon shall be immediately returned to Buyer, any other
money or documents in Escrow shall be returned to the party depositing the same,
and neither party hereto shall have any further rights or obligations hereunder.
(b) In the event that prior to the close of Escrow
there is any non-material damage to the Real Property, or any part thereof,
Seller shall repair or replace such damage prior to the Close of Escrow.
Notwithstanding the preceding sentence, in the event Seller is unable to repair
or replace such damage, Seller shall notify Buyer in writing of such fact (the
"Non-Repair Notice") and Buyer shall thereafter have the right, exercisable by
giving Seller notice within fifteen (15) days after receiving the Non-Repair
Notice either (i) to terminate this Agreement, in which event the Deposit and
all interest accrued thereon shall be immediately returned to Buyer, any other
money or documents in Escrow shall be returned to the party depositing the
same, and neither party hereto shall have any further rights or obligations
hereunder, or (ii) to accept the Real Property in its then condition and
proceed with the transaction contemplated by this Agreement, in which event
Buyer shall be entitled to an assignment of all of Seller's rights to any
insurance proceeds payable by reason of such damage or destruction. If Buyer
elects to proceed under clause (ii) above, Seller shall not compromise, settle
or adjust any claims to such proceeds without Buyer's prior written consent.
(c) In the event that prior to the Close of
Escrow, all or any material portion of the Real Property is subject to a taking
by a public or governmental authority, Buyer shall have the right, exercisable
by giving written notice to Seller within fifteen (15) days after receiving
written notice of such taking, either (i) to terminate this Agreement, in
which event the Deposit and all interest accrued thereon shall be immediately
returned to Buyer, any other money or documents in Escrow shall be returned to
the party depositing the same, and neither party hereto shall have any further
rights or obligations hereunder, or (ii) to accept the Real Property in its
then condition, without a reduction in the Purchase Price, and to receive an
assignment of all of Seller's rights to any condemnation award or proceeds
payable by reason of such taking. If Buyer elects to proceed under clause (ii)
above, Seller shall not compromise, settle or adjust any claims to such award
without Buyer's prior written consent.
(d) In the event that prior to the Close of Escrow,
any non-material portion of the Real Property is subject to a taking by any
public or governmental authority, Buyer shall accept the Real Property in its
then condition and proceed with the consummation of the transaction
contemplated by this Agreement, in which event Buyer shall be entitled to an
assignment of all of Seller's rights to any award or proceeds payable in
connection with such taking. In the event of any such non-material taking,
Seller shall not compromise, settle or adjust any claims to such award without
Buyer's prior written consent.
(e) For purposes of this Paragraph 16, damage to
the Real Property or a taking of a portion thereof shall be deemed to involve a
material portion thereof if the estimated cost of restoration or repair, as
estimated by Buyer in Buyer's reasonable discretion, of such damage or the
amount of the condemnation award with respect to such taking shall exceed Fifty
Thousand Dollars ($50,000) or involve any access to the Real Property.
(f) Seller agrees to give Buyer prompt written
notice of any taking of, proposed taking of, damage to or destruction of the
Real Property.
18. NOTICES. All notices or other communications required
or permitted hereunder shall be in writing, and shall be personally delivered,
sent by overnight mail (Federal Express or the like) or
-14-
<PAGE> 17
sent by registered or certified mail, postage prepaid, return receipt
requested, telegraphed, delivered or sent by telex, telecopy, facsimile, fax or
cable and shall be deemed received upon the earlier of (i) if personally
delivered, the date of delivery to the address of the person to receive such
notice, (ii) if sent by overnight mail, the business day following its deposit
in such overnight mail facility, (iii) if mailed, four (4) business days after
the date of posting by the United States post office, or (iv) if given by
telex, telecopy, facsimile or fax, when sent. Any notice, request, demand,
direction or other communication sent by cable, telex, telecopy, facsimile or
fax must be confirmed within forty-eight (48) hours by letter mailed or
delivered in accordance with the foregoing.
To Buyer: Oasis Residential, Inc.
5251 DTC Parkway, Suite 425
Englewood, Colorado 80111
Attention: Walter Eeds
Phone No. (303) 220-8080
Fax No. (303) 220-1765
With a copy to: Allen, Matkins, Leck, Gamble & Mallory LLP
18400 Von Karman, Suite 400
Irvine, California 92612
Attention: R. Michael Joyce, Esq.
Phone No. (714) 553-1313
Fax No. (714) 553-8354
To Seller: Hutton Development Co., Inc.
3505 Cadillac Avenue, Bldg. O-110
Costa Mesa, California 92626
Attention: Mr. C. J. Felix
Phone No. (714) 432-8707
Fax No. (714) 432-7026
With a copy to: Rutan & Tucker, LLP
611 Anton Blvd., Ste. 1400
Costa Mesa, California 92626
Attention: Marcia A. Forsyth, Esq.
Phone No. (714) 641-3453
Fax No. (714) 546-9035
Copy to: Newport Mesa Partners
11300 Sorrento Valley Road, Suite 220
San Diego, California 92121
Attention: Kenneth A. Picerne
Phone No. (619) 558-3700
Fax No. (619) 558-3777
Copy to: Procopio, Cory, Hargreaves & Savitch LLP
530 B Street, Suite 2100
San Diego, California 92101
Attention: Jeffrey R. Stoke, Esq.
Phone No. (619) 238-1900
Fax No. (619) 235-0298
To Escrow Holder: Chicago Title Company
16969 Von Karman Avenue
Irvine, California 92714
Attention: Lorri Beasley
Phone No. (714) 263-2500
Fax No. (714) 752-8043
Notice of change of address shall be given by written notice in the manner
detailed in this Paragraph. Rejection or other refusal to accept or the
inability to deliver because of changed address of which no notice was given
shall be deemed to constitute receipt of the notice, demand, request or
communication sent.
19. BROKERS. Upon the Close of Escrow, Seller shall pay a real
estate brokerage commission to Hirsch Companies in the sum of Two Hundred
Thousand Dollars ($200,000) with respect to this transaction in accordance with
Seller's separate agreement with said brokers and Seller hereby agrees
15
<PAGE> 18
to indemnify, protect, defend (with counsel chosen by Buyer) and hold Buyer
free and harmless from and against any and all commissions or other claims such
brokers may assert in connection with the parties entering into, or consummating
the transactions contemplated by, this Agreement. If any additional claims for
broker's or finders' fees or commissions for the consummation of this Agreement
arise, then Buyer hereby agrees to indemnify, protect, save harmless and defend
Seller from and against such claims if they are based upon any statement,
representation or agreement made by Buyer, and Seller hereby agrees to
indemnify, protect, save harmless and defend Buyer from and against such claims
if they are based upon any statement, representation or agreement made by
Seller.
20. Legal Fees. In the event of the bringing of any action or suit by
a party hereto against another party hereunder by reason of any breach of any
of the covenants or agreements or any inaccuracies in any of the
representations and warranties on the part of the other party arising out of
this Agreement, then in that event, the prevailing party in such action or
dispute, whether by final judgment or out of court settlement, shall be entitled
to have and recover of and from the other party all costs and expenses of suit,
including actual attorneys' fees. Any judgment or order entered in any final
judgment shall contain a specific provision providing for the recovery of all
costs and expenses of suit, including actual attorneys' fees (collectively
"Costs") incurred in enforcing, perfecting and executing such judgment. For
the purposes of this paragraph, Costs shall include, without limitation,
attorneys' fees, costs and expenses incurred in (i) postjudgment motions, (ii)
contempt proceeding, (iii) garnishment, levy, and debtor and third party
examination, (iv) discovery, and (v) bankruptcy litigation.
21. Assignment; Exchange. Seller may not assign, transfer or convey
its rights or obligations under this Agreement without the prior written
consent of Buyer, and then only if Seller's assignee assumes in writing all of
Seller's obligations hereunder; provided, however, Seller shall in no event be
released from its obligations hereunder by reason of such assignment. Buyer,
without being relieved of liability hereunder and without obtaining Seller's
consent, shall have the right to assign its rights and obligations hereunder or
to nominate another person or entity in whom title to the Property shall vest.
22. Miscellaneous.
(a) Survival of Covenants. The covenants, of both Buyer and
Seller set forth in this Agreement shall survive the recordation of the Grant
Deed and the Close of Escrow; provided, however, the representations and
warranties of Seller shall not survive the Close of Escrow.
(b) Required Actions of Buyer and Seller. Buyer and Seller
agree to execute such instruments and documents and to diligently undertake
such actions as may be required in order to consummate the purchase and sale
herein contemplated and shall use their best efforts to accomplish the Close of
Escrow in accordance with the provisions hereof.
(c) Computation of Time Periods. If the date upon which the
Contingency Period expires, the Closing Date or any other date of time period
provided for in this Agreement is or ends on a Saturday, Sunday or federal,
state or legal holiday, then such date shall automatically be extended until 5
p.m. Pacific Time of the next day which is not a Saturday, Sunday or federal,
state or legal holiday.
(d) Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which,
together, shall constitute but one and the same instrument.
(e) Captions. Any captions to, or headings of, the paragraphs
or subparagraphs of this Agreement are solely for the convenience of the
parties hereto, are not a part of this Agreement, and shall not be used for
the interpretation or determination of the validity of this Agreement or any
provision hereof.
(f) No Obligations to Third Parties. Except as otherwise
expressly provided herein, the execution and delivery of this Agreement shall
not be deemed to confer any rights upon, nor obligate any of the parties
hereto, to any person or entity other than the parties hereto.
(g) Exhibits. The Exhibits attached hereto are hereby
incorporated herein by this reference for all purposes.
(h) Amendment to this Agreement. The terms of this Agreement
may not be modified or amended except by an instrument in writing executed by
each of the parties hereto.
(i) Waiver. The waiver or failure to enforce any provision
of this Agreement shall not operate as a waiver of any future breach of any such
provision or any other provision hereof.
-16-
<PAGE> 19
(j) Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
(k) Fees and Other Expenses. Except as otherwise provided
herein, each of the parties hereto shall pay its own fees and expenses in
connection with this Agreement.
(l) Entire Agreement. This Agreement supersedes any prior
agreements, negotiations and communications, oral or written, and contains the
entire agreement between Buyer and Seller as to the subject matter hereof. No
subsequent agreement, representation, or promise made by either party hereto,
or by or to an employee, officer, agent or representative of either party
hereto shall be of any effect unless it is in writing and executed by the party
to be bound thereby.
(m) Successors and Assigns. Subject to the restrictions set
forth in Paragraph 20 hereof, this Agreement shall be binding upon and shall
inure to the benefit of the successors and assigns of the parties hereto.
(n) Construction. The parties hereto hereby acknowledge and
agree that (i) each party hereto is of equal bargaining strength, (ii) each
such party has actively participated in the drafting, preparation and
negotiation of this Agreement, (iii) each such party has consulted with such
party's own, independent counsel, and such other professional advisors as such
party has deemed appropriate, relative to any and all matters contemplated
under this Agreement, (iv) each such party and such party's counsel and
advisors have reviewed this Agreement, (v) each such party has agreed to enter
into this Agreement following such review and the rendering of such advice, and
(vi) any rule of construction to the effect that ambiguities are to be resolved
against the drafting parties shall not apply in the interpretation of this
Agreement, or any portions hereof, or any amendments hereto.
-17-
<PAGE> 20
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
"Buyer" OASIS RESIDENTIAL, INC.
a Nevada corporation
By: [SIG]
-------------------------
Name:
---------------------
Title:
--------------------
"Seller" HUTTON DEVELOPMENT CO., INC.,
a California corporation
By: [SIG]
-------------------------
Name:
---------------------
Title: President
--------------------
Acceptance by Escrow Holder:
Chicago Title Company hereby acknowledges that it has received a fully
executed original or original executed counterparts of the foregoing Agreement
of Purchase and Sale and Joint Escrow Instructions and agrees to act as Escrow
Holder thereunder and to be bound and strictly perform the terms thereof as
such terms apply to Escrow Holder.
CHICAGO TITLE COMPANY
Dated: May 19, 1997 By: [SIG]
---------------------------
Its Authorized Agent
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<PAGE> 21
IN WITNESS WHEREOF, the parties acknowledge and accept the rights and
obligations of Prior Owner pursuant to the terms and conditions of this
Agreement.
"Prior Owner" NEWPORT MESA PARTNERS,
a California limited partnership
By: PICERNE COSTA MESA I,
a California limited partnership,
its General Partner
By: PICERNE ASSOCIATES,
a California corporation,
its General Partner
By: [SIG]
----------------------
Kenneth A. Picerne
President
[The remainder of this page intentionally left blank.]
<PAGE> 22
Order No: 7305124 M08 Your Ref: C-156420
1. The estate or interest in the land hereinafter described or referred to
covered by this report is:
A FEE
2. Title to said estate or interest at the date hereof is vested in:
HUTTON DEVELOPMENT CO., INC., A CALIFORNIA CORPORATION
3. The land referred to in this report is situated in the State of California,
County of ORANGE and is described as follows:
LOT 1102 OF NEWPORT MESA TRACT, IN THE CITY OF COSTA MESA, COUNTY OF ORANGE,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 5, PAGE 1 OF MISCELLANEOUS
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM ALL OIL, GAS, MINERAL AND HYDROCARBON SUBSTANCES IN AND
UNDER SAID LAND, BUT WITHOUT THE RIGHT OF SURFACE ENTRY TO A DEPTH OF 500 FEET,
MEASURED FROM THE SURFACE THEREOF, AS RESERVED BY HAROLD S. JASPER AND HARRIET
JASPER, HUSBAND AND WIFE, IN DEED RECORDED APRIL 5, 1988 AS INSTRUMENT NO.
88-155496 OF OFFICIAL RECORDS.
EXHIBIT "a"
TO
EXHIBIT "H"
<PAGE> 23
RENT ROLL
[To Be Supplied]
EXHIBIT "B"
<PAGE> 24
EXHIBIT "B"
SEA PALMS VILLAGE APARTMENTS
<TABLE>
<CAPTION>
Unit Unit Unit Res. Lease Move Market Lease Sched. Gross
No. Type Status Status Names Exp. In/Out Rent Rent Concess Pct. Deposits
- ----- ------- -------- ------ -------------------------- ------ ------ ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A101 2+2A1-0 Occup Resd CHESTER MOSES
ALLYSON MOSES 53197 31193 1025.00 1025.00 25.00 1025.00 299.00
A102 2+1A1 Occup Resd ALBERT PATTON 03197 30197 975.00 975.00 50.00 975.00 300.00
A103 2+1A1 EMPLOY 975.00 975.00
A104 2+1A1 Nto/Rnt Appl JENNIFER REEDY
JOHN REEDY 53197 975.00 975.00* 50.00
Resd DUNCAN SOUZA
CHRIS MC DONALD 52197 52196 975.00 975.00 99.00
A105 1+1A1 Occup Resd SANDRA RYAN 50497 40597 875.00 844.00 844.00 819.00
Prev JEFF CATALLINI
DEBBIE CATALLINI 72196 13197 844.00* 0.00
A106 2+1R1 Occup Resd MARC MITCHELL
MONICA NIECH 63197 43095 875.00 875.00 45.00 875.00 100.00
A107 2+2R1 Occup Resd AL SCHULMAN
CAROL SPEAS 31498 11597 950.00 950.00 50.00 950.00 249.00
A108 2+2R1 Occup Resd DIANA LERNER
RODNEY ANDERSON 121795 111795 950.00 844.00 844.00 199.00
A109 2+2R1 Occup Resd DEVON WISNIEWSKI
JEFF PULPER 51197 41097 950.00 844.00 844.00 99.00
Prev T. ROGER WHISNER
KAREN WHISNER 101495 40397 844.00* 0.00
A201 2+2A2-O Occup Resd VINCENT NG
AGNES YONG
BOON NG 11098 11197 1050.00 1050.00 100.00 1050.00 99.00
A202 2+2A2-OO Occup Resd MICHELLE EGAN
JOHN EGAN
DANA EGAN
RYAN HANEY 92197 12197 1100.00 1075.00 75.00 1075.00 99.00
A203 2+2A2-OO MODEL 1100.00 1100.00
A204 2+2A2-OO Occup Resd DINO VISCIGLIO 71597 62593 1100.00 1100.00 125.00 1100.00 200.00
A205 2+1A2 Occup Resd DAVID SCHAFFNER 43092 110190 900.00 844.00 844.00 400.00
A206 2+1R2 Occup Resd TRACY PERRY
QUY TOM 100197 101291 900.00 900.00 40.00 900.00 500.00
</TABLE>
<PAGE> 25
06-MAY-97 SEA PALMS VILLAGE APARTMENTS (# 00002-400) Page 03
RENT ROLL
<TABLE>
<CAPTION>
Unit Unit Unit Res. Lease Move Market Lease Sched. Gross
No. Type Status Status Names Exp. In/Out Rent Rent Concess Pct. Deposits
- ----- ------- -------- ------ -------------------------- ------ ------ ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A207 2+2R2-O Occup Resd DAVID WEAR
LEONA AQUINO 11098 11197 1075.00 1075.00 75.00 1075.00 99.00
A208 2+2R2-O Occup Resd CLINT BYUN
CAROLYN FAHRER
KENNY FAHRER 51997 111996 1075.00 1075.00 1075.00 99.00
A209 2+2R2-O Occup Resd DAVID WELLS
DEBORAH WELLS 30998 31096 1075.00 1075.00 55.00 1075.00 249.00
A304 2+2R3-O Occup Resd SHELLEY MARCH
LISA LEIBOW 83197 30197 1125.00 1125.00 75.00 1125.00 249.00
A305 2+1R3-O Occup Resd MICHAEL RICHMAN
CONZUELO RICHMAN 91497 91595 950.00 950.00 60.00 950.00 99.00
A306 2+1R3-O Occup Resd JOHN BEISEL
JASON GORDON 50398 50497 950.00 950.00 950.00 99.00
Prev KATIE TEIGEN 50597 50397 950.00- 0.00
B201 1+1 Occup Resd BRIANNA HAWKINS 51197 41297 745.00 683.00 683.00 99.00
Prev HEATHER MC DUGALL 110794 41197 683.00- 0.00
B202 1+1 Occup Resd BRENDA HARRIS 83192 83192 745.00 683.00 683.00 300.00
B203 1+1 Occup Resd LORNZO VILLALBA
ALFREDO VILLALBA 120194 100294 745.00 745.00 745.00 99.00
B204 1+1 Occup Resd RHONDA BRABBIN 123195 120195 745.00 683.00 683.00 600.00
C101 2+2R1 Occup Resd STEVEN GOLDBERG 71097 11197 950.00 950.00 50.00 950.00 99.00
C102 2+2R1 Occup Resd MARCEL JOHNSON
BEN ESQUE
BEN'S 631-1174 80397 80496 950.00 950.00 60.00 950.00 99.00
C103 2+2R1 Occup Resd BRONWEN MONTE
JONATHAN MONTE 42098 52195 950.00 950.00 60.00 950.00 99.00
C104 2+2R1 Occup Resd ERIC KENNEDY
JEREMY FETTERS
JOE MAURER
JONATHAN HARTSHORN 90197 50497 950.00 950.00 950.00 99.00
Prev DIEGO MONDRAGON
MARIA ESPINOZA
LAZARO ARTEAGA
ROSA ESPINOZA 41797 43097 950.00* 0.00
</TABLE>
<PAGE> 26
06-MAY-'97 SEA PALMS VILLAGE APARTMENTS (#00002-600) Page
RENT ROLL
<TABLE>
<CAPTION>
Unit Unit Res. Lease Move Market Lease Sched. Gross
Unit No. Type Status Status Names Exp. In/Out Rent Rent Concess Pct. Deposits
- -------- ---- ------ ------ --------------------- ----- ------ ------ ----- ------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
C105 2+2R1 Occup Resd MICK MAIDOVICH
ALEKSANDR MAIDOVICH
ALEX MAIDOVICH 72097 12197 950.00 950.00 75.00 950.00 100.00
C106 2+1R1 Occup Resd RAUL MARTINEZ
BERTHA MARTINEZ 93097 100293 875.00 875.00 50.00 875.00 200.00
C107 2+1A1 Occup Resd GIL RIVERA 100996 91096 875.00 844.00 844.00 99.00
C108 2+1A1 Occup Resd MARTA SALAS-STREIFF 33197 40195 975.00 975.00 975.00 399.00
C109 2+1A1 Occup Resd HELENE NIRLEEN
BRANDON PROVINI 101497 41597 975.00 975.00 50.00 975.00 99.00
Prev RYAN NELSON
STEPHEN SHUMAN
RALPH NELSON COSIGN 32797 40397 975.00 0.00
C110 2+2A2 Occup Resd DIANA BLAISURE 51896 41996 975.00 975.00 975.00 99.00
C111 2+2A1 Occup Resd ROBIN SANDUSKY
NANCY SNYDER
ROBIN'S #621-6471 110297 50396 975.00 975.00 975.00 99.00
C201 2+2R2 Occup Resd DAVID LEWIS
JUSTIN RODENBECK 62797 62896 975.00 975.00 50.00 975.00 99.00
C202 2+2R2 Occup Resd PAUL ALBERTH 41498 41597 975.00 975.00 75.00 975.00 99.00
C203 2+2R2 Occup Resd STEPHEN WYNN
LAUREL WYNN
CATHERINE HAAS (MINOR) 83197 11997 975.00 975.00 75.00 975.00 460.00
C204 2+2R2 Occup Resd CHRISTOPH MARTIN 122797 122896 975.00 975.00 50.00 975.00 99.00
C205 2+2R2 Occup Resd MARIA SERPAS
JOSE SERPAS
JOSE MINOR
MANUEL MINOR 80897 80996 975.00 975.00 75.00 975.00 99.00
C206 2+1R2 NTC/UNR Resd VIVIAN GARCIA
GAUTAN SHARMA 92097 92196 900.00 900.00 50.00 900.00 249.00
C207 2+1A2 Mtc/Rnt Appl PAUL BORDEN 51597 900.00 844.00- 75.00
Resd DENISHA SYME 102796 92896 844.00 844.00 99.00
C208 2+2A2 Occup Resd STACEE ENGLE
GINA DIXON
GINA'S #574-9472 63097 40795 1000.00 1000.00 75.00 1000.00 99.00
</TABLE>
<PAGE> 27
06-MAY-97 SEA PALMS VILLAGE APARTMENTS (S 00002-400) PAGE
RENT ROLL
<TABLE>
<CAPTION>
Unit Unit Unit Res. Lease Move Market Lease Sched. Gross
No. Type Status State Names Exp. In/Out Rent Rent Concess Pct. Deposits
- ---- ----- ------ ----- ---------------- ------ ------ ------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
C109 2+2A2 Occup Resd ALEX MCCLURE 71497 11597 1000.00 1000.00 75.00 1000.00 99.00
C110 2+2A2 Occup Resd JASON CULLEN
ROBERT LEWIS 22598 22697 1000.00 1000.00 75.00 1000.00 99.00
C111 2+2A2 Occup Resd JAMES BERARDINI
KELLY BERARDINI 82597 22697 1000.00 1000.00 75.00 1000.00 249.00
C101 2+2R3 Occup Resd MIHO ISHIDA 83197 30196 1000.00 1000.00 75.00 1000.00 99.00
C102 2+2R3 EMPLOY 1000.00 1000.00
C103 2+2R3 Occup Resd JOE KEAY
LISA PETERSON 90697 30797 1000.00 1000.00 50.00 1000.00 99.00
C104 2+2R3 Occup Resd KRISTEN PETTERMAN
JEREMY DUTCHER
CHRISTOPH HOWELL 101497 101596 1000.00 1000.00 75.00 1000.00 249.00
C105 2+2R3 Occup Resd ABDOLBAGH ENTESARI
SIMA ENTESARI 50195 20694 1000.00 844.00 844.00 99.00
C106 2+1R3 Occup Resd G. JOHN DIAZ 81497 21597 925.00 925.00 50.00 925.00 99.00
C107 2+1A3 Occup Resd TIFFANY JONES
JUDY IVIE 52697 82796 925.00 925.00 925.00 99.00
C108 2+2A3 Occup Resd CHRISTINA OTTEN
JAIME CENICEROS
ROBA DO 61197 121396 1025.00 1025.00 50.00 1025.00 99.00
C109 2+2A3 Occup Resd JENNIFER OWENS
JOHN GROENHOF 22896 30197 1025.00 1025.00 75.00 1025.00 300.00
C110 2+2A3 Occup Resd SCARLET DOOMAN 30898 30996 1025.00 1025.00 50.00 1025.00 99.00
C311 2+2A3 Occup Resd BRYAN PULLMAN
LAURA PULLMAN 110297 80196 1025.00 1025.00 60.00 1025.00 300.00
D201 1+1 Occup Resd ELLIOT PESSAM 73196 63094 745.00 683.00 683.00 99.00
D202 1+1 Occup Resd KIM STACHNIAK 31497 21597 745.00 683.00 683.00 99.00
D203 1+1 Occup Resd CAROLINE SCHAUER
DOUGLAS SCHAUER 90796 80896 745.00 683.00 683.00 99.00
D204 1+1 Occup Resd PAMELA NEIGHBORS 122195 112295 745.00 683.00 683.00 99.00
</TABLE>
<PAGE> 28
06-MAY-97 SEA PALMS VILLAGE APARTMENTS (# 00002-600) Page
RENT ROLL
<TABLE>
<CAPTION>
Unit Unit Unit Res. Lease Move Market Lease Sched. Gross
No. Type Status Status Names Exp. In/Out Rent Rent Concess Pct. Deposits
- ---- ----- ------ ------ ----------------- ------ ------ ------- ------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
E101 2+2R1 Occup Resd AFSANETH ZADSHIRI
MAHMOOD ZADSHIRI 83195 90194 950.00 950.00 950.00 99.00
E102 2+2R1 Occup Resd MARK WING 53197 100795 950.00 950.00 75.00 950.00 249.00
E103 2+2R1 Occup Resd DON TYLER
JON BOULINGER 102096 62996 950.00 844.00 844.00 99.00
E104 2+2R1 Occup Resd ANNA RAMIREZ
NESTOR RAMIREZ 70597 70597 950.00 950.00 75.00 950.00 99.00
E201 2+2R2 Occup Resd RAYMOND JAUREQUI
JUDY JAUREQUI 20698 20795 975.00 975.00 35.00 979.00 300.00
E202 2+2R2 Occup Resd DANA HIXSON
LEIGH HARVEY 83197 92896 975.00 975.00 60.00 975.00 249.00
E203 2+2R2 Vac/Ent 975.00
Appl KRISTY DELONG
BENJAMIN FISHER 50797 975.00* 975.00 74.00
Prev MICHELLE WILLIAMS 12697 41597 975.00* 0.00
E204 2+2R2 Occup Resd GREG MUNGALL
DURANNE MUNGALL 90197 41297 975.00 975.00 50.00 975.00 249.00
Prev THOMAS SMITH
KATHLEEN SMITH 22897 40497 975.00* 0.00
E301 2+2R3 Occup Resd CAROLYN SCHILDE 63096 11892 1000.00 975.00 975.00 300.00*
E302 2+2R3 Occup Resd SHERRY LEYSEN
KURT LEYSEN
SHERRY WK#474-1411 103197 30194 1000.00 1000.00 50.00 1000.00 99.00
E303 2+2R3 Occup Resd STACY NETHERCOTT 93097 100194 1000.00 1000.00 100.00 1000.00 249.00
E304 2+2R3 Occup Resd BRYAN STEWARD
AMY STEWARD 91797 31997 1000.00 1000.00 50.00 1000.00 249.00
Prev ROSE ELBLING
CYNTHIA CORLEY 113096 31897 1000.00* 0.00
F201 1+1 Occup Resd JOHN KURRACK
MARIA KURRACK 100596 90696 745.00 683.00 683.00 99.00
F202 1+1 Ntc/Rnt Appl DAVID BROWN
CANDICE DURANT 60697 745.00 683.00* 50.00
Resd DENNIS ESPOSITO
DEBBIE ESPOSITO 101194 91294 683.00 683.00 99.00
</TABLE>
<PAGE> 29
06-MAY-97
SEA PALMS VILLAGE APARTMENTS (8 00002-600) Page
RENT ROLL
<TABLE>
<CAPTION>
Unit Unit Unit Res. Lease Move Market Lease Sched. Gross
No. Type Status Status Names Exp. In/Out Rent Rent Concess. Pct. Deposits
- ---- ----- ------ ------ ------------------------------- ----- ------ ------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
F203 1+1 Occup Resd REBECCA MCRAE 12697 122796 745.00 683.00 683.00 99.00
F204 1+1 Occup Resd CLAY JOHNSON 43097 91292 745.00 745.00 745.00 300.00
G101 2+2A1 Occup Resd OLGA SANTANA 20698 20797 975.00 975.00 75.00 975.00 99.00
G102 2+2A1 Occup Resd DANIEL MURPHY
GEORGIA MOORE 12398 12497 975.00 975.00 75.00 975.00 249.00
G103 2+2A1 Occup Resd EDWARD GOUDREAU 03197 20592 975.00 1000.00 50.00 1000.00 300.00
G104 2+2A1 Occup Resd GLORIA MINTZ
TODD MINTZ 33197 110191 975.00 975.00 975.00 100.00
G105 2+2A1 Occup Resd CARMEN DICKSON
DAVID DICKSON 50897 40997 675.00 844.00 844.00 99.00
Prev CHRIS MILLER
CARRIE ORTIZ 120896 40197 844.00* 0.00
G106 2+2A1 Occup Resd JACKI LIVINGSTON
AMANDA (MINOR) 62297 61496 950.00 950.00 75.00 950.00 249.00
G201 2+2A2 Occup Resd MATTHEW CORRIGAN
MANUEL MARTINHO
DAVID BELAR
ANTHONY KUEMI 90197 50197 1000.00 1000.00 1000.00 99.00
Prev GREGORY SAFFER
ADELINE SAFFER
ELIZABETH MCNAMARA 03197 40497 1000.00 0.00
G202 2+2A2 Occup Resd GORDON FERIC
DORIS FERIC 42097 102996 1000.00 1000.00 1000.00 99.00
G203 2+2A2 Occup Resd ELIZABETH KENNY 33196 12897 1000.00 1000.00 75.00 1000.00 99.00
Prev TAMI GREEN
PHILIP ESQUIBEL 52497 12197 1000.00* 0.00
G204 2+1A2 Occup Resd AMY JONES
EMILY HAWKINS 51898 81996 1000.00 1000.00 1000.00 99.00
G205 2+2B2 Occup Resd MAHMAZ DELRAY
VANESSA CHOMINA
VANESSA'S 7220-8760 30797 20797 900.00 844.00 844.00 99.00
G206 2+2A2 Occup Resd TERESA EDELMAN
DANNY (MINOR) 91997 92096 975.00 975.00 75.00 975.00 549.00
G301 2+2A3 Occup Resd CLYDE FIELDS
SUE FIELDS 110697 20797 1025.00 1025.00 75.00 1025.00 99.00
</TABLE>
<PAGE> 30
EXHIBIT "B" PAGE 08
SEA PALMS VILLAGE APARTMENTS (#00002-400)
RENT ROLL
<TABLE>
<CAPTION>
Unit Unit Unit Res. Lease Move Market Lease Sched. Gross
No. Type Status Status Names Exp. In/Out Rent Rent Concess Pct. Deposits
- ----- ------- -------- ------ -------------------------- ------ ------ ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
G302 2+2A3 Occup Resd BILL WASSERMAN
STEVE REINDERES 50697 20896 1025.00 1025.00 1025.00 99.00
G303 2+2A3 Occup Resd ERIC STEINEMAN
FRANCINE STEINEMAN
ERIC WKN 509-4089 100497 40397 1025.00 1025.00 75.00 1025.00 399.00
Prev JEAN SMILEY
GINA SULLIVAN 32997 40297 1025.00* 0.00
G304 2+2A3 Occup Resd FRANK TINOCO
MARIA CALDERON 83197 40596 1025.00 1025.00 75.00 1025.00 299.00
G305 2+1R3 Occup Resd RICHARD BARIL
GEORGIA SAGER BARIL 22896 20793 925.00 925.00 75.00 925.00 300.00
G306 2+2R3 Occup Resd DANIEL BARBER
CHARLENE BARBER 120897 122096 1000.00 950.00 75.00 950.00 99.00
H101 2+2A1 Vac/Rnt 950.00
Appl KEVIN COUGHLIN
MARIA COUGHLIN 50997 950.00* 950.00 75.00
Prev DWAYNE TATE
SUZETTE TATE 110495 50197 950.00* 0.00
H102 2+1A1 Occup Resd LINDA DORANTES
CESAR DORANTES 91696 43095 875.00 844.00 844.00 199.00
H103 2+2A1 Occup Resd MARGARET STOVER 80697 52096 975.00 975.00 115.00 975.00 100.00
H104 2+2A1 Occup Resd DAVID YARTE
MONIQUE PINOCCHIO 70295 60395 975.00 844.00 844.00 99.00
H105 2+2A1 Occup Resd EBRU EREM 10697 90796 975.00 975.00 975.00 99.00
H106 2+2A1 Occup Resd KURT GRIGAS
CHARLES GRIGAS, JR. 70697 20797 975.00 975.00 75.00 975.00 99.00
H201 2+1A2 Occup Resd CHRISTINE KAKOUR
WK# 435-0673 93097 100392 975.00 975.00 75.00 975.00 200.00
H202 2+1A2 Occup Resd ALBERT ADUNA
CHANTEL ADUNA 111896 101996 900.00 844.00 844.00 99.00
H203 2+2A2 Occup Resd APRIL BYRD
TAMMY SMITH
ANGELA JOHNSON
CHERYL MOREFIELD 110297 50297 1000.00 1000.00 1000.00 99.00
Prev ANGELA ALLEYMAN
WK# 7262797 11197 40497 1000.00* 0.00
</TABLE>
<PAGE> 31
<TABLE>
06-MAY-97 SEA PALMS VILLAGE APARTMENTS (# 00002-400) Page 09
RENT ROLL
<CAPTION>
Unit Unit Unit Res. Lease Move Market Lease Sched. Gross
No. Type Status Status Names Exp. In/Out Rent Rent Concess Pct. Deposits
- ----- ------- -------- ------ -------------------------- ------ ------ ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
H204 2+2A2 Occup Resd DARLA GIVEN
JOSEPH UNDERWOOD
LANCE PETTIS
SABRINA STERRET 81597 90696 1000.00 1000.00 75.00 1000.00 99.00
H205 2+2A2 Occup Resd DEBORAH WEBSTER
WK# 645-0606 X1445 73196 70196 1000.00 844.00 844.00 400.00
H206 2+2A2 Occup Resd DIANE BALDONI
BEN DORANTES 73197 42696 1000.00 1000.00 50.00 1000.00 99.00
H301 2+2R3 Occup Resd DANIEL VESELY 110297 50397 1000.00 1000.00 1000.00 99.00
Prev JEANNE ESQUIVEL 63097 50297 1000.00* 50.00 0.00
H302 2+1A3 Occup Resd RICHARD WILSON, JR.
LIZ HYATT 83197 30197 925.00 925.00 50.00 925.00 249.00
H303 2+2A3 Occup Resd BARBIE THOMPSON
MARK THOMPSON 90497 32094 1025.00 1000.00 1000.00 399.00
H304 2+2A3 Occup Resd LEIGHTON CARNER
MARISOL SANCHIZ 30798 30897 1025.00 1025.00 50.00 1025.00 249.00
H305 2+2A3 Occup Resd CARLOS BUTEROSTRO
DARLA BORGATTA 21498 21497 1025.00 1025.00 100.00 1025.00 249.00
H306 2+2A3 Occup Resd MATT SEGAL
DOMINIC MORABITO 73197 40191 1025.00 1025.00 40.00 1025.00 200.00
J201 1+1 Occup Resd KELLEY HILL 53197 50197 745.00 683.00 683.00 99.00
WALTER SPURGIASZ 10197 43097 683.00 0.00
J202 1+1 Occup Resd DONALD KING 71592 71592 745.00 683.00 683.00 300.00
J203 1+1 Occup Resd DOUG SARNQ 11596 121695 745.00 683.00 683.00 99.00
J204 1+1 Occup Resd JEANNE SHOBE 111295 100795 745.00 683.00 683.00 99.00
K101 2+1R1K Occup Resd MARIA TORRES
EDWARD TORRES 63095 10495 850.00 800.00 800.00 99.00
K102 2+2R1K Occup Resd ANNA ABRANOVA 100497 100596 925.00 925.00 40.00 925.00 249.00
K103 2+2R1K Occup Resd LYNN MOORLAG
DANIEL ZIMOLZAK
JORDAN (MINOR) 53197 60196 925.00 925.00 75.00 925.00 1150.00
K104 2+2R1K Occup Resd HENRY ZAMORA 103197 110192 925.00 950.00 75.00 950.00 300.00
</TABLE>
<PAGE> 32
06-MAY-97 SEA PALMS VILLAGE APARTMENTS (# 00002-600) Page
RENT ROLL
<TABLE>
<CAPTION>
Unit Unit Unit Res. Lease Move Market Lease Sched. Gross
No. Type Status Status Names Exp. In/Out Rent Rent Concess Pct. Deposits
- ---- ----- ------ ------ ----------------- ------ ------ ------- ------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
K105 2+2R1K Occup Resd DAWN MARTIN
CHRISTIAN MARTIN 100897 40997 925.00 925.00 50.00 925.00 99.00
Prev WILLIAM SANTOLUCITO
BRANDON AVILA
ANDY GLENDINNING 40497 32597 925.00* 0.00
K201 2+1R2K Occup Resd SAM ALIMO
BEATRICE ALIMO 53197 60395 875.00 875.00 250.00 875.00 99.00
K202 2+2R2K Occup Resd MARY GOMEZ 43097 50194 950.00 950.00 950.00 555.00
K203 2+2R2K Occup Resd DREW WALLACE 113097 110192 950.00 975.00 125.00 975.00 300.00
K204 2+2R2K Occup Resd ANITA KRAUSE
DALE KRAUSE 93097 41995 950.00 950.00 85.00 950.00 399.00
K205 2+2R2K Occup Resd PETE VARA
MICHAEL BURROUGHS
SHIRLEY VARA 81497 111596 950.00 925.00 50.00 925.00 99.00
K302 2+2R3K Occup Resd CHERYL DREW 121397 121496 975.00 975.00 75.00 975.00 99.00
K303 2+2R3K Occup Resd WILLIAM BAKER 83197 80694 975.00 975.00 50.00 975.00 600.00
K304 2+2R3K Occup Resd WILLIAM BAKER "SCOTT"
KATHRYN BAKER 121697 121794 975.00 975.00 25.00 975.00 399.00
K305 2+2R3K Occup Resd NADAR ALLAHVERDY
DOROTHY LIGGONS
PH# 631-7825
PGR 213-241-7153 53197 70193 975.00 975.00 100.00 975.00 99.00
L101 2+2A1 Occup Resd CHRISTINA KIMBER
MICHAEL MATCHORN 122797 122896 975.00 1000.00 75.00 1000.00 99.00
L102 2+2A1 Occup Resd JOHN BAKER
ARMANDO HERNANDEZ 22898 51096 975.00 975.00 65.00 975.00 300.00
L201 2+2A2 Occup Resd ALLISON TAYLOR
EVETTE ROTH 13158 20197 1000.00 1000.00 50.00 1000.00 99.00
L202 2+2A2 Occup Resd MOLISSA BRYANT
RANDY AMBROSE 111595 40595 1000.00 925.00 925.00 200.00
L302 2+2A3 Occup Resd BETH BELIGAN
AARON GARCIA 92097 92196 1025.00 1025.00 75.00 1025.00 99.00
M201 2+2A2 Occup Resd SHAHANA ALI
FAIZAL ALI
SHAHANA ALI (MINOR) 71297 11396 1000.00 1000.00 80.00 1000.00 99.00
</TABLE>
<PAGE> 33
04-MAY-97 SEA PALMS VILLAGE APARTMENTS (# 00002-400) Page 11
RENT ROLL
<TABLE>
<CAPTION>
Unit Unit Unit Res. Lease Move Market Lease Sched. Gross
No. Type Status Status Names Exp. In/Out Rent Rent Concess Pct. Deposits
- ---- ----- ------ ------ ---------------- ------ ------ ------- --------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WAIT027 Appl CHRISTY RIDINGS 80797 683.00* 0.00
WAIT028 Appl ROBERT ANDERSON 61597 683.00* 0.00
WAIT029 Appl ROBYN UMBAUGH
GREG FOURNIER 61597 1000.00* 0.00
TOTALS: Scheduled
</TABLE>
Total Number of Units: 138
- --------------------
* Applicant and Previous lease rent is not included in the lease rent total.
<PAGE> 34
WHEN RECORDED MAIL TO:
Allen, Matkins, Leck, Gamble & Mallory
18400 Von Karman, Fourth Floor
Irvine, California 92715
Attention:______________, Esq.
MAIL TAX STATEMENTS TO:
- ------------------------------
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(Above Space for Recorder's Use Only)
GRANT DEED
The undersigned grantor declares:
Documentary Transfer Tax not shown pursuant
to Section 11932 of the Revenue and
Taxation Code, as amended
County of_________________
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
_______________________________, a _________________________, hereby GRANTS
to _________________________________________, a _______________, that certain
real property in the City of _____________, County of ___________, State of
California, which is more particularly described on Exhibit "1" which is
attached hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Grant Deed to
be executed as of the _____ day of ______________, 199_.
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By:
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Print Name:
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Print Title:
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By:
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Print Name:
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Print Title:
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[ATTACH APPROPRIATE ACKNOWLEDGMENTS]
EXHIBIT "C"
<PAGE> 35
Order No: 7305124 M08 Your Ref: C-156420
1. The estate or interest in the land hereinafter described or referenced to
covered by this report is:
A FEE
2. Title to said estate or interest at the date hereof is vested in:
HUTTON DEVELOPMENT CO., INC., A CALIFORNIA CORPORATION
3. The land referred to in this report is situated in the State of California,
County of ORANGE and is described as follows:
LOT 1102 OF NEWPORT MESA TRACT, IN THE CITY OF COSTA MESA, COUNTY OF ORANGE,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 5, PAGE 1 OF MISCELLANEOUS
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM ALL OIL, GAS, MINERAL AND HYDROCARBON SUBSTANCES IN AND
UNDER SAID LAND, BUT WITHOUT THE RIGHT OF SURFACE ENTRY TO A DEPTH OF 500 FEET,
MEASURED FROM THE SURFACE THEREOF, AS RESERVED BY HAROLD S. JASPER AND HARRIET
JASPER, HUSBAND AND WIFE, IN DEED RECORDED APRIL 5, 1988 AS INSTRUMENT NO.
88-155496 OF OFFICIAL RECORDS.
EXHIBIT "1"
<PAGE> 36
Document No. ______________________
Recorded __________________, 199___
STATEMENT OF TAX DUE AND REQUEST THAT TAX DECLARATION NOT BE MADE A
PART OF THE PERMANENT RECORD IN THE OFFICE OF THE COUNTY RECORDER
(PURSUANT TO SECTION 11932 OF THE CALIFORNIA REVENUE AND TAXATION
CODE)
TO: Recorder
County of ______________________
Request is hereby made in accordance with the provisions of the
Documentary Transfer Tax Act that the amount of the tax due not be shown on the
original document which names:
Grantor: ____________________________, a ____________________________________
Grantee: ____________________________, a ____________________________________
The property described in the accompanying document is located in the
City of ___________________, County of ____________________________.
The amount of tax due on the accompanying document is $____________.
_______ Computed on full value of property conveyed.
_______ Or Computed on full value, less liens and encumbrances remaining at
the time of sale.
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(Signature of Declarant or Agent)
-------------------------------------------
(Firm Name)
Note: After the permanent record is made, this form will be affixed to the
conveying document and returned with it.
<PAGE> 37
TENANT LEASE ASSIGNMENT
THIS TENANT LEASE ASSIGNMENT ("Assignment") is made this ________ day
of _______________, 19__ by and between _____________________________________,
a _____________________ ("Assignor"), and ________________________________, a
_______________________ ("Assignee").
W I T N E S S E T H:
A. Assignor and Assignee entered into that certain Agreement of
Purchase and Sale and Joint Escrow Instructions, dated as of
_____________________, 19__ ("Agreement"), respecting the sale of the "Property"
(as defined in the Agreement).
B. Under the Agreement, Assignor is obligated to assign to Assignee
any and all of Assignor's right, title and interest in and to all leases,
licenses, rental agreements or occupancy agreements relative to the real
property ("Real Property") described in Exhibit "1" attached hereto, together
with all rents, issues and profits thereunder (collectively, the "Tenant
Leases") and all security deposits, prepaid rentals, cleaning fees and other
deposits, plus any interest accrued thereon, paid by tenants of the Real
Property to Assignor or any other person ("Tenant Deposits"), which
Tenant Leases and Tenant Deposits are set forth on Exhibit "2" attached hereto.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
1. Assignor hereby assigns, sells, transfers, sets over and delivers
unto Assignee all of Assignor's estate, right, title and interest in and to the
Tenant Leases and the Tenant Deposits and Assignee hereby accepts such
assignment. The assignment by Assignor hereunder is made on a "AS-IS"
without representation or warranty.
2. Assignor hereby covenants that Assignor will, at any time and from
time to time upon written request therefor, execute and deliver to Assignee,
Assignee's successors, nominees or assigns, such documents as Assignee or they
may reasonably request in order to fully assign and transfer to and vest in
Assignee or Assignee's successors, nominees and assigns the Tenant Leases and
the Tenant Deposits, and to protect Assignee's or their right, title and
interest in and to the Tenant Leases and the Tenant Deposits and the rights of
Assignor intended to be transferred and assigned hereby, or to enable Assignee,
Assignee's successors, nominees and assigns to realize upon or otherwise enjoy
such rights in and to the Tenant Leases and the Tenant Deposits.
3. Assignee hereby assumes the performance of all of the terms,
covenants and conditions imposed upon Assignor as landlord under the Tenant
Leases accruing or arising on or after the "Close of Escrow" (as defined in
the Agreement).
4. In the event of the bringing of any action or suit by a party hereto
against another party hereunder by reason of any breach of any of the covenants,
conditions, agreements or provisions on the part of the other party arising out
of this Assignment, then in that event the prevailing party shall be entitled to
have and recover of and from the other party all costs and expenses of the
action or suit, including reasonable attorneys' fees.
5. This Assignment may be executed in counterparts, each of which shall
be deemed an original, but all of which, together, shall constitute one and the
same instrument.
6. This Assignment shall be binding upon and inure to the benefit of
the successors, assignees, personal representatives, heirs and legatees of all
the respective parties hereto.
<PAGE> 38
"Assignor"
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----------------------------------------------------
----------------------------------------------------
"Assignee" ----------------------------------------------------
----------------------------------------------------
By:
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Its:
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[Attach Real Property Description as Exhibit "1"
and Schedule of Leases and Security Deposits as Exhibit "2"]
D-2
<PAGE> 39
ASSIGNMENT
OF
CONTRACTS AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT OF CONTRACTS AND ASSUMPTION AGREEMENT ("Assignment"),
is made as of the ____ day of _________________, 19__ by and between
________________________, a __________________ ("Assignor"), and
______________________ , a __________________ ("Assignee").
W I T N E S S E T H:
A. Assignor and Assignee entered into that certain Agreement of
Purchase and Sale and Joint Escrow Instructions, dated _________________, 19__,
("Agreement"), for the purchase and sale of certain real property ("Property")
more particularly described in the Agreement.
B. This Assignment is being made pursuant to the terms of the
Agreement for the purpose of assigning to Assignee all of Assignor's right,
title and interest in and to those certain contracts, warranties and
guaranties, together with all supplements, amendments and modifications thereto
approved by Buyer pursuant to the Agreement (collectively, the "Contracts").
The Contracts are more particularly described in Exhibit "1" attached hereto.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
1. Assignor hereby grants, assigns, transfers, conveys and delivers to
Assignee the Contracts and all of Assignor's right, title, interest, benefits
and privileges thereunder, and Assignee hereby accepts such Assignment. The
assignment by Assignor hereunder is made on an "AS-IS" basis without
representation or warranty.
2. By acceptance of this Assignment, Assignee hereby assumes and
agrees to perform and to be bound by all of the terms, covenants, conditions
and obligations imposed upon or assumed by Assignor under the Contracts. Said
assumption shall have application only to those obligations under the Contracts
first accruing or arising on or after the Close of Escrow and shall have no
application to obligations accruing or arising prior to said date.
3. This Assignment may be executed in counterparts, each of which
shall be deemed an original, but all of which, together, shall constitute one
and the same instrument.
4. This Assignment shall be binding upon and inure to the benefit of
the successors, assigns, personal representatives, heirs and legatees of the
respective parties hereto.
5. In the event of the bringing of any action or suit by a party hereto
against another party hereunder by reason of any breach of any of the
covenants, conditions, agreements or provisions on the part of the other party
arising out of this Assignment, then in that event the prevailing party shall
be entitled to have and recover of and from the other party all costs and
expenses of the action or suit, including reasonable attorneys' fees.
6. This Assignment shall be governed by, interpreted under, and
construed in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
"Assignor"
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----------------------------------------------------
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[SIGNATURES CONTINUED]
EXHIBIT "E"
<PAGE> 40
"Assignee"
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----------------------------------------------------
By:
-------------------------------------------------
Its:
---------------------------------------------
[Attach Schedule of Contracts
as Exhibit "1"]
E-2
<PAGE> 41
BILL OF SALE
------------
THIS BILL OF SALE ("Bill of Sale") is made this ____ day of _________,
19__ by NEWPORT MESA PARTNERS, A California limited partnership ("NMP"), in
favor of ___________________, a ___________________ ("Buyer").
W I T N E S S E T H:
A. HUTTON DEVELOPMENT CO., INC., a California corporation, NMP, and
Buyer entered into that certain Agreement of Purchase and Sale and Joint Escrow
Instructions dated as of ___________________, 19__ ("Agreement") respecting the
sale of certain "Property" (as defined in the Agreement).
B. Under the Agreement, NMP is obligated to transfer to Buyer any and
all of NMP's right, title and interest in and to all equipment, appliances,
tools, machinery, supplies, building materials and other personal property of
every kind and character owned by NMP and attached to, appurtenant to, located
in or used in connection with the operation of the "Improvements" (as defined
in the Agreement) (collectively, the "Personal Property").
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, NMP does hereby absolutely and
unconditionally give, grant, bargain, sell, transfer, set over, assign, convey,
release, confirm and deliver to Buyer without warranty and on an "AS-IS" basis,
all of the Personal Property, including, without limitation, those certain
items of personal property described on Exhibit "1" attached hereto.
1. NMP hereby covenants that NMP will, at any time and from time to
time upon written request therefor, execute and deliver to Buyer, Buyer's
successors, nominees or assigns, such documents as Buyer or they may
reasonably request in order to fully assign and transfer to and vest the
Personal Property in Buyer or Buyer's successors, nominees and assigns
and to protect Buyer's or their right, title and interest in and to all of the
Personal Property and the rights of NMP intended to be transferred and assigned
hereby, or to enable Buyer, Buyer's successors, nominees and assigns to
realize upon or otherwise enjoy such rights and property.
2. This Bill of Sale shall be binding upon and inure to the benefit of
the successors, assigns, personal representatives, heirs and legatees of Buyer
and NMP.
3. This Bill of Sale shall be governed by, interpreted under, and
construed and enforceable in accordance with, the laws of the State of
California.
IN WITNESS WHEREOF, NMP has executed and delivered this Bill of Sale as
of the date first written above.
"Seller" NEWPORT MESA PARTNERS, a California
limited partnership
By: Its:
-------------------------- ---------------------------------
[Attach Description of Personal Property
as Exhibit "1"]
EXHIBIT "F"
<PAGE> 42
TRANSFEROR'S CERTIFICATION OF NON-FOREIGN STATUS
To inform _________________________________________, a _________________
_____________ (the "Transferee") that withholding of tax under Section 1445 of
the Internal Revenue Code of 1986, as amended ("Code") will not be required
upon the transfer by __________________________________________________________,
a _________________________________________________ ("Transferor") of certain
interests in real property to the Transferee, the undersigned hereby certifies
the following on behalf of the Transferor:
1. The Transferor is not a foreign corporation, foreign
partnership, foreign trust, foreign estate or foreign person (as those terms are
defined in the Code and the Income Tax Regulations promulgated thereunder); and
2. The Transferor's U.S. employer or tax (social security)
identification number is _________________________________________.
The Transferor understands that this Certification may be disclosed to
the Internal Revenue Service by the Transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
Under penalty of perjury I declare that I have examined this
Certification and to the best of my knowledge and belief it is true, correct
and complete, and I further declare that I have authority to sign this document
on behalf of the Transferor.
"TRANSFEROR" ____________________________________________
____________________________________________
____________________________________________
Dated: _______________, 19__
EXHIBIT "G"
<PAGE> 43
GENERAL ASSIGNMENT AGREEMENT
THIS GENERAL ASSIGNMENT AGREEMENT ("Assignment"), is made as of the
____ day of _______, 199__, by and among HUTTON DEVELOPMENT CO., INC., a
California corporation and NEWPORT MESA PARTNERS, a California limited
partnership (collectively "Assignor") and ________________________ ("Assignee").
WITNESSETH:
HUTTON DEVELOPMENT CO., INC., a California corporation ("Seller") is the
owner of that certain land (the "Land") located in the City of _________, County
of ___________, State of California more particularly described in "Exhibit A"
attached hereto, and all rights, privileges and easements appurtenant to the
Land (the "Appurtenances"), and all buildings and other improvements thereon
(the "Improvements"). The Land, the Appurtenances and the Improvements are
hereinafter referred to collectively as the "Real Property." The Real Property
is being conveyed by Seller to Assignee pursuant to a grant, bargain and sale
deed ("Grant Deed") of on or about even date herewith.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Assignor hereby grants, assigns, transfers, conveys and delivers
to Assignee all of Assignor's right, title, interest, benefits and privileges in
and to the following described property (collectively, the "Rights"):
(a) All construction, engineering, consulting, architectural
and other similar contracts, and any and all amendments and modifications
thereto, concerning the design or construction of any or all of the Real
Property and all warranties with respect thereto (including all statutory,
express and implied warranties);
(b) All architectural drawings, plans, specifications, soils
tests, appraisals, engineering reports and similar materials relating to any or
all of the Real Property;
(c) All payment and performance bonds or guaranties and any
and all modifications and extensions thereof relating to the Real Property;
(d) All governmental entitlements (including, but not
limited to, all environmental impact reports, negative declarations, map
approvals, conditional use permits, building permits and certificates of
occupancy for the Improvements), permissions, environmental clearances,
authority to subdivide the Land, rights, licenses and permits which relate to
all or any of the Real Property;
(e) All general tangibles relating to the development or use
of the Real Property, including, without limitation, all names under which or by
which the Real Property or any portion thereof may at any time be operated or
known, all rights to carry on business under any such names or any variant
thereof, and all trademarks and goodwill in any way relating to the Real
Property;
(f) All refunds and payments of any kind relating to the
construction, operation, occupancy, use and/or disposition of any or all of the
Real Property; and
(g) All proceeds and claims arising on account of any damage
to or taking of the Real Property or any part thereof, and all causes of action
and recoveries for any loss or diminution in the value of the Real Property.
2. Assignee hereby accepts the grant, assignment, transfer,
conveyance and delivery of the Rights set forth in Paragraph 1 hereof, effective
as of the recordation of the Grant Deed.
3. This Assignment shall be binding upon and inure to the benefit
of the successors, assigns, personal representatives, heirs and legatees of the
respective parties hereto.
4. In the event of the bringing of any action or suit by a party
hereto against another party hereunder by reason of any breach of any of the
covenants, conditions, agreements or provisions on the part of the other party
arising out of this Assignment, then in that event the prevailing party shall be
EXHIBIT "H"
<PAGE> 44
entitled to have and recover of and from the other party all costs and expenses
of the action or suit, including reasonable attorney's fees.
5. This Assignment shall be governed by, interpreted under, and
enforced and construed in accordance with the laws of the State of California.
6. This Assignment may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which together shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this instrument as
of the date first hereinabove written.
"Assignor" __________________________________
__________________________________
__________________________________
"Assignee" __________________________________
a_________________________________
By:_______________________________
Its:___________________________
H-2
<PAGE> 45
Order No: 7305124 M08 Your Ref: C-156420
1. The estate or interest in the land hereinafter described or referred to
covered by this report is:
A FEE
2. Title to said estate or interest at the date hereof is vested in:
HUTTON DEVELOPMENT CO., INC., A CALIFORNIA CORPORATION
3. The land referred to in this report is situated in the State of California,
County of ORANGE and is described as follows:
LOT 1102 OF NEWPORT MESA TRACT, IN THE CITY OF COSTA MESA, COUNTY OF ORANGE,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 5, PAGE 1 OF MISCELLANEOUS
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM ALL OIL, GAS, MINERAL AND HYDROCARBON SUBSTANCES IN AND
UNDER SAID LAND, BUT WITHOUT THE RIGHT OF SURFACE ENTRY TO A DEPTH OF 500 FEET,
MEASURED FROM THE SURFACE THEREOF, AS RESERVED BY HAROLD S. JASPER AND HARRIET
JASPER, HUSBAND AND WIFE, IN DEED RECORDED APRIL 5, 1988 AS INSTRUMENT NO.
88-155496 OF OFFICIAL RECORDS.
EXHIBIT "a"
TO
<PAGE> 46
HAZARDOUS WASTE DISCLOSURE
--------------------------
[To Be Provided]
EXHIBIT "I"
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1997
<CASH> 2,296
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 843,247
<DEPRECIATION> 62,124
<TOTAL-ASSETS> 809,021
<CURRENT-LIABILITIES> 0
<BONDS> 149,797
0
42
<COMMON> 162
<OTHER-SE> 366,871
<TOTAL-LIABILITY-AND-EQUITY> 809,021
<SALES> 52,923
<TOTAL-REVENUES> 54,895
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 28,844
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,827
<INCOME-PRETAX> 14,224
<INCOME-TAX> 0
<INCOME-CONTINUING> 14,224
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,125
<EPS-PRIMARY> .59
<EPS-DILUTED> .59
</TABLE>
