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 September 30, 1996
Commission file number: 1-12592
WALDEN RESIDENTIAL PROPERTIES, INC.
(Exact name of Registrant as specified in its Charter)
MARYLAND
(State or other jurisdiction
of incorporation or
organization)
75-2506197
(I.R.S. Employer
Identification
Number)
One Lincoln Centre
5400 LBJ Freeway, Suite 400
Dallas, Texas 75240
(Address of principal executive offices)
(972) 788-0510
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
---
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of common stock,
as of the latest practicable date:
As of November 8, 1996, there were 15,757,361 shares of Common Stock,
$0.01 par value, outstanding.
WALDEN RESIDENTIAL PROPERTIES, INC.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of September
30, 1996 (Unaudited) and December 31, 1995 . . . . . . . 3
Condensed Consolidated Statements of Income for the
Three Months nd Nine Months Ended September 30, 1996
and 1995 (Unaudited) . . . . . . . . . . . . . . . . . . 4
Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 1996 and 1995
(Unaudited). . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Condensed Consolidated Financial Statements
(Unaudited). . . . . . . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . 9
PART 2. OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . 15
Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . 15
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . 15
Item 4. Submission of Matters to a Vote of Security
Holders. . . . . . . . . . . . . . . . . . . . . . . . . 15
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . 15
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 15
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
WALDEN RESIDENTIAL PROPERTIES, INC.
Condensed Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Real estate assets, at cost
Land . . . . . . . . . . . . . . . . . . . . . . $ 72,518 $ 60,637
Buildings. . . . . . . . . . . . . . . . . . . . 539,521 452,704
--------- --------
612,039 513,341
Less: Accumulated depreciation . . . . . . . (36,160) (23,734)
--------- --------
575,879 489,607
Receivable from and investment in WDN Management . 1,105 1,005
Rent and other receivables . . . . . . . . . . . . 2,003 1,448
Prepaid and other assets . . . . . . . . . . . . . 3,085 1,353
Deferred financing costs, net. . . . . . . . . . . 6,132 4,359
Cash and cash equivalents. . . . . . . . . . . . . 4,870 6,801
Restricted cash:
Escrow deposits. . . . . . . . . . . . . . . . . 5,525 4,105
Additional collateral on loans . . . . . . . . . 2,520 1,870
-------- --------
Total assets. . . . . . . . . . . . . . . . . $601,119 $510,548
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable . . . . . . . . . . . . . $251,477 $252,515
Credit facility. . . . . . . . . . . . . . . . . 35,800 6,500
Accrued real estate taxes. . . . . . . . . . . . 8,535 6,522
Accounts payable . . . . . . . . . . . . . . . . 5,032 4,815
Accrued expenses and other liabilities . . . . . 4,858 4,608
Preferred distribution payable on convertible
equity securities. . . . . . . . . . . . . . . 377 461
-------- --------
Total liabilities . . . . . . . . . . . . . . 306,079 275,421
Commitments and contingencies
Stockholders' equity:
Convertible equity securities. . . . . . . . . . 14,886 18,608
Common stock . . . . . . . . . . . . . . . . . . 157 142
Preferred stock. . . . . . . . . . . . . . . . . 18 --
Additional paid in capital . . . . . . . . . . . 312,140 238,899
Notes receivable from Company officers and
directors. . . . . . . . . . . . . . . . . . . (5,263) (4,971)
Distributions in excess of net income. . . . . . (26,898) (17,551)
-------- --------
Total stockholders' equity. . . . . . . . . . 295,040 235,127
-------- --------
Total liabilities and stockholders' equity. . $601,119 $510,548
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
WALDEN RESIDENTIAL PROPERTIES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share information)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
REVENUES
Rental income . . . . . . . . . . . . . . . $27,462 $22,563 $76,032 $54,928
Other property income . . . . . . . . . . . 1,064 920 2,810 2,234
Interest income . . . . . . . . . . . . . . 329 202 1,048 573
Other income. . . . . . . . . . . . . . . . 44 141 246 391
------- ------- ------- -------
Total revenues . . . . . . . . . . . . . 28,899 23,826 80,136 58,126
EXPENSES
Property operating and maintenance. . . . . 9,848 8,307 27,319 20,486
Real estate taxes . . . . . . . . . . . . . 2,600 2,237 7,249 5,063
General and administrative. . . . . . . . . 1,296 992 3,702 2,707
Interest. . . . . . . . . . . . . . . . . . 5,123 4,730 14,810 12,121
Amortization. . . . . . . . . . . . . . . . 272 235 666 671
Depreciation. . . . . . . . . . . . . . . . 4,997 4,534 14,262 11,147
------- ------- ------- -------
Total expenses . . . . . . . . . . . . . 24,136 21,035 68,008 52,195
------- ------- ------- -------
Operating income. . . . . . . . . . . . . . . 4,763 2,791 12,128 5,931
Gain on disposition of real property. . . . . 724 -- 1,996 1,110
------- ------- ------- -------
Income before extraordinary item. . . . . . . 5,487 2,791 14,124 7,041
Extraordinary loss on debt extinguishment . . (488) -- (1,072) (465)
------- ------- ------- -------
Net income. . . . . . . . . . . . . . . . . . 4,999 2,791 13,052 6,576
Preferred distributions . . . . . . . . . . . (1,409) (461) (2,693) (461)
------- ------- ------- -------
Net income available to common stockholders . $ 3,590 $ 2,330 $10,359 $ 6,115
======= ======= ======= =======
Income per share:
Before extraordinary item, less preferred
distributions. . . . . . . . . . . . . . $ .28 $ .17 $ .80 $ .57
Extraordinary loss on debt extinguishment . (.03) -- (.08) (.04)
------- ------- ------- -------
Net income available to common
stockholders. . . . . . . . . . . . . . . $ .25 $ .17 $ .72 $ .53
======= ======= ======= =======
Distributions per share of common stock . . . $ .465 $ .455 $ 1.395 $ 1.365
======= ======= ======= =======
Weighted average number of common stock and
common stock equivalent shares
outstanding. . . . . . . . . . . . . . . . 14,645 13,945 14,335 11,484
======= ======= ======= =======
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
WALDEN RESIDENTIAL PROPERTIES, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
------------------
1996 1995
------ ------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income. . . . . . . . . . . . . . . . . . . . . . $ 13,052 $ 6,576
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization. . . . . . . . . . . 14,928 11,818
Gain on disposition of real property . . . . . . . (1,996) (1,110)
Extraordinary loss on debt extinguishment. . . . . 1,072 465
Amortization of prepaid interest expense . . . . . 23 --
Net effect of changes in operating accounts:
Escrow deposits. . . . . . . . . . . . . . . . . (1,455) (1,461)
Other assets . . . . . . . . . . . . . . . . . . (2,353) (422)
Accrued real estate taxes. . . . . . . . . . . . 2,013 2,137
Accounts payable . . . . . . . . . . . . . . . . 528 1,073
Other liabilities. . . . . . . . . . . . . . . . 250 1,184
--------- ---------
Net cash provided by operating activities . . 26,062 20,260
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of real estate assets, net of noncash
items shown below . . . . . . . . . . . . . . . . . (108,730) (73,982)
Real estate asset additions . . . . . . . . . . . . . (5,281) (4,113)
Proceeds from disposition of real property,
net of noncash item . . . . . . . . . . . . . . . . 18,696 8,654
--------- ---------
Net cash used in investing activities. . . . . . . (95,315) (69,441)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock issuance, net of issuance costs . 79,715 65,341
Purchase of the Company's common stock. . . . . . . . (6,573) --
Purchase of convertible equity securities . . . . . . (3,975) --
Distributions paid. . . . . . . . . . . . . . . . . . (22,484) (15,585)
Proceeds from mortgage notes payable and credit
facility. . . . . . . . . . . . . . . . . . . . . . 91,270 113,121
Payment of mortgage notes payable and credit
facility. . . . . . . . . . . . . . . . . . . . . . (61,970) (107,870)
Principal reductions of debt. . . . . . . . . . . . . (4,461) (733)
Payment of financing costs. . . . . . . . . . . . . . (3,550) (3,645)
Additional collateral on loans. . . . . . . . . . . . (650) (1,256)
--------- ---------
Net cash provided by financing activities. . . . . 67,322 49,373
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS. . (1,931) 192
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD. . . . . 6,801 4,289
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD. . . . . . . . $ 4,870 $ 4,481
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest. . . . . . . . . . . . . . . . $ 14,786 $ 12,085
========= =========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Items related to purchase of assets:
Mortgage notes assumed . . . . . . . . . . . . . . $ 7,618 $ 73,055
========= =========
Stock issued for purchase of assets. . . . . . . . $ -- $ 22,825
========= =========
Mortgage note assumed by buyer upon disposition
of property . . . . . . . . . . . . . . . . . . . . $ 4,195 $ --
========= =========
Notes receivable for officer and director
stock purchases . . . . . . . . . . . . . . . . . . $ 292 $ --
========= =========
Preferred distribution payable on convertible equity
securities. . . . . . . . . . . . . . . . . . . . . $ 377 $ 461
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
WALDEN RESIDENTIAL PROPERTIES, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Interim Unaudited Financial Information
Walden Residential Properties, Inc. (the "Company") is a self-administered
and self-managed equity real estate investment trust, as defined under the
Internal Revenue Code of 1986, as amended. As of September 30, 1996, the
Company owned 65 multifamily properties, containing 19,953 apartment units,
primarily in the Southwest and Southeast regions of the United States.
The accompanying unaudited financial statements should be read in
conjunction with the Company's Form S-3 Registration Statements, as amended,
dated March 19, 1996 and October 9, 1996, Forms 8-K, as amended, dated April
23, 1996 and September 16, 1996, and the financial statements and notes thereto
included in the Company's Forms 10-Q for the periods ended June 30, 1996 and
March 31, 1996, and Forms 10-K, as amended, for the periods ended December 31,
1995 and 1994, all of which were filed with the Securities and Exchange
Commission ("SEC"). The accompanying interim unaudited financial information
has been prepared pursuant to the rules and regulations of the SEC. Certain
information and footnote disclosures normally included in the annual financial
statements have been condensed or omitted pursuant to the rules and regulations
of the SEC. Management believes that the disclosures contained in this Form
10-Q are adequate to make the information presented not misleading. In the
opinion of management, all adjustments and eliminations, consisting only of
normal recurring adjustments, necessary to present fairly the consolidated
financial position of the Company and its subsidiaries as of September 30,
1996 and the consolidated results of their operations for the three and nine
months ended September 30, 1996 and 1995 and cash flows for the nine months
ended September 30, 1996 and 1995, have been included. The consolidated
results of operations for the nine months ended September 30, 1996 are
not necessarily indicative of the results for the full year.
Effective July 1, 1996, the Company implemented prospectively a new
accounting policy whereby capital expenditures for carpet replacement are
capitalized instead of expensed. The Company believes that the newly adopted
accounting policy is preferable because it is consistent with policies currently
being used by the majority of the largest apartment real estate investment
trusts and provides a better matching of expenses with the related benefit of
the expenditure.
2. Acquisitions and Dispositions
During the third quarter of 1996, the Company purchased seven apartment
properties, consisting of 1,906 units located in Florida, Texas and Tennessee,
for an aggregate purchase price of approximately $62.6 million. The property
acquisitions were funded by $39.7 million of borrowings under the Company's
credit facility with the remainder funded from proceeds from a common stock
offering in August 1996 (see Note 4).
The Company sold a 304-unit apartment property located in Corpus Christi,
Texas for $9.2 million in August 1996 and a 144-unit apartment property located
in Stone Mountain, Georgia for $5.8 million in September 1996. In connection
with the sale of the Georgia property, the outstanding fixed-rate debt on the
property of $4.2 million was assumed by the purchaser. In connection with both
sales, the Company recognized an aggregate gain of $724,000.
3. Convertible Equity Securities
In June 1995, the Company acquired a controlling interest in a limited
partnership (the "Partnership") which currently owns 10 apartment properties.
This Partnership is being accounted for as wholly-owned since the limited
partnership interests in the Partnership which were not purchased by the
Company are only exchangeable for shares of the Company's common stock, and are
accounted for as convertible equity securities. The limited partnership
interests were initially exchangeable for an aggregate of 1,012,660 shares of
the Company's common stock. In September 1996, the Company purchased a limited
partner's interest in the Partnership for $4.0 million. As a result, as of
September 30, 1996, the remaining limited partnership interests not owned by
the Company are exchangeable for an aggregate of 810,128 shares of the
Company's common stock. A preferred distribution of $377,000 on the convertible
equity securities was accrued as of September 30, 1996.
4. Common and Preferred Stock Transactions
On July 1, 1996, 14,000 shares of the Company's 9.16% Series A Convertible
Redeemable Preferred Stock were converted into 15,968 shares of common stock.
In July 1996, the Company purchased (and retired) 152,000 shares of its
common stock at a cost of $3,042,000.
On August 27, 1996, the Company issued 1,525,000 shares of its common stock
at $20.625 per share for net proceeds of approximately $29.8 million. On
September 20, 1996, the Company issued an additional 155,250 shares of its
common stock in connection with the exercise of the over-allotment option by the
underwriters of such stock offering. The Company received additional net
proceeds of approximately $3.0 million.
5. Net Income Per Share of Common Stock
Net income per share of common stock has been computed by dividing net
income available to common stockholders by the weighted average number of common
stock and common stock equivalent shares outstanding. Net income available to
common stockholders is net income less the preferred distributions on the
convertible equity securities and preferred stock. Common stock equivalents
include the weighted average number of assumed equivalent shares outstanding
from stock options, if dilutive. Fully diluted net income per share of common
stock is not materially dilutive and is not presented.
6. Pro Forma Statements of Income (Unaudited)
The following unaudited condensed pro forma information for the nine
months ended September 30, 1996 and 1995 was prepared from the financial
statements of the Company by adjusting for properties acquired or disposed of
in 1996 and 1995, including the related stock offerings or debt used to finance
the acquisitions or debt that was repaid from proceeds of dispositions, as if
all of these transactions had occurred on January 1, 1996 and 1995. This
information is not necessarily indicative of what the performance would have
been had the Company owned these properties for the entire period, nor does it
purport to represent future results of operations of the Company. (In
thousands, except per share information.)
<TABLE>
<CAPTION>
Pro Forma
Nine Months Ended
September 30,
-----------------
1996 1995
------ ------
<S> <C> <C>
Revenues. . . . . . . . . . . . . . . . . . . . . $89,409 $84,808
Expenses. . . . . . . . . . . . . . . . . . . . . 75,741 74,291
------- -------
Net income (1). . . . . . . . . . . . . . . . . . 13,668 10,517
Preferred distributions . . . . . . . . . . . . . (4,402) (4,504)
------- -------
Net income available to common stockholders (1) . $ 9,266 $ 6,013
======= =======
Net income available to common stockholders
per share (1) . . . . . . . . . . . . . . . . . $ .59 $ .39
======= =======
Weighted average shares of common stock
outstanding . . . . . . . . . . . . . . . . . . 15,815 15,531
======= =======
</TABLE>
(1) Before extraordinary item.
7. Commitments and Contingencies
As of September 30, 1996, the Company had executed contracts to acquire
four apartment properties consisting of 1,030 units (of which one property with
170 units was purchased in October 1996 - see Note 8.) In connection therewith,
the Company deposited $675,000 of earnest money. The property acquisitions are
subject to the completion of normal due diligence procedures and there is no
assurance the Company will purchase such properties.
8. Subsequent Events
On October 2, 1996, the Company purchased a 170-unit apartment property
located in Dallas/Fort Worth, Texas for approximately $4.8 million. The
acquisition was funded by a borrowing under the Company's credit facility.
On October 9, 1996, the Company filed a shelf registration for $150,000,000
in shares of common or preferred stock or warrants to purchase shares of common
or preferred stock.
On October 31, 1996, the Company refinanced $14.4 million of existing
fixed-rate debt on three properties. The new mortgage loans total $15.5 million
and require aggregate monthly payments of approximately $119,000, including
principal and interest, at an average fixed rate of 7.9%, through November 2003.
In connection with these refinancings, the Company incurred financing costs of
approximately $306,000.
On November 7, 1996, the Company declared a cash distribution of $.465 per
share and $.5725 per share to its common and preferred stockholders,
respectively. The distributions are payable on December 4, 1996, to holders of
record on November 18, 1996.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
- ---------------------
The following discussion should be read in conjunction with the
"Supplemental Financial and Operating Data" and all of the consolidated
financial statements and notes thereto included elsewhere in this Form 10-Q.
Such financial statements and information have been prepared to reflect the
historical condensed consolidated operations of the Company for the three months
and nine months ended September 30, 1996 and 1995, and the condensed
consolidated balance sheet data of the Company as of September 30, 1996 and
December 31, 1995.
The changes in revenues and expenses related to property operations
between the periods are primarily the result of the increased number of units
owned due to acquisitions of additional multifamily properties by the Company.
Where appropriate, comparisons are made on a dollars-per-weighted-average-unit
basis in order to adjust for changes in the number of units owned during each
period.
The following financial and operating data (see Page 10) is provided as
supplemental information to all financial statements included elsewhere in this
Form 10-Q. Such supplemental information is unaudited except the balance sheet
data as of December 31, 1995.
SUPPLEMENTAL FINANCIAL AND OPERATING DATA
(In thousands, except per share and property data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
OPERATING DATA
Revenues
Rental income. . . . . . . . . . . . . $27,462 $22,563 $76,032 $54,928
Other property income. . . . . . . . . 1,064 920 2,810 2,234
Interest income. . . . . . . . . . . . 329 202 1,048 573
Other income . . . . . . . . . . . . . 44 141 246 391
------- ------- ------- -------
Total revenues . . . . . . . . . . . 28,899 23,826 80,136 58,126
------- ------- ------- -------
Expenses
Property operating and maintenance . . 9,848 8,307 27,319 20,486
Real estate taxes. . . . . . . . . . . 2,600 2,237 7,249 5,063
General and administrative . . . . . . 1,296 992 3,702 2,707
Interest . . . . . . . . . . . . . . . 5,123 4,730 14,810 12,121
Amortization . . . . . . . . . . . . . 272 235 666 671
Depreciation . . . . . . . . . . . . . 4,997 4,534 14,262 11,147
------- ------- ------- -------
Total expenses . . . . . . . . . . . 24,136 21,035 68,008 52,195
------- ------- ------- -------
Operating income. . . . . . . . . . . . . 4,763 2,791 12,128 5,931
Gain on disposition of real property. . . 724 -- 1,996 1,110
------- ------- ------- -------
Income before extraordinary item. . . . . 5,487 2,791 14,124 7,041
Extraordinary loss on debt
extinguishment. . . . . . . . . . . . . (488) -- (1,072) (465)
------- ------- ------- -------
Net income. . . . . . . . . . . . . . . . 4,999 2,791 13,052 6,576
Preferred distributions . . . . . . . . . (1,409) (461) (2,693) (461)
------- ------- ------- -------
Net income available to common
stockholders . . . . . . . . . . . . . $ 3,590 $ 2,330 $10,359 $ 6,115
======= ======= ======= =======
Distributions per share of common stock . $ .465 $ .455 $ 1.395 $ 1.365
======= ======= ======= =======
Weighted average number of common stock
and common stock equivalent shares
outstanding. . . . . . . . . . . . . . 14,645 13,945 14,335 11,484
======= ======= ======= =======
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
PROPERTY DATA
Total properties (at end of period) . . . 65 52 65 52
Total units (at end of period). . . . . . 19,953 16,385 19,953 16,385
Total units (weighted average). . . . . . 18,972 16,385 17,758 13,881
Weighted average monthly property
revenue per unit . . . . . . . . . . . $ 501 $ 478 $ 493 $ 458
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
OTHER DATA
Funds from operations (new definition). . $ 9,760 $ 7,325 $26,390 $17,078
</TABLE>
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
BALANCE SHEET DATA
Real estate assets, net, at cost . . . . $575,879 $489,607
Mortgage notes payable and credit
facility . . . . . . . . . . . . . . . 287,277 259,015
Stockholders' equity . . . . . . . . . . 295,040 235,127
</TABLE>
COMPARISON OF THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996
TO THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1995
The weighted average number of units owned for the third quarter of 1996
increased by 2,587 units, or 15.8%, from 16,385 units for the third quarter of
1995 to 18,972 units for the third quarter of 1996 as a result of the
acquisition of additional properties. The portfolio had a weighted average
occupancy of 94.7% for both the third quarter of 1995 and 1996.
The weighted average number of units owned for the nine months ended
September 30, 1996, increased by 3,877 units, or 27.9%, from 13,881 units for
the first nine months of 1995 to 17,758 units for the first nine months of
1996 as a result of the acquisition of additional properties. Total units
owned at September 30, 1995 and 1996 were 16,385 and 19,953, respectively.
The portfolio had a weighted average occupancy of 94.4% and 94.7% for the
first nine months of 1995 and 1996, respectively.
The Company owned 36 properties with 11,188 units throughout both periods
in 1996 and 1995 ("same store"). A summary of the operating performance for
same store properties is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ % ----------------- %
1996 1995 Change 1996 1995 Change
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Rental and other property
revenue (in thousands) . . . $16,022 $15,296 4.7% $47,617 $45,038 5.7%
Property operating expenses
(in thousands) (1) . . . . . 6,916 7,071 -2.2% 20,981 20,358 3.1%
------- ------- ------- -------
Property operating income
(in thousands) . . . . . . . $ 9,106 $ 8,225 10.7% $26,636 $24,680 7.9%
======= ======= ======= =======
Weighted average physical
occupancy. . . . . . . . . . 94.6% 94.9% 94.5% 94.5%
======= ======= ======= =======
Average monthly revenue per
unit . . . . . . . . . . . . $ 477 $ 456 4.6% $ 473 $ 447 5.8%
======= ======= ======= =======
Average annualized operating
and maintenance expenses
per unit . . . . . . . . . . $ 2,010 $ 2,052 -2.0% $ 2,032 $ 1,976 2.8%
======= ======= ======= =======
Average annualized real estate
taxes per unit . . . . . . . $ 463 $ 476 -2.7% $ 468 $ 450 4.0%
======= ======= ======= =======
Operating expense ratio. . . . 43.2% 46.2% N/A 44.1% 45.2% N/A
======= ======= ======= =======
</TABLE>
The operating performance of properties not owned throughout both periods
in 1996 and 1995 is summarized as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Rental and other property
revenue (in thousands) . . . $12,504 $ 8,187 $31,225 $12,124
Property operating expenses
(in thousands) (1) . . . . . 5,532 3,473 13,587 5,191
------- ------- ------- -------
Property operating income
(in thousands) . . . . . . . $ 6,972 $ 4,714 $17,638 $ 6,933
======= ======= ======= =======
Weighted average number of
units. . . . . . . . . . . . 7,784 5,197 6,570 2,693
======= ======= ======= =======
Weighted average physical
occupancy. . . . . . . . . . 94.8% 94.3% 95.0% 94.0%
======= ======= ======= =======
Average monthly revenue per
unit . . . . . . . . . . . . $ 535 $ 525 $ 528 $ 500
======= ======= ======= =======
Average annualized operating
and maintenance expenses per
unit . . . . . . . . . . . . $ 2,172 $ 1,977 $ 2,084 $ 1,932
======= ======= ======= =======
Average annualized real estate
taxes per unit . . . . . . . $ 671 $ 696 $ 673 $ 638
======= ======= ======= =======
Operating expense ratio. . . . 44.2% 42.4% 43.5% 42.8%
======= ======= ======= =======
</TABLE>
(1) Consists of property operating and maintenance and real estate
tax expenses.
Interest income increased $127,000 for the third quarter of 1996, or
62.9%, from $202,000 for the third quarter of 1995 to $329,000 for the third
quarter of 1996. Interest income increased $475,000 for the first nine months
of 1996, or 82.9%, from $573,000 for the first nine months of 1995 to
$1,048,000 for the first nine months of 1996. The increases in interest
income were primarily due to interest earned on notes receivable from stock
issuances to officers and directors of the Company in December 1995 and January
1996.
General and administrative expenses increased $304,000 for the third
quarter of 1996, or 30.6%, from $992,000 for the third quarter of 1995 to
$1,296,000 for the third quarter of 1996. This represented a per unit
increase of $31, or 12.8%, on an annualized basis. General and administrative
expenses increased $995,000 for the first nine months of 1996, or 36.7%, from
$2,707,000 for the first nine months of 1995 to $3,702,000 for the first nine
months of 1996. This represents a per unit increase of $18, or 6.9%, on an
annualized basis. The increases in general and administrative expenses were
primarily the result of the increase in the occupancy cost due to the relocation
of the Company's corporate office, increases in salaries and increased costs
associated with the increased number of stockholders.
Interest expense increased $393,000 for the third quarter of 1996, or
8.3%, from $4,730,000 for the third quarter of 1995 to $5,123,000 for the
third quarter of 1996. Interest expense increased $2,689,000 for the first
nine months of 1996, or 22.2%, from $12,121,000 for the first nine months of
1995 to $14,810,000 for the first nine months of 1996. The increases were
primarily due to additional debt incurred in connection with the acquisition
of additional properties, partially offset by a decrease in the weighted
average interest rate on debt between periods.
Depreciation expense increased $463,000 for the third quarter of 1996,
or 10.2%, from $4,534,000 for the third quarter of 1995 to $4,997,000 for the
third quarter of 1996. Depreciation increased $3,115,000 for the first nine
months of 1996, or 27.9%, from $11,147,000 for the first nine months of 1995 to
$14,262,000 for the first nine months of 1996. The increases were due to
depreciation on additional properties acquired.
The $1,072,000 extraordinary loss on debt extinguishment recorded in the
nine months ended September 30, 1996, resulted from the write off of
unamortized deferred financing costs due to the refinancing of the Company's
credit facility in February 1996 ($488,000), the refinancing of $22 million of
variable rate tax-exempt debt in May 1996 ($96,000) and the repayment of the
debt on a property sold in September 1996 ($488,000). The $465,000
extraordinary loss on debt extinguishment recorded in the first nine months
of 1995 resulted from the write off of unamortized deferred financing costs
and prepayment penalties incurred in connection with the refinancing of two
mortgage loans.
The $1,996,000 gain on disposition of real property recorded in the nine
months ended September 30, 1996 represented the gain on the sale of a 384-unit
apartment property, located in Wichita, Kansas, in April 1996 (a $1,272,000
gain), a 304-unit apartment property, located in Corpus Christi, Texas, in
August 1996 and a 144-unit apartment property, located in Stone Mountain,
Georgia, in September 1996. These dispositions generated approximately $22.9
million of net sale proceeds which were used to purchase additional properties.
The $1,110,000 gain on disposition of real property recorded in the nine months
ended September 30, 1995 resulted from the sale of a property in April 1995 for
approximately $8.7 million.
Liquidity and Capital Resources
- -------------------------------
The Company's principal demands for liquidity are distributions to its
stockholders, ongoing maintenance and repair of its properties, capital
improvements to its properties, acquisitions of properties, interest on
indebtedness and debt repayments.
The Company intends to meet its short-term liquidity requirements,
including capital expenditures related to the maintenance and improvements of
its properties, through cash flow provided by operations. Historically, cash
provided by the Company's operating activities has been adequate to meet both
its operating requirements and distributions to stockholders. Net cash flow
from operating activities was $26.1 million for the first nine months of 1996.
In the first nine months of 1996, the Company paid distributions of $22.5
million and expended $2.9 million and $2.4 million, respectively, for capital
expenditures and acquisition rehabilitation costs. Such amounts were funded by
the net cash flow from operating activities from the first nine months of 1996
and existing working capital from the prior year. Capital expenditures on
existing properties are anticipated to be approximately $0.9 million for the
remainder of 1996. Rehabilitation on acquisition properties are anticipated to
be approximately $6.9 million for the remainder of 1996 and the first half of
1997.
As of September 30, 1996, the Company had outstanding indebtedness in the
aggregate principal amount of $287.3 million, consisting of fixed rate debt of
$200.4 million and variable rate debt of $86.9 million (including $35.8 million
under the Company's credit facility). The weighted average interest rate on the
Company's outstanding indebtedness at September 30, 1996 was approximately
7.4%.
The Company's ability to meet its long-term liquidity requirements, such as
refinancing mortgages and property acquisitions, including capital improvements
on property acquisitions, is dependent upon its ability to obtain long-term
borrowings, both secured and unsecured, and to issue debt or equity securities.
The Company has a $75 million credit facility (the "Credit Facility"), which
expires in February 1998. The Credit Facility has been used to finance property
acquisitions, including capital improvements. The availability of funds to the
Company under the Credit Facility is subject, however, to certain borrowing
base restrictions and other customary restrictions. As of September 30, 1996,
the Company's borrowing base was approximately $57.1 million. The Company
currently has four apartment properties under contract which would cost
approximately $36.5 million in the aggregate (of which one property was
purchased in October 1996 for approximately $4.8 million). The acquisitions
would be funded by borrowings under the Credit Facility, other borrowings or
from the proceeds of debt or equity security offerings.
Investing activities of the Company used $95.3 million in the first nine
months of 1996, consisting of $108.7 million used for the purchase of real
estate assets, $2.9 million spent for capital expenditures and $2.4 million
spent for acquisition rehabilitation. These amounts were offset by $18.7 million
of proceeds received from the three property dispositions.
Financing activities of the Company generated $67.3 million in the first
nine months of 1996, primarily due to (i) $79.7 million of net proceeds from
common and preferred stock offerings and common stock issued under the
Company's dividend reinvestment plan, and (ii) $29.3 million of net borrowings
under the Credit Facility. This amount was primarily offset by $22.5 million of
distributions paid to stockholders, $6.6 million of purchases of the Company's
common stock, $4.5 million of principal payments on debt and $4.0 million used
to purchase certain of the convertible equity securities (see Note 3 to the
condensed consolidated financial statements included herein).
Funds from Operations
- ---------------------
Industry analysts generally consider funds from operations ("FFO") an
appropriate measure of the performance of an equity real estate investment
trust. FFO is defined as net income (determined in accordance with generally
accepted accounting principles), excluding gains (or losses) from debt
restructuring and sales of property, plus depreciation of real estate assets.
The Company believes that in order to facilitate a clear understanding of its
operating results, FFO should be examined in conjunction with net income as
presented herein. FFO does not represent cash generated from operating
activities in accordance with generally accepted accounting principles and is
not necessarily indicative of cash available to fund cash needs and cash
distributions. FFO should not be considered as an alternative to net income
(determined in accordance with generally accepted accounting principles) as an
indication of the Company's performance or as an alternative to cash flow
(determined in accordance with generally accepted accounting principles) as a
measure of liquidity. Effective January 1, 1996, the Company adopted the
modified definition of FFO as recommended by the National Association of Real
Estate Investment Trusts. FFO for the three months and nine months ended
September 30, 1996 and 1995 (as restated to conform to the new definition of
FFO) are as follows (unaudited):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ----------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Funds from operations:
Net income available to common
stockholders . . . . . . . . . . $ 3,590 $ 2,330 $10,359 $ 6,115
Preferred distributions. . . . . 1,409 461 2,693 461
Extraordinary loss on debt
extinguishment . . . . . . . . 488 -- 1,072 465
Gain on disposition of real
property . . . . . . . . . . . (724) -- (1,996) (1,110)
Depreciation of real estate
assets . . . . . . . . . . . . 4,997 4,534 14,262 11,147
------- ------- ------- -------
Funds from operations . . . . $ 9,760 $ 7,325 $26,390 $17,078
======= ======= ======= =======
Implementation of New Accounting Policy
- ---------------------------------------
Effective July 1, 1996, the Company implemented prospectively a new
accounting policy whereby capital expenditures for carpet replacement are
capitalized instead of expensed. The Company believes that the newly adopted
accounting policy is preferable because it is consistent with policies currently
being used by the majority of the largest apartment real estate investment
trusts and provides a better matching of expenses with the related benefit of
the expenditure.
Inflation
- ---------
The Company leases apartments under lease terms generally ranging from
six to 12 months. Management believes that such short-term lease contracts
lessen the impact of inflation on the cost of property operations, as well as
allow for the adjustment of rental rates to market levels as leases expire.
PART 2. 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
------------------------------------------------------------
None.
Item 5. Other Information
--------------------------
None.
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
(a) Exhibits
See Index to Exhibits - Page E-1
(b) Reports
A report on Form 8-K was filed on September 16, 1996, for the
acquisition of 14 apartment properties consisting of 3,580 units and
the disposition of three properties consisting of 832 units. An
amendment to such Form 8-K was filed on November 8, 1996, containing
the required financial statements.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Walden Residential Properties, Inc. certifies that it
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
WALDEN RESIDENTIAL PROPERTIES, INC.
By: / s / Don R. Daseke
------------------------
Don R. Daseke
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed by the following persons on
behalf of Walden Residential Properties, Inc. and in the
capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
/s/ Don R. Daseke Chairman of the Board of Directors, November 8, 1996
- ----------------------- Chief Executive Officer and Director
Don R. Daseke (Principal Executive Officer)
/s/ Mark S. Dillinger Executive Vice President, Chief November 8, 1996
- ----------------------- Financial Officer and Director
Mark S. Dillinger (Principal Financial and Accounting
Officer)
/s/ Marshall B. Edwards President, Chief Acquisitions November 8, 1996
- ----------------------- Officer and Director
Marshall B. Edwards
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
10.10 Purchase and Sale Agreement by and
between Walden Residential Properties,
Inc. and Cozumel Associates, Ltd. dated
as of June 26, 1996 (Cozumel
Apartments).
10.11 Purchase and Sale Agreement by and
between Walden Residential Properties,
Inc. and TE-TWO Real Estate Limited
Partnership dated as of July 26, 1996
(Princeton Meadows I Apartments).
10.12 Purchase and Sale Agreement by and
between Woodwinds, Ltd. dated as of May
1, 1996 (Brandywine Apartments).
10.13 Purchase and Sale Agreement by and
between Walden Residential Properties,
Inc. and Florida Raintree I Associates,
Ltd. dated as of June 26, 1996 (Raintree
Apartments).
10.14 Purchase and Sale Agreement by and
between Walden Residential Properties,
Inc. and Florida Princeton Meadows II
Associates, Ltd. dated as of June 26,
1996 (Princeton Meadows II Apartments).
10.15 Purchase and Sale Agreement by and
between Walden Residential Properties,
Inc. and Quayle Walk Apartments Partners
dated as of July 29, 1996 (Quayle Walk
Apartments).
10.16 Purchase and Sale Agreement by and
between Walden Residential Properties,
Inc. and Timber Creek Apartments
Partners dated as of July 29, 1996
(Timber Creek Apartments).
10.17 Purchase and Sale Agreement by and
between Walden Residential Properties,
Inc. and Waterford Partners dated as of
July 29, 1996 (Waterford on the Meadow
Apartments).
10.18 Purchase and Sale Agreement by and
between Walden Residential Properties,
Inc., Mark Paskin and Marcia Paskin
dated as of August 14, 1996 (Oak Forest
Apartments).
11.1 Computation of Net Income per Share
12.1 Computation of Ratio of Earnings to
Combined Fixed Charges and Preferred
Stock Dividends
23.1 Independent Accountants' Preferability
Letter for New Accounting Policy
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 4,870
<SECURITIES> 0
<RECEIVABLES> 2,003
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 612,039
<DEPRECIATION> 36,160
<TOTAL-ASSETS> 601,119
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
18
<COMMON> 157
<OTHER-SE> 294,865
<TOTAL-LIABILITY-AND-EQUITY> 601,119
<SALES> 0
<TOTAL-REVENUES> 78,842
<CGS> 0
<TOTAL-COSTS> 34,568
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,810
<INCOME-PRETAX> 12,128
<INCOME-TAX> 0
<INCOME-CONTINUING> 12,128
<DISCONTINUED> 0
<EXTRAORDINARY> (1,072)
<CHANGES> 0
<NET-INCOME> 10,359
<EPS-PRIMARY> .72
<EPS-DILUTED> .72
</TABLE>
PURCHASE AND SALE AGREEMENT
(Cozumel Apartments)
This PURCHASE AND SALE AGREEMENT ("Agreement") is entered into
as of the ________ day of June, 1996.
1. Parties. The parties to this Agreement are as follows:
Walden Residential Properties, Inc., a Maryland corporation,
maintaining its principal office at One Lincoln Center, 5400 LBJ
Freeway, Suite 400, Dallas, Texas 75240.
Cozumel Associates, Ltd. a Florida limited partnership,
maintaining offices at 1412 West Colonial Drive, Orlando, Florida
32804, Attention: Sal LeCesse
2. Definitions. As used in this Agreement, the following
terms shall have the meanings hereinafter set forth in this
Paragraph:
(a) Agencies: All governmental agencies having jurisdiction
over the construction, zoning and operation of the Property.
(b) Applicable Environmental Laws: Any and all applicable
laws pertaining to health or the environment, including, without
limitation, the Superfund Reauthorization and Amendments Act of
1986 ("SARA"), the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA"), and the
Resource Conservation and Recovery Act of 1976 ("RCRA"), as well as
any and all other laws, ordinances, rules and/or regulations
created or imposed by any governmental authority having
jurisdiction with respect to the Property, whether local, state or
federal, pertaining to environmental regulation, contamination,
clean-up or disclosure, as now existing and/or as hereafter
amended.
(c) Appurtenant Interests: All of the Seller's interest in
and to the appurtenances to the Land and in and to all streets,
alley and other public ways adjacent thereto.
(d) Closing: The consummation of the transfer of title to
the Property as contemplated hereunder and payment of the
consideration thereof in the manner provided at Paragraph 8 hereof.
(e) Current Rent Roll: The current schedule attached hereto
as Exhibit G, dated not more than thirty (30) days prior to the
Effective Date, setting forth, as of the date thereof, the Tenant
Leases.
(f) Earnest Money Deposit: An amount equal to $100,000.00 in
cash, to be delivered by Purchaser to the Escrow Agent within two
(2) business days following the Effective Date, together with all
earnings (if any) thereon.
(g) Effective Date: The date upon which this Agreement,
executed by both Purchaser and Seller, shall have been delivered to
Title Insurer together with the Earnest Money Deposit.
(h) Escrow Agent: The law firm of Shutts & Bowen, LLP, 20
North Orange Avenue, Suite 1000, Orlando, Florida 32801.
(i) Excluded Personal Property: The tangible personal
property listed at Exhibit F hereto.
(j) Feasibility Period: Purchaser shall have thirty (30) days
from the execution of this Agreement and the receipt by Purchaser
of (a) the most current survey of the Property in Seller's
possession, (b) a current title commitment on the Property issued
by the Title Company with respect to the Property and (c) a copy of
all documents of record affecting the Property or any portion
thereof as shown in the Commitment (the "Feasibility Period").
(k) Hazardous Materials: Any toxic materials, hazardous
waste or hazardous substance as these terms are defined in the
Applicable Environmental Laws.
(l) Improvements: All of the buildings, fixtures and
improvements located on the Land, together with all mechanical
systems, fixtures and equipment, electrical systems, fixtures and
equipment, plumbing fixtures, systems and equipment, heating
fixtures, systems and equipment and air conditioning fixtures,
systems and equipment installed in, belonging to or constructed as
components of the Improvements.
(m) Included Personal Property: All tangible personal
property listed at Exhibit E hereto, together with, for each
apartment unit comprising the Improvements, whether or not thus
listed, all existing (or replacements thereof as required under the
terms of this Agreement) carpeting, window coverings, ranges,
ovens, dishwashers, ceiling fan(s), bookshelves, range hoods,
refrigerators, heating units, air conditioning units, sinks and
garbage disposals, and washers and dryers, the same to be in the
same condition at Closing as existed at the expiration of the
Feasibility Period, normal wear and tear excepted or as otherwise
provided under the terms of this Agreement, and all other
furniture, fixtures, equipment, machinery, supplies and other
tangible personal property and all leases of tangible personal
property located on the Land and Improvements and belonging to
Seller and used in the normal operation and maintenance of the Land
and Improvements.
(n) Land: The land more particularly described at Exhibit A.
(o) Material Damage: Damage to the Property of a nature such
that the cost of restoring the Improvements located on Property to
its condition prior to the fire or other casualty, as mutually
agreed by Seller and Purchaser or as otherwise determined in
accordance with this Agreement, (but in full compliance with all
then applicable building, health, zoning, and similar laws,
ordinances, and regulations) will exceed an amount equal to two
percent (2%) of the Purchase Price, whether or not such damage is
covered by insurance.
(p) Owner Policy: An Owner Policy of Title Insurance issued
by the Title Insurer in the standard form promulgated by the
Florida Department of Insurance, as modified pursuant to Paragraph
6(d) hereof.
(q) Permitted Title Exceptions: The six items listed below
together with any other items to which Purchaser does not object
within the time period provided in Paragraph 6(c) hereof or which
Purchaser approves as otherwise provided in this Agreement.
1. Real estate taxes for the year 1996 and subsequent
years which are not yet due and payable.
2. Easement made by and between Lonestar Partnership
and Jacksonville Electric Authority dated March 25,
1986 and recorded June 10, 1986 in Official Records
Volume 6142, Page 1276, Public Records of Duval
County, Florida.
3. Declaration of Easement made by Lonestar
Partnership, a Texas general partnership, dated
October 23, 1986 and recorded October 24, 1986 in
Official Records Volume 6216, Page 490,. and re-recorded
on October 28, 1986 in Official Records
Volume 6244, Page 435; as partially released by
Termination and Release of Irrigation Easement made
by Resolution Trust Corporation, as Receiver for
Sunbelt Federal Savings, F.S.B. and Secret Hills
Joint Venture, a Florida general partnership, dated
May 29, 1992 and recorded June 10, 1992 in Official
Records Volume 7350, Page 2059, all of the Public
Records of Duval County, Florida.
4. Developer Agreement made by and between Lone Star
Partnership and Southern States Utilities, Inc.
recorded January 2, 1986 in Official Records Volume
6065, Page 682, Public Records of Duval County,
Florida.
5. Existing unrecorded leases and all rights
thereunder of the lessees and of any person
claiming by, through or under the leases.
6. Survey prepared by Charles Bassett & Associates,
Inc., dated March 10, 1987 and revised February 24,
1994 under Order No. 2-87-53 which reveals the
following:
a. Catch basin encroaching into adjacent property
along the eastern boundary of lands described
in Exhibit "A".
b. Concrete spillway encroaching into adjacent
property along the westerly boundary of lands
described in Exhibit "A".
(r) Plans and Specifications: The plans and specifications,
if any, with respect to the Property.
(s) Property: The parcel of real property to be purchased
and sold pursuant to this Agreement and comprised of the Land,
Improvements, Included Personal Property, Appurtenant Interests,
Tenant Leases and all other property described in Paragraph 4
hereof.
(t) Proration Date: 12:00 a.m., Central Daylight Time, on the
date preceding Closing or such other date as shall be specified in
Paragraph 9 hereof.
(u) Purchase Price: The total consideration to be paid by
Purchaser for the Property as set forth in Paragraph 5 hereof.
(v) Purchaser: Walden Residential Properties, Inc., a
Maryland corporation, together with any designee thereof described
in Paragraph 21 hereof.
(w) Rent Roll: Collectively, the Current Rent Roll and the
Revised Rent Roll, or either of them as of the context may
required.
(x) Revised Rent Roll: A revision of the Current Rent Roll
dated not earlier than five (5) days prior to Closing.
(y) Seller: Cozumel Associates, Ltd., a Florida limited
partnership.
(z) Service Contracts: All service or maintenance contracts
relating to the Property as described at Exhibit K hereto.
(aa) Street Rents: The rents for space in the Property being
offered to the public as of the date of this Agreement.
(bb) Survey: With respect to the Property, an on-the-ground
survey of the Land and Improvements prepared by a qualified,
registered public surveyor selected by Purchaser, satisfactory to
the Title Insurer (i) containing a field note description of the
Land which (A) establishes a beginning point by reference to a
permanent monument, (B) states the distances, bearing and angles of
all sides or boundaries of the Land, (C) if appropriate, states the
length of arc, central angle and radius of circle for arc, central
angle and radius of circle for arc and chord distance and bearing
of all curving sides or boundaries of the Land, (D) establishes a
single perimeter description, and (E) references all abutting or
encroaching streets, roadways and fence lines, including a
statement of width, (ii) noting, by plat, the size and location of
all Improvements and other physical conditions affecting the
Property, (iii) noting, by plat, the size and location of all
abutting or encroaching streets, roadways and fence lines, (iv)
noting, by plat, the size and location of all encroachments or
protrusions, (v) noting, by plat, the size, location and recording
data of all easements, ditches, rights-of-way, setback lines, curb
cuts and similar matters, (vi) locating any portion of the Land or
Improvements determined to be flood prone or within the 100-year
flood plain under the Flood Disaster Protection Act of 1973 or
otherwise determined to be flood prone or within the flood plain by
the Federal Emergency Management Agency, the United States Army
Corps of Engineers, a unit or department of the United States, the
engineer preparing the Survey, or any other state or federal
agency, (vii) certifying the number of acres of land in the Land,
both as to total acreage and as to net acreage, (viii) certified by
the surveyor as conforming to the current Florida Surveyor's
Association Standards and Specifications for a Category 1A
Condition II, (ix) being dated or recertified as of a date not
earlier than the Effective Date, and (x) containing a certificate
substantially in the form attached hereto as Exhibit C.
(cc) Tenant Leases: The lease agreements relating to the
Land and Improvements and existing at Closing.
(dd) Title Commitment: A Commitment for Title Insurance
issued by the Title Insurer in the standard form promulgated by the
Florida Department of Insurance.
(ee) Title Insurer: Chicago Title Insurance Company, acting
through its agent, Shutts & Bowen, L.L.P., 20 North Orange Avenue,
Suite 1000, Orlando, Florida 32801, or other title insurance
company acceptable to Purchaser in its sole discretion.
3. Agreement of Purchase and Sale. For good and valuable
consideration paid to Seller by Purchaser on the Effective Date,
the receipt and sufficiency of which hereby is acknowledged and
which sum is non-refundable to Purchaser and in no event shall be
applied against the Purchase Price and for the Purchase Price set
forth at Paragraph 5, Purchaser hereby agrees to purchase, and
Seller hereby agrees to sell, the Property.
4. Property to be Sold. The Property to be purchased
hereunder by Purchaser shall be comprised of (i) the Land, (ii) the
Improvements, (iii) all Included Personal Property, but not the
Excluded Personal Property, (iv) the Appurtenant Interests, (v) the
Tenant Leases, and (vi) all of Seller's right, title and interest,
if any, in and to (A) warranties covering the Included Personal
Property and the Improvements, (B) the trademarks or tradenames
used by Seller in connection with the Property, including, but not
limited to, "Cozumel Apartments", (C) the Service Contracts (and
any deposits thereunder) (to the extent assignable and not
terminated as provided elsewhere in this Agreement), (D) all
licenses, permits, approvals and other intangible property rights
relating to the Property and (E) all utility, security and other
deposits.
5. Purchase Price. Subject to any adjustments provided
elsewhere in this Agreement, the Purchase Price shall be SEVEN
MILLION ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($7,100,000.00)
payable as follows:
(a) Earnest Money Deposit. $100,000.00, payable by delivery
of the Earnest Money Deposit to the Escrow Agent in accordance with
this Agreement; and
(b) Cash at Closing. $7,000,000.00, payable in cash or other
immediately available funds at Closing.
6. Evidence of Title.
(a) Title Commitment. Within ten (10) days from and after the
Effective Date, Seller, at Seller's sole expense, shall order and
deliver, or cause to be delivered, to Purchaser or Purchaser's
attorney, a current Title Commitment from the Title Insurer
covering the Property, in the amount of the Purchase Price covering
the Land and Improvements located on the Property. The Title
Commitment shall be issued as of or subsequent to the Effective
Date and shall include good, legible copies of all documents
constituting exceptions to the Seller's title as reflected in the
Title Commitment. The Title Commitment shall reflect good and
indefeasible fee simple title vested in the Seller.
(b) Survey. Purchaser, at Purchaser's sole expense, shall
order a Survey of the Land and Improvements. The Survey shall be
sufficient to permit the Title Insurer to modify the standard
printed exception in the Owner Policy pertaining to discrepancies,
conflicts, shortages in area or boundary lines, encroachments,
overlapping of improvements or similar matters, as provided below,
and shall otherwise comply with the terms hereof. Purchaser shall
furnish a copy of the Survey to Seller and Seller's counsel.
(c) Review. Purchaser shall have through and including the
expiration of the Feasibility Period in which to review the Title
Commitment, Survey and exception documents and to deliver to Seller
in writing such objections as Purchaser may have to anything
contained or set forth therein. Any items to which Purchaser does
not object to prior to the expiration of the Feasibility Period
shall be Permitted Title Exceptions. Seller may, at its sole
discretion, elect to attempt to cure any of Purchaser's title and
survey objections. If Seller so elects, Seller shall so notify
Purchaser in writing and shall have a period of fifteen (15) days
from and after receipt of Purchaser's written objections within
which to attempt to cure same. In the event that Seller fails or
refuses to cure such objections within such fifteen (15) day
period, Purchaser shall have the right to terminate this Agreement
and receive an immediate return of the Earnest Money Deposit or
proceed to Closing subject to such objections which shall be deemed
waived and shall become Permitted Title Exceptions.
(d) Owner Policy. At Closing, the special warranty deed to
the Land and Improvements referred to in Subparagraph 8(b)(i)
hereof shall be recorded, and Seller shall furnish or cause to be
furnished to Purchaser, at Seller's sole expense, the Owner Policy
covering the Property, together with such endorsements as Purchaser
may reasonably require, to the extent authorized by Florida law,
insuring good and marketable fee simple title to be vested in
Purchaser and insuring Purchaser's title to the Property in an
amount equal to the Purchase Price for the Property, subject only
to the Permitted Title Exceptions and the standard printed
exceptions, except that:
(i) the exception relating to restrictions against the
Property shall be endorsed by the Title Insurer to read "None
of record" except for such restrictions as may be included in
the Permitted Title Exceptions;
(ii) the exception relating to discrepancies, conflicts,
shortages in area, boundaries, encroachments, or overlaps
shall be modified, at Seller's sole cost and expense, by
deleting such exception and referencing only specific survey
exceptions; and
(iii) the exception relating to ad valorem taxes
shall except only to taxes owing for the current year of
Closing and subsequent years and subsequent assessments for
prior years due to change in land usage or ownership, not yet
due and payable.
(e) Remedies of Purchaser. If Seller is unable to furnish
Purchaser the Title Commitment pursuant to Subparagraph 6(a) or the
Owner Policy in the manner provided at Subparagraph 6(d), then, at
Purchaser's sole discretion, Purchaser may terminate this Agreement
and receive an immediate return of the Earnest Money Deposit, and
the parties shall have no further obligation to each other, except
as is expressly provided herein.
(f) Uniform Commercial Code Search. Seller also shall
deliver at Closing, at Seller's cost and expense, Uniform Commercial
Code financing statement searches covering Seller and any general
partner of Seller for the state constituting the situs of the
Property and the county in which the Property is located showing
that all of the Included Personal Property is free and clear of all
liens and encumbrances other than the Permitted Title Exceptions
and also shall deliver copies of receipts showing payment of all
taxes levied and payable on the Property.
7. Covenants, Representations and Warranties of Seller.
Seller and Purchaser agree that, except as expressly provided
herein, the Property is being conveyed to Purchaser in an "AS IS"
condition, without representation or warranty by Seller.
Notwithstanding the foregoing, as an inducement to Purchaser to
enter into and perform this Agreement, Seller represents and
warrants to, and covenants with, Purchaser, as of the date of this
Agreement and thereafter in accordance with Paragraph 7(v), as
follows:
(a) Legal and Beneficial Title. Seller is the sole entity
holding good and indefeasible fee simple title to the Property,
free and clear of all liens and encumbrances except as set forth in
the Title Commitment.
(b) Due Authorization and Execution and Validity, Binding
Effect and Enforceability. This Agreement has been duly authorized
and executed by Seller and is a valid and binding obligation of,
and is enforceable, in accordance with its terms, against Seller.
The documents delivered to Purchaser at Closing will be duly
authorized and executed by Seller and will be a valid and binding
obligation of, and will be enforceable in accordance with their
terms against, Seller.
(c) Rent Roll. Attached hereto as Exhibit G is the Current
Rent Roll. Not earlier than five (5) days prior to Closing, Seller
shall deliver a Revised Rent Roll to Purchaser, certified by Seller
in writing as true and correct. The Revised Rent Roll shall set
forth the following:
(i) the name of each tenant;
(ii) the lease commencement and expiration dates; the
nature of any renewal options;
(iii) the amount of any security deposits;
(iv) a list of vacant apartment units;
(v) the size and type of each vacant unit; and
(vi) the amount and description of any concessions and
any rights of first refusal.
(d) Representations as to Rent Roll. To Seller's knowledge
and except as expressly set forth in the Rent Roll:
(i) All of the information contained on the Rent Roll is
true, correct and complete as of its date, in all material
respects.
(ii) No rent under any Tenant Lease has been, or prior to
Closing will be, prepaid for a period in excess of thirty (30)
days.
(iv) No tenant has any right of first refusal or option
with respect to the leasing of any portion of the Property.
(v) No one, including any tenant, has any option or
right of first refusal to purchase the Property or any part
thereof.
(vi) There are no oral agreements with anyone, including
tenants, with respect to the Property or any portion thereof,
except as set forth in a Rent Roll or at Exhibit K.
(vii) All of the present Tenant Leases for rental
space in the Improvements are in writing, on a standard form
(which form is attached hereto as Exhibit N) and are (A) in
full force and effect, (B) valid and binding agreements of,
and fully enforceable in accordance with their terms against,
the tenants, and (C) duly executed by all parties.
(viii) The Tenant Leases will not be amended in any
way after the date hereof, other than in the ordinary course
of business, without the prior, written consent of Purchaser,
which consent shall not be unreasonably withheld. Purchaser,
unless it otherwise shall advise Seller in writing within five
(5) days following Seller's request for such consent, shall be
deemed to have consented to any such amendment.
(ix) There are no uncured defaults on the part of any
party to any of the Tenant Leases, and Seller is in material
compliance with all of lessor's obligations thereunder.
(x) None of the rentals due or to become due under the
Tenant Leases will be assigned, encumbered, or subject to any
liens at the Closing other than the Permitted Title
Exceptions.
(xi) Except as set forth at Exhibit G, at the time of
Closing, all tenants will be paying charges for electricity
consumed in their space, including heating and air
conditioning, on an individually metered basis.
(e) Street Rents. The Street Rents are as set out on Exhibit
"H" attached hereto:
(f) Operating Statements. Attached at Exhibit I is the most
recent monthly statement of income and expense in connection with
the operation and maintenance of the Property. Such statements are
unaudited and were prepared on an accrual basis of accounting by an
accountant employed by Seller. There have been no material adverse
changes in the gross income from the Property from that set forth
in the most recent operating statement at Exhibit I to the
Effective Date. Seller agrees to make available to Purchaser or its
representatives, at Seller's office (or to provide Purchaser with
photocopies thereof upon request), all existing supporting
documentation for such statements in Seller's possession or control.
(g) Financial Statements. Seller has previously provided to
Purchaser such information as is available and required by
Purchaser's accountants to perform (at Purchaser's expense) a
complete audit of the Property for the twelve (12) month year ended
December 31, 1995, as well as information from January 1, 1996 to
the current date. Additionally, at least thirty (30) days prior to
Closing, Seller shall provide Purchaser with the then existing most
current audited financial statements of the Property.
(h) Compliance with Applicable Regulations.
(i) To Seller's knowledge, there exist no commitments or
agreements between Seller and any of the Agencies affecting
the Property which have not been fully disclosed to Purchaser
in writing.
(ii) To Seller's knowledge, Seller has received no
notices and is unaware of any facts or conditions which, with
notice or lapse of time, would constitute uncured violations
at the Property of zoning, building, fire, rent control,
tenant security or other deposits or any other applicable
statute, ordinance or regulation, relating to the Property,
its construction or any occupancy thereof, nor, to Seller's
knowledge, are there presently pending or threatened against
Seller or against the Property any judgments relating to any
of the above matters, any judicial proceedings or
administrative actions or any state of facts which, to
Seller's knowledge, with notice or lapse of time, could
reasonably be expected to give rise to any such proceedings or
actions.
(iii) To Seller's knowledge, the Property and Seller
are not currently subject to (A) any existing, pending or
threatened investigation or inquiry by any governmental
authority or (B) any remedial obligations, under any
Applicable Environmental Laws; and Seller has not obtained and
is not required to obtain, and Seller has no knowledge of any
reason Purchaser will be required to obtain, any permits,
licenses, or similar authorizations to occupy, renovate,
operate or use any portion of the Property by reason of any
Applicable Environmental Laws.
(iv) To Seller's knowledge, no Hazardous Materials are
located on the Property. To Seller's knowledge, the Property
does not contain any underground tanks for the storage or
disposal of Hazardous Materials. Further, to Seller's
knowledge, (A) the Property during Seller's ownership has not
been used for the storage, manufacture or disposal of
Hazardous Materials, and (B) no written complaint, order,
citation or notice with regard to air emissions, water
discharges, noise emissions and Hazardous Materials, if any,
or any other Applicable Environmental Laws from any person,
government or entity has been issued to and received by
Seller.
(v) If, prior to Closing, (A) Seller has received any
written notices from any of the Agencies, or (B) any legal
action has been instituted and served upon Seller relating to
violations at the Property of zoning, building, fire, rental
controls or Applicable Environmental Laws or (C) any written
notice or advice from any current insurer of the Property or
any part thereof, requesting any improvements alterations,
additions, corrections or other work in, on or about the
Improvements, whether related to the Property or to the
activities of any occupant thereof is received by Seller, the
parties shall agree in writing on an amount to be delivered to
the Title Insurer or such other party agreed upon by Seller
and Purchaser in escrow for the cost of curing or eliminating
any such items and the amount as so determined shall be
withheld from the proceeds of sale and shall be paid over to
Seller upon completion by Seller of such items. If the
parties shall fail to agree on the cost of curing or
eliminating said items prior to Closing, either party shall
have the right to terminate this Agreement by giving written
notice thereof to the other not later than the date of Closing
and, in such event, Purchaser shall have the right to the
return of the Earnest Money Deposit, and neither party shall
have any future obligations to the other, except for
Purchaser's surviving indemnity relating to inspections. The
foregoing provision to the contrary notwithstanding, if the
notice is received or the action served within fifteen (15)
days of the Closing, Seller may elect, in its sole and
absolute discretion, to extend the Closing for a period not to
exceed thirty (30) days in order to attempt to cure or
eliminate any such matter.
(i) Liens on Property. To Seller's knowledge, no action has
been taken with respect to work performed or delivery of material
which would give rise to a lien on the Property for which adequate
provision for payment has not been made. To Seller's knowledge, at
Closing, there will be no claim in favor of any person or entity
which is or could become a lien on the Land, the Improvements, or
the Included Personal Property, arising out of the furnishing of
labor or materials to the Property for which adequate provision for
payment has not been made; there will be no unpaid assessments
against the Property, except for property taxes assessed but not
due and payable at the time of Closing; and there will be no claim
in favor of any person or entity (including the present management)
for any unpaid commissions or fees for leasing of the Property. In
the event of any such claims at Closing, Seller, at its option and
in lieu of the foregoing, either may (i) establish with the Title
Insurer an escrow of funds in an amount and upon conditions
reasonably acceptable to Seller and Purchaser, or (ii) provide a
bond in favor of Purchaser or the Title Insurer in such amount,
upon such conditions and for such purposes as may be satisfactory
to Purchaser, Seller and the Title Insurer in either case for the
purpose of providing for such claims and/or inducing the Title
Insurer to insure Purchaser's title to the Property free and clear
of such claims.
(j) Insurance. To Seller's knowledge, the insurance policies
listed and described at Exhibit J are presently in force, and all
such policies or their equivalent will be maintained in force until
Closing. Seller will not renew, amend, or reduce the coverage
under, or cancel, any existing policy or procure any new policy
without Purchaser's prior, written consent, which shall not be
unreasonably withheld or delayed. Purchaser, at Closing, shall
obtain its own insurance coverage. Seller has received no written
notices from any insurer of the Property or any part thereof
requesting any improvements, alterations, additions, correction or
other work in, on or about the Improvements, whether related to the
Property or to the operation of any occupant thereof, which have
not been cured or satisfied.
(k) Pending or Threatened Litigation. To Seller's knowledge,
there are no lawsuits or legal proceedings threatened, instituted,
or served upon Seller regarding ownership, construction, use or
possession of the Property or any portion thereof. Notwithstanding
the foregoing, Purchaser hereby acknowledges and agrees that Seller
has disclosed the litigation regarding corrosive pipes and existing
damage to the Property related thereto styled D. Miller McCarthy &
Cambridge Cozumel, Inc., General Partners for Cozumel Associates,
Ltd., a Florida limited partnership, v. Southern States Utiltities
Co., Case No. CI 93-5014, Orange County, Florida ("Pipes
Litigation"). Purchaser and Seller hereby agree that Seller shall
retain and shall not assign its rights pursuant to, in connection
with or related to the Pipes Litigation and shall retain all
proceeds of any judgment relating thereto. Seller further shall
pay the costs of pursuit of the Pipes Litigation (including
attorneys' fees and expenses). There shall be no adjustment to the
Purchase Price relating to the Pipes Litigation.
(l) Inspection of Plans and Specifications, Reports and Books
and Records. The Plans and Specifications, all reports (including
but not limited to soil tests and construction inspection reports),
the books and records and all Tenant Leases and other documents
related thereto regarding the construction, management and
operation of the Property in Seller's possession or control that are
not otherwise provided to Purchaser hereunder shall be open to
inspection by Purchaser or Purchaser's agents during regular
business hours from and after the Effective Date, and Seller shall
reasonably cooperate with Purchaser or its agents with respect to
the inspection of the Plans and Specifications, all reports, the
books and records, the Tenant Leases, the Property or the
construction, management and operation thereof. Such cooperation
shall not be deemed to include incurring any cost or expense.
(m) Maintenance of Property Until Closing. Until Closing,
the Property will be managed, operated and maintained, in the
ordinary course of business and materially the same manner in which
the Property is currently being managed, operated and maintained,
and Seller will not remove any fixtures, furnishings, equipment or
personalty subject to this Agreement, except for repair or
replacement.
(n) Service Contracts.
(i) All Service Contracts are listed in Exhibit K.
Seller will not enter into any other service, operating or
management contracts relative to the Property that cannot be
canceled on thirty (30) days' notice and at no cost or
expense, nor will Seller make, or agree to, prior to Closing,
any material change or modification to the contracts set forth
in Exhibit K without the prior, written consent of Purchaser
which shall not be unreasonably withheld. The agreement
concerning the management of the Property currently in effect
set forth at Exhibit K shall be terminated effective on the
date of Closing. After the expiration of the Feasibility
Period, provided Purchaser has not terminated this Agreement,
Seller shall, upon written notice from Purchaser, send
termination notices with respect to such cancelable Service
Contracts specified by Purchaser.
(ii) Seller has no employees in connection with the
Property. Any persons who work at the Property (other than
pursuant to Service Contracts) are employees of the Seller's
property manager pursuant to a property management agreement
which shall be terminated at Closing. Seller agrees that
benefits or compensation accrued prior to Closing, and due or
claimed to be due either before or after Closing, to employees
or former employees of the property manager shall constitute
obligations of the property manager only, and Seller agrees to
indemnify and hold Purchaser harmless from all such
obligations and claims.
(o) Restrictions on Additional Indebtedness. Seller will not
borrow any money or do, or fail to do, any other act or thing which
would cause the Land, the Improvements or any Included Personal
Property to become pledged or otherwise utilized as collateral or
in any way stand as security for any indebtedness or obligation,
other than as presently existing or in the ordinary course of
business.
(p) Closing Not Constituting Breach. The consummation of the
transaction contemplated herein will not result in the breach of
any provision in any lease or other agreement affecting the
Property.
(q) Access to Property. Seller has received no written
notices of the existence of any fact or condition which would
result in the termination or restriction of the current access from
the Property to any presently existing highways and roadways
adjoining the Property or to any sewer or other utility serving the
Property.
(r) Improvements and Amenities.
(i) Description of Improvements and Amenities. A
description of the improvements and amenities of each Property
is more particularly set forth at Schedule V attached hereto
and incorporated herein by reference for all purposes, which
is materially correct.
(ii) Utilities. Utility systems for the transmission of
gas, telephone, electricity, storm and sanitary services, and
water are available at the property lines of the Property.
(s) Seller's Non-foreign Status. Seller is not a "foreign
person" within the meaning of Sections 1445 and 7701 of the
Internal Revenue Code of 1954, as amended; that is, Seller is not
a non-resident alien, foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the
Internal Revenue Code of 1986, as now existing or hereafter
amended).
(t) Taxes and Assessments. All ad valorem taxes and personal
property taxes which are due and payable, together with all special
assessments for improvements to the Property have been paid in
full.
(u) Exhibits. To Seller's knowledge, all exhibits attached
hereto are true and correct in all material respects.
(v) Seller's Affidavit at Closing. The representations,
warranties and covenants of the Seller contained in this Agreement
or in any document delivered to Purchaser pursuant to the terms of
this Agreement (whether in this Paragraph 7 or elsewhere) (i) shall
be true and correct in all material respects and not in default at
the time of Closing, just as though they were made at such time,
and Seller shall deliver to Purchaser, at Closing, an Affidavit to
that effect, and (ii) in the event of a breach of such
representations, warranties or covenants prior to or at Closing,
Purchaser shall have the right to make a claim hereunder against
Seller for a period of one (1) year following the Closing.
7A. Covenants, Representations and Warranties of Purchaser.
As an inducement to Seller to enter into and perform this
Agreement, Purchaser makes the following covenants, representations
and warranties which covenants, representations and warranties
shall be true and correct in all material respects on the date
hereof and on the Closing Date, and shall be a condition precedent
to Seller's obligation to close the transaction contemplated
herein:
(a) Organization and Authority. Purchaser is a corporation
duly organized, validly existing and in good standing under the
laws of Maryland, and has all requisite power, authority and
capacity to execute and enter into this Agreement; and the
transactions contemplated herein by Purchaser have been duly
authorized and approved by all requisite corporate actions, and
this Agreement has been duly executed and delivered on behalf of
Purchaser by its duly authorized officers and constitutes the
legal, valid and binding obligations of Purchaser. Purchaser has
no knowledge of any item or provision of this Agreement which is
unenforceable.
(b) No Conflict; Required Filings and Consents.
(i) The execution and delivery of this Agreement by
Purchaser does not and the transactions contemplated by this
Agreement will not (A) conflict with, or result in any
violation or breach of any provision of Purchaser's Charter or
Bylaws, (B) result in any violation or breach of, or
constitute (with or without notice or lapse of time, or both)
a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any
benefit) under any note, bond, mortgage, indenture, lease,
contract or other agreement, instrument or obligation to which
Purchaser is a party or by which Purchaser or any of its
properties or assets are bound, or (C) conflict or violate any
permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable
to Purchaser or any of its properties or assets, except in the
case of (B) and (C) for any such violations, breaches,
defaults, terminations, cancellations, accelerations or
conflicts which would not, in the aggregate, have or result in
a material adverse effect on Purchaser or impair the ability
of Purchaser to consummate the transactions contemplated by
this Agreement.
(ii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental
entity, is required with respect to Purchaser in connection
with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
8. Closing and Conditions to Closing.
(a) The Closing Generally. The Closing shall occur at 10:00
a.m. on or before, but no later than, the fifteenth (15th) day
following the expiration of the Feasibility Period and the
satisfaction of the conditions set forth in subparagraph 8(c). The
Closing will be held at the offices of the Title Insurer, or at
such other time and place as to which the parties hereafter may
agree upon in writing. At Closing, the Purchase Price shall be
delivered to Seller in the manner provided at Paragraph 5, together
with the documents to be delivered by Purchaser to Seller
hereunder, and possession of, and title to, the Property shall be
delivered and conveyed to Purchaser by Seller in the manner
provided herein, together with all other documents to be delivered
by Seller to Purchaser hereunder.
(b) Documents Delivered By Seller at Closing. With respect
to the Property, at the Closing, Seller, at its sole cost and
expense, shall deliver, or shall cause to be delivered, to
Purchaser the documents described below:
(i) Special Warranty Deed. A special warranty deed,
duly executed and acknowledged, conveying to Purchaser good
and indefeasible fee simple title to the Land and Improvements
free and clear of all liens and encumbrances, except the
Permitted Title Exceptions, in the form attached at Exhibit M.
(ii) Bill of Sale and Assignment. A bill of sale, duly
executed and acknowledged, with special warranties of title,
subject only to the Permitted Title Exceptions, conveying to
Purchaser (A) the Included Personal Property, (B) Seller's
interest in and to all assignable Service Contracts which were
not terminated as herein provided, together with copies of the
originals of each of said contracts, if in Seller's
possession, (C) all existing warranties, if any, on the
Improvements and/or the Included Personal Property, including,
but not limited to, roofs, foundations, plumbing, heating, air
conditioning, and electrical, if any, (D) Seller's right,
title and interest, if any, in and to the trademarks or
tradenames used by Seller in connection with the Property
including, but not limited to, "Cozumel Apartments" and (E)
Seller's right, title and interest, if any, in any and all
licenses, permits, approvals and other intangible property or
rights relating to the Property, together with appropriate
endorsements or such other instruments as may be necessary to
transfer title to Seller's interest in the Improvements and
Included Personal Property in the form attached at Exhibit M.
Any and all sales tax due with respect to the Included
Personal Property arising solely as a result of the sale of
the Included Personal Property to Purchaser shall be paid by
Purchaser.
(iii) Assignment of Tenant Leases. A transfer and
assignment of the Tenant Leases (the "Assignment of Tenant
Leases"), together with all rents, other income and deposits
paid or payable thereunder, subject to the Permitted Title
Exceptions in the form attached as Exhibit M, together with
delivery of all Tenant Leases and information pertinent
thereto.
(iv) Affidavit of Seller. An affidavit of Seller in the
form attached as Exhibit M, pursuant to Subparagraph 7(v) to
the effect that the representations and warranties of Seller
pursuant to Paragraph 7 continue to be true and correct in all
material respects and that all of Seller's covenants (not
otherwise waived by Purchaser) have been performed as of the
date of Closing.
(v) Owner Policy. Seller, at its sole cost and expense,
also shall deliver or cause to be delivered, as soon as
possible following the Closing, the Owner Policy.
(c) Conditions Precedent to Purchaser's Obligations.
Purchaser shall not be obligated to consummate the transfer of
title to the Property hereunder unless and until:
(i) Closing Documents. Seller has delivered (A) to the
Title Insurer, an executed Closing Statement (in form and
substance reasonably acceptable to Seller and Purchaser), the
closing documents attached at Exhibit M and any other
documents reasonably required by the Title Insurer in order to
insure Purchaser's good and indefeasible fee simple title to
the Property free and clear of all liens and encumbrances,
except the Permitted Title Exceptions, and (B) to Purchaser
all other instruments and documents required by the terms of
this Agreement.
(ii) No Uncured Breach. There has been no uncured breach
by Seller of any of the agreements, representations,
warranties or covenants contained herein, except as may
otherwise expressly provided in this Agreement.
(iii) Title Vested in Seller. Good and indefeasible
title to the Property has been shown to be vested in Seller
subject only to the Permitted Exceptions.
(iv) Delivery of Reports and Books and Records. Pursuant
to the terms of Schedule I attached hereto, Seller shall have
delivered to Purchaser all reports and books and records
concerning the management and operation of the Property
through the date of Closing required to be delivered pursuant
to this Agreement.
(v) Waiver by Purchaser. Purchaser, at any time at or
prior to Closing, may waive any one or more of the preceding
requirements by written notice to Seller to that effect.
(d) Closing Costs. The costs for obtaining and delivering to
Purchaser the Title Commitment and all other documents required
herein to be provided to Purchaser by Seller, the premiums for the
Owner Policy in accordance with paragraph 6(d), all applicable
documentary stamp taxes incurred as a result of recording the
special warranty deed described in Subparagraph 8(b)(i) hereof,
except as otherwise provided herein, the recording costs for the
special warranty deed described in Subparagraph 8(b)(i) hereof and
the recording costs for any other of the Closing documents
necessary to convey good and indefeasible fee simple title to the
Property to Purchaser in accordance with this Agreement, except as
otherwise provided herein, any and all prepayment penalties or
premiums with respect to existing debts secured by the Property
which will not constitute Permitted Exceptions and the commission
due to Broker described in subparagraph 12(a) herein and the costs
of obtaining any estoppel letters shall be borne by Seller. The
escrow fees, if any, charged by the Title Company shall be borne
equally by Purchaser and Seller. Purchaser and Seller each shall
pay their respective attorneys' fees and expenses. The costs for
obtaining the Survey shall be borne by Purchaser. All other costs
and expenses in connection with the transaction contemplated by
this Agreement, unless otherwise expressly set forth herein to the
contrary, shall be borne by Seller and Purchaser in the manner in
which such costs and expenses customarily are allocated between the
parties at closings of real property similar to the situs of the
Property, respectively.
8A. Deliveries by Purchaser at Closing. With respect to the
Property, at the Closing, Purchaser, at its sole cost and expense,
shall deliver, or shall cause to be delivered, to Seller, the items
described below:
(a) The cash portion of the Purchase Price in accordance with
Paragraph 5 hereof;
(b) A Closing Statement in form and substance reasonably
acceptable to Seller and Purchaser;
(c) The Assignment of Tenant Leases;
(d) Such documents as may be reasonably required by the Title
Insurer to be executed and delivered by Purchaser, including
without limitation, a Mechanic's Lien Affidavit and Indemnity, Tax
Agreement and Utility Agreement;
(e) Such documents as may be reasonably required by Seller
pursuant to which Purchaser acknowledges receipt of such documents,
items and property as may be delivered to and received by Purchaser
at the Property, including books and records, contracts, plans and
specifications, licenses and permits, keys, and the like; and
(f) Other documents and instruments which Seller may
reasonably request or to which Seller may be reasonably entitled
under any of the other provisions of this Agreement.
9. Prorations and Adjustments.
(a) Items Prorated. All prorations and adjustments shall be
made and determined as of the Proration Date as follows:
(i) Rents. Collected rents shall be prorated. Seller
shall not receive any proration credit for rents accrued and
delinquent for months prior to the Proration Date, and all
rentals received after such date shall be applied, first, to
current and, then, delinquent obligations, the latter of which
shall be paid to Seller; provided, however, nothing herein
shall operate to require Purchaser to institute a lawsuit to
recover such amounts. Seller shall not be charged for
uncollected rent for the month within which the Proration Date
shall occur, it being the intent of the parties to prorate
only the rents that have been collected at such date. Any
delinquent rents for periods prior to the Proration Date and
a prorated portion of rents for the month uncollected as of
the Proration Date which are collected by Purchaser and which
are not necessary to bring a tenant current as described above
shall be forwarded to Seller.
(ii) Prepaid Rents and Security and Other Deposits.
Prepaid rents and security and other tenant deposits
(including but not limited to pet deposits and key deposits),
if any, under assigned leases shall be paid to Purchaser by
Seller (or credited against the Purchase Price) at Closing.
Purchaser shall assume full liability therefor and shall
indemnify and hold Seller harmless with respect to all such
deposits.
(iii) Service Contracts. Prepaid or unpaid amounts
under those Service Contracts listed in Exhibit K, which shall
be assigned to and assumed by Purchaser at Closing shall be
prorated. Notwithstanding the foregoing, Purchaser shall
receive no credit or proration for initial payments and
incentive compensation paid on long-term contracts including
but not limited to laundry contracts and leases.
(iv) Property Taxes. Taxes assessed upon the Property
for calendar year 1996 shall be prorated based on the
assumption that the actual taxes for the entire calendar year
1996 will be the same as calendar year 1995, which amount
Seller and Purchaser agree is a reasonable estimate of 1996
taxes. Taxes prorated at Closing shall be re-prorated between
the parties promptly upon the receipt of the 1996 real estate
tax bill and proper adjustments promptly paid.
(v) Utilities. Utility charges shall not be prorated
but, rather, instructions shall be given to the utility
companies by Seller (with a duplicate copy of such instruction
being provided concurrently to Purchaser) to read the meters
on the date of Closing and to issue separate statements
thereafter. If applicable, utility deposits will be credited
to Seller and assigned to Purchaser at Closing. In the event
that any provider of utilities shall refuse to issue separate
statements in the manner aforesaid, applicable utility charges
shall be adjusted to the effect that Seller shall pay utility
charges to the Proration Date and Purchaser shall pay utility
charges thereafter.
(vi) Other Adjustments. Such other items as are adjusted
pursuant to custom in the state constituting the situs of the
Property and on similar real estate transactions.
(vii) Delivery by Seller of Documents and Supplies.
Seller, at Closing, shall assign and deliver to Purchaser all
original leases, deposits, supplies, contracts, and other
items as to which proration is to be made. Seller also shall
deliver to Purchaser all Plans and Specifications, if any,
relating to the Property and all such other documents, books,
records, and keys in Seller's possession which relate to the
operation, maintenance or management of the Property. Seller
also shall deliver to Purchaser its current supply, if any, of
printed leasing brochures, floor plans and other advertising
literature with respect to the Property.
10. Material Damage.
(a) Procedure. If, prior to Closing, a Property shall be
destroyed or sustain Material Damage as a result of fire or other
casualty, then, at Purchaser's option exercised in the manner
provided hereunder, the following shall occur with respect to the
Property:
(i) This Agreement shall become null and void and the
Earnest Money Deposit shall be returned to Purchaser, provided
that Purchaser gives notice of such election at or prior to
Closing, but in any event within ten (10) days following
receipt by Purchaser of notice of the occurrence of any such
event; or
(ii) If all other conditions precedent to Purchaser's
obligation to close have been satisfied, the purchase and sale
transaction shall close with a reduction in the cash portion
of the purchase price equal to the amount of the applicable
insurance deductible, and concurrently with such closing,
Seller and any other named insured shall assign to Purchaser,
in form reasonably satisfactory to Purchaser, all claims
arising under any policy of insurance covering such casualty,
and Seller shall have no further liability to Purchaser with
respect to such damage.
(iii) If the parties shall fail to agree on the
amount of the cost of such restoration, such cost of
restoration shall be determined by the following process:
Seller and Purchaser together shall select three (3) reputable
independent third party contractors to submit estimates for
the cost of repair of the damage and shall accept the average
of all of the estimates as the amount of the damage for
purposes of this paragraph.
(b) Damage Other Than Material Damage. In the event of any
damage to a Property other than Material Damage, the purchase and
sale transaction shall close in accordance with and subject to the
conditions of Subparagraph 10(a)(ii). If the Property is
uninsured, the cash portion of the Purchase Price shall be reduced
by the cost to restore determined in the manner provided above.
11. Condemnation. If, prior to Closing, any governmental or
similar authority shall institute eminent domain or similar
proceeding or take any steps preliminary thereto (including the
giving of any direct or indirect notice of intent to institute any
such proceeding) that, if successful, would materially, adversely
affect the value of the Property or materially interfere with the
use thereof, Purchaser shall be entitled to terminate this
Agreement upon written notice to Seller prior to Closing and to a
return of the Earnest Money Deposit. As used in this paragraph,
the term "materially" shall mean condemnation proceeds in excess of
an amount equal to two percent (2%) of the Purchase Price.
12. Brokerage and Consultants.
(a) Representation of Seller. Seller represents and warrants
that, except for Daniel V. Allen of CB Commercial Real Estate
Group, Inc. ("CB") and Bart A. Walchle ("Walchle"; CB and Walchle
are hereafter collectively referred to herein as Broker"), it has
neither employed, retained nor consulted any broker, consultant,
agent or finder in carrying on the negotiations relative to this
Agreement or the purchase and sale referred to herein, and Seller
shall indemnify and hold Purchaser harmless from and against any
and all claims, demands, causes of action, debts, liabilities,
judgments and damages (including costs and reasonable attorney's
fees) which may be asserted or recovered against it on account of
any brokerage fee, consulting fee, commission or other compensation
arising by reason of the breach of this representation and
warranty. Seller further represents and warrants that, except for
the sum of $90,0000 to be paid to CB and an amount to be paid to
Walchle under a separate commission agreement between Seller and
Walchle, no amount shall be paid by Seller to any party as a fee or
a commission, or any amount of a similar nature, whatever
designated, as a result of the purchase and sale referred to
herein. Seller acknowledges that in no event shall Purchaser be
responsible for any amounts to be paid to Broker.
(b) Representation of Purchaser. Purchaser represents and
warrants that it has neither employed, retained, nor consulted any
broker, consultant, agent or finder in carrying on the negotiations
relative to this Agreement or the purchase and sale referred to
herein, and Purchaser shall indemnify and hold Seller harmless from
and against any and all claims, demands, actions, causes of action,
debts, liabilities, judgments and damages (including costs and
reasonable attorney's fees) which may be asserted or recovered
against it on account of any brokerage fee, consulting fee,
commission or other compensation arising by reason of the breach of
this representation and warranty. Purchaser further represents and
warrants that no amount shall be paid by any Purchaser to any party
as a fee or a commission, or any amount of a similar nature,
whatever designated, as a result of the purchase and sale referred
to herein.
(c) Advice as to Title. Purchaser acknowledges that, at the
time of execution of this Agreement, Seller has advised Purchaser
by this writing that Purchaser should have the abstract covering
the Property examined by an attorney of Purchaser's own selection
or that Purchaser should be furnished with or should obtain a
policy of title insurance.
13. Indemnification.
(a) Indemnification of Purchaser. Seller hereby agrees to
indemnify, defend and hold harmless Purchaser and any other holder
of record title to the Property pursuant to Paragraph 21, their
officers, directors, general partners, agents and employees and
their respective heirs, executors, administrators, successors and
assigns, from and against any and all liability arising out of the
ownership or operation of the Property prior to Closing, including,
but not limited to, any and all claims, liabilities, damages,
penalties and losses, costs or expenses (including court costs and
reasonable attorney's fees) incurred, resulting from or in any way
arising out of any act or omission of Seller, its agents and
employees, in respect of the operation of the Property prior to
Closing, and any injury to persons or damage to property happening
or occurring in, on or about the Property prior to Closing. Seller
further agrees, upon notice and request from Purchaser, to contest
any such demand, claim, suit or action against which Seller has
hereinabove agreed to indemnify and hold Purchaser harmless, and to
defend any action that may be brought in connection with any such
demand, claim, suit or action or with respect to which Seller has
hereinabove agreed to indemnify and hold Purchaser harmless and to
bear all costs and expenses of such contest and defense, provided,
however, that Seller shall have no obligation hereunder to
indemnify or hold Purchaser harmless from and against any claim,
liability, damage, penalty or loss, cost or expense incurred by
Purchaser incident to, resulting from or in any way arising out of
any act or omission of Purchaser, its agent or employees, it being
understood and agreed, however, that the employees engaged in the
operation of the Property prior to Closing are and shall be
construed to be, for purposes of this provision, the employees of
Seller and the acts and omissions of said employees shall in no way
be attributable to Purchaser for the purposes of this provision.
(b) Indemnification of Seller. Subject to Subparagraph
13(a), Purchaser agrees to indemnify, defend and hold Seller, its
officers, directors, general partners, agents and employees and
their respective heirs, executors, administrators, successors and
assigns, harmless from and against any claim, liability, damage,
penalty, loss, cost or expense (including court costs and
reasonable attorney's fees) incurred by Seller incident to,
resulting from or in any way arising out of any act or omission of
Purchaser, its agents or employees, after Closing, or arising out
of, or in any way connected with, Purchaser's inspections of the
Property pursuant to this Agreement or the operation of the
Property from and after Closing and any injury to Persons or damage
to property happening on the Property after Closing; and Purchaser
further agrees, upon notice, and request from Seller, to contest
any such demand, claim, suit, or action against which Purchaser has
hereinabove agreed to indemnify and hold Seller harmless, and to
defend any action that may be brought in connection with any such
demand, claim, suit or action or with respect to which Purchaser
has hereinabove agreed to indemnify and hold the Seller harmless
and to bear all costs and expenses of such contest and defense,
provided, however, that Purchaser shall have no obligation
hereunder to indemnify or hold Seller harmless from and against any
claim, liability, damage, penalty or loss, cost or expense incurred
by Seller incident to, resulting from or in any way arising out of
any act or omission of Seller, its agents or employees, it being
understood and agreed, however, that the employees engaged in the
operation of the Property after the Closing are and shall be
construed to be, for purposes of this provision, the employees of
Purchaser and the acts and omissions of said employees shall in no
way be attributable to Seller for the purposes of this provision.
(c) Indemnification Procedure. To the extent of any claims
against Seller or Purchaser predicated upon facts which could
reasonably be interpreted as giving rise to potential liability of
Seller or Purchaser under this Paragraph 13, the party against whom
such claim is asserted shall promptly give notice thereof to the
other party hereto. Thereupon, such other party shall have the
option of retaining counsel of its choice to defend both it and the
remaining party in respect of such claim and to control, in a
manner reasonable in light of applicable circumstances, the course
and ultimate disposition of such claim. In the event that a party
to this Agreement shall elect to exercise the option provided in
the preceding sentence, the party electing such option, by reason
thereof, shall be deemed to have agreed to pay all reasonable costs
and expenses of defending against such claim and any liability of
the party against whom such claim was asserted on account thereof.
Without regard to whether any party hereto shall exercise such
option, Seller and Purchaser and their counsel shall consult with
one another concerning such claim and with due regard to both the
mutual and the independent interests of Seller and Purchaser
therein.
14. Notice to Tenants. On the date of Closing or at any time
thereafter, upon request by Purchaser, Seller agrees to give
notice, said notice to be in compliance with local law and in form
reasonably approved by Purchaser, to each of the tenants of space
located on the Property that Seller has sold and conveyed the
Property to Purchaser and that all future rental payments due under
the terms of the Tenant Leases are to be paid as directed by
Purchaser. On the date of Closing or at any time thereafter, upon
request of Seller, Purchaser agrees to give notice to all tenants
that their security deposit (if any) has been paid over to the
Purchaser, and Purchaser has assumed the liability therefor.
15. Payments.
(a) General. All payments to be made under this Agreement
shall be made by the wire transfer of immediately available funds
pursuant to written wiring instructions from the parties and shall
be deemed paid when written confirmation of receipt has been issued
by the receiving bank and not before.
(b) Deposits to Account of Title Insurer. Unless and until
the Title Insurer shall advise Purchaser and Seller to the contrary
in writing, it is represented and acknowledged that deposits to the
account of Title Insurer made hereunder by Seller and/or Purchaser
shall be made as follows:
Account Owner: Shutts & Bowen, LLP
Account Name: Escrow Account
Account Number: 20 9000 1500 478
Depository: First Union National Bank of Florida
20 North Orange Avenue
Orlando, Florida 32801
ABA Routing No.: 063000021
Telephone Advice: Cecilia Slavish - 423-3200
16. Default and Remedies.
(a) Remedies of Seller. In the event that all conditions to
Purchaser's obligation to close have been satisfied and Purchaser
fails to close its purchase of the Property hereunder, the Earnest
Money Deposit shall be paid to Seller and retained by it as
liquidated damages as Seller's sole and exclusive remedy hereunder.
The parties acknowledge that Seller's damages occasioned by
Purchaser's default hereunder would be difficult to ascertain, but
agree that the amount of the Earnest Money Deposit represents a
reasonable estimate of Seller's damages.
(b) Remedies of Purchaser. In the event that all conditions
to Seller's obligation to close have been satisfied and Seller fails
to close the sale of the Property in accordance with its
obligations under the terms and conditions specified hereunder,
Purchaser, at its sole discretion, either may (i) specifically
enforce this Agreement and the sale and purchase provided for
herein according to its terms by suit filed within ninety (90)
days, or (ii) terminate this Agreement, whereupon the Earnest Money
Deposit shall be returned in full to Purchaser.
(c) Rightful Termination by Purchaser. In the event that the
conditions precedent to Purchaser's obligation to close are not
satisfied and Purchaser terminates this Agreement pursuant to the
terms hereof, the Earnest Money Deposit shall be returned in full
to Purchaser as its sole remedy, and the parties shall have no
further liability to one another, except as may otherwise be
expressly provided hereunder.
(d) Attorneys' Fees. In the event of any arbitration or other
legal or equitable proceeding for enforcement of any of the terms
or conditions of this Agreement, or any alleged disputes, breaches,
defaults or misrepresentations in connection with any provision of
this Agreement, the prevailing party in such proceeding, or the
nondismissing party where the dismissal occurs other than by reason
of a settlement, shall be entitled to recover its reasonable costs
and expenses, including, without limitation, reasonable attorneys'
fees and costs paid or incurred in good faith at the arbitration,
pre-trial, trial and appellate levels, and in enforcing any award
or judgment granted pursuant thereto. Any award, judgment or order
entered in any such proceeding shall contain a specific provision
providing for the recovery of attorneys' fees and costs incurred in
enforcing such award or judgment, including, without limitation,
(a) postaward or postjudgment motions, (b) contempt proceedings,
(c) garnishment, levy, and debtor and third party examinations, (d)
discovery and (e) bankruptcy litigation. The "prevailing party,"
for purposes of this Agreement, shall be deemed to be that party
which obtains substantially the result sought, whether by
dismissal, award or judgment.
17. Notices. All notices and other communications hereunder
shall be effective as to any party only if, concurrent with notice
to such party, notice shall be given to such party's counsel. All
notices shall be in writing and shall be deemed to have been duly
given the date deposited with a commercial air courier service,
telecopy or facsimile, or the United States Postal Service, the
latter being registered or certified mail, return receipt
requested, first class, postage prepaid, notice to be effective on
the date of receipt, as follows:
Notice to Seller:
Cozumel Associates, Ltd.
1412 West Colonial Dr.
Orlando, Florida 32804
Attention: Mr. Sal LeCesse
Phone:
Fax:
with a copy to:
Cambridge Cozumel, Inc.
1412 West Colonial Dr.
Orlando, Florida 32804
Attention: Mr. Sal LeCesse
Phone:
Fax:
Notice to Seller's Counsel:
Shutts & Bowen, LLP
20 North Orange Avenue
Suite 1000
Orlando, Florida 32801
Attention: Michael J. Grindstaff, Esq.
Phone: (407) 423-3200
Fax: (407) 423-3200
Notice to Purchaser:
Walden Residential Properties, Inc.
One Lincoln Center
5400 LBJ Freeway, Suite 400
Dallas, Texas 75240
Attention: Mr. Marshall B. Edwards
Phone: 214/788-0510
Fax: 214/788-1550
Notice to Purchaser's Counsel:
Munsch Hardt Kopf Harr & Dinan, P.C.
4000 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202
Attention: Robin K. Minick, Esq.
Phone: 214/855-7542
Fax: 214/855-7584
18. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED,
ENFORCED AND GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF
FLORIDA WITH VENUE AGREED TO BE IN ORANGE COUNTY, FLORIDA. THE
INITIAL DRAFT OF THIS AGREEMENT WAS PREPARED BY PURCHASER ONLY AS
A MATTER OF CONVENIENCE AND SHALL NOT BE CONSTRUED FOR OR AGAINST
EITHER PARTY ON THAT ACCOUNT.
19. Binding Effect. This Agreement and the exhibits attached
hereto shall be binding upon, and shall inure to the benefit of,
the parties hereto, their successors and permitted assigns, if any.
20. Entire Agreement. This Agreement and the exhibits
attached hereto shall constitute the entire contract between the
parties and supersedes all prior and contemporaneous agreements,
representations and undertakings of the parties regarding the
subject matter of this Agreement. This Agreement may not be
modified except by a writing, one or more counterparts of which is
signed by all parties to this Agreement.
21. Vesting of Title To Property. Seller and Purchaser agree
that title to the Property will be conveyed at Closing to such
other entity as Purchaser may direct by written notice to Seller
not less than fifteen (15) days prior to Closing.
22. Waiver. Except as expressly provided in this Agreement,
no inspection by Purchaser of the Property or of any item delivered
by Seller to Purchaser as provided in this Agreement shall
constitute a waiver of any representation, warranty or covenant
made by Seller hereunder. The waiver by a party hereto of any term,
covenant, agreement or condition herein contained shall not be
deemed to be a waiver of any subsequent breach or failure of
condition as to the same or any other term, covenant, agreement or
condition herein contained, nor shall any custom or practice which
may arise between the parties in the administration of the terms
hereof be construed as a waiver of or in such a manner as to lessen
the rights of any party to insist upon the performance by the other
parties in strict accordance with such terms.
23. Time of the Essence. The time for performance of the
obligations of the parties hereunder is of the essence in this
Agreement.
24. Survival of Agreement. The obligation of any parties to
this Agreement, including any performance specified or anticipated
to occur following the Closing, to that extent shall survive the
Closing for a period of one (1) year following the Closing.
25. Headings. The subject headings of paragraphs and
subparagraphs of this Agreement are included for purposes of
convenience only and shall not affect the construction or
interpretation of any of its provisions.
26. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.
The facsimile signature of either party to this Agreement shall be
deemed an original signature for all purposes.
27. General.
(a) Memorandum of Terms. Neither Seller nor Purchaser shall
record or cause to be recorded in the public records, at any time
prior to Closing this Agreement or any memorandum or other evidence
hereof.
(b) Time for Performance of Certain Obligations. At either
party's option, this Agreement shall be null and void unless one
copy hereof, executed by Purchaser and Seller shall have been
delivered to the Title Insurer within three (3) business days
following the date of execution hereof by Seller.
(c) Limited Liability of Purchaser's Officers. This Agreement
and all documents, agreements, understandings, and arrangements
relating to this transaction have been executed by the undersigned
in his/her capacity as an officer or director of Purchaser which
has been formed as a Maryland corporation pursuant to the Articles
of Incorporation of Purchaser, and not individually, and neither
the directors, officers or stockholders of Purchaser shall be bound
or have any personal liability hereunder or thereunder. Seller
shall look solely to the assets of Purchaser for satisfaction of
any liability of the Purchaser in respect of this Agreement and all
documents, agreements, understandings and arrangements relating to
the transaction contemplated by this Agreement and will not seek
recourse or commence any action against any of the directors,
officers or stockholders of Purchaser or any of their personal
assets for the performance or payment of any obligation hereunder
or thereunder. The foregoing shall also apply to any future
documents, agreements, understandings, arrangements and
transactions between the parties hereto.
(d) Limited Liability of Seller's Officers. This Agreement
and all documents, agreements, understandings, and arrangements
relating to this transaction have been executed by the undersigned
in his/her capacity as an officer or director of Seller, and not
individually, and neither the directors, officers or stockholders
of Seller shall be bound or have any personal liability hereunder
or thereunder. Purchaser shall look solely to the assets of Seller
for satisfaction of any liability of the Seller in respect of this
Agreement and all documents, agreements, understandings and
arrangements relating to the transaction contemplated by this
Agreement and will not seek recourse or commence any action against
any of the directors, officers or stockholders of Seller or any of
their personal assets for the performance or payment of any
obligation hereunder or thereunder. The foregoing shall also apply
to any future documents, agreements, understandings, arrangements
and transactions between the parties hereto.
(e) No Further Agreements. While this Agreement is in full
force and effect, Seller shall not enter into any other agreement
or Letter of Intent to sell the Property.
(f) Confidentiality. The parties hereto hereby agree that
they will maintain the confidentiality of all information and
materials provided to each other in connection herewith and the
terms of the transaction contemplated hereby, the contents of this
Agreement and related documents, if any, except that Purchaser may
disclose material terms which are required to be disclosed by
applicable securities laws or as required by any national
securities exchange on which Purchaser's common stock may be listed
and Purchaser may include a copy of this Agreement and in its
filings with the Securities and Exchange Commission.
28. Date of Performance. In the event the expiration date of
any review period herein specified or the expiration date of any
period of time in which a party hereto is to deliver any item to
any other party hereto should be a legal holiday in the State of
Florida or a Saturday or Sunday, such expiration date shall be
extended to the next business day which is not a legal holiday in
the State of Florida or a Saturday or Sunday, and such next
business day shall be considered such expiration date.
29. Invalid Provisions. If any one or more of the provisions
of this Agreement shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision
hereof, all of which other provisions shall remain in full force
and effect.
30. Inspections. Prior to the expiration of the Feasibility
Period, Purchaser shall have received various reports, satisfactory
to Purchaser in its sole discretion, of inspections of the Property
(including without limitation structural, mechanical,
environmental, cathodic and financial). On or prior to the
Effective Date, Purchaser shall have received the items listed in
Schedule I attached hereto. Seller shall make the Property and all
reports, books and records and agreements relating to the
construction, management and operation of the Property available to
the Purchaser and its agents as provided in Paragraph 7 hereof
throughout the Feasibility Period. If the results of the
inspections are unsatisfactory to Purchaser, or for any reason
whatsoever, in its sole and absolute discretion, Purchaser, at its
election, may terminate this Agreement by giving written notice to
Seller at any time prior to 5:00 P.M., C.D.T., on or before the
last day of the Feasibility Period, whereupon the Title Insurer
immediately shall return the Earnest Money Deposit to Purchaser,
this Agreement automatically shall terminate, and neither party
shall have any further obligation to the other except the
indemnities contained elsewhere herein. In the absence of such
notice by such date, the inspections shall be deemed to have been
approved by Purchaser. Except as expressly set forth herein,
Seller has not made, does not hereby make, and hereby specifically
disclaims any express or implied representations or warranties
whatsoever with respect to the condition of the Property, including
without limitation any representation or warranty regarding quality
of construction, workmanship, merchantability or fitness for any
particular purpose; and Purchaser acknowledges that Purchaser is
entering into this Agreement without relying upon any such warranty
or representation by Seller, its agents or representatives except
for those representations or warranties expressly set forth herein.
Purchaser's failure to terminate this Agreement prior to the
expiration of the Feasibility Period shall conclusively establish
that Purchaser has fully examined and inspected the Property and is
satisfied with the condition thereof. Notwithstanding the
foregoing, Purchaser acknowledges that Seller acquired title to the
Property from the Resolution Trust Corporation, as Receiver for
Sunbelt Federal Savings, FSB, and that Seller does not have in
Seller's possession any soil or substrata reports or studies,
engineering plans and studies, architectural renderings, architect's
certificates, plans and specifications, construction plans and
drawings, floor plans, permits, certificates of occupancy or any
other similar plans, permits, diagrams or studies. Purchaser will
be purchasing the Property in its "AS IS" condition.
34. Notification of Non-Delivery. In the event that either
party hereto shall become aware of the non-delivery of any item or
document required to be delivered under this Agreement, a breach of
a representation, warranty or covenant set forth herein, or other
failure of condition, the party becoming aware of such event shall
give prompt notice to the other party in accordance with Paragraph
17 hereof.
35. Radon Gas Disclosure. As required by Florida Law, the
following notification is provided regarding radon gas:
Radon Gas: Radon is a naturally-occurring
radioactive gas that, when it has accumulated
in a building in sufficient quantities, may
present health risks to persons who are
exposed to it over time. Levels of radon that
exceed federal and state guidelines have been
found in buildings in Florida. Additional
information regarding radon and radon testing
may be obtained from your county public health
unit.
36. Energy Efficient Rating Disclosure. In accordance with
Florida Law, the Energy-Efficiency Rating Disclosure is attached
hereto as Exhibit L.
37. Property Exchange. Purchaser hereunder desires to
exchange other property of like kind and qualifying use within the
meaning of section 1031 of the Internal Revenue Code of 1986, as
amended and the regulations promulgated thereunder, for fee title
in the Property which is the subject of this Contract. Purchaser
expressly reserves the right to assign its rights, but not its
obligations, hereunder to a Qualified Intermediary as provided in
Reg. Section 1.103(k)-1(g)(4) on or before Closing. Seller specifically
agrees that Purchaser may assign this Contract as it may deem
necessary or desirable to consummate the exchange and agrees to
cooperate with Purchaser in connection therewith. Such exchange
shall be accomplished without delay, cost or expense to Seller.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed on the day and in the year entered below, effective as
above written.
PURCHASER:
WALDEN RESIDENTIAL PROPERTIES, INC.,
a Maryland corporation
By:______________________________
Marshall B. Edwards
President
Date Executed by Purchaser:_________
SELLER:
COZUMEL ASSOCIATES, LTD.,
a Florida limited partnership
By: Cambridge Cozumel, Inc.
By:_______________________________
Sal LeCesse
Vice President
Date Executed by Seller:__________
The undersigned, constituting the Escrow Agent, hereby agrees
to accept in escrow the moneys provided for in the above Agreement
to be paid into escrow and to hold and apply the same as provided
in said Agreement.
SHUTTS & BOWEN, LLP
By:_____________________________
Name:___________________________
Its: ___________________________
Date executed by Escrow Agent:____________
SCHEDULE I
ITEMS TO BE DELIVERED OR MADE AVAILABLE TO PURCHASER
WITHIN TEN (10) DAYS OF THE EFFECTIVE DATE TO THE EXTENT
SUCH ITEMS ARE IN SELLER'S ACTUAL POSSESSION
1. Seller's most current owner's title insurance policy and a
copy of all title reports and documents in Seller's
possession..
2. A list and a copy of all Service Contracts, all documents
pertaining to any leased Personalty, and all warranties,
guaranties and bonds relating to the Property; or any part
thereof.
3. A complete, itemized and detailed inventory of the Personalty
to be conveyed by Seller to Purchaser at the Closing.
4. A copy of (i) all income and expense statements for the
Property, for the year-to-date and for the most recently
completed prior year (prepared on a monthly basis), and annual
operating statements for the two (2) most recent fiscal years,
certified by Seller or audited (when available) as having been
prepared in accordance with generally accepted accounting
principles (except to the extent prepared on a cash basis),
(ii) operating budgets for the Property for the current
calendar year and the upcoming calendar year, and (iii) a
capital expenditure budget for the Property for the current
calendar year and the upcoming calendar year, and (iv) such
other information as may be required by Purchaser's
accountants to perform a complete audit of the Property for
the twelve (12) month period ended December 31, 1995, and
year-to-date 1996.
5. A copy of all ad valorem and other property tax statements
(including personal property tax statements) relating to the
Property for the current tax year and the immediately
preceding two (2) tax years, including copies of any
assessments or statements for the current or forthcoming year,
including a summary of any contested tax assessments relating
to the property for the preceding two (2) years, and the
results thereof.
6. A copy of (i) a resident rent roll for the Improvements,
showing actual occupancies, rentals, delinquencies, defaults,
security deposits, assigned parking spaces (if any), free
rent, rent concessions, resident incentives, lease terms, unit
numbers, unit types, and unit amenities, (ii) a current
schedule of rental rates for each type of unit within the
Improvements, and (iii) such other pertinent information
regarding the resident leases and rental units as is
reasonably available to Seller, including, without limitation,
a schedule of the appliances and amenities included in each
type of rental unit.
7. A copy of all site plans, surveys, environmental reports or
studies, if any, relating to the Property.
8. A letter from the appropriate city dated no earlier than the
Effective Date stating that the Property complies fully with
all applicable zoning ordinances and the operation of the
improvements as an apartment complex is a permitted use under
such ordinances, together with a copy of such ordinances.
9. A list of all employees currently employed in the operation of
the Property, setting forth his/her name, address, telephone
number, position, salary, benefits, bonuses, leasing
commissions, other incentives, apartment allowance (if
applicable) and tenure with the Property.
10. A schedule outlining, and invoices, contracts and/or work
orders pertaining to any (i) carpet replacement, window
replacement, and appliance replacement over the past two (2)
years relating to the Improvements, (ii) any other capital
expenditures over the past two (2) years at the Property,
showing the nature of the work, expense, date and unit or
common area where the work was done, and (iii) regular
maintenance and repair at the Property over the past twelve
(12) months.
11. A copy of the standard form of resident lease, leasing
application, security and pet deposit documents, rules and
regulations, leasing brochures, occupancy checklist, current
marketing/leasing plans and business plans for the Property,
other standard forms and documents currently used in
connection with the leasing and marketing of the Property, and
a profile of existing resident base, including data on age,
income, sex, household structure, occupation, etc., to the
extent such information is available to Seller.
12. A list of all utility deposits or bonds for the Property and
a copy of all utility bills for the Property for the previous
twelve (12) months, excluding individually metered resident
utility bills; and letter from each of the utility providers
stating that the utilities are available to the Property.
13. A summary of any approvals, requirements or prerequisites (if
any) imposed by any current lender having a security interest
in the Property (or any portion thereof) as a condition to the
execution of this Agreement by Seller or as a condition to the
Closing as contemplated by this Agreement.
14. Copies of and/or access throughout the Feasibility Period to
all resident files.
15. Copies of any pertinent litigation of safety related issues
with respect to the Property.
16. Such other books, records, leasing files, contracts,
agreements and information relating to the Property that are
in Seller's possession or are readily available to Seller and
as may be required by Purchaser's accountants to perform a
complete audit of the Property for the twelve (12) month
period ended December 31, 1995.
17. Copies of all pleadings with regard to the Pipes Litigation.
SCHEDULE II
DESCRIPTION OF IMPROVEMENTS AND AMENITIES
____ dwelling units located in ________ buildings, consisting of
_______ one-bedroom, _________ two-bedroom and ________
three-bedroom units, a clubhouse, laundry facilities, ________
swimming pool(s), ___________ tennis court(s) and
____________________________________.
EXHIBIT A
LEGAL DESCRIPTIONS OF LAND
[TO BE PROVIDED]
EXHIBIT B
[INTENTIONALLY OMITTED]
EXHIBIT C
SURVEYOR'S CERTIFICATE
[TO BE PROVIDED]
EXHIBIT D
[INTENTIONALLY DELETED]
EXHIBIT E
INCLUDED PERSONAL PROPERTY
[TO BE PROVIDED]
EXHIBIT F
EXCLUDED PERSONAL PROPERTY
[TO BE PROVIDED]
EXHIBIT G
RENT ROLL
[TO BE PROVIDED]
EXHIBIT H
STREET RENTS
Unit Type Number Square Feet Monthly Rent
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
Total __________ ___________ $___________
EXHIBIT I
STATEMENTS OF INCOME AND EXPENSE
[TO BE PROVIDED]
EXHIBIT J
SCHEDULE OF INSURANCE
[TO BE PROVIDED]
EXHIBIT K
SCHEDULE OF SERVICE CONTRACTS
[TO BE PROVIDED]
EXHIBIT L
[INTENTIONALLY DELETED]
EXHIBIT M
CLOSING DOCUMENTS
[TO BE PROVIDED]
EXHIBIT N
STANDARD TENANT LEASE
[TO BE PROVIDED]
AGREEMENT OF SALE AND PURCHASE
by and between
TE-TWO REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
as Seller
and
WALDEN RESIDENTIAL PROPERTIES, INC.,
a Maryland corporation
as Purchaser
TABLE OF CONTENTS
Article Page
I. Sale and Purchase; Property. . . . . . . . . . . . . .5
1.1 Sale and Purchase . . . . . . . . . . . . . . . .5
II. Consideration. . . . . . . . . . . . . . . . . . . . .6
2.1 Purchase Price. . . . . . . . . . . . . . . . . .6
2.2 Earnest Money . . . . . . . . . . . . . . . . . .6
III. Inspection . . . . . . . . . . . . . . . . . . . . . .6
3.1 Inspection Period . . . . . . . . . . . . . . . .6
3.2 Document Review . . . . . . . . . . . . . . . . .7
(a) Documents. . . . . . . . . . . . . . . . . .7
(b) Proprietary Information. . . . . . . . . . .7
(c) Return of Documents. . . . . . . . . . . . .7
(d) No Representation or Warranty by Seller. . .7
3.3 Inspection Obligations. . . . . . . . . . . . . .8
(a) Purchaser's Responsibilities . . . . . . . .8
(b) PURCHASER'S AGREEMENT TO INDEMNIFY . . . . .8
(c) Right of Termination . . . . . . . . . . . .8
3.4 Property Conveyed "As Is. . . . . . . . . . . . .8
(a) DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
BY SELLER. . . . . . . . . . . . . . . . . .8
(c) "Hazardous Substances" Defined . . . . . . 10
3.5 Investigative Studies . . . . . . . . . . . . . 10
3.6 Purchaser Represented by Counsel. . . . . . . . 11
3.7 Purchaser's Release of Seller and Seller Parties11
IV. Survey . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 Survey. . . . . . . . . . . . . . . . . . . . . 11
V. Title. . . . . . . . . . . . . . . . . . . . . . . . 11
5.1 Title Commitment. . . . . . . . . . . . . . . . 11
VI. Remedies . . . . . . . . . . . . . . . . . . . . . . 12
6.1 Seller's Remedies . . . . . . . . . . . . . . . 12
6.2 Purchaser's Remedies. . . . . . . . . . . . . . 12
6.3 Attorneys' Fees . . . . . . . . . . . . . . . . 13
6.4 Disposition of Earnest Money. . . . . . . . . . 13
VII. Closing. . . . . . . . . . . . . . . . . . . . . . . 13
7.1 Closing Date. . . . . . . . . . . . . . . . . . 13
7.2 Closing Matters . . . . . . . . . . . . . . . . 13
(a) Seller's Deliveries. . . . . . . . . . . . 13
(b) Purchaser's Deliveries . . . . . . . . . . 14
(c) Prorations . . . . . . . . . . . . . . . . 14
(d) Purchaser's Assumption . . . . . . . . . . 15
(e) Preparation of Documents . . . . . . . . . 15
(f) Survival Provisions. . . . . . . . . . . . 15
7.3 Closing Costs . . . . . . . . . . . . . . . . . 15
7.4 Real Estate Commissions . . . . . . . . . . . . 15
VIII. Condemnation . . . . . . . . . . . . . . . . . . . . 16
8.1 Condemnation. . . . . . . . . . . . . . . . . . 16
IX. Risk of Loss . . . . . . . . . . . . . . . . . . . . 16
9.1 Risk of Loss. . . . . . . . . . . . . . . . . . 16
9.2 Material Loss . . . . . . . . . . . . . . . . . 16
9.3 Non-Material Loss . . . . . . . . . . . . . . . 17
9.4 Delay in Completion of Repairs. . . . . . . . . 17
9.5 Postponement of Closing . . . . . . . . . . . . 17
X. Miscellaneous. . . . . . . . . . . . . . . . . . . . 17
10.1 Entire Agreement. . . . . . . . . . . . . . . . 17
10.2 Agreement Binding on Parties. . . . . . . . . . 18
10.3 Effective Date. . . . . . . . . . . . . . . . . 18
10.4 Notice. . . . . . . . . . . . . . . . . . . . . 18
10.5 Time of the Essence . . . . . . . . . . . . . . 19
10.6 Place of Performance. . . . . . . . . . . . . . 19
10.7 Currency. . . . . . . . . . . . . . . . . . . . 19
10.8 Section Headings. . . . . . . . . . . . . . . . 19
10.9 Obligations . . . . . . . . . . . . . . . . . . 19
10.10 Business Days. . . . . . . . . . . . . . . . . 19
10.11 Purchaser's Representations and Warranties . . 19
(a) Authority of Purchaser . . . . . . . . . . 19
(b) No Bankruptcy or Receivership. . . . . . . 19
10.12 Representations and Warranties of Seller . . . 19
10.13 Effect of Representations and Warranties . . . 20
10.14 No Recording . . . . . . . . . . . . . . . . . 20
10.15 Multiple Counterparts. . . . . . . . . . . . . 20
10.16 Severability . . . . . . . . . . . . . . . . . 20
10.17 Mandatory Arbitration. . . . . . . . . . . . . 20
10.18 Asset Manager; Designated Representative . . . 21
10.19 Confidentiality. . . . . . . . . . . . . . . . 21
10.20 Limited Liability of Officers. . . . . . . . . 21
10.21 Vesting of Title To Property . . . . . . . . . 21
JOINDER BY TITLE COMPANY . . . . . . . . . . . . . . . . . . . 23
LIST OF EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . 24
EXHIBIT "A" LEGAL DESCRIPTION OF LAND. . . . . . . . . . . . . .1
EXHIBIT "B" LIST OF DUE DILIGENCE DOCUMENTS. . . . . . . . . . .1
EXHIBIT "C" DEED . . . . . . . . . . . . . . . . . . . . . . . .1
EXHIBIT "D" BILL OF SALE ASSIGNMENT AND ASSUMPTION . . . . . . .1
EXHIBIT "E" CERTIFICATION OF NON-FOREIGN STATUS. . . . . . . . .1
THIS AGREEMENT OF SALE AND PURCHASE ("Agreement") is made by
and between TE-TWO REAL ESTATE LIMITED PARTNERSHIP, a Delaware
limited partnership ("Seller"), and WALDEN RESIDENTIAL PROPERTIES,
a Maryland corporation ("Purchaser"), and is as follows:
W I T N E S S E T H:
WHEREAS, Seller desires to sell and Purchaser desires to
purchase the property described in Section 1. 1 below, on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
I.
Sale and Purchase; Property
1.1 Sale and Purchase. Seller agrees to sell and convey unto
Purchaser, and Purchaser agrees to purchase and accept from Seller,
for the price and subject to the terms, covenants, conditions and
provisions herein set forth, the following:
(a) All of that certain land more particularly described
on Exhibit "A" attached hereto ("Land"), including all structures,
improvements and fixtures (collectively "Improvements") thereon.
The Land and the Improvements are sometimes referred to herein
collectively as the "Real Property" and consist primarily of a two
hundred eighteen (218) unit apartment complex (only Phase I of
Princeton Meadows Apartments) located at Jacksonville, Duval
County, Florida;
(b) All right, title and interest, if any, of Seller, in
and to any land lying in the bed of any street, road or access way,
opened or proposed, in front of, at a side of or adjoining the Real
Property("Property Rights");
(c) All right, title and interest of Seller, reversionary
or otherwise, in and to all easements in or upon the Land and all
other rights and appurtenances belonging or in Aeneas pertaining
thereto, if any ("Appurtenances");
(d) Any and all furniture, carpeting, draperies,
appliances, building supplies, equipment, machinery, inventory, and
other items of personal property owned by Seller and presently
affixed or attached to, placed or situated upon the Real Property
and used in connection with the ownership, operation and occupancy
of the Real Property, and specifically excluding any items of
personal property owned by lawful tenants at or on the Real
Property ("Tenants") and further excluding any items of personal
property owned by third parties and leased to Seller
("Personalty");
(e) Seller's interest in all leases ("Leases") now or
hereafter affecting the Real Property, together with all refundable
security deposits ("Security Deposits") of Tenants held by Seller;
and
(f) Seller's interest in all assignable leasing, service,
supply and maintenance contracts ("Contracts") relating to the Real
Property or Personalty (subject to Section 7-2(a)(i) hereof).
The items described in (a) through (f) of this Section 1. I are
hereinafter collectively called the "Property".
II.
Consideration
2.1 Purchase Price. The purchase price ("Purchase Price") to
be paid by Purchaser to Seller for the sale and conveyance of the
Property shall be SEVEN MILLION FIVE HUNDRED FIFTY-FOUR THOUSAND
AND 00/100 DOLLARS ($7,554,000.00), which shall be payable to
Seller at the closing of the transaction contemplated hereby
("Closing") by wire transfer and which funds must be delivered in
a manner to permit the Title Company (defined below) to deliver
good funds to the Seller or its designee on the Closing Date
(defined below) (and if requested by Seller, by wire transfer).
2.2 Earnest Money.
(a) It shall be a condition precedent to the effectiveness
of this Agreement that within two (2) business days following the
date upon which National Network Title Services, Ltd. ("Title
Company"), 2301 Ohio Drive, Suite 202, Plano, Texas 75093, Attn:
Elizabeth Fitzpatrick, Tel. No. 214-596-8804; Fax No. 214-867-0619),
receives a copy of this Agreement executed by both Seller
and Purchaser, Purchaser deposit with Title Company by wire
transfer of immediately available federal funds the amount of One
Hundred Thousand and No/ I 00 Dollars ($ 1 00,000.00) (the "Earnest
Money"). Simultaneously with the delivery of the Earnest Money to
the Title Company by the Purchaser, Purchaser shall deliver to
Seller the sum of One Hundred and No/ I 00 Dollars ($100.00) as
"Independent Consideration" (herein so called), which Independent
Consideration shall be retained by Seller in all instances and
shall not be applied against the Purchase Price. As used herein,
the term "Earnest Money" shall mean the Earnest Money plus any
interest accrued thereon.
(b) The Title Company shall deposit the Earnest Money into
an interest-bearing money market account maintained at a federally
insured bank or savings and loan association located in Dallas
County or Collin County, Texas. Such account shall have no penalty
for early withdrawal, and Purchaser accepts all risks with regard
to the account, specifically including the risk of closure of such
bank or savings and loan association by state and/or federal
regulators, and all losses occasioned thereby. If any portion of
the Earnest Money and the Independent Consideration are not
delivered by Purchaser to the Title Company within the required
periods, Seller may terminate this Agreement by delivering written
notice to Purchaser. Upon said termination, the Title Company
shall immediately return to Seller all executed originals of this
Agreement in its possession. Thereafter, neither party shall have
any further rights or obligations hereunder, except that if this
Agreement is terminated during or after the expiration of the
Inspection Period, then Purchaser's obligations to indemnify under
Section 3.3 shall survive such termination. If the transaction
contemplated hereby is consummated in accordance with the terms and
provisions hereof, the Earnest Money shall be credited against the
Purchase Price at Closing. If the transaction is not so
consummated, the Earnest Money shall be held and delivered by the
Title Company as hereinafter provided. All interest earned shall
be reported to the Internal Revenue Service as income of Purchaser.
Purchaser shall promptly execute all forms reasonably requested by
the Title Company.
(c) The balance of the Purchase Price, as adjusted by the
prorations and credits specified herein, less the Earnest Money,
shall be paid on the Closing Date in the manner set forth in
Section 7.2.
III.
Inspection
3.1 Inspection Period. Seller shall permit Purchaser and its
authorized agents and representatives to enter upon the Real
Property at all reasonable times during normal business hours to
inspect and conduct reasonably necessary tests which are approved
in writing by Seller, which approval shall not be unreasonably
withheld. Such entry and inspections may be conducted only during
the period ("Inspection Period") commencing on the Effective Date
(as defined in Section 10.3) and ending on the date which is thirty
(30) days after the Effective Date; provided, however, that so long
as this Agreement has not been terminated, Purchaser shall have the
right to enter upon the Real Property at all reasonable times
during normal business hours subsequent to the expiration of the
Inspection Period and prior to Closing for the purposes of
continuing its inspection of the same so long as Purchaser complies
with each of the provisions of this Article III relating to such
entry and inspection. Notwithstanding the foregoing, in no event
shall such entry and inspection subsequent to the expiration of the
Inspection Period serve to extend Purchaser's right to terminate
this Agreement prior to the expiration of the Inspection Period as
provided in Section 3.4 hereof. Purchaser shall notify Seller, in
writing, of its intention, or the intention of its agents or
representatives, to enter the Real Property at least forty-eight
(48) hours prior to such intended entry, and obtain Seller's prior
written consent to any tests to be conducted. Purchaser shall bear
the cost of all inspections and tests. At Seller's option, Seller
may be present for any inspection or test.
3.2 Document Review.
(a) Documents. Within five (5) days of the Effective
Date, Seller shall deliver to Purchaser, to the extent they are in
Seller's possession, copies of the documents described on Exhibit
"B" attached hereto and incorporated herein by reference
(collectively, the "Delivered Documents"). Seller agrees to allow
Purchaser, its authorized agents and representatives, to inspect
and make copies at its own expense, of environmental reports and
studies prepared for the benefit of Seller, assessments (special or
otherwise) statements, ad valorem and personal property tax bills,
notices and correspondence from governmental entities, lease
agreements, rent rolls, plans and specifications, operating
statements, certificates of occupancy, licenses, pleadings and
other documents filed in connection with litigation, and books,
records, files and related items relating exclusively to the
Property, if any, which are in Seller's possession at either the
office of Seller or at the Property (at Seller's option) (such
reports, studies, statements, bills, notices, correspondence, lease
agreements, rent rolls, plans and specifications, certificates,
licenses, pleadings, documents, books, records, files, and related
items, together with the Delivered Documents, are hereinafter
collectively referred to as the "Documents".)
(b) Proprietary Information. Purchaser acknowledges that
any and all of the Documents are proprietary and confidential in
nature and will be delivered to Purchaser solely to assist
Purchaser in determining the feasibility of purchasing the
Property. Purchaser agrees not to disclose the contents of the
Documents to any party outside of Purchaser's organization except
to certain of its attorneys, accountants, lenders, or investors
(collectively, the "Permitted Outside Parties"). Purchaser further
agrees that the Documents shall be disclosed and exhibited only to
those persons within Purchaser's organization or to those Permitted
Outside Parties who are responsible for determining the feasibility
of Purchaser's acquisition of the Property and who have agreed in
writing to preserve the confidentiality of such information as
required herein. In permitting the Permitted Outside Parties to
review the Documents or other information to assist Purchaser,
Seller has not waived any privilege or claim of confidentiality
with respect thereto, and no third party benefits or relationships
of any kind, either express or implied, have been offered, intended
or created by Seller and any such claims are expressly rejected by
Seller and waived by Purchaser and the Permitted Outside Parties,
for whom, by its execution of this Agreement, Purchaser is acting
as an agent with regard to such waiver.
(c) Return of Documents. Purchaser shall return all of
the Documents, any and all copies Purchaser has made of the
Documents, and all copies of any studies, reports or test results
obtained by Purchaser in connection with its inspection of the
Property (collectively, "Purchaser's Information") on the earlier
to occur of (i) such time as Purchaser determines that it shall not
acquire the Property, or (ii) such time as this Agreement is
terminated for any reason.
(d) No Representation or Warranty by Seller. Purchaser
hereby acknowledges that neither Seller nor Asset Manager
(hereinafter defined) has made and does not make any warranty or
representation regarding the truth, accuracy or completeness of the
Documents or the source(s) thereof, and that Seller and Asset
Manager have not undertaken any independent investigation as to the
truth, accuracy or completeness of the Documents and are providing
the Documents solely as an accommodation to Purchaser. Seller
expressly disclaims any and all liability for representations or
warranties, express or implied, statements of fact and other
matters contained in the Documents, or for any omissions from the
Documents, or in any other written or oral communications
transmitted or made available to Purchaser. Purchaser shall rely
solely upon its own investigation with respect to the Property,
including, without limitation, the Property's physical,
environmental or economic condition, compliance or lack of
compliance with any ordinance, order, permit or regulation or any
other attribute or matter relating thereto.
3.3 Inspection Obligations.
(a) Purchaser's Responsibilities. In conducting any
inspections, investigations or tests of the Property and/or
Documents, Purchaser and its agents and representatives shall: (i)
not disturb the Tenants or interfere with their use of the Property
pursuant to their respective Leases; (ii) not interfere with the
operation and maintenance of the Property; (iii) not damage any
part of the Property or any personal property owned or held by any
Tenant or third party; (iv) not injure or otherwise cause bodily
harm to Seller, Asset Manager, or their respective agents, guests,
invitees, contractors and employees or any Tenant or their guests
or invitees; (v) maintain comprehensive general liability
(occurrence) insurance in terms and amounts satisfactory to Seller
covering any accident arising in connection with the presence of
Purchaser, its agents and representatives on the Property and shall
deliver a certificate of insurance verifying such coverage to
Seller prior to entry upon the Property; (vi) promptly pay when due
the costs of all tests, investigations, and examinations done with
regard to the Property; (vii) not permit any liens to attach to the
Real Property by reason of the exercise of its rights hereunder;
(viii) fully restore the Land and the Improvements to the condition
in which the same were found before any such inspection or tests
were undertaken; (ix) not reveal or disclose any information
obtained during the Inspection Period concerning the
Property and the Documents to anyone outside Purchaser's
organization, except in accordance with the confidentiality
standards set forth in Section 3.2(d) hereof; and (x) deliver to
Seller a copy of all Purchaser's Information.
(b) PURCHASER'S AGREEMENT TO INDEMNIFY. PURCHASER HEREBY
INDEMNIFIES AND HOLDS SELLER AND ASSET MANAGER HARMLESS FROM AND
AGAINST ANY AND ALL LIENS, CLAIMS, CAUSES OF ACTION, DAMAGES,
LIABILITIES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES)
(COLLECTIVELY, "CLAIMS") ARISING OUT OF PURCHASER'S INSPECTIONS OR
TESTS OR ANY VIOLATION OF THE PROVISIONS OF THIS SECTION 3.3,
EXCEPT FOR SUCH CLAIMS AS MAY BE CAUSED BY THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF SELLER.
(c) Right of Termination. If, during the Inspection
Period, Purchaser shall, for any reason, in Purchaser's sole
discretion, judgment and opinion, be dissatisfied with any aspect
of the Property or any item examined by Purchaser pursuant to this
Agreement, Purchaser shall be entitled, as its sole remedy, to
terminate this Agreement by giving written notice to Seller on or
before the expiration of the Inspection Period, whereupon all of
the provisions of this Agreement (except Section 3.3) shall
terminate. Upon such termination, neither Seller nor Purchaser
shall have any further obligation or liability to the other
hereunder, except as provided in Sections 3.3 and 7.4 hereof. Upon
Purchaser's delivery to Seller of the Documents and Purchaser's
Information, the Earnest Money shall be returned to Purchaser,
subject to the operation of Sections 3.3 and 7.4.
3.4 Property Conveyed "As Is."
(a) DISCLAIMER OF REPRESENTATIONS AND WARRANTIES BY
SELLER. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY,
IT IS UNDERSTOOD AND AGREED THAT EXCEPT AS SET FORTH IN SECTION
10.12 HEREOF, SELLER AND ASSET MANAGER HAVE NOT MADE AND ARE NOT
NOW MAKING, AND THEY SPECIFICALLY DISCLAIM, ANY WARRANTIES,
REPRESENTATIONS OR GUARANTIES OF ANY KIND OR CHARACTER, EXPRESS OR
ENTITLED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, WITH RESPECT TO
THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, WARRANTIES,
REPRESENTATIONS OR GUARANTIES AS TO (i) MATTERS OF TITLE (OTHER
THAN SELLER'S WARRANTY OF TITLE SET FORTH IN THE DEED [HEREINAFTER
DEFINED) TO BE DELIVERED AT CLOSING); (ii) ENVIRONMENTAL MATTERS
RELATING TO THE PROPERTY OR ANY PORTION THEREOF; (iii) GEOLOGICAL
CONDITIONS, INCLUDING, WITHOUT LIMITATION, SUBSIDENCE, SUBSURFACE
CONDITIONS, WATER TABLE, UNDERGROUND WATER RESERVOIRS, LIMITATIONS
REGARDING THE WITHDRAWAL OF WATER AND EARTHQUAKE FAULTS AND THE
RESULTING DAMAGE OF PAST AND/OR FUTURE EARTHQUAKES; (iv) WHETHER, AND
THE EXTENT TO WHICH, THE PROPERTY OR ANY PORTION THEREOF IS
AFFECTED BY ANY STREAM (SURFACE OR UNDERGROUND), BODY OF WATER,
FLOOD PRONE AREA, FLOOD PLAIN, FLOODWAY OR SPECIAL FLOOD HAZARD;
(v) DRAINAGE; (vi) SOIL CONDITIONS, INCLUDING THE EXISTENCE OF
INSTABILITY, PAST SOIL REPAIRS, SOIL ADDITIONS OR CONDITIONS OF
SOIL FILL, OR SUSCEPTIBILITY TO LANDSLIDES, OR THE SUFFICIENCY OF
ANY UNDERSHORING; (vii) ZONING TO WHICH THE PROPERTY OR ANY PORTION
THEREOF MAY BE SUBJECT; (viii) THE AVAILABILITY OF ANY UTILITIES TO
THE PROPERTY OR ANY PORTION THEREOF, INCLUDING, WITHOUT LIMITATION,
WATER, SEWAGE, GAS AND ELECTRIC; (ix) USAGES OF ADJOINING PROPERTY;
(x) ACCESS TO THE PROPERTY OR ANY PORTION THEREOF; (xi) THE VALUE,
COMPLIANCE WITH THE PLANS AND SPECIFICATIONS, SIZE, LOCATION, AGE,
USE, DESIGN, QUALITY, DESCRIPTION, SUITABILITY, STRUCTURAL
INTEGRITY, OPERATION, TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION
OF THE PROPERTY OR ANY PORTION THEREOF, OR ANY INCOMEE, EXPENSES,
CHARGES, LIENS, ENCUMBRANCES, RIGHTS OR CLAIMS ON OR AFFECTING OR
PERTAINING TO THE PROPERTY OR ANY PART THEREOF; (xii) THE PRESENCE
OF HAZARDOUS SUBSTANCES (HEREINAFTER DEFINED) IN OR ON, UNDER OR IN
THE VICINITY OF THE PROPERTY; (xiii) THE CONDITION OR USE OF THE
PROPERTY OR COMPLIANCE OF THE PROPERTY WITH ANY OR ALL PAST,
PRESENT OR FUTURE FEDERAL, STATE OR LOCAL ORDINANCES, RULES,
REGULATIONS OR LAWS, BUILDING, FIRE OR ZONING ORDINANCES, CODES OR
OTHER SIMILAR LAWS;(xiv) THE EXISTENCE OR NON-EXISTENCE OF
UNDERGROUND STORAGE TANKS; (xv) ANY OTHER MATTER AFFECTING THE
STABILITY OR INTEGRITY OF THE REAL PROPERTY; (xvi) THE POTENTIAL
FOR FURTHER DEVELOPMENT OF THE PROPERTY; (xvii) THE EXISTENCE OF
VESTED LAND USE, ZONING OR BUILDING ENTITLEMENTS AFFECTING THE
PROPERTY; (xviii) THE MERCHANTABILITY OF THE PROPERTY OR FITNESS OF
THE PROPERTY FOR ANY PARTICULAR PURPOSE (PURCHASER AFFIRMING THAT
PURCHASER HAS NOT RELIED ON SELLER'S OR ASSET MANAGER'S SKILL OR
JUDGMENT TO SELECT OR FURNISH THE PROPERTY FOR ANY PARTICULAR
PURPOSE, AND THAT SELLER MAKES NO WARRANTY THAT THE PROPERTY IS FIT
FOR ANY PARTICULAR PURPOSE); OR (xix) TAX CONSEQUENCES (INCLUDING,
BUT NOT LIMITED TO, THE AMOUNT, USE OR PROVISIONS RELATING TO ANY
TAX CREDITS).
(b) Sale "As Is". EXCEPT AS SET FORTH IN SECTION 10.12
HEREOF, PURCHASER HAS NOT RELIED UPON AND WILL NOT RELY UPON,
EITHER DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF
SELLER OR ASSET MANAGER OR ANY OF THEIR RESPECTIVE AGENTS AND
ACKNOWLEDGES THAT NO SUCH REPRESENTATIONS HAVE BEEN MADE.
PURCHASER REPRESENTS THAT IT IS A KNOWLEDGEABLE, EXPERIENCED AND
SOPHISTICATED PURCHASER OF REAL ESTATE AND THAT IT IS RELYING
SOLELY ON ITS OWN EXPERTISE AND THAT OF PURCHASER'S CONSULTANTS IN
PURCHASING THE PROPERTY. PURCHASER WILL CONDUCT SUCH INSPECTIONS
AND INVESTIGATIONS OF THE PROPERTY AS PURCHASER DEEMS NECESSARY,
INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL
CONDITIONS THEREOF, AND SHALL RELY UPON SAME. UPON CLOSING,
PURCHASER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING,
BUT NOT LIMITED TO, ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS,
MAY NOT RAVE BEEN REVEALED BY PURCHASER'S INSPECTIONS AND
INVESTIGATIONS. PURCHASER ACKNOWLEDGES AND AGREES THAT UPON
CLOSING, SELLER SHALL SELL AND CONVEY TO PURCHASER AND PURCHASER
SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS," WITH ALL FAULTS.
PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT THERE ARE NO ORAL
AGREEMENTS, WARRANTIES OR REPRESENTATIONS, COLLATERAL TO OR
AFFECTING THE PROPERTY BY SELLER, ANY AGENT OF SELLER OR ANY THIRD
PARTY. THE TERMS AND CONDITIONS OF TIES SECTION 3.5 SHALL
EXPRESSLY SURVIVE THE CLOSING, NOT MERGE WITH THE PROVISIONS OF ANY
CLOSING DOCUMENTS AND SHALL BE INCORPORATED INTO THE DEED. SELLER
IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN
STATEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO THE
PROPERTY FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE,
SERVANT OR OTHER PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH
OR REFERRED TO HEREIN. PURCHASER ACKNOWLEDGES THAT THE PURCHASE
PRICE REFLECTS THE "AS IS" NATURE OF THIS SALE AND ANY FAULTS,
LIABILITIES, DEFECTS OR OTHER ADVERSE MATTERS THAT MAY BE
ASSOCIATED WITH THE PROPERTY. PURCHASER HAS FULLY REVIEWED THE
DISCLAIMERS AND WAIVERS SET FORTH IN THIS AGREEMENT WITH ITS
COUNSEL AND UNDERSTANDS THE SIGNIFICANCE AND EFFECT THEREOF.
PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT THE PROVISIONS OF
THIS ARTICLE III AND IN PARTICULAR THIS SECTION 3.5 ARE AN INTEGRAL
PART OF THIS AGREEMENT AND THAT SELLER WOULD NOT HAVE AGREED TO
SELL THE PROPERTY TO PURCHASER FOR THE PURCHASE PRICE WITHOUT SUCH
PROVISIONS.
(c) "Hazardous Substances" Defined. For purposes hereof,
"Hazardous Substances" means any hazardous, toxic or dangerous
waste, substance or material, pollutant or contaminant, as defined
for purposes of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Sections 9601 et
seq.), as amended ("CERCLA"), or the Resource Conservation and
Recovery Act (42 U.S.C. Sections 6901 et seq.), as amended
("RCRA"), or any other federal, state or local law, ordinance,
rule or regulation applicable to the Property, or any substance
which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous, or any
substance which contains gasoline, diesel fuel or other petroleum
hydrocarbons, polychlorinated biphenyls (pcbs), radon gas, urea
formaldehyde, asbestos, lead or electromagnetic waves.
3.5 Investigative Studies. As additional consideration for the
transaction contemplated herein, Purchaser agrees that it will
provide to Seller, immediately following the receipt of same by
Purchaser, copies of any and all reports, tests or studies
involving structural or geologic conditions or environmental,
hazardous waste or hazardous substances contamination of the
Property which reports, tests or studies shall be addressed to both
Seller and Purchaser at no cost to Seller; provided, however,
Purchaser shall have no obligation to cause any such tests or
studies to be performed on the Property. In the event that such
reports, tests or studies indicate that additional investigation
may be required, either Seller or Purchaser may request (at the
cost of the party requesting same) that such additional
investigation be completed, provided that neither Seller nor
Purchaser shall be obligated to undertake any such additional
investigation and either Purchaser or Seller shall be entitled to
terminate this Agreement rather than proceed with any such
additional investigation. In the event such additional
investigation is undertaken, the right to terminate as provided in
this Section shall continue until ten (10) days after receipt of
such supplemental reports, tests or studies, which receipt of
reports shall be accomplished within fifteen (I 5) days from the
request for same unless a longer period is mutually agreed upon by
Seller and Purchaser. Seller hereby acknowledges that Purchaser
has not made and does not make any warranty or representation
regarding the truth or accuracy of any such studies or reports and
has not undertaken any independent investigation as to the truth or
accuracy thereof. Purchaser shall have no liability or culpability
of any nature as a result of having provided such information to
Seller or as a result of Seller's reliance thereon. Purchaser
shall be responsible for any and all costs, claims, damages and
liabilities caused by any testing performed or requested by
Purchaser.
3.6 Purchaser Represented by Counsel. Purchaser hereby
represents and warrants to Seller that: (i) Purchaser is not in a
significantly disparate bargaining position in relation to Seller;
(ii) Purchaser is represented by legal counsel in connection with
the transaction contemplated by this Agreement; and (iii) Purchaser
is purchasing the Property for business, commercial, investment or
other similar purpose and not for use as Purchaser's residence.
3.7 Purchaser's Release of Seller and Seller Parties. Seller
and Asset Manager are hereby released from all responsibility and
liability regarding the condition (including the presence in the
soil, air, structures and surface and subsurface waters, of
materials or substances that have been or may in the future be
determined to be toxic, hazardous, undesirable or subject to
regulation and that may need to be specially treated, handled
and/or removed from the Property under current or future federal,
state and local laws, regulations or guidelines), valuation,
marketability or utility of the Property, or its suitability for
any purpose whatsoever. Purchaser expressly acknowledges that
Purchaser has not relied on any warranties, promises,
understandings or representations, express or implied, oral or
written, of Seller or Asset Manager or of any of their respective
agents, relating to the Property which are not contained in this
Agreement, and/that Purchaser is acquiring the Property in its
present condition and state of repair, "as is, where is", with all
defects, latent or apparent. Purchaser acknowledges that any
information of any type which Purchaser has received or may receive
from Seller, Asset Manager or their respective agents, including,
without limitation, any environmental reports and surveys, is
furnished on the express condition that Purchaser shall make an
independent verification of the accuracy of such information, all
such information being furnished without any warranty whatsoever.
Purchaser agrees that Purchaser will not attempt to assert any
liability against Seller, its officers, employees, agents,
controlling persons or affiliates ("Seller Parties") for furnishing
such information, and Purchaser agrees to indemnify and hold the
Seller Parties free and harmless for, from and against any and all
such claims of liability by Purchaser. This indemnity shall
survive Closing or the earlier termination of this Agreement.
IV.
Survey
4.1 Survey. Within ten (10) days of the Effective Date, Seller
shall deliver to Purchaser a copy of the survey ("Survey") of the
Real Property currently in the possession of Seller, if any. If
revisions, modifications, or recertifications to the Survey are
necessary in order for the Title Company to delete the survey
exception from the Title Policy (as defined in Section 5. 1.) or
for the Title Company to issue the Title Policy without the
standard exceptions, or to otherwise satisfy Purchaser's
objectives, all such costs shall be borne exclusively by Purchaser.
V.
Title
5.1 Title Commitment. Within ten (10) days after the Effective
Date, Seller shall furnish to Purchaser a title commitment (the
"Commitment"), by the terms of which Title Company, as issuing
agent for Chicago Title Insurance Corporation, agrees to issue to
Purchaser at Closing an owner's policy of title insurance (the
"Title Policy") in the amount of the Purchase Price on the standard
ALTA form used in the State of Florida, insuring Purchaser's fee
simple title to the Real Property to be good and marketable,
subject to the terms of such policy and the title exceptions. As
used herein, the term "Title Objection Period" shall mean a period
commencing on the first day following Seller's delivery to
Purchaser of the Survey and Commitment and ending ten (10) days
thereafter. All matters shown on the Survey and exceptions listed
in the Commitment which are not objected to by Purchaser by
delivery of written notice to Seller within the Title Objection
Period shall be conclusively deemed to be acceptable to Purchaser.
In the event Purchaser timely objects to any title exception or
Survey matter ("Title Objection"), Seller may, but shall not be
obligated to, cure such Title Objection; provided, however, if
Seller is able and willing to eliminate or cure such Title
Objection, Seller shall notify Purchaser in writing within five (5)
days after the Title Objection Period ("Seller's Notice Period") of
such facts (said notice hereinafter called "Seller's Title
Notice"), in which case the elimination or curing of the Title
Objection shall be completed on or before the Closing Date (as
defined in Section 7.1). In the event Seller does not deliver
Seller's Title Notice to Purchaser within Seller's Notice Period,
Purchaser is deemed to be notified that Seller is unable or
unwilling to cure the Title Objection. In the event Seller (i)
does not deliver Seller's Title Notice, or (ii) notifies Purchaser
that Seller is unable or unwilling to cure any Title Objection,
Purchaser shall be deemed to have waived the Title Objections
unless, within five (5) days following the expiration of Seller's
Notice Period, Purchaser delivers to Seller written notice
terminating this Agreement. Notwithstanding anything herein to the
contrary, in the event that Purchaser's right to terminate this
Agreement pursuant to any provision of this Section 5.1 has not
expired prior thereto, it shall expire upon expiration of the
Inspection Period. As used in this Agreement, the term "Permitted
Exceptions" shall mean all matters either shown on the Survey or
listed in the Commitment as either exceptions or exclusions to
which Purchaser does not raise a Title Objection within the Title
Objection Period or, having objected, Purchaser waives or is deemed
to have waived in accordance with the provisions of this Section 5.
1. Notwithstanding the foregoing, Purchaser and Seller acknowledge
that although Seller has no obligation to cure any title matters
(whether or not the same constitute Title Objections), Seller does
agree (subject to Purchaser's full performance hereunder) to
deliver title to the Property at Closing free and clear of any and
all liens of the deeds of trust and/or mortgages created by Seller,
as reflected on the Commitment. Furthermore, Seller has no
obligation to ensure that the Title Company will provide extended
or comprehensive coverage or any endorsements or amendments
thereto, all of which, if Purchaser elects to obtain such coverage,
shall be Purchaser's responsibility and shall be at Purchaser's
expense.
In the event of termination of this Agreement pursuant to this
Section 5.1, upon Purchaser's delivery of the Documents and the
Purchaser's Information, the Earnest Money shall be delivered to
Purchaser and thereafter neither party shall have any further
rights or obligations hereunder, except for the rights and
obligations arising pursuant to Sections 3.3, 3.5 and 7.4.
VI.
Remedies
6.1 Seller's Remedies. Other than the matters provided in
Sections 3.3 and 7.4 hereof, in the event Purchaser fails to
perform its obligations pursuant to this Agreement for any reason
except failure by Seller to perform hereunder, Seller shall be
entitled to terminate this Agreement and recover the Earnest Money
as liquidated damages and not as penalty, in full satisfaction of
claims against Purchaser hereunder. Seller and Purchaser agree
that the Seller's damages resulting from Purchaser's default are
difficult, if not impossible, to determine and the Earnest Money is
a fair and reasonable estimate of those damages which has been
agreed to in an effort to cause the amount of said damages to be
certain. Provided further, however, in the event of Purchaser's
default or a termination of this Agreement and notwithstanding
anything in this Section 6.1 to the contrary, Seller shall have the
right to submit its claims to arbitration in accordance with the
provisions of Section 10.16 in the event Purchaser or any party
related to or affiliated with Purchaser is asserting any claims or
right to the Property that would otherwise delay or prevent Seller
from having clear, indefeasible and marketable title to the
Property. In all other events Seller's remedies shall be limited
to those described in Sections 3.3. 6.1. 6.3, 6.4 and 7.4.
6.2 Purchaser's Remedies. In the event Seller fails to perform
its obligations pursuant to this Agreement for any reason except
failure by Purchaser to perform hereunder, Purchaser shall elect,
as its sole remedy, either to (i) terminate this Agreement by
giving Seller timely written notice of such election prior to or at
Closing and, upon delivery of the Documents and the Purchaser's
Information, recover the Earnest Money in accordance with Section
6.4, or (ii) enforce specific performance. Notwithstanding
anything herein to the contrary, Purchaser shall be deemed to have
elected to terminate this Agreement if Purchaser fails to deliver
to Seller written notice of its intent to file a claim or assert a
cause of action for specific performance against Seller on or
before ninety (90) days following the Closing Date or, having given
such notice fails to file a lawsuit asserting said claim or cause
of action in Duval County, Florida, within one hundred eighty (I
80) days following the Closing Date. Purchaser's remedies shall be
limited to those described in Sections 6.2. 6.3 and 6.4. IN NO
EVENT SHALL SELLER, ITS DIRECT OR INDIRECT PARTNERS, SHAREHOLDERS,
OWNERS OR AFFILIATES, ANY OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF
THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING PERSON THEREOF HAVE
ANY LIABILITY, BEYOND ITS INTEREST IN THE PROPERTY, FOR ANY CLAIM,
CAUSE OF ACTION OR OTHER LIABILITY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE PROPERTY, WHETHER BASED ON CONTRACT, COMMON
LAW, STATUTE, EQUITY OR OTHERWISE.
6.3 Attorneys' Fees. In the event either party hereto is
required to employ an attorney in connection with claims by one
party against the other arising from the operation of this
Agreement, the non-prevailing party shall pay the prevailing party
all reasonable fees and expenses, including attorneys' fees,
incurred in connection with such transaction.
6.4 Disposition of Earnest Money. In the event of a
termination of this Agreement by either Seller or Purchaser, Title
Company is authorized to deliver the Earnest Money to the party
hereto entitled to same pursuant to the terms hereof on or before
the fifth (5th) day following receipt by the Title Company and
non-terminating party of written notice of such termination from the
terminating party, unless the other party hereto notifies the Title
Company that it disputes the right of the other party to receive
the Earnest Money. In such event, the Title Company shall
interplead the Earnest Money into a court of competent jurisdiction
in Duval County, Florida. All attorneys' fees and costs and Title
Company's costs and expenses incurred in connection with such
interpleader shall be assessed against the party that is not
awarded the Earnest Money or if the Earnest Money is distributed in
part to both parties, then in the inverse proportion of such
distribution. Notwithstanding the foregoing, in the event this
Agreement is terminated and Purchaser is entitled to receive the
Earnest Money, Title Company is not authorized to deliver the
Earnest Money to Purchaser unless and until Seller notifies Title
Company in writing that it has received the Documents and the
Purchaser's Information. Seller agrees to deliver said notice
promptly following its receipt of the Documents and the Purchaser's
Information.
VII.
Closing
7.1 Closing Date. The Closing shall be held in the offices of
the Title Company (or such other location as may be mutually agreed
upon by Seller and Purchaser) at 10:00 a.m. (Central Daylight
Savings Time) on or before the fifteenth (15th) day following the
expiration of the Inspection Period.
7.2 Closing Matters.
(a) Seller's Deliveries. At Closing, Seller shall
deliver:
(i) to the extent available and in Seller's
possession or control, originals of all Leases and Contracts
affecting the Real Property;
(ii) possession of the Property, subject to the rights
of Tenants and the Permitted Exceptions;
(iii) to the extent available and in Seller's
possession, copies of all necessary permits issued by appropriate
governmental authorities and utility companies relating to the
Property;
(iv) an executed and acknowledged special warranty
deed ("Deed") in the form set forth in Exhibit "C" conveying the
Real Property;
(v) a bill of sale, assignment and assumption in the
form of Exhibit "D" ("Bill of Sale, Assignment and Assumption"),
executed and acknowledged by Seller, conveying without warranty the
Personalty and assigning Seller's interest in the Leases and all
assignable non-cancelable or approved (by Purchaser) cancelable
Contracts. Seller shall assign the Leases and Contracts to
Purchaser at Closing, and Purchaser shall assume all liability
thereunder. Purchaser hereby agrees (which agreement shall survive
the closing) to indemnify, defend, and hold Seller free and
harmless from any loss, injury, liability, damage, claim, lien,
cost or expense, including attorneys' fees and costs, arising out
of any claims related to such Leases and Contracts relating to acts
or omissions occurring from and after the Closing Date; and
(vi) a certificate of Seller respecting the "non-foreign"
status of Seller in the form set forth in Exhibit "E" attached hereto.
(b) Purchaser's Deliveries. At Closing, Purchaser shall
deliver:
(i) the remaining funds for the Purchase Price to the
Title Company (all monies Purchaser is required to deliver shall be
sent by wire transfer of immediately available federal funds to the
account-designated by Title Company and available for disbursement
no later than 2:00 p.m. [Central Daylight Savings Time] on the
Closing Date);
(ii) the Bill of Sale, Assignment and Assumption, duly
executed and acknowledged by Purchaser; and
(iii) such other documents as may be reasonably
required by Seller or Title Company, including, but not limited to,
a certified copy of a resolution of the board of directors of
Purchaser (if a corporation) authorizing Purchaser to consummate
the purchase of the Property in accordance with this Agreement and
designating those persons authorized to execute and deliver all
necessary documents at Closing.
(c) Prorations. At Closing, the following items shall be
prorated as of the date of Closing with all items of income and
expense for the Property being borne by Purchaser for the date of
Closing: Rents; fees and assessments; prepaid expenses and
obligations under Contracts; accrued expenses; ad valorem taxes and
other personal property taxes and assessments (collectively, "Ad
Valorem Taxes") for the year of Closing on a due date basis paid in
advance; and tax service costs ("Tax Service Costs"), if any,
incurred by Seller in connection with obtaining a reduction in the
ad valorem tax valuation of the Property for the year of Closing.
(i) If the Ad Valorem Taxes for the year of Closing
are not known or cannot be reasonably estimated, taxes shall be
adjusted based on taxes for the year prior to closing. If the Tax
Service Costs incurred in the year of Closing are not known, the
costs will be adjusted based on the best information available to
Seller at the time of Closing. Any additional Ad Valorem Taxes
relating to the year of Closing or prior years arising out of a
change in the use of the Real Property or a change in ownership
shall be paid by Purchaser when assessed. The provisions of this
Section 7.2(.Q) shall survive Closing.
(ii) Purchaser shall take all steps necessary to
effectuate the transfer of all utilities to its name as of the
Closing Date and, where necessary, post deposits with the utility
companies. Purchaser shall further ensure that all utility meters
are read as of the Closing Date. Seller shall pay all utilities up
to and including the Closing Date and all utilities thereafter
shall be paid for by Purchaser. Seller shall be entitled to
recover any and all deposits held by any utility company as of the
Closing Date. To the extent Purchaser fails to provide, where
required, deposits to any such utility company(ies) so as to
prevent the timely release of Seller's deposit(s) by the utility
company(ies) on the Closing Date, the amount of such deposit(s)
shall be credited to Seller and the Purchase Price shall be
adjusted accordingly. In such event, the deposit(s) will be
assigned to Purchaser, who shall have rights to have the deposit(s)
released to it upon satisfaction of the conditions imposed by the
utility company(ies).
(iii) Seller shall retain the Security Deposits,
if any, and the amount thereof (as reflected in the lease files)
shall be credited to the Purchase Price.
(iv) At Closing, Seller shall pay to the Purchaser, in
cash, the amount of any rents paid to the Seller by Tenants for the
Closing Date and periods subsequent to the Closing Date. No
proration shall be made for rents and other charges delinquent as
of the Closing Date (collectively, "Delinquent Rents"). All
Delinquent Rents collected on or after the Closing Date shall be
allocated to the earliest month for which rental is still due for
that Tenant. Any Delinquent Rents collected by Purchaser after
Closing, shall be forthwith paid by Purchaser to Seller. Seller
shall be entitled to collect all Delinquent Rents. Once any
Delinquent Rents are in excess of ninety (90) days past due, all
rights to pursue collection of such amounts shall vest solely in
Seller; provided, however, that Seller shall not be entitled to
pursue eviction proceedings in connection with any such legal
action.
(d) Purchaser's Assumption. Purchaser agrees to: (i)
assume and perform all of the covenants of Seller and Seller's
predecessor in title pursuant to the Leases and Contracts, which
are performable subsequent to the Closing Date; (ii) deliver
written notice ("Security Deposit Notice") to each of the Tenants
of the Property in form reasonably satisfactory to Seller, to the
effect, among other things, that Purchaser has assumed all
liability with respect to the Security Deposits; (iii) on or before
ten (10) days following the Closing Date, deliver to Seller a
certification to the effect that the Security Deposit Notices have
been delivered to all Tenants of the Property; and (iv) collect on
behalf of Seller all Delinquent Rents and deliver all such sums
collected to Seller promptly thereafter. Purchaser indemnifies and
holds Seller harmless from and against any and all claims, costs
and expenses (including reasonable attorneys' fees) asserted
against or incurred by Seller and arising out of the failure of
Purchaser to perform its obligations pursuant to this Section
7.2(d).
(e) Preparation of Documents. All of the documents to be
executed at Closing shall be in the form prepared to the
satisfaction of Seller's counsel and delivered to Purchaser on or
before two (2) days prior to the Closing Date.
(f) Survival Provisions. The agreements set forth in
Section 7.2(c) and (d) shall survive the Closing and be enforceable
until fully performed.
7.3 Closing Costs. Except as otherwise provided in Sections
6.3 and 6.4, each party shall be responsible for the payment of its
own attorneys' fees incurred in connection with the transaction
that is the subject of this Agreement. Any escrow fee charged by
the Title Company shall be paid 1/2 by Seller and 1/2 by Purchaser.
Subject to the foregoing in this Section 7.3, Seller shall pay only
the costs for the Commitment, the Title Policy (except for extended
or comprehensive coverage, any endorsements or amendments thereto
or any Title Company inspection fees, which shall all be at the
cost and expense of Purchaser) and one-half (1/2) of any and all
recording, transfer and documentary stamp fees or taxes. Other
than the costs and fees which are to be paid by Seller pursuant to
the preceding sentence, Purchaser shall pay any and all other
costs, fees or taxes, including, without limitation, the other one-half
(1/2) of all recording, transfer and documentary stamp fees or
taxes and any and all mortgage fees or taxes, and all other closing
costs of any nature and costs of any inspections or tests Purchaser
authorizes or conducts.
7.4 Real Estate Commissions. Seller and Purchaser each
represent and warrant to the other that no real estate brokerage
commission is payable to any person or entity in connection with
the transaction contemplated hereby, and each agrees to and does
hereby indemnify and hold the other harmless against the payment of
any commission to any person or entity claiming by, through or
under Seller or Purchaser, as applicable. This indemnification
shall extend to any and all claims, liabilities, costs and expenses
(including reasonable attorneys' fees and litigation costs) arising
as a result of such claims and shall survive the Closing.
VIII.
Condemnation
8.1 Condemnation. If, prior to Closing, any governmental
authority or other entity having condemnation authority shall
institute an eminent domain proceeding or take any steps
preliminary thereto (including the giving of any direct or indirect
notice of intent to institute such proceedings) with regard to a
Material Portion (as hereinafter defined) of the Real Property, and
the same is not dismissed on or before ten (IO) days prior to
Closing, Purchaser shall be entitled, as its sole remedy, to
terminate this Agreement by giving written notice to Seller on or
before the earlier to occur of (a) ten (10) days following notice
by Seller to Purchaser of such condemnation, or (b) the Closing
Date. In the event Purchaser does not terminate this Agreement
pursuant to the preceding sentence, Purchaser shall be conclusively
deemed to have elected to close the acquisition of the Property
subject to such condemnation and waives any right to terminate this
Agreement as a result thereof. For purposes of this Section, a
"Material Portion" shall mean that portion of the Real Property
which, if taken or condemned, would reduce the value of the
Property by not less than $1,000,000.00 or twenty-five percent
(25%) of the Purchase Price, whichever is greater. Notwithstanding
anything to the contrary herein, if any eminent domain proceeding
is instituted (or notice of which shall be given) solely for the
taking of any subsurface rights for utility easements or for any
right-of-way easement, and the surface may, after such taking, be
used in substantially the same manner as though such rights had not
been taken, Purchaser shall not be entitled to terminate this
Agreement as to any part of the Real Property, but any award
resulting therefrom shall be the exclusive property of Purchaser
upon Closing. In the event Purchaser elects to terminate this
Agreement under this Section 8.1, the Earnest Money shall be
returned to Purchaser upon Seller's receipt of the Documents and
Purchaser's Information in accordance with Section 6.4, and neither
party to this Agreement shall thereafter have any further rights or
obligations hereunder except as otherwise provided in Sections 3.3
and 7.4 hereof. If Purchaser waives (or is deemed to have waived)
the right to terminate this Agreement as a result of such a
condemnation, despite such condemnation, Seller and Purchaser shall
close this Agreement in accordance with the terms hereof with no
reduction in the Purchase Price, and Seller shall assign to
Purchaser at Closing all of Seller's right, title and interest in
and to all proceeds resulting or to result from said condemnation.
IX.
Risk of Loss
9.1 Risk of Loss. Until Closing, Seller alone shall bear the
risk of loss should there be damage to any of the Improvements by
fire or other casualty (collectively, "Casualty"). If, prior to
the Closing, any of the Improvements shall be damaged by a
Casualty, Seller shall deliver to Purchaser written notice
("Casualty Loss Notice") of such Casualty after it has made its
termination determination provided for in Section 9.2 hereof.
9.2 Material Loss. For the purposes of Section 9.2 and 9.3,
"Material Damage" shall mean damage to the Improvements of such
nature that the cost of restoring the same to their condition prior
to the Casualty will, in Seller's determination, exceed the greater
of $ 1,000,000.00 or twenty-five percent (25%) of the Purchase
Price, whether or not such damage is covered by insurance. If, in
Seller's determination, the Improvements have sustained Material
Damage by a Casualty, Seller may, at its option, terminate this
Agreement by delivering written notice to Purchaser on or before
Closing, and neither party hereto shall have any further rights or
obligations hereunder (except pursuant to Section 3.3 and 7.4
hereof). In the event Seller does not so terminate this Agreement,
Purchaser may, at its sole option, within fifteen (15) days after
delivery of the Casualty Loss Notice, either (a) terminate this
Agreement by delivering written notice of same to Seller, or (b)
waive its right of termination and proceed to close this
transaction in accordance with the terms hereof (clause (b) shall
be referred to herein as the "Waiver Option"). Failure of
Purchaser to deliver written notice of termination within said
fifteen (I 5) day period shall be conclusively deemed to be an
election by Purchaser of the Waiver Option. In the event Seller or
Purchaser elects to terminate this-Agreement under this Section
9.2, the Earnest Money shall be returned to Purchaser upon Seller's
receipt of the Documents and Purchaser's Information and thereafter
neither party to this Agreement shall thereafter have any further
rights or obligations hereunder, except as otherwise provided in
Sections 3.3 and 7.4 hereof. If Purchaser elects the Waiver
Option, then at the option of Seller, (a) Seller shall repair the
Improvements to substantially their condition prior to such damage,
or (b) Seller shall deliver to Purchaser an amount equal to the
deductible and assign to Purchaser all of its rights in the
resulting casualty insurance proceeds [but the amount of such
deductible plus insurance proceeds shall not exceed the lesser of
(i) the cost of repair or (ii) the Purchase Price] and a pro rata
share of the rental or business loss proceeds, if any, from the
insurance coverage. In the event Seller elects to assign insurance
proceeds, (A) Purchaser may notify all appropriate insurance
companies of its interest in the insurance proceeds, and (B) all
casualty insurance proceeds payable as a result of the loss
(subject to the limitation herein described) and Purchaser's pro
rata share of any rental or business loss proceeds shall be
assigned to Purchaser at Closing.
9.3 Non-Material Loss. In the event, in Seller's
determination, the Improvements have sustained less than Material
Damage by a Casualty, the rights and obligations of the parties
shall not be affected thereby and at the option of Seller, (a)
Seller shall repair the Improvements to substantially their
condition prior to such damage, or (b) Seller shall deliver to
Purchaser an amount equal to the deductible and assign to Purchaser
all of its rights in the resulting casualty insurance proceeds [but
the amount of such deductible plus insurance proceeds shall not
exceed the lesser of (i) the cost of repair or (ii) the Purchase
Price) and a pro rata share of the rental or business loss
proceeds, if any, from the insurance coverage. In the event Seller
elects to assign insurance proceeds, (A) Purchaser may notify all
appropriate insurance companies of its interest in the insurance
proceeds, and (B) all casualty insurance proceeds payable as a
result of the loss (subject to the limitation herein described) and
Purchaser's pro rata share of any rental or business loss proceeds
shall be assigned to Purchaser at Closing.
9.4 Delay in Completion of Repairs. If Seller has elected to
repair and if the repairs cannot be completed by the Closing Date,
the Seller may, at Seller's option, and following notice to
Purchaser of Seller's exercise of such option on or before Closing,
postpone the Closing Date until five (5) days following substantial
completion of the repairs, notwithstanding anything in Section 7.1
of this Agreement to the contrary.
9.5 Postponement of Closing. If, as a result of a Casualty,
any determination (including, but not limited to, a determination
by arbitration), election or agreement required by the terms of
this Article IX is not made by the Closing Date, the Closing Date
shall be extended until twenty (20) days after said determination,
election or agreement is made, subject to such further extension as
may be allowed by the terms of this Article IX, notwithstanding
anything in Section 7.1 of this Agreement to the contrary;
provided, however, if said determination, election or agreement has
not been made within thirty (30) days following the originally
scheduled Closing Date, this Agreement shall automatically
terminate and, provided that Purchaser is not in default hereunder,
neither party shall have any further rights or obligations
hereunder (except pursuant to Sections 3.3 and 7.4 hereof) and the
Earnest Money shall be returned to Purchaser following Purchaser's
delivery of the Documents and Purchaser's Information in accordance
with Section 6.4.
X.
Miscellaneous
10.1 Entire Agreement. This Agreement contains the entire
agreement of the parties hereto. There are no other agreements,
oral or written, and this Agreement can be amended only by written
agreement signed by the parties hereto, and by reference, made a
part hereof.
10.2 Agreement Binding on Parties. This Agreement, and the
terms, covenants, and conditions herein contained, shall inure to
the benefit of and be binding upon the heirs, personal
representatives, successors, and assigns of each of the parties
hereto. Purchaser may assign its rights under this Agreement upon
the following conditions: (i) the assignee of Purchaser must be an
affiliate of Purchaser or an entity controlling, controlled by, or
under common control with Purchaser, (ii) all of the Earnest Money
must have been delivered in accordance with Section 2.2, (iii) the
Inspection Period shall be deemed to have ended, (iv) Purchaser
shall remain primarily liable for the performance of Purchaser's
obligations, (v) Purchaser shall agree to reimburse Seller for its
attorneys' fees and expenses, if any, incurred in connection with
revisions to the closing documents, and (vi) a copy of the fully
executed written assignment and assumption agreement shall be
delivered to Seller at least ten (10) days prior to Closing.
10.3 Effective Date. The Effective Date of this Agreement shall
be the date on which the Title Company acknowledges (by execution
of the Joinder by Title Company) its receipt of a copy of this
Agreement executed by both Seller and Purchaser and receipt of the
Earnest Money. The execution hereof by Purchaser shall constitute
an offer by Purchaser to Seller to purchase the Property on the
terms and conditions herein stated, which must be accepted by
Seller on or before 5:00 P.M. on or before the third (3rd) day
after receipt, by the execution hereof by Seller. If Purchaser's
offer is not timely accepted, this Agreement shall be thereafter
null and void.
10.4 Notice. Any notice, communication, request, reply or
advice (collectively, "Notice") provided for or permitted by this
Agreement to be made or accepted by either party must be in
writing. Notice may, unless otherwise provided herein, be given or
served by (i) depositing the same in the United States mail,
postage paid, certified, and addressed to the party to be notified,
with return receipt requested, (ii) by delivering the same to such
party, or an agent of such party, in person or by commercial
courier, (iii) by facsimile, evidenced by confirmed receipt, such
facsimile notice to be followed by notice by one of the other
delivery methods described in this Section 10.4, or (iv) by
depositing the same into custody of a nationally recognized
overnight delivery service such as Federal Express Corporation,
Airborne Express, Emery or Purolator. Notice deposited in the mail
in the manner hereinabove described shall be effective on the third
day after such deposit. Notice given in any other manner shall be
effective only if and when received by the party to be notified
between the hours of 8:00 A.M. and 5:00 P.M. [Central Daylight
Savings Time] of any business day, with delivery made after such
hours to be deemed received the following business day. For the
purposes of notice, the addresses of the parties shall, until
changed as hereinafter provided, be as follows:
Seller: Mr. Paul Harris
TE-Two Real Estate Limited Partnership
c/o J.E. Robert Companies, Inc.
600 E. Las Colinas Boulevard, Suite 1900
Irving, Texas 75039
Fax: (214) 868-2560
with copy to: Charles T. Clark, Esq. and
Joel S. Reed, Esq.
Winstead Sechrest & Minick P.C.
1201 Elm Street, Suite 5400
Dallas, Texas 75270
Fax: (214) 745-5390
Purchaser: Mr. Marshall B. Edwards
Walden Residential Properties, Inc.
One Lincoln Centre - Lock Box 45
5400 LBJ Freeway, Suite 400
Dallas, Texas 75240
Fax: (214) 788-1550
with copy to: Ms. Robin Minick
Munsch Hardt Kopf Harr & Dinan
4000 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202
Fax: (214) 855-7584
The parties hereto shall have the right from time to time to
change their respective addresses, and each shall have the right to
specify as its address any other address within the United States
of America by at least five (5) days written notice to the other
party.
10.5 Time of the Essence. Time is of the essence in all things
pertaining to the performance of this Agreement.
10.6 Place of Performance. This Agreement is made and shall be
performable in Duval County, Florida, and shall be construed in
accordance with the laws of the State of Florida.
10.7 Currency. All dollar amounts are expressed in United
States currency.
10.8 Section Headings. The section headings contained in this
Agreement are for convenience only and shall in no way enlarge or
limit the scope or meaning of the various and several sections
hereof.
10.9 Obligations. To the extent necessary to carry out the
terms and provisions hereof, and unless otherwise specifically
provided elsewhere herein, the terms, conditions, obligations and
rights set forth herein shall not be deemed terminated at the time
of Closing, nor will they merge into the various documents executed
and delivered at the time of Closing.
10.10 Business Days. To the extent available and in
Seller's possession or control, originals of all Leases and
Contracts affecting the Real Property.
10.11 Purchaser's Representations and Warranties.
(a) Authority of Purchaser. Purchaser represents and
warrants that Purchaser has full right, power and authority to
enter into this Agreement and, at Closing, will have full right,
power and authority to consummate the sale provided for herein.
(b) No Bankruptcy or Receivership. That at no time on or
before the Closing Date, shall any of the following have occurred
with respect to Purchaser, and if Purchaser is a partnership, to
any general partners of Purchaser: (i) the commencement of a case
under Title I I of the United States Code, as now constituted or
hereafter amended, or under any other applicable federal or state
bankruptcy law or other similar law; (ii) the appointment of a
trustee or receiver of any property interest; (iii) an assignment
for the benefit of creditors; (iv) an attachment, execution or
other judicial seizure of a substantial property interest; (v) the
taking of, failure to take, or submission to any action indicating
an inability to meet its financial obligations as they accrue; or
(vi) a dissolution or liquidation, death or incapacity.
10.12 Representations and Warranties of Seller. Seller
hereby represents, warrants and covenants to Purchaser as follows:
(a) Seller has full right, power and authority to enter
into this Agreement and, at Closing will have full right, power and
authority to consummate the sale provided for herein.
(b) Seller has no actual knowledge of any breach or
violation of any legal requirement, ordinance, regulation, order,
decree, law or statute pertaining to the Real Property or any
portion thereof and, to the best of Seller's actual knowledge, the
Real Property is not currently subject to any pending condemnation
action.
10.13 Effect of Representations and Warranties. Where the
foregoing representations, warranties and covenants of Seller or
Purchaser are qualified to the best of such party's knowledge or
words of similar import, such phrase shall mean matters of which
such party has current, actual knowledge, without the obligation or
duty to undertake any independent investigation or inquiry
whatsoever. Neither party shall be entitled to bring any action,
suit or proceeding or seek any other right or remedy against the
other party for a breach of any warranty or covenant hereunder or
as a result of any misrepresentation made by such party herein
unless the aggrieved party has given the defaulting party
reasonably detailed written notice of such breach within twelve
(12) months after Closing.
10.14 No Recording. Without the prior written consent of
Seller, there shall be no recordation of either this Agreement or
any memorandum hereof, or any affidavit pertaining hereto and any
such recordation of this Agreement or memorandum hereto by
Purchaser without the prior written consent of Seller shall
constitute a default hereunder by Purchaser, whereupon this
Agreement shall, at the option of Seller, terminate and be of no
further force and effect. Upon termination all Earnest Money shall
be immediately delivered to Seller, whereupon the parties shall
have no further duties or obligations one to the other except as
provided in Sections 3.3 and 7.4.
10.15 Multiple Counterparts. This Agreement may be executed
in multiple counterparts, each of which is to be deemed an original
for all purposes.
10.16 Severability. If any provision of this Agreement or
application to any party or circumstance shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to
any extent, the remainder of this Agreement or the application of
such provision to such person or circumstances, other than those as
to which it is so determined invalid or unenforceable, shall not be
affected thereby, and each provision hereof shall be valid and
shall be enforced to the fullest extent permitted by law.
10.17 Mandatory Arbitration. The parties hereby agree to
submit all controversies, claims and matters of difference arising
out of or relating to this Agreement and the transactions
contemplated hereby to binding arbitration in the County of Duval,
State of Florida, in accordance with the rules and practices of The
American Arbitration Association from time to time in effect (the
"Rules"). This submission and agreement to arbitrate shall be
mandatory, exclusive and specifically enforceable. All references
in this Agreement to litigation between Purchaser and Seller, shall
be governed by the provisions of this Section 10, 16. Without
limiting the generality of the foregoing, the following shall be
considered controversies for this purpose:
(a) All questions relating to the breach of any
obligation, warranty, representation, covenant or agreement
hereunder or under any Exhibit hereto and all questions relating to
the construction and interpretation thereof,
(b) All questions relating to representations,
negotiations and other proceedings leading to the execution hereof
and all modifications of this Agreement of every nature and
description;
(c) Failure of any party to deny or reject a claim or
demand of another party;
(d) All questions as to whether the right to arbitrate any
questions exists or as to the existence of any agreement to
arbitrate; and
(e) All issues raised by any subsequent alleged amendment
hereto, whether written or oral, unless such amendment expressly
cancels this arbitration provision in writing signed by all
affected parties hereto.
The parties may agree on a retired judge as sole arbitrator. In
the absence of such agreement, there shall be three (3)
arbitrators, selected in accordance with the Rules: one (1)
attorney and/or retired judge, one (1) expert in commercial
mortgage and real estate transactions, and one (1) certified public
accountant. A decision agreed on by two (2) of the arbitrators
shall be the decision of the arbitration panel; provided however,
that in the case of monetary damages, if there is no agreement of
two arbitrators as to the amount of the award, then the final award
of the arbitration panel for the purpose of this Agreement shall be
the amount left after excluding the highest and lowest amounts.
The parties agree to abide by all awards rendered in such
proceedings. Any award shall include costs and reasonable
attorneys' fees to the successful party. Such awards shall be
final and binding on all parties. There shall be no appeal
therefrom, other than for fraud or misconduct. All awards may be
filed with the clerk of one or more courts, State or Federal,
having jurisdiction over the party against whom such an award is
rendered or its property as a basis of judgment and of the issuance
of an order authorizing execution for collection. Nothing in this
Agreement and/or the Exhibits hereto shall be deemed to prevent the
arbitration panel from exercising authority to permit exercise by
a party of its legal and/or equitable remedies, including the right
of offset. It is understood by the parties that there is not
intended in this Agreement or any Exhibit hereto that there be a
waiver of a party's right to any remedy which may be enforced
through arbitration, specifically including, without limitation,
the right of setoff and injunctive relief.
10.18 Asset Manager; Designated Representative. Owner has
engaged J.E. Robert Companies, Inc. ("Asset Manager") to provide
certain asset management services with respect to the Property,
including acting as a liaison between Owner and Purchaser in
connection with the Property and this Agreement. The Asset Manager
will appoint one or more representatives ("Designated
Representative(s)") to deal with Purchaser. Purchaser understands
and agrees that the Asset Manager and its Designated
Representative(s) have the authority to take any actions, grant any
approvals, consents, acceptances or directions, on behalf of Owner
(including entering into this Agreement on behalf of Owner) unless
and until Owner has given written notice to Purchaser that such
authority has been amended, modified or terminated.
10.19 Confidentiality. The parties hereto hereby agree that
they will maintain the confidentiality of all information and
materials provided to each other in connection herewith and the
terms of the transaction contemplated hereby, the contents of this
Agreement and related documents, if any, except that Purchaser may
disclose material terms which are required to be disclosed by
applicable securities laws or as required by any national
securities exchange on which Purchaser's common stock may be listed
and Purchaser may include a copy of this Agreement and in its
filings with the Securities and Exchange Commission.
10.20 Limited Liability of Officers. This Agreement and all
documents, agreements, understandings, and arrangements relating to
this transaction have been executed by the undersigned in his/her
capacity as an officer or director of Purchaser which has been
formed as a Maryland corporation pursuant to the Articles of
Incorporation of Purchaser, and not individually, and neither the
directors, officers or stockholders of Purchaser shall be bound or
have any personal liability hereunder or thereunder. Seller shall
look solely to the assets of Purchaser for satisfaction of any
liability of the Purchaser in respect of this Agreement and all
documents, agreements, understandings and arrangements relating to
the transaction contemplated by this Agreement and will not seek
recourse or commence any action against any of the directors,
officers or stockholders of Purchaser or any of their personal
assets for the performance or payment of any obligation hereunder
or thereunder. The foregoing shall also apply to any future
documents, agreements, understandings, arrangements and
transactions between the parties hereto.
10.21 Vesting of Title To Property. Purchaser may assign
its rights and obligations under this Agreement to an affiliate of
Purchaser upon written notice to Seller not less than five (5) days
prior to Closing; provided, however, that such assignee must
expressly assume the obligations of Purchaser hereunder; and
notwithstanding such assumption by Assignee, Purchaser shall remain
fully liable for the obligations of Purchaser under this Agreement.
SELLER:
TE-TWO REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WH-JER TE-Two Investors, L.P.,
a Delaware limited partnership,
its general partner
By: JER TE-Two Services, Inc.,
a Virginia corporation,
its general partner
DATE: July ____, 1996 By: _________________________
Name: _________________________
Title: _________________________
PURCHASER
WALDEN RESIDENTIAL PROPERTIES, INC.,
a Maryland corporation
DATE: July ____, 1996 By: _________________________
Name: Marshall B. Edwards
Title: President
JOINDER BY TITLE COMPANY
National Network Title Services, Ltd., referred to in this
Agreement as the "Title Company," hereby acknowledges that it
received this Agreement executed by Seller and Purchaser on the day
of July, 1996, and accepts the obligations of the Title Company as
set forth herein. It further acknowledges that it received the
Earnest Money on the _____ day of July, 1996. The Title Company
hereby agrees to hold and distribute the Earnest Money in
accordance with the terms and provisions of this Agreement.
NATIONAL NETWORK TITLE SERVICES, LTD.
DATE: July ____, 1996 By: _________________________
Name: _________________________
Title: _________________________
Address: 2301 Ohio Drive, Suite 202
Plano, Texas 75093
Attn: Elizabeth Fitzpatrick
LIST OF EXHIBITS
Exhibit "A" - Legal Description of Land
Exhibit "B" - List of Due Diligence Documents
Exhibit "C" - Deed
Exhibit "D" - Bill of Sale, Assignment and Assumption
Exhibit "E" - Certificate of Non-Foreign Status
EXHIBIT "A"
LEGAL DESCRIPTION OF LAND
PARCEL A:
A portion of Section 26, Township 3 South, Range 27 East. Duval
County, Florida, being more particularly described as follows:
Commence at the corner common to Sections 23 24, 25 and 26, said
point being located in the centerline of Baymeadows Road (formerly
San Clarc Road, a 100 foot right of way as now established): thence
South 00 Degrees 29' 04" East, along the line dividing said Sections 25
and 26, 234.09 feet to the Southerly right of way line of
Baymeadows Bypass Road (a 100 foot right of way as described and
recorded in Official Records Volume 3310 page 1198 of the public
records of said county); thence Northwesterly along said Southerly
right of way line and along and around the arc of a curve concave
Southwesterly and rating a radius of 1859.86 feet, an arc distance
of 799.06 feet, said arc being subtended by a chord bearing and
distance of North 75 Degrees 57' 58" West, 783.16 feet to the POINT OF
BEGINNING) thence continue along said Southerly of way line, along
and around the arc of said curve, an arc distance of 45.33 feet,
said arc being subtended by a chord bearing and distance of North
88 Degrees 31' 00" West, 45.33 feet to the point of tangency of said
curve; thence North 89 Degrees 31' 00" West, along the Southerly line of
Baymeadows Road (a 100 foot right of way as now established),
130.29 feet; thence South 00 Degrees 29' 00" West, 707.81 feet; thence
South 89 Degrees 31' 00" East, 266.97 feet to an intersection with a curve
leading Northerly; thence along and around concave Easterly and
having a radius of 1386.50 feet, an arc distance of 361.91 feet,
said arc being subtended by a chord bearing and distance of North
06 Degrees 59' 40" West, 360.88 feet to the point of tangency of said
curve; thence North 00 Degrees 29' 00" East, 324.46 feet to the point of
curvature of a curve to the left, thence along and a concave
Southwesterly and having a radius of 25.00 feet, an arc distance of
38.66 feet, said arc being subtended by a chord bearing and
distance of North feet to the point of beginning.
PARCEL B:
A portion of Section 26, Township 3 South, Range 27 East, Duval
County, Florida, being more particularly described as follows:
Commence at the corner common to Sections 23 24, 25 and 26; thence
South 00 Degrees 19' 04" East, along the line dividing said Sections 25
and 26, 234.09 feet to the Southerly right of way line of
Baymeadows Bypass Road (a 100 foot right of way as described and
recorded in Official Records Volume 3310 page 1198 of the public
records of said county); thence Northwesterly along said Southerly
right of way Iine and along and around the arc of a curve concave
Southwesterly and having a radius of !859.96 feet, an arc distance
of 789.06 feet, said arc being subtended by a chord bearing and
distance of North 75 degrees 57' 56" West, 793.16 feet to the point of
reverse curvature of a curve leading Southeasterly; thence along
and around the arc of a curve concave Southwesterly and having a
radius of 25.00 feet, an arc distance of 38.66 feet, said arc being
subtended by a chord bearing and distance of South 43 degrees 49' 09"
East, 34.92 feet to the point of tangency of said curve; thence
South 00 degrees 29' 00" West, 324.46 feet to the Point of curvature of a
curve to the left; thence along and around the arc of a curve
concave Easterly and having a radius of 1386.50 feet, an arc
distance of 361.91 feet, said arc being subtended by a chord
bearing and distance of South 06 degrees 59' 40" East, 360.88 feet to the
POINT OF BEGINNING, thence continue along and around the arc of
said curve, an arc distance of 116.02 feet, said arc being
subtended by a chord bearing and distance of South 16 degrees 52' 10"
East, 115.99 feet to a point on said curve; thence South 19 degrees 15'
56" East, 266.37 feet to the intersection of a curve leading
Southwesterly; thence along and around the arc of a curve concave
Northwesterly and having a radius of 270.00 feet an arc distance of
517.18 feet, said arc being subtended by a chord bearing and
distance of West, 441.67 feet to the point of tangency of said
curve; thence North 89 degrees 31' 00" West, 237.47 feet; thence North 00
degrees 29' 00" East, 22.65 feet; thence North 29 degrees 17' 14" West, 35.10
feet; thence North 00 degrees 29' 00" East, 396.10 feet; thence South 89
degrees 31' 00" East, 540.82 feet to the point of beginning.
EXHIBIT "B"
LIST OF DUE DILIGENCE DOCUMENTS
A. Rent Roll dated June 1996
B. Monthly Operating Statements for the calendar year 1995 and
the months of January 1996 through May 1996
C. 1995 Ad Valorem Tax Bill
D. Environmental Report
E. Service Contracts
F. Schedule of Capital Expenditures for the calendar year 1995
and the months of January 1996 through May 1996
G. Current Personal Property Inventory
EXHIBIT "C"
DEED
This Deed, made this _____ day of ____________________,1996,
by and between TE-TWO REAL ESTATE LIMITED PARTNERSHIP, a Delaware
limited partnership ("Grantor"), the address of which is c/o
J.E. Robert Companies, 600 E. Las Colinas Blvd., Irving, Texas 75039,
and WALDEN RESIDENTIAL PROPERTIES, INC., a Maryland corporation
("Grantee"), the address of which is One Lincoln Centre - Lock Box 45,
5400 LBJ Freeway, Suite 400, Dallas, Texas 75240.
WITNESSETH:
For valuable consideration paid to Grantor by Grantee, the
receipt of which is hereby acknowledged, Grantor does hereby grant,
bargain, sell and convey to Grantee that certain real property
situated in the City of Jacksonville, Duval County, Florida, more
particularly described in Exhibit "A" attached hereto and made a
part hereof, together with all and singular the tenements,
hereditaments and appurtenances thereunto belonging or in anywise
appertaining (the "Premises"), and all the estate, right, title,
interest, claim or demand whatsoever, of Grantor, either in law or
equity, of, in and to the above described Premises, subject to
those matters set forth in Exhibit "B" attached hereto and made a
part hereof.
Grantor does hereby wan-ant and will defend the title to the
Premises, subject to those matters set forth on Exhibit "B"
attached hereto, against the lawful claims of all persons
whomsoever claiming by, through or under Grantor but not otherwise.
EXCEPT AS SPECIFICALLY STATED HEREIN, GRANTOR HAS NOT MADE AND
IS NOT NOW MAKING, AND GRANTOR SPECIFICALLY DISCLAIMS, ANY
WARRANTIES, REPRESENTATIONS OR GUARANTEES OF ANY KIND OR CHARACTER,
EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, WITH
RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, WARRANTIES,
REPRESENTATIONS OR GUARANTIES AS TO (I) MATTERS OF TITLE (OTHER
THAN GRANTOR'S WARRANTY OF TITLE SET FORTH HEREIN); (II)
ENVIRONMENTAL MATTERS RELATING TO THE PROPERTY OR ANY PORTION
THEREOF; (III) GEOLOGICAL CONDITIONS, INCLUDING, WITHOUT LIMITATION,
SUBSIDENCE, SUBSURFACE CONDITIONS, WATER TABLE, UNDERGROUND WATER
RESERVOIRS, LIMITATIONS REGARDING THE WITHDRAWAL OF WATER AND
EARTHQUAKE FAULTS AND THE RESULTING DAMAGE OF PAST AND/OR FUTURE
EARTHQUAKES; (IV) WHETHER, AND THE EXTENT TO WHICH, THE PROPERTY OR
ANY PORTION THEREOF IS AFFECTED BY ANY STREAM (SURFACE OR
UNDERGROUND), BODY OF WATER, FLOOD PRONE AREA, FLOOD PLAIN,
FLOODWAY OR SPECIAL FLOOD HAZARD; (V) DRAINAGE; (VI) SOIL
CONDITIONS, INCLUDING THE EXISTENCE OF INSTABILITY, PAST SOIL
REPAIRS, SOIL ADDITIONS OR CONDITIONS OF SOIL FELL, OR
SUSCEPTIBILITY TO LANDSLIDES, OR THE SUFFICIENCY OF ANY
UNDERSHORING; (VII) ZONING TO WHICH THE PROPERTY OR ANY PORTION
THEREOF MAY BE SUBJECT; (VIII) THE AVAILABILITY OF ANY UTILITIES TO
THE PROPERTY OR ANY PORTION THEREOF, INCLUDING, WITHOUT LIMITATION,
WATER, SEWAGE, GAS AND ELECTRIC; (DC) USAGES OF ADJOINING PROPERTY;
(X) ACCESS TO THE PROPERTY OR ANY PORTION THEREOF; (XI) THE VALUE,
COMPLIANCE WITH THE PLANS AND SPECIFICATIONS, SIZE, LOCATION, AGE,
USE, DESIGN, QUALITY, DESCRIPTION, SUITABILITY, STRUCTURAL
INTEGRITY, OPERATION, TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION
OF THE PROPERTY OR ANY PORTION THEREOF, OR ANY INCOME, EXPENSES,
CHARGES, LIENS, ENCUMBRANCES, RIGHTS OR CLAIMS ON OR AFFECTING OR
PERTAINING TO THE PROPERTY OR ANY PART THEREOF; (XII) THE PRESENCE
OF HAZARDOUS SUBSTANCES (AS DEFINED IN FEDERAL, STATE OR LOCAL LAWS
AND REGULATIONS) IN OR ON, UNDER OR IN THE VICINITY OF THE
PROPERTY; (XIII) THE CONDITION OR USE OF THE PROPERTY OR COMPLIANCE
OF THE PROPERTY WITH ANY OR ALL PAST, PRESENT OR FUTURE FEDERAL,
STATE OR LOCAL ORDINANCES, RULES, REGULATIONS OR LAWS, BUILDING,
FIRE OR ZONING ORDINANCES, CODES OR OTHER SIMILAR LAWS; (UV) THE
EXISTENCE OR NONEXISTENCE OF UNDERGROUND STORAGE TANKS; (XV) ANY
OTHER MATTER AFFECTING THE STABILITY OR INTEGRITY OF THE REAL
PROPERTY; (XVI) THE POTENTIAL FOR FURTHER DEVELOPMENT OF THE
PROPERTY; (XVII) THE EXISTENCE OF VESTED LAND USE, ZONING OR
BUILDING ENTITLEMENTS AFFECTING THE PROPERTY; (XVIII) THE
MERCHANTABILITY OF THE PROPERTY OR FITNESS OF THE PROPERTY FOR ANY
PARTICULAR PURPOSE (PURCHASER, BY ITS ACCEPTANCE HEREOF, AFFIRMING
THAT PURCHASER HAS NOT RELIED ON GRANTOR'S SKILL OR JUDGMENT TO
SELECT OR FURNISH THE PROPERTY FOR ANY PARTICULAR PURPOSE, AND THAT
GRANTOR MAKES NO WARRANTY THAT THE PROPERTY IS FIT FOR ANY
PARTICULAR PURPOSE); OR (XIX) TAX CONSEQUENCES (INCLUDING, BUT NOT
LIMITED TO, THE AMOUNT, USE OR PROVISIONS RELATING TO ANY TAX
CREDITS). THE CONVEYANCE OF THE PROPERTY AS PROVIDED FOR HEREIN IS
MADE ON AN "AS IS, WHERE IS" BASIS, WITH ALL FAULTS.
IN WITNESS WHEREOF, Grantor has executed this deed on the day
and year first above written.
GRANTOR:
TE-TWO REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WH-JER TE-Two Investors, L.P.
a Delaware limited partnership,
its general partner
By: JER TE-Two Services, Inc.,
a Virginia corporation,
its general partner
By: _________________________
Name: _________________________
Title: _________________________
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was ACKNOWLEDGED before me, on the _____ day of
____________________, 1996, by the of JER TE-Two Services, Inc., a Virginia
corporation, the general partner of WH-JER TE-Two Investors, L.P.,
a Delaware limited partnership, the general partner of TE-TWO REAL
ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership on
behalf of said corporation and said limited partnerships.
[S E A L) _____________________________
Notary Public, State of Texas Notary Public, State of Texas
My Commission Expires:
_____________________________
Printed Name of Notary Public
Grantee's Address for Tax Notices:
Walden Residential Properties, Inc.
One Lincoln Centre - Lock Box 45
5400 LBJ Freeway, Suite 400
Dallas, Texas 75240
Attn: Mr. Marshall B. Edwards
When recorded. return to:
Joel S. Reed, Esq.
Winstead Sechrest & Minick P.C.
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
EXHIBIT "D"
BILL OF SALE ASSIGNMENT AND ASSUMPTION
THIS BILL OF SALE, ASSIGNMENT AND ASSUMPTION is made the _____ day
of ____________________, 1996, by and between TE-TWO REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership ("Assignor"), and WALDEN
RESIDENTIAL PROPERTIES, INC., a Maryland corporation ("Assignee").
WITNESSETH:
For good and valuable consideration, receipt and sufficiency of
which are hereby acknowledged, Assignor and Assignee hereby agree
as follows:
1. Assignor hereby sells, transfers, assigns and conveys to
Assignee the following:
A. All right, title and interest of Assignor in and to
all tangible personal property ("Personalty") set forth in the
inventory on Exhibit "B" attached hereto and made a part hereof,
and located on, and used in connection with the management,
maintenance or operation of that certain land and improvements
located in the County of Duval, State of Florida, as more
particularly described in Exhibit "A" attached hereto and made
a part hereof ("Real Property"), but excluding tangible personal
property owned or leased by Assignor's property manager or the
tenants of the Real Property under the "Tenant Leases" (as
defined below).
b. All right, title and interest of Assignor in and to
those certain leases described on Exhibit "C", attached hereto
and made a part hereof (the "Tenant Leases"), relating to the
leasing of space in the Real Property and all of the rights,
interests, benefits and privileges of the lessor thereunder, and
to the extent Assignee has not received a credit therefor under
the Purchase Agreement (as defined below), all prepaid rents and
security and other deposits held by Assignor under the Tenant
Leases and not credited or returned to tenants, but subject to
all terms, conditions, reservations and limitations set forth in
the Tenant Leases.
c. To the extent assignable, all right, title and
interest in and to those certain contracts set forth on Exhibit
"D" attached hereto and made a part hereof, and all warranties,
guaranties, indemnities and claims (including, without
limitation, for workmanship, materials and performance) which
exist or may hereafter exist against any contractor,
subcontractor, manufacturer or supplier or laborer for services
relating thereto (collectively, the "Contracts").
2. This Bill of Sale, Assignment and Assumption is given
pursuant to that certain Agreement of Sale and Purchase (the
"Agreement") dated as of July ___, 1996, between Assignor and
Assignee, providing for, among other things, the conveyance of the
Personalty, the Tenant Leases and the Contracts.
3. As set forth in Section 3.5 of the Agreement, which is
hereby incorporated by reference as if herein set out in full, the
property conveyed hereunder is conveyed by Assignor and accepted by
Assignee AS IS, WHERE IS, AND WITHOUT ANY WARRANTIES OF WHATSOEVER
NATURE, EXPRESS OR IMPLIED, IT BEING THE INTENTION OF ASSIGNOR AND
ASSIGNEE EXPRESSLY TO NEGATE AND EXCLUDE ALL WARRANTIES, INCLUDING,
WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR ANY PARTICULAR PURPOSE, WARRANTIES CREATED BY ANY
AFFIRMATION OF FACT OR PROMISE OR BY ANY DESCRIPTION OF THE
PROPERTY CONVEYED HEREUNDER, OR BY ANY SAMPLE OR MODEL THEREOF, AND
ALL OTHER WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY THE
UNIFORM COMMERCIAL CODE, AS ADOPTED IN THE STATE OF FLORIDA.
4. Assignee hereby accepts the assignment of the Personalty,
the Tenant Leases and the Contracts and agrees to assume and
discharge, in accordance with the terms thereof, all of the
obligations thereunder from and after the date hereof.
5. Assignee agrees to indemnify and hold harmless Assignor
from any cost, liability, damage or expense (including attorneys'
fees) arising out of or relating to Assignee's failure to perform
any of the foregoing obligations arising from and accruing on or
after the date hereof.
6. This Bill of Sale, Assignment and Assumption may be
executed in any number of counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the
same instrument.
7. This Bill of Sale, Assignment and Assumption shall be
governed by the laws of the State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed this
Bill of Sale, Assignment and Assumption as of the date first above
written.
ASSIGNOR:
TE-TWO REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WH-JER TE-Two Investors, L.P.,
a Delaware limited partnership,
its general partner
By: JER TE-Two Services, Inc.,
a Virginia corporation,
its general partner
By: _________________________
Name: _________________________
Title: _________________________
ASSIGNEE:
WALDEN RESIDENTIAL PROPERTIES, INC.,
a Maryland corporation
By: _________________________
Name: Marshall B. Edwards
Title: President
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was ACKNOWLEDGED before me, on the _____ day of
____________________, 1996, by __________________________________
the of JER TE-Two Services, Inc., a Virginia corporation, the
general partner of WH-JER TE-Two Investors, L.P., a Delaware
limited partnership, the general partner of TE-TWO REAL ESTATE
LIMITED PARTNERSHIP, a Delaware limited partnership on behalf of
said corporation and said limited partnerships.
[S E A L) _____________________________
Notary Public, State of Texas Notary Public, State of Texas
My Commission Expires:
_____________________________
Printed Name of Notary Public
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was ACKNOWLEDGED before me, on the day of 1996,
by Marshall B. Edwards, the President of WALDEN RESIDENTIAL
PROPERTIES, INC., a Maryland corporation, on behalf of said
corporation.
[S E A L) _____________________________
Notary Public, State of Texas Notary Public, State of Texas
My Commission Expires:
_____________________________
Printed Name of Notary Public
EXHIBIT "E"
CERTIFICATION OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code provides that a
transferee of a United States real property interest must withhold
tax if the transferor is a foreign person. To inform the
transferee, WALDEN RESIDENTIAL PROPERTIES, INC., a Maryland
corporation, that withholding tax is not required upon the
disposition of a United States real property interest by TE-TWO
REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership
("Seller"), the undersigned hereby certifies the following on
behalf of Seller:
1. Seller is not a foreign corporation, foreign partnership,
foreign trust or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations promulgated
pursuant thereto);
2. Seller's United States Employer Identification Number is:
; and
3. Seller's office address is c/o J.E. Robert Companies, 600
E. Las Colinas Boulevard, Suite 1900, Irving, Texas 75039,
Attention: Paul Harris.
Seller understands that this Certification may be disclosed to
the Internal Revenue Service by transferee and that any false
statement contained herein could be punished by fine, imprisonment
or both.
Under penalties 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 Seller.
EXECUTED this _____ day of ____________________1996, at
Irving, Texas.
SELLER:
TE-TWO REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WH-JER TE-Two Investors, L.P.,
a Delaware limited partnership,
its general partner
By: JER TE-Two Services, Inc.,
a Virginia corporation,
its general partner
By: _________________________
Name: _________________________
Title: _________________________
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was SUBSCRIBED AND SWORN TO before me, on the _____ day
of ____________________, 1996, by _________________________________, the
of JER TE-Two Services, Inc., a Virginia corporation, the general
partner of WH-JER TE-Two Investors, L.P., a Delaware limited partnership,
the general partner of TE-TWO REAL ESTATE LIMITED PARTNERSHIP, a Delaware
limited partnership on behalf of said corporation and said limited
partnership, to certify which witness my hand and seal of office.
[S E A L) _____________________________
Notary Public, State of Texas Notary Public, State of Texas
My Commission Expires:
_____________________________
Printed Name of Notary Public
CONTRACT OF SALE
BETWEEN
WOODWINDS, LTD., as Seller
AND
WALDEN RESIDENTIAL PROPERTIES, INC., as Buyer
TABLE OF CONTENTS
1. Purchase Price. . . . . . . . . . . . . . . . . . . . . . .1
2. Intentionally Deleted . . . . . . . . . . . . . . . . . . .2
3. Independent Contract Consideration. . . . . . . . . . . . .2
4. Title Insurance . . . . . . . . . . . . . . . . . . . . . .2
5. Survey. . . . . . . . . . . . . . . . . . . . . . . . . . .4
6. Prorations and Closing Costs. . . . . . . . . . . . . . . .5
7. Closing . . . . . . . . . . . . . . . . . . . . . . . . . .5
8. Buyer's Remedies. . . . . . . . . . . . . . . . . . . . . .6
9. Seller's Remedy . . . . . . . . . . . . . . . . . . . . . .7
10. Intentionally Deleted . . . . . . . . . . . . . . . . . . .7
11. Seller's Representations and Warranties . . . . . . . . . .7
12. Seller's Covenants. . . . . . . . . . . . . . . . . . . . 10
13. Conditions Precedent to Buyer's Obligations . . . . . . . 10
14. Assignment. . . . . . . . . . . . . . . . . . . . . . . . 11
15. Intentionally Deleted . . . . . . . . . . . . . . . . . . 12
16. Inspection Period . . . . . . . . . . . . . . . . . . . . 12
17. Time Extensions . . . . . . . . . . . . . . . . . . . . . 13
18. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 13
19. Performance . . . . . . . . . . . . . . . . . . . . . . . 15
20. Binding Effect. . . . . . . . . . . . . . . . . . . . . . 15
21. Entire Agreement. . . . . . . . . . . . . . . . . . . . . 15
22. Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . 15
23. Survival. . . . . . . . . . . . . . . . . . . . . . . . . 16
24. Holidays, Etc.. . . . . . . . . . . . . . . . . . . . . . 16
25. Governing Law . . . . . . . . . . . . . . . . . . . . . . 16
26. Risk of Loss; Condemnation. . . . . . . . . . . . . . . . 16
27. Headings. . . . . . . . . . . . . . . . . . . . . . . . . 16
28. Effective Date. . . . . . . . . . . . . . . . . . . . . . 17
EXHIBIT A - THE LAND
EXHIBIT B - SURVEYOR'S CERTIFICATE
EXHIBIT C - NON-FOREIGN AFFIDAVIT
CONTRACT OF SALE
This Contract of Sale (this Contract) is between WOODWINDS,
LTD. (Seller) and WALDEN RESIDENTIAL PROPERTIES, INC. (Buyer).
BACKGROUND
A. Seller is the owner of that certain tract of land
(Land) located in Davidson County, Tennessee, more particularly
described on Exhibit A attached hereto and made a part hereof.
B. Buyer wants to purchase the Land, together with all of
the improvements located thereon, and all personal property,
appurtenant interests, all tenant leases and related rights to
monies due thereunder and deposits held by Seller, all of
Seller's right, title and interest, if any, in and to (A)
warranties covering the personal property and the improvements,
(B) the trademarks or tradenames used by Seller in connection
with the Property, including, but not limited to, "Brandywine
Apartments", (C) the service contracts (and any deposits
thereunder) related to the operation and maintenance of the
improvements (to the extent assignable and not terminated by
Seller prior to Closing as directed by Buyer), (D) all licenses,
permits, approvals and other intangible property rights relating
to the Property and (E) all utility, security and other deposits.
and all related rights and appurtenances, including, without
limitation, Seller's interest in adjacent streets, alleys,
rights-of-way, strips, gores, and access easements, and any
improvements located on the Land (the Land and related rights,
appurtenances, and improvements are collectively referred to as
the Property).
AGREEMENT
Seller shall sell the Property to Buyer and Buyer shall
purchase the Property from Seller upon the following terms:
1. Purchase Price
The purchase price of the Property (the Purchase Price) is
$8,760,000 payable in cash at Closing, together with all closing
costs (the Closing Costs) related to the transaction contemplated
hereby (collectively, the Base Amount); provided, however, that
in the event that the amount required by Lender to repay in full
the indebtedness (the Existing Indebtedness) payable by Seller
and secured by the Property, together with the Closing Costs
(collectively, the Increased Amount), exceeds the Base Amount,
upon approval of the Increased Amount by Buyer in its sole
discretion, the Purchase Price shall be equal to the New Payoff
Amount. In the event that Buyer does not approve the Increased
Amount, this Contract shall be terminable by Buyer at Buyer's
option.
2. Intentionally Deleted.
3. Independent Contract Consideration
Buyer tenders to Seller and Seller acknowledges receipt of the
sum of ONE HUNDRED DOLLARS ($100.00) as independent and
nonrefundable contract consideration for the Inspection Period
(as defined in Paragraph 16). This independent consideration is
in addition to any other deposits made under this Contract.
4. Title Insurance
a. Seller, at Seller's expense, shall furnish to Buyer at
Closing a Tennessee Standard Form of Owner Policy of
Title Insurance (the Owner Policy) covering the
Property issued by Chicago Title Insurance Company
(Underwriter), through its agent, Safeco Land Title of
Dallas (Title Company), 1201 Elm Street, Suite 5220,
Dallas, Texas, Attention: L. Lamar Tims, Phone: (214)
573-2250, dated as of the Closing Date, in the amount
of the Purchase Price, and containing no exceptions or
conditions except as follows:
the restrictive covenants exception must be
deleted or must state "None of Record except..."
and then must list only specific restrictive
covenants approved by Buyer;
the survey exception must be amended to read
"shortages in area";
stand-by fees, taxes, and assessments for the year
of Closing and subsequent years, and subsequent
assessments for prior years due to change in land
usage or ownership; and
any other Permitted Exceptions (as defined below
in this Paragraph).
b. Seller, at Seller's expense, shall furnish to Buyer a
title insurance commitment covering the Property issued
by Title Company (the Commitment), together with
legible and complete copies of all documents referenced
as title exceptions in the Commitment.
c. Buyer shall have until five (5) days prior to Closing
to object to any exception, condition or matter
unacceptable to Buyer in the Commitment or on the
Survey by giving notice to Seller. If Buyer does not
give notice of any such objections to Seller within
such period, Buyer is deemed to approve the title to
the Property as shown in the Commitment as well as
matters shown on the Survey.
d. Seller has 5 days after receipt of Buyer's notice to
cure Buyer's objections.
e. If Buyer gives notice of any objections within the
15-day period and Seller does not cure any of Buyer's
objections within Seller's 5-day cure period, Buyer
may, on or before the fifth (5th) day after the last
day of Seller's 5-day cure period, as Buyer's sole and
exclusive remedy, waiving all other remedies, either:
terminate this Contract by notice to Seller
whereupon the parties thereafter have no further
rights, liabilities, or obligations under this
Contract; or
waive its objections to the Commitment and the
Survey and accept Seller's title as shown in the
Commitment and on the Survey.
f. The exceptions to title listed in Schedule B of the
Commitment that are either accepted or waived by Buyer
are the Permitted Exceptions. No item listed in
Schedule C of the Commitment shall be a Permitted
Exception.
g. Seller may not further encumber the title to the
Property after the Effective Date without the prior
written consent of Buyer, in Buyer's sole discretion.
h. If any additional title encumbrances are discovered
after Title Company's issuance of the Commitment, Buyer
has the same rights concerning objections to the
additional title encumbrances as are provided above in
this Paragraph.
5. Survey
Seller, at Seller's expense, shall furnish to Buyer and the Title
Company within 10 days after the Effective Date five (5) copies
of a current survey of the Land (the Survey) certified to Seller,
Buyer, Underwriter, Title Company, and Buyer's lender by a
surveyor licensed in the State of Tennessee and selected by Buyer
showing:
a correct legal description of the Property by plat
reference, if applicable, and a metes and bounds
description of the Land with a point of commencement at
the intersection of two platted streets and the
recording data for the streets shown on the Survey and
with adjoinder calls to common property lines or right-of-way
lines and reference made to the recorded deed or plat;
the area, boundaries, and dimensions of the Land;
any encroachments or protrusions;
the location of all easements, known proposed
easements, apparent easements, and building
restrictions affecting the Land;
the location and dimensions of any improvements on the
Land;
the gross square footage of the Land and the square
footage of the Land net of areas lying within any
existing or proposed right-of-way of any highway, road,
street, alley, or railroad, or within the boundaries of
any conservation or drainage easements, any easements
not located in the boundaries of any building setback
lines, encroachments, waterways, or areas designated by
the Federal Emergency Management Agency as being within
the 100-year flood plain;
the approximate centerline of any springs or streams on
the Land and, if visible, the location of where they
enter or exit the surface of the Land; and
any waterways and any other areas on the Land
designated by the Federal Emergency Management Agency
(or other appropriate agency) as being within the
100-year flood plain.
The form of certificate to be used on the Survey is attached to
this Contract as Exhibit B.
6. Prorations and Closing Costs
a. Ad valorem taxes against the Property will be prorated
at Closing as of the Closing Date based on the tax
bills for the year of Closing. Seller shall pay to
Buyer at Closing the portion of the taxes on the
Property from the beginning of the current year through
the Closing Date. If Closing occurs before the current
year's tax bills are available, the proration will be
based on the latest tax rate applied to the latest
assessed valuation; then, after the taxes for the
current year are finally assessed, upon written demand,
Buyer shall refund to Seller any amount overpaid by
Seller or Seller shall pay to Buyer the amount of any
deficiency in the proration.
b. All closing costs other than as specified above, or as
may be specifically allocated elsewhere in this
Contract, will be allocated to Seller and Buyer in the
customary manner for the sale and purchase of
unimproved real property in Davidson County, Tennessee,
as of the Closing Date; provided, each party shall pay
its own attorneys' fees except in the event of
litigation.
7. Closing
a. The "Closing" of this Contract will occur in Title
Company's offices at 10:30 a.m., Dallas, Texas time, on
or before the fifth (5th) day after the last day of the
Inspection Period (the Closing Date).
b. At the Closing:
(i) Buyer must pay to Seller the Purchase Price; and
(ii) Seller must deliver to Buyer:
a special warranty deed in form acceptable to
Buyer conveying the Property to Buyer and
containing no exceptions or conditions except
the Permitted Exceptions (excluding the
standard printed exceptions in the Owner
Policy);
a bill of sale and assignment in form
acceptable to Buyer conveying the personal
property and all other intangibles to Buyer
and containing no exceptions or conditions
except the Permitted Exceptions (excluding
the standard printed exceptions in the Owner
Policy);
an assignment of tenant leases in form
acceptable to Buyer conveying to Buyer all of
the tenant leases and rights appurtenant
thereto affecting the Property;
the Owner Policy (or Buyer, in its sole
discretion, may waive issuance of the Owner
Policy and receive a credit against the
Purchase Price equal to the amount of
premiums Seller would have paid for the Owner
Policy);
a Non-Foreign Affidavit in substantially the
form attached to this Contract as Exhibit C;
a certificate that Seller's representations
and warranties continue to be true and
correct as of the Closing Date;
any other documents deemed necessary by the
Title Company or Buyer's counsel; and
exclusive possession of the Property.
8. Buyer's Remedies
If Seller does not perform its obligations under this Contract,
Buyer may, at its option, either:
enforce specific performance; or
terminate this Contract.
If Buyer terminates this Contract due to Seller's default, Seller
shall reimburse Buyer upon demand for all reasonable
out-of-pocket expenses incurred by Buyer in connection with this
transaction, and the parties thereafter have no further rights,
liabilities, or obligations under this Contract.
9. Seller's Remedy
If Buyer does not perform its obligations under this Contract for
any reason except the termination of this Contract pursuant to an
applicable provision of this Contract, Seller's exclusive remedy,
waiving all other remedies, is to terminate this Contract. If
Seller terminates this Contract, the parties thereafter have no
further rights, liabilities, or obligations under this Contract.
10. Intentionally Deleted
11. Seller's Representations and Warranties
Seller represents and warrants to Buyer as follows (which
representations and warranties are also deemed made by Seller to
Buyer at Closing and survive Closing):
a. Seller has good and indefeasible title to the Property
subject only to the Permitted Exceptions.
b. There are no parties in possession of any portion of
the Property as lessees, tenants at sufferance, or
trespassers. No leases, other than the leases for
apartments, affect the Property.
c. There is no pending or, to the knowledge of Seller,
threatened condemnation or similar proceeding or
special assessment (inclusive of assessments for street
widening, repair, or improvement), or change in zoning
affecting the Property.
d. The location, occupancy, operation, and use of the
Property do not violate any applicable federal, state,
county or city statute, ordinance, code, rule, or
regulation.
e. Seller has received no notice concerning the Property
from any Governmental Authority (as defined below in
this Paragraph) about a violation of any federal,
state, county, or city statute, ordinance, code, rule,
or regulation or stating that any investigation has
commenced or is contemplated regarding any violation.
f. There is no pending or, to Seller's knowledge,
threatened litigation or administrative proceeding
affecting Seller or the Property.
g. Seller has obtained all necessary consents and
approvals from any person, entity, or Governmental
Authority required for the execution and delivery of
this Contract by Seller and the performance by Seller
of its obligations under this Contract.
h. The execution and delivery of, and Seller's performance
under, this Contract are within Seller's powers and
have been duly authorized by all requisite actions.
This Contract constitutes a binding obligation of
Seller enforceable in accordance with its terms.
i. Performance of this Contract by Seller will not result
in any default under, or result in the imposition of
any lien or encumbrance upon the Property under, any
contract or other agreement that affects Seller or the
Property.
j. There are no attachments, executions, assignments for
the benefit of creditors, or voluntary or involuntary
proceedings in bankruptcy or under other debtor relief
laws contemplated by, pending, or threatened against
Seller.
k. Seller has not entered into, and has no knowledge of,
any contracts or other agreements with any private
party or Governmental Authority affecting the Property,
including, without limitation, any that require the
owner of the Property to install, maintain, construct,
or otherwise participate in or contribute to any
installation, maintenance, or construction of any
offsite improvements serving or intended to serve any
portion of the Property.
l. No portion of the Property has been established or
dedicated as park land, historical site, drainage
easement, conservation area, or open space and no
portion of the Property has been designated by Seller
or any Governmental Authority as a jogging, bicycle, or
other public pathway.
m. No tax liens or judgments affect the Property.
n. There are no unpaid charges, debts, liabilities,
claims, or obligations arising from the ownership or
operation of the Property that could give rise to any
mechanics' or materialman's or other statutory liens
against the Property or for which Buyer will be
responsible.
o. The Property has access to and from dedicated and
accepted public highways, streets, or roads. There is
no pending or, to Seller's knowledge, threatened action
by any Governmental Authority to limit or terminate
that access.
p. The Property is served at its perimeter with, and has a
right of access to without payment of any fees other
than normal tap fees, water, gas, electricity, waste
water, storm water, cable television, and telephone
services. There is no pending or, to Seller's
knowledge, threatened action by any Governmental
Authority or utility company that would limit or
terminate any utility service to the Property.
q. The Property has not been used for the disposal or
dumping of nor has there been any spillage, seepage, or
uncontrolled loss on or filtration from or onto the
Property of any "hazardous substances" or "hazardous
wastes", and the Property contains no such "hazardous
substances" or "hazardous wastes", as those terms are
defined in the Comprehensive Environment Response,
Compensation, and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976 (RCRA) the
Superfund Amendments and Reauthorization Act of 1986,
the Clean Water Act, the Federal Water Pollution
Control Act, the Federal Environmental Pesticides Act,
and similar State and local regulations and codes, all
as amended, and all rules and regulations applicable to
each.
r. There are no underground storage tanks (as defined in
RCRA) located in, on, under, or, to Seller's knowledge,
adjacent to the Property. Seller has no reason to
believe and does not believe that any hazardous wastes
or hazardous materials have seeped or flowed onto or
into the Property from other sites or from the Property
onto or into any other sites.
s. The Land is currently zoned for "___________" uses
under the applicable zoning ordinances of the
applicable local authority (the City).
The terms "Governmental Authority" and "Governmental Authorities"
mean the United States of America, the State of Tennessee,
Davidson County, the City, and any other political subdivision in
which the Property is located or which exercises jurisdiction
over the Property, and any agency, department, commission, board,
bureau, property owners association, utility district, flood
control district, improvement district, or similar district, or
other instrumentality of any of them.
12. Seller's Covenants
Seller shall, at Seller's sole cost and expense:
a. Promptly advise Buyer in writing of any litigation or
hearing or notice received or any material changes of
facts that cause any of Seller's representations or
warranties to be inaccurate in any respect.
b. Not take any action or omit to take any action that
could have the effect of violating any representations,
warranties, or agreements of Seller in this Contract.
c. Deliver to Buyer within 10 days after the Effective
Date copies of all tax statements for the Property,
including those for 1993, 1994, and 1995 relating to
personal and ad valorem taxes and special assessments,
correspondence with Governmental Authorities (including
any condemnation notices, proceedings or awards), soils
reports, environmental studies, surveys, plats, site
plans, elevations, topographical maps, engineering
studies, traffic studies, and other studies and reports
in Seller's possession concerning the Property.
d. Keep the terms of this Contract and the identity of
Buyer confidential. Seller may not issue or comment on
any press releases or news reports of this transaction
without Buyer's prior approval.
e. From the Effective Date until the Closing, maintain the
Property in good condition and repair.
13. Conditions Precedent to Buyer's Obligations
Buyer is not obligated to close this transaction, if at the time
of Closing, any of Seller's representations and warranties are
not true and correct in all respects, or Seller refuses to
execute and deliver to Buyer a certificate stating they are true
and correct in all material respects or Seller has not performed
all of its covenants under this Contract.
Buyer may, at Buyer's sole option, waive all or any of these
conditions precedent. If any condition precedent is not
satisfied by Closing, or any earlier time frame specified above,
then Buyer, at its sole option, may terminate this Contract on or
before the Closing Date by giving notice to Seller.
Upon termination, the the parties thereafter have no further
rights, obligations, or liabilities under this Contract. If
Buyer is entitled to terminate this Contract because a condition
precedent is not satisfied, Buyer does not terminate this
Contract, and the Closing occurs, then Buyer is deemed to waive
the respective condition if Buyer had actual knowledge the
condition precedent was not satisfied.
14. Assignment
Buyer may not assign this Contract without Seller's consent
except to an affiliate of Buyer. Upon any permitted assignment,
the assignee shall assume, and Buyer shall be released from,
Buyer's obligations under this Contract.
15. Intentionally deleted.
16. Inspection Period
a. Commencing on the Effective Date and continuing through
the 120th day after the Effective Date (the Inspection
Period), Buyer may, but is not obligated to, inspect
the Property and all of Seller's books and records
concerning the Property, review and analyze all
materials, surveys, maps, reports, and other matters
and information provided pursuant to this Contract,
together with any other materials, surveys, maps,
reports, studies, and other matters it may choose, in
its sole and absolute discretion.
b. Buyer may, for any reason whatsoever, or for no reason
at all, in Buyer's sole discretion, terminate this
Contract by notifying Seller of Buyer's election to
terminate under this Paragraph no later than 5:00 p.m.,
Dallas, Texas time, on the last day of the Inspection
Period.
c. If Buyer timely terminates this Contract under this
Paragraph, the parties thereafter have no further
rights, liabilities, or obligations under this
Contract.
d. If Buyer does not notify Seller in writing of Buyer's
election to terminate this Contract under this
Paragraph by 5:00 p.m., Dallas, Texas time, on the last
day of the Inspection Period, Buyer is deemed to waive
its right to terminate this Contract under this
Paragraph.
e. Seller grants to Buyer, its agents, contractors and
employees, a license, terminable only upon the
termination of this Contract, to inspect all of
Seller's books and records concerning the Property and
to enter upon the Property to make all studies and
inspections deemed necessary or desirable by Buyer.
Buyer's performance of all studies and tests is at its
sole risk and expense.
f. If the Property is damaged by Buyer or Buyer's agents
or contractors during Buyer's inspections, Buyer shall:
repair and restore the Property to substantially
the same condition as existed prior to conducting
the studies and tests; and
hold Seller harmless from any actual damages
(Seller waives any right to collect consequential
or punitive damages) arising solely and directly
from the actions of Buyer, its agents,
contractors, or employees, in conducting the
studies or tests.
g. Buyer has no liability to Seller for any reduction in
value to the Property that results from the discovery
of matters or circumstances through Buyer's studies and
tests.
17. Time Extensions
If Seller does not provide the Commitment, the Survey, or the
documents listed in Paragraph 12(c) to Buyer within the
respective time frames set forth in Paragraphs 4, 5 and 12, the
time periods for Seller to provide those items are extended until
Seller provides each of the items to Buyer and the expiration
date of the Inspection Period and the Closing Date are
automatically extended for like periods of time.
18. Notices
All notices, requests, approvals, and other communications
required or permitted to be delivered under this Contract must be
in writing and are effective:
on the business day sent if sent by telecopier prior to
5:00 p.m., Dallas, Texas time, and the sending
telecopier generates a written confirmation of sending;
upon receipt if delivered personally or by any method
other than by telecopier transmission (with written
confirmation), or by any method other than by mail;
1 day after delivery to a nationally recognized,
overnight courier service; or
if orderly delivery of the mail is not then disrupted
or threatened in which event some method of delivery
other than the mail must be used, 3 days after being
deposited in the United States mail, certified, return
receipt requested, postage prepaid;
in each instance addressed to Seller or Buyer, as the case may
be, at the following addresses, or to any other address either
party may designate by notice to the other party:
Seller: Woodwinds, Ltd.
c/o Walden Management Company
5400 LBJ Freeway, Suite 400, LB 45
Dallas, Texas 75240
escription of the subject property.
9. This survey was actually made on the ground as per record
description furnished by the title insurance company and is
true and correct.
10. This survey is conforms with the
_________________________________.
EXHIBIT C - NON-FOREIGN AFFIDAVIT
SUBJECT PROPERTY: See Exhibit A attached hereto.
SELLER: , a
Buyer: ______________________, a
_________________
Section 1445 of the Internal Revenue Code provides that a
transferee of a U.S. real property interest must withhold tax if
the transferror is a foreign person. To inform Buyer that the
withholding of tax is not required upon the disposition of a U.S.
real property interest by Seller, the undersigned hereby certify
the following on behalf of Seller:
1. Seller is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those
terms are defined in the Internal Revenue Code and Income
Tax Regulations);
2. Seller's U.S. employer identification number is
_____________________.
3. Seller's office address is:
Seller understands that this certification may be disclosed
to the Internal Revenue Service by Buyer and that any false
statement contained herein could be punished by fine,
imprisonment, or both.
Under penalties 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 Seller.
, a
By:
Name:
Title:
SWORN TO AND SUBSCRIBED before me, the undersigned
authority, by _________________, __________________ of
_____________________, a __________________ on this _________
day of ____________________, 199__.
Notary Public, State of Texas
PURCHASE AND SALE AGREEMENT
(Raintree Apartments)
This PURCHASE AND SALE AGREEMENT ("Agreement") is entered into
as of the ________ day of June, 1996.
1. Parties. The parties to this Agreement are as follows:
Walden Residential Properties, Inc., a Maryland corporation,
maintaining its principal office at One Lincoln Center, 5400 LBJ
Freeway, Suite 400, Dallas, Texas 75240.
Florida Raintree I Associates, Ltd., a Florida limited
partnership maintaining offices at c/o Lincoln Property Company,
One North Dale Mabry Highway, Suite 820, Tampa, Florida 33609.
2. Definitions. As used in this Agreement, the following
terms shall have the meanings hereinafter set forth in this
Paragraph:
(a) Agencies: All governmental agencies having jurisdiction
over the construction, zoning and operation of the Property.
(b) Applicable Environmental Laws: Any and all applicable
laws pertaining to health or the environment, including, without
limitation, the Superfund Reauthorization and Amendments Act of
1986 ("SARA"), the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA"), and the
Resource Conservation and Recovery Act of 1976 ("RCRA"), as well as
any and all other laws, ordinances, rules and/or regulations
created or imposed by any governmental authority having
jurisdiction with respect to the Property, whether local, state or
federal, pertaining to environmental regulation, contamination,
clean-up or disclosure, as now existing and/or as hereafter
amended.
(c) Appurtenant Interests: All of the Seller's interest in
and to the appurtenances to the Land and in and to all streets,
alley and other public ways adjacent thereto.
(d) Closing: The consummation of the transfer of title to
the Property as contemplated hereunder and payment of the
consideration thereof in the manner provided at Paragraph 8 hereof.
(e) Current Rent Roll: The current schedule attached hereto
as Exhibit G, dated not more than thirty (30) days prior to the
Effective Date, setting forth, as of the date thereof, the Tenant
Leases.
(f) Earnest Money Deposit: An amount equal to $100,000.00 in
cash, to be delivered by Purchaser to the Title Insurer within two
(2) business days following the Effective Date, together with all
earnings (if any) thereon.
(g) Effective Date: The date upon which this Agreement,
executed by both Purchaser and Seller, shall have been delivered to
Title Insurer together with the Earnest Money Deposit.
(h) Excluded Personal Property: The tangible personal
property listed at Exhibit F hereto.
(i) Feasibility Period: The period commencing with the
Information Delivery Date (as hereinafter defined) and ending on
the thirtieth (30th) day thereafter.
(j) Hazardous Materials: Any toxic materials, hazardous
waste or hazardous substance as these terms are defined in the
Applicable Environmental Laws.
(k) Improvements: All of the buildings, fixtures and
improvements located on the Land, together with all mechanical
systems, fixtures and equipment, electrical systems, fixtures and
equipment, plumbing fixtures, systems and equipment, heating
fixtures, systems and equipment and air conditioning fixtures,
systems and equipment installed in, belonging to or constructed as
components of the Improvements.
(l) Included Personal Property: All tangible personal
property listed at Exhibit E hereto, together with, for each
apartment unit comprising the Improvements, whether or not thus
listed, all existing (or replacements thereof as required under the
terms of this Agreement) carpeting, window coverings, ranges,
ovens, dishwashers, ceiling fan(s), bookshelves, range hoods,
refrigerators, heating units, air conditioning units, sinks and
garbage disposals, and washers and dryers, the same to be in the
same condition at Closing as existed at the expiration of the
Feasibility Period, normal wear and tear excepted or as otherwise
provided under the terms of this Agreement, and all other
furniture, fixtures, equipment, machinery, supplies and other
tangible personal property and all leases of tangible personal
property located on the Land and Improvements and belonging to
Seller and used in the normal operation and maintenance of the Land
and Improvements.
(m) Information Delivery Date: The date which is fifteen
(15) days from the Effective Date, by which date Seller shall
deliver to Purchaser the documents and other items listed in
Schedule I attached hereto and incorporated herein by reference.
(n) Land: The land more particularly described at Exhibit A.
(o) Material Damage: Damage to the Property of a nature such
that the cost of restoring the Improvements located on Property to
its condition prior to the fire or other casualty, as mutually
agreed by Seller and Purchaser or as otherwise determined in
accordance with this Agreement, (but in full compliance with all
then applicable building, health, zoning, and similar laws,
ordinances, and regulations) will exceed an amount equal to five
percent (5%) of the Purchase Price, whether or not such damage is
covered by insurance.
(p) Owner Policy: An Owner Policy of Title Insurance issued
by the Title Insurer in the standard form promulgated by the
Florida Department of Insurance, as modified pursuant to Paragraph
6(d) hereof.
(q) Permitted Title Exceptions: Any items to which Purchaser
does not object within the time period provided in Paragraph 6(c)
hereof or which Purchaser approves as otherwise provided in this
Agreement.
(r) Plans and Specifications: The plans and specifications
in Seller's possession, if any, with respect to the Property.
(s) Property: The parcel of real property to be purchased
and sold pursuant to this Agreement and comprised of the Land,
Improvements, Included Personal Property, Appurtenant Interests,
Tenant Leases and all other property described in Paragraph 4
hereof.
(t) Proration Date: 12:00 a.m., Eastern Daylight Time, on the
date of Closing or such other date as shall be specified in
Paragraph 9 hereof.
(u) Purchase Price: The total consideration to be paid by
Purchaser for the Property as set forth in Paragraph 5 hereof.
(v) Purchaser: Walden Residential Properties, Inc., a
Maryland corporation, together with any designee thereof described
in Paragraph 21 hereof.
(w) Rent Roll: Collectively, the Current Rent Roll and the
Revised Rent Roll, or either of them as of the context may
required.
(x) Revised Rent Roll: A revision of the Current Rent Roll
dated not earlier than five (5) days prior to Closing.
(y) Seller: Florida Raintree I Associates, Ltd., a Florida
limited partnership.
(z) Seller's Knowledge: The term "Seller's Knowledge" as used
herein shall mean the actual knowledge of Mary Cook Detweiler,
local Property Manager for Lincoln Property Company and Fred
Cheney, National Property Manager for Lincoln Property Company.
(aa) Service Contracts: All service or maintenance contracts
relating to the Property as described at Exhibit K hereto.
(bb) Street Rents: The rents for space in the Property being
offered to the public as of the date of this Agreement.
(cc) Survey: With respect to the Property, an on-the-ground
survey of the Land and Improvements prepared by a qualified,
registered public surveyor selected by Seller and reasonably
acceptable to Purchaser and the Title Insurer (i) containing a
field note description of the Land which (A) establishes a
beginning point by reference to a permanent monument, (B) states
the distances, bearing and angles of all sides or boundaries of the
Land, (C) if appropriate, states the length of arc, central angle
and radius of circle for arc, central angle and radius of circle
for arc and chord distance and bearing of all curving sides or
boundaries of the Land, (D) establishes a single perimeter
description, and (E) references all abutting or encroaching
streets, roadways and fence lines, including a statement of width,
(ii) noting, by plat, the size and location of all Improvements and
other physical conditions affecting the Property, (iii) noting, by
plat, the size and location of all abutting or encroaching streets,
roadways and fence lines, (iv) noting, by plat, the size and
location of all encroachments or protrusions, (v) noting, by plat,
the size, location and recording data of all easements, ditches,
rights-of-way, setback lines, curb cuts and similar matters, (vi)
locating any portion of the Land or Improvements determined to be
flood prone or within the 100-year flood plain under the Flood
Disaster Protection Act of 1973 or otherwise determined to be flood
prone or within the flood plain by the Federal Emergency Management
Agency, the United States Army Corps of Engineers, a unit or
department of the United States, the engineer preparing the Survey,
or any other state or federal agency, (vii) certifying the number
of acres of land in the Land, both as to total acreage and as to
net acreage, (viii) being dated or recertified as of a date not
earlier than the Effective Date, and (ix) containing a certificate
substantially in the form attached hereto as Exhibit C.
(dd) Tenant Leases: The lease agreements relating to the Land
and Improvements and existing at Closing.
(ee) Title Commitment: A Commitment for Title Insurance
issued by the Title Insurer in the standard form promulgated by the
Florida State Board of Insurance.
(ff) Title Insurer: Stewart Title Guaranty Company, or other
title insurance company acceptable to Purchaser in its sole
discretion, 3401 W. Cypress, Suite 101, Tampa, Florida 33607-5040;
phone (813) 876-0619; fax (813) 872-2795, Attention: Harold
Hickman.
3. Agreement of Purchase and Sale. Subject to the terms and
conditions thereof and for the consideration of One Hundred and
No/100 Dollars ($100.00) paid to Seller by Purchaser on the
Effective Date, the receipt and sufficiency of which hereby is
acknowledged and which sum is non-refundable to Purchaser and in no
event shall be applied against the Purchase Price and for the
Purchase Price set forth at Paragraph 5, Purchaser hereby agrees to
purchase, and Seller hereby agrees to sell, the Property.
4. Property to be Sold. The Property to be purchased
hereunder by Purchaser shall be comprised of (i) the Land, (ii) the
Improvements, (iii) all Included Personal Property, but not the
Excluded Personal Property, (iv) the Appurtenant Interests, (v) the
Tenant Leases, and (vi) all of Seller's right, title and interest,
if any, in and to (A) warranties covering the Included Personal
Property and the Improvements, (B) the trademarks or tradenames
used by Seller in connection with the Property, including, but not
limited to, "Raintree Apartments", but excluding the name "Lincoln
Property Company" and any of its associated logos, (C) the Service
Contracts (and any deposits thereunder) (to the extent assignable
and not terminated as provided elsewhere in this Agreement), (D)
all licenses, permits, approvals and other intangible property
rights relating to the Property and (E) all utility, security and
other deposits.
5. Purchase Price. Subject to any adjustments provided
elsewhere in this Agreement, the Purchase Price shall be SIX
MILLION FOUR HUNDRED FORTY FIVE THOUSAND AND NO/100 DOLLARS
($6,445,000.00) payable as follows:
(a) Earnest Money Deposit. $100,000.00, payable by delivery
of the Earnest Money Deposit to the Title Insurer in accordance
with this Agreement; and
(b) Cash at Closing. $6,345,000.00, payable in cash or other
immediately available funds at Closing.
6. Evidence of Title.
(a) Title Commitment. Within ten (10) days from and after the
Effective Date, Seller, at Seller's sole expense, shall order and
deliver, or cause to be delivered, to Purchaser or Purchaser's
attorney, a current Title Commitment from the Title Insurer
covering the Property, in the amount of the Purchase Price covering
the Land and Improvements located on the Property. The Title
Commitment shall be issued as of or subsequent to the Effective
Date and shall include good, legible copies of all documents
constituting exceptions to the Seller's title as reflected in the
Title Commitment. The Title Commitment shall reflect good and
indefeasible fee simple title vested in the Seller.
(b) Survey. Within five (5) days from the date of delivery of
the Title Commitment, Seller, at Seller's sole expense, shall order
and deliver, or shall cause to be delivered, to Purchaser or
Purchaser's attorney, the Survey of the Land and Improvements. The
Survey shall be sufficient to permit the Title Insurer to modify
the standard printed exception in the Owner Policy pertaining to
discrepancies, conflicts, shortages in area or boundary lines,
encroachments, overlapping of improvements or similar matters, as
provided below, and shall otherwise comply with the terms hereof.
(c) Review. Purchaser shall have through and including the
expiration of the Feasibility Period in which to review the Title
Commitment, Survey and exception documents and to deliver to Seller
in writing such objections as Purchaser may have to anything
contained or set forth therein. Any items to which Purchaser does
not object to prior to the expiration of the Feasibility Period
shall be Permitted Title Exceptions. Seller may, at its sole
discretion, elect to attempt to cure any of Purchaser's title and
survey objections. If Seller so elects, Seller shall so notify
Purchaser in writing and shall have a period of fifteen (15) days
from and after receipt of Purchaser's written objections within
which to attempt to cure same. In the event that Seller fails or
refuses to cure such objections within such fifteen (15) day
period, Purchaser shall have the right to terminate this Agreement
and receive an immediate return of the Earnest Money Deposit or
proceed to Closing subject to such objections which shall be deemed
waived and shall become Permitted Title Exceptions.
(d) Owner Policy. At Closing, the special warranty deed to
the Land and Improvements referred to in Subparagraph 8(b)(i)
hereof shall be recorded, and Seller shall furnish or cause to be
furnished to Purchaser as soon as possible after Closing, at
Seller's sole expense, the Owner Policy covering the Property,
together with such endorsements as Purchaser may require, insuring
good and indefeasible fee simple title to be vested in Purchaser
and insuring Purchaser's title to the Property in an amount equal
to the Purchase Price for the Property, subject only to the
Permitted Title Exceptions and the standard printed exceptions,
except that:
(i) the exception relating to restrictions against the
Property shall be endorsed by the Title Insurer to read "None
of record" except for such restrictions as may be included in
the Permitted Title Exceptions;
(ii) the exception relating to discrepancies, conflicts,
shortages in area, boundaries, encroachments, or overlaps
shall be modified, at Seller's sole cost and expense, by
deleting such exception and referencing only specific survey
exceptions; and
(iii) the exception relating to ad valorem taxes
shall except only to taxes owing for the current year of
Closing and subsequent years and subsequent assessments for
prior years due to change in land usage or ownership, not yet
due and payable.
(e) Remedies of Purchaser. If Seller is unable to furnish
Purchaser the Title Commitment pursuant to Subparagraph 6(a) or the
Owner Policy in the manner provided at Subparagraph 6(d), then, at
Purchaser's sole discretion, Purchaser may terminate this Agreement
and receive an immediate return of the Earnest Money Deposit, and
the parties shall have no further obligation to each other, except
as is expressly provided herein.
(f) Uniform Commercial Code Search. Seller also shall
deliver at Closing, at Seller's cost and expense, Uniform Commercial
Code financing statement searches covering Seller and any general
partner of Seller for the state constituting the situs of the
Property and the county in which the Property is located showing
that all of the Included Personal Property is free and clear of all
liens and encumbrances other than the Permitted Title Exceptions
and also shall deliver copies of receipts showing payment of all
taxes levied and payable on the Property.
7. Covenants, Representations and Warranties of Seller.
Seller and Purchaser agree that, except as expressly provided
herein, the Property is being conveyed to Purchaser in an "AS IS"
condition, without representation or warranty by Seller.
Notwithstanding the foregoing, as an inducement to Purchaser to
enter into and perform this Agreement, Seller represents and
warrants to, and covenants with, Purchaser, as of the date of this
Agreement and thereafter in accordance with Paragraph 7(w), as
follows:
(a) Legal and Beneficial Title. Seller is the sole entity
holding good and indefeasible fee simple title to the Property,
free and clear of all liens and encumbrances except as set forth in
the Title Commitment.
(b) Due Authorization and Execution and Validity, Binding
Effect and Enforceability. This Agreement has been duly authorized
and executed by Seller and is a valid and binding obligation of,
and is enforceable, in accordance with its terms, against Seller.
The documents delivered to Purchaser at Closing will be duly
authorized and executed by Seller and will be a valid and binding
obligation of, and will be enforceable in accordance with their
terms against, Seller.
(c) Rent Roll. Attached hereto as Exhibit G is the Current
Rent Roll. Not earlier than five (5) days prior to Closing, Seller
shall deliver a Revised Rent Roll to Purchaser, certified by Seller
in writing as true and correct in all material respects. The
Revised Rent Roll shall set forth the following:
(i) the name of each tenant;
(ii) the lease commencement and expiration dates; the
nature of any renewal options;
(iii) the amount of any security deposits;
(iv) a list of vacant apartment units;
(v) the size and type of each vacant unit; and
(vi) the amount and description of any concessions and
any rights of first refusal.
(d) Representations as to Rent Roll. To Seller's Knowledge
and except as expressly set forth in the Rent Roll:
(i) All of the information contained on the Rent Roll is
true, correct and complete as of its date, in all material
respects.
(ii) No rent under any Tenant Lease has been, or prior to
Closing will be, prepaid for a period in excess of thirty (30)
days except as set forth on the current Rent Roll and/or
Revised Rent Roll.
(iii) No tenant has any right of first refusal or
option with respect to the leasing of any portion of the
Property.
(iv) Except as otherwise provided in Article 9(a) of this
Agreement, no one, including any tenant, has any option or
right of first refusal to purchase the Property or any part
thereof.
(v) There are no oral agreements with anyone, including
tenants, with respect to the Property or any portion thereof,
except as set forth in a Rent Roll or at Exhibit K.
(vi) All of the present Tenant Leases for rental space in
the Improvements are in writing, on a standard form (which
form is attached hereto as Exhibit N) and are (A) in full
force and effect, (B) valid and binding agreements of, and
fully enforceable in accordance with their terms against, the
tenants, and (C) duly executed by all parties.
(vii) The Tenant Leases will not be amended in any
way after the date hereof, other than in the ordinary course
of business, without the prior, written consent of Purchaser,
which consent shall not be unreasonably withheld. Purchaser,
unless it otherwise shall advise Seller in writing within five
(5) days following Seller's request for such consent, shall be
deemed to have consented to any such amendment.
(viii) There are no uncured defaults on the part of
any party to any of the Tenant Leases except as otherwise
disclosed on the current Rent Roll and/or Revised Rent Roll,
and Seller is in material compliance with all of lessor's
obligations thereunder.
(ix) None of the rentals due or to become due under the
Tenant Leases will be assigned, encumbered, or subject to any
liens at the Closing other than the Permitted Title
Exceptions.
(x) Except as set forth at Exhibit G, at the time of
Closing, all tenants will be paying charges for electricity
consumed in their space, including heating and air
conditioning, on an individually metered basis.
(e) Street Rents. The Street Rents are set forth on Exhibit
H attached hereto and incorporated herein for all purposes.
(f) Operating Statements. Attached at Exhibit I is the most
recent monthly statement of income and expense in connection with
the operation and maintenance of the Property. Such statements are
unaudited and were prepared on a modified accrual basis of
accounting by an accountant employed by Seller. There have been no
material adverse changes in the gross income from the Property from
that set forth in the most recent operating statement at Exhibit I
to the Effective Date. Seller agrees to make available to Purchaser
or its representatives, at Seller's office or at the Property, all
existing supporting documentation for such statements in Seller's
possession or control.
(g) Financial Statements. Seller has previously provided to
Purchaser such information as is available in the ordinary course
of business and required by Purchaser's accountants to perform (at
Purchaser's expense) a complete audit of the Property for the
twelve (12) month year ended December 31, 1995, as well as
information from January 1, 1996 to the current date.
Additionally, at least thirty (30) days prior to Closing, Seller
shall provide Purchaser with the then existing most current
financial statements of the Property.
(h) Compliance with Applicable Regulations.
(i) To Seller's Knowledge, there exist no commitments or
agreements between Seller and any of the Agencies affecting
the Property which have not been fully disclosed to Purchaser
in writing.
(ii) To Seller's Knowledge, Seller has received no
notices and is unaware of any facts or conditions which, with
notice or lapse of time, would constitute uncured violations
at the Property of zoning, building, fire, rent control,
tenant security or other deposits or any other applicable
statute, ordinance or regulation, relating to the Property,
its construction or any occupancy thereof, nor, to Seller's
Knowledge, are there presently pending or threatened against
Seller or against the Property any judgments relating to any
of the above matters, any judicial proceedings or
administrative actions or any state of facts which, to
Seller's Knowledge, with notice or lapse of time, could
reasonably be expected to give rise to any such proceedings or
actions.
(iii) To Seller's Knowledge, the Property and Seller
are not currently subject to (A) any existing, pending or
threatened investigation or inquiry by any governmental
authority or (B) any remedial obligations, under any
Applicable Environmental Laws; and Seller has not obtained and
to Seller's Knowledge, is not required to obtain, and Seller
has no knowledge of any reason Purchaser will be required to
obtain, any permits, licenses, or similar authorizations to
occupy, renovate, operate or use any portion of the Property
by reason of any Applicable Environmental Laws.
(iv) To Seller's Knowledge, no Hazardous Materials are
located on the Property. To Seller's Knowledge, the Property
does not contain any underground tanks for the storage or
disposal of Hazardous Materials. Further, to Seller's
Knowledge, (A) the Property during Seller's ownership has not
been used for the storage, manufacture or disposal of
Hazardous Materials, and (B) no written complaint, order,
citation or notice with regard to air emissions, water
discharges, noise emissions and Hazardous Materials, if any,
or any other Applicable Environmental Laws from any person,
government or entity has been issued to and received by
Seller.
(v) If, prior to Closing, (A) Seller has received any
written notices from any of the Agencies, or (B) any legal
action has been instituted and served upon Seller relating to
violations at the Property of zoning, building, fire, rental
controls or Applicable Environmental Laws or (C) any written
notice or advice from any current insurer of the Property or
any part thereof, requesting any improvements alterations,
additions, corrections or other work in, on or about the
Improvements, whether related to the Property or to the
activities of any occupant thereof is received by Seller, the
parties shall agree in writing on an amount to be delivered to
the Title Insurer or such other party agreed upon by Seller
and Purchaser in escrow for the cost of curing or eliminating
any such items and the amount as so determined shall be
withheld from the proceeds of sale and shall be paid over to
Seller upon completion by Seller of such items. If the
parties shall fail to agree on the cost of curing or
eliminating said items prior to Closing, either party shall
have the right to terminate this Agreement by giving written
notice thereof to the other not later than the date of Closing
and, in such event, Purchaser shall have the right to the
return of the Earnest Money Deposit, and neither party shall
have any future obligations to the other, except for
Purchaser's surviving indemnity relating to inspections. The
foregoing provision to the contrary notwithstanding, if the
notice is received or the action served within fifteen (15)
days of the Closing, Seller may elect, in its sole and
absolute discretion, to extend the Closing for a period not to
exceed thirty (30) days in order to attempt to cure or
eliminate any such matter.
(i) Liens on Property. To Seller's Knowledge, no action has
been taken with respect to work performed or delivery of material
which would give rise to a lien on the Property for which adequate
provision for payment has not been made. To Seller's Knowledge, at
Closing, there will be no claim in favor of any person or entity
which is or could become a lien on the Land, the Improvements, or
the Included Personal Property, arising out of the furnishing of
labor or materials to the Property for which adequate provision for
payment has not been made; there will be no unpaid assessments
against the Property, except for property taxes assessed but not
due and payable at the time of Closing; and there will be no claim
in favor of any person or entity (including the present management)
for any unpaid commissions or fees for leasing of the Property. In
the event of any such claims at Closing, Seller, at its option and
in lieu of the foregoing, either may (i) establish with the Title
Insurer an escrow of funds in an amount and upon conditions
reasonably acceptable to Seller and Purchaser, (ii) provide a bond
in favor of Purchaser or the Title Insurer in such amount, upon
such conditions and for such purposes as may be satisfactory to
Purchaser, Seller and the Title Insurer in either case for the
purpose of providing for such claims and/or inducing the Title
Insurer to insure Purchaser's title to the Property free and clear
of such claims, or (iii) in the event that a statutory bond process
is available, a bond in the form and amount required by applicable
statute.
(j) Insurance. To Seller's Knowledge, the insurance policies
listed and described at Exhibit J are presently in force, and all
such policies or their equivalent will be maintained in force until
Closing. Seller will not renew, amend, or reduce the coverage
under, or cancel, any existing policy or procure any new policy
without Purchaser's prior, written consent, which shall not be
unreasonably withheld or delayed. Purchaser, at Closing, shall
obtain its own insurance coverage. Seller has received no written
notices from any insurer of the Property or any part thereof
requesting any improvements, alterations, additions, correction or
other work in, on or about the Improvements, whether related to the
Property or to the operation of any occupant thereof, which have
not been cured or satisfied.
(k) Pending or Threatened Litigation. To Seller's Knowledge,
there are no lawsuits or legal proceedings threatened, instituted,
or served upon Seller regarding ownership, construction, use or
possession of the Property or any portion thereof.
(l) Inspection of Plans and Specifications, Reports and Books
and Records. The Plans and Specifications, all reports (including
but not limited to soil tests and construction inspection reports),
the books and records and all Tenant Leases and other documents
related thereto regarding the construction, management and
operation of the Property in Seller's possession or control that are
not otherwise provided to Purchaser hereunder shall be open to
inspection by Purchaser or Purchaser's agents during regular
business hours from and after the Effective Date, and Seller shall
reasonably cooperate with Purchaser or its agents with respect to
the inspection of the Plans and Specifications, all reports, the
books and records, the Tenant Leases, the Property or the
construction, management and operation thereof. Such cooperation
shall not be deemed to include incurring any cost or expense.
(m) Maintenance of Property Until Closing.
(i) Until Closing, the Property will be managed,
operated and maintained, in the ordinary course of business
and materially the same manner in which the Property is
currently being managed, operated and maintained, and Seller
will not remove any fixtures, furnishings, equipment or
personalty subject to this Agreement, except for repair or
replacement.
(ii) All vacant rental units shall be in "market-ready"
rentable condition as of the date of Closing; provided,
however, Seller and Purchaser acknowledge that rental units
that are vacated within five (5) business days prior to the
date of Closing will be in varying conditions of make-ready
for leasing, as is ordinary in Seller's course of business.
As to any units that are not in "market-ready" rentable
condition which units were vacated more than five (5) business
days prior to the date of the Closing, Purchaser and Seller
understand and agree that Purchaser shall be entitled to
credit against the Purchase Price at Closing an amount equal
to $500.00 per unit which Seller and Purchaser agree is the
amount required to put in "market-ready" rentable condition
any units that are not in such condition as of the date of the
Closing. For purposes of this paragraph, the term "market-ready"
shall mean units that are cleaned (including carpets),
painted, in good repair, with all appliances in good-working
order. Purchaser shall have the right to re-inspect the
Property during the period commencing not earlier than five
(5) days prior to the Closing and ending on the Closing solely
for purposes of verifying the maintenance of the Property in
accordance with the applicable provisions of this Agreement.
(n) Service Contracts.
(i) All Service Contracts are listed in Exhibit K.
Seller will not enter into any other service, operating or
management contracts relative to the Property that cannot be
canceled on thirty (30) days' notice and at no cost or
expense, nor will Seller make, or agree to, prior to Closing,
any material change or modification to the contracts set forth
in Exhibit K without the prior, written consent of Purchaser
which shall not be unreasonably withheld. The agreement
concerning the management of the Property currently in effect
set forth at Exhibit K shall be terminated effective on the
date of Closing. After the expiration of the Feasibility
Period, provided Purchaser has not terminated this Agreement,
Seller shall, upon written notice from Purchaser, send
termination notices with respect to such cancelable Service
Contracts specified by Purchaser.
(ii) Seller has no employees in connection with the
Property. Any persons who work at the Property (other than
pursuant to Service Contracts) are employees of the Seller's
property manager pursuant to a property management agreement
which shall be terminated at Closing. Seller agrees that
benefits or compensation accrued prior to Closing, and due or
claimed to be due either before or after Closing, to employees
or former employees of the property manager shall constitute
obligations of the property manager only, and Seller agrees to
indemnify and hold Purchaser harmless from all such
obligations and claims.
(o) Restrictions on Additional Indebtedness. Seller will not
borrow any money or do, or fail to do, any other act or thing which
would cause the Land, the Improvements or any Included Personal
Property to become pledged or otherwise utilized as collateral or
in any way stand as security for any indebtedness or obligation,
other than as presently existing or in the ordinary course of
business.
(p) Closing Not Constituting Breach. The consummation of the
transaction contemplated herein will not result in the breach of
any provision in any lease or other agreement affecting the
Property subject to the satisfaction of the conditions set forth in
Article 9(a) of this Agreement.
(q) Access to Property. Seller has received no written
notices of the existence of any fact or condition which would
result in the termination or restriction of the current access from
the Property to any presently existing highways and roadways
adjoining the Property or to any sewer or other utility serving the
Property.
(r) Improvements and Amenities.
(i) Description of Improvements and Amenities. A
description of the improvements and amenities of the Property
is more particularly set forth at Schedule II attached hereto
and incorporated herein by reference for all purposes, which
is materially correct.
(ii) Utilities. Utility systems for the transmission of
gas, telephone, electricity, storm and sanitary services, and
water are available at the property lines of the Property.
(s) Seller's Non-foreign Status. Seller is not a "foreign
person" within the meaning of Sections 1445 and 7701 of the
Internal Revenue Code of 1954, as amended; that is, Seller is not
a non-resident alien, foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the
Internal Revenue Code of 1986, as now existing or hereafter
amended).
(t) Taxes and Assessments. All ad valorem taxes and personal
property taxes which are due and payable, together with all special
assessments for improvements to the Property have been paid in
full.
(u) Exhibits. To Seller's Knowledge, all exhibits attached
hereto are true and correct in all material respects.
(v) Seller's Affidavit at Closing. The representations,
warranties and covenants of the Seller contained in this Agreement
or in any document delivered to Purchaser pursuant to the terms of
this Agreement (whether in this Paragraph 7 or elsewhere) (i) shall
be true and correct in all material respects and not in default at
the time of Closing, just as though they were made at such time,
and Seller shall deliver to Purchaser, at Closing, an Affidavit to
that effect, and (ii) in the event of a breach of such
representations, warranties or covenants prior to or at Closing,
Purchaser shall have the right to make a claim hereunder against
Seller for a period of one (1) year following the Closing.
8. Covenants, Representations and Warranties of Purchaser.
As an inducement to Seller to enter into and perform this
Agreement, Purchaser makes the following covenants, representations
and warranties which covenants, representations and warranties
shall be true and correct in all material respects on the date
hereof and on the Closing Date, and shall be a condition precedent
to Seller's obligation to close the transaction contemplated
herein:
(a) Organization and Authority. Purchaser is a corporation
duly organized, validly existing and in good standing under the
laws of Maryland, and has all requisite power, authority and
capacity to execute and enter into this Agreement; and the
transactions contemplated herein by Purchaser have been duly
authorized and approved by all requisite corporate actions, and
this Agreement has been duly executed and delivered on behalf of
Purchaser by its duly authorized officers and constitutes the
legal, valid and binding obligations of Purchaser. Purchaser has
no knowledge of any item or provision of this Agreement which is
unenforceable.
(b) No Conflict; Required Filings and Consents.
(i) The execution and delivery of this Agreement by
Purchaser does not and the transactions contemplated by this
Agreement will not (A) conflict with, or result in any
violation or breach of any provision of Purchaser's Charter or
Bylaws, (B) result in any violation or breach of, or
constitute (with or without notice or lapse of time, or both)
a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any
benefit) under any note, bond, mortgage, indenture, lease,
contract or other agreement, instrument or obligation to which
Purchaser is a party or by which Purchaser or any of its
properties or assets are bound, or (C) conflict or violate any
permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable
to Purchaser or any of its properties or assets, except in the
case of (B) and (C) for any such violations, breaches,
defaults, terminations, cancellations, accelerations or
conflicts which would not, in the aggregate, have or result in
a material adverse effect on Purchaser or impair the ability
of Purchaser to consummate the transactions contemplated by
this Agreement.
(ii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental
entity, is required with respect to Purchaser in connection
with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
9. Closing and Conditions to Closing.
(a) Conditions Precedent to Closing. It shall be a condition
precedent to Closing that Seller obtain (i) all necessary consents
of the limited partners of Seller to the transaction set forth
herein and (ii) that General Electric Capital Corporation ("GECC")
as lienholder on the Property waive its right of first refusal to
purchase the Property and agree to the release of the Property from
the lien held by GECC . In addition, Purchaser and Seller
acknowledge and agree that Purchaser shall have no right to
purchase the Property except and unless Purchaser simultaneously
purchase the property owned by Seller, located in Jacksonville,
Florida known as The Princeton Meadows II Apartments, pursuant to
a contract of even date herewith by and between Seller and
Purchaser (the "Princeton Meadows II Contract"). A default by
either party under the Princeton Meadows II Contract shall be
deemed a default hereunder.
(b) The Closing Generally. The Closing shall occur at 10:00
a.m. on or before, but no later than, the fifteenth (15th) day
following the expiration of the Feasibility Period and the
satisfaction of the conditions set forth in subparagraph 8(c). The
Closing will be held at the offices of the Title Insurer, or at
such other time and place as to which the parties hereafter may
agree upon in writing. At Closing, the Purchase Price shall be
delivered to Seller in the manner provided at Paragraph 5, together
with the documents to be delivered by Purchaser to Seller
hereunder, and possession of, and title to, the Property shall be
delivered and conveyed to Purchaser by Seller in the manner
provided herein, together with all other documents to be delivered
by Seller to Purchaser hereunder.
(c) Documents Delivered By Seller at Closing. With respect
to the Property, at the Closing, Seller, at its sole cost and
expense, shall deliver, or shall cause to be delivered, to
Purchaser the documents described below:
(i) Special Warranty Deed. A special warranty deed,
duly executed and acknowledged, conveying to Purchaser good
and indefeasible fee simple title to the Land and Improvements
free and clear of all liens and encumbrances, except the
Permitted Title Exceptions, in the form attached at Exhibit M.
(ii) Bill of Sale. A bill of sale, duly executed and
acknowledged, with special warranties of title, subject only
to the Permitted Title Exceptions, conveying to Purchaser the
Included Personal Property in the form attached at Exhibit M
together with appropriate endorsements or such other
instruments as may be necessary to transfer title to Seller's
interest in the Improvements and Included Personal Property.
(iii) Assignment and Assumption Agreement. An
assignment and assumption agreement, duly executed and
acknowledged, assigning to Purchaser, and containing an
assumption by Purchaser of (A) Seller's interest in and to
all assignable Service Contracts which were not terminated as
herein provided, together with copies of the originals of each
of said contracts, if in Seller's possession, (B) all existing
warranties, if any, on the Improvements and/or the Included
Personal Property, including, but not limited to, roofs,
foundations, plumbing, heating, air conditioning, and
electrical, if any, (C) Seller's right, title and interest, if
any, in and to the trademarks or tradenames used by Seller in
connection with the Property including, but not limited to,
"Raintree Apartments" and (D) Seller's right, title and
interest, if any, in any and all licenses, permits, approvals
and other intangible property or rights relating to the
Property.
(iv) Assignment of Tenant Leases. A transfer and
assignment of the Tenant Leases (the "Assignment of Tenant
Leases"), together with all rents, other income and deposits
paid or payable thereunder, subject to the Permitted Title
Exceptions in the form attached as Exhibit M, together with
delivery of all Tenant Leases and information pertinent
thereto.
(v) Affidavit of Seller. An affidavit of Seller in the
form attached as Exhibit M, pursuant to Subparagraph 7(w) to
the effect that the representations and warranties of Seller
pursuant to Paragraph 7 continue to be true and correct in all
material respects and that all of Seller's covenants (not
otherwise waived by Purchaser) have been performed as of the
date of Closing.
(iv) Owner Policy. Seller, at its sole cost and expense,
also shall deliver or cause to be delivered, as soon as
possible following the Closing, the Owner Policy.
(d) Conditions Precedent to Purchaser's Obligations.
Purchaser shall not be obligated to consummate the transfer of
title to the Property hereunder unless and until:
(i) Closing Documents. Seller has delivered (A) to the
Title Insurer, an executed Closing Statement (in form and
substance reasonably acceptable to Seller and Purchaser), the
closing documents attached at Exhibit M and any other
documents reasonably required by the Title Insurer in order to
insure Purchaser's good and indefeasible fee simple title to
the Property free and clear of all liens and encumbrances,
except the Permitted Title Exceptions, and (B) to Purchaser
all other instruments and documents required by the terms of
this Agreement.
(ii) No Uncured Breach. There has been no uncured breach
by Seller of any of the agreements, representations,
warranties or covenants contained herein, except as may
otherwise expressly provided in this Agreement.
(iii) Title Vested in Seller. Good and indefeasible
title to the Property has been shown to be vested in Seller
subject only to the Permitted Exceptions.
(iv) Delivery of Plans and Specifications, Reports and
Books and Records. Seller shall have delivered to Purchaser,
to the extent in Seller's possession, the Plans and
Specifications and all reports and books and records
concerning the construction, management and operation of the
Property through the date of Closing required to be delivered
pursuant to this Agreement.
(v) Waiver by Purchaser. Purchaser, at any time at or
prior to Closing, may waive any one or more of the preceding
requirements by written notice to Seller to that effect.
(e) Closing Costs. The costs for obtaining and delivering to
Purchaser the Title Commitment, the Survey and all other documents
required herein to be provided to Purchaser by Seller, the premiums
for the Owner Policy in accordance with paragraph 6(d), all
applicable intangible and documentary taxes incurred as a result of
recording the special warranty deed described in Subparagraph
8(b)(i) hereof, except as otherwise provided herein, any and all
prepayment penalties or premiums with respect to existing debts
secured by the Property which will not constitute Permitted
Exceptions and the commission due to Broker described in
subparagraph 12(a) herein and the costs of obtaining any estoppel
letters shall be borne by Seller. The recording costs for the
special warranty deed described in subparagraph 8(b)(i) hereof and
any other of the Closing Documents necessary to convey good and
indefeasible fee simple title to the Property to Purchaser in
accordance with this Agreement, the escrow fees, if any, charged by
the Title Company shall be borne equally by Purchaser and Seller.
Purchaser and Seller each shall pay their respective attorneys'
fees and expenses. All other costs and expenses in connection with
the transaction contemplated by this Agreement, unless otherwise
expressly set forth herein to the contrary, shall be borne by
Seller and Purchaser in the manner in which such costs and expenses
customarily are allocated between the parties at closings of real
property similar to the situs of the Property, respectively.
10. Deliveries by Purchaser at Closing. With respect to the
Property, at the Closing, Purchaser, at its sole cost and expense,
shall deliver, or shall cause to be delivered, to Seller, the items
described below:
(a) The cash portion of the Purchase Price in accordance with
Paragraph 5 hereof;
(b) A Closing Statement in form and substance reasonably
acceptable to Seller and Purchaser;
(c) The Assignment of Tenant Leases;
(d) Such documents as may be reasonably required by the Title
Insurer to be executed and delivered by Purchaser, including
without limitation, a Mechanic's Lien Affidavit and Indemnity, Tax
Agreement and Utility Agreement;
(e) Such documents as may be reasonably required by Seller
pursuant to which Purchaser acknowledges receipt of such documents,
items and property as may be delivered to and received by Purchaser
at the Property, including books and records, contracts, plans and
specifications, licenses and permits, keys, and the like; and
(f) Other documents and instruments which Seller may
reasonably request or to which Seller may be reasonably entitled
under any of the other provisions of this Agreement.
11. Prorations and Adjustments.
(a) Items Prorated. All prorations and adjustments shall be
made and determined as of the Proration Date as follows:
(i) Rents. Collected rents shall be prorated. Seller
shall not receive any proration credit for rents accrued and
delinquent for months prior to the Proration Date, and all
rentals received after such date shall be applied, first, to
current and, then, delinquent obligations, the latter of which
shall be paid to Seller; provided, however, nothing herein
shall operate to require Purchaser to institute a lawsuit to
recover such amounts. Seller shall not be charged for
uncollected rent for the month within which the Proration Date
shall occur, it being the intent of the parties to prorate
only the rents that have been collected at such date. Any
delinquent rents for periods prior to the Proration Date and
a prorated portion of rents for the month uncollected as of
the Proration Date which are collected by Purchaser and which
are not necessary to bring a tenant current as described above
shall be forwarded to Seller.
(ii) Prepaid Rents and Security and Other Deposits.
Prepaid rents and security and other tenant deposits
(including but not limited to pet deposits and key deposits),
if any, under assigned leases shall be paid to Purchaser by
Seller (or credited against the Purchase Price) at Closing.
Purchaser shall assume full liability therefor and shall
indemnify and hold Seller harmless with respect to all such
deposits.
(iii) Service Contracts. Prepaid or unpaid amounts
under those Service Contracts listed in Exhibit K, which shall
be assigned to and assumed by Purchaser at Closing shall be
prorated. Notwithstanding the foregoing, Purchaser shall
receive no credit or proration for initial payments and
incentive compensation paid on long-term contracts including
but not limited to laundry contracts and leases.
(iv) Property Taxes. Taxes assessed upon the Property
for calendar year 1996 shall be prorated based on the
assumption that the actual taxes for the entire calendar year
1996 will be the same as calendar year 1995, which amount
Seller and Purchaser agree is a reasonable estimate of 1996
taxes. Taxes prorated at Closing shall be re-prorated between
the parties promptly upon the receipt of the 1996 real estate
tax bill and proper adjustments promptly paid.
(v) Utilities. Utility charges shall not be prorated
but, rather, instructions shall be given to the utility
companies by Seller (with a duplicate copy of such instruction
being provided concurrently to Purchaser) to read the meters
on the date of Closing and to issue separate statements
thereafter. If applicable, utility deposits will be credited
to Seller and assigned to Purchaser at Closing. In the event
that any provider of utilities shall refuse to issue separate
statements in the manner aforesaid, applicable utility charges
shall be adjusted on a prorata basis by dividing the amount
charged on the utility statement by the number of days covered
by such statement. Seller shall be responsible for payment of
utility charges accruing prior to the Proration Date and
Purchaser shall pay utility charges thereafter.
(vi) Other Adjustments. Such other items as are adjusted
pursuant to custom in the state constituting the situs of the
Property and on similar real estate transactions.
(vii) Delivery by Seller of Documents and Supplies.
Seller, at Closing, shall assign and deliver to Purchaser all
original leases, deposits, supplies, contracts, and other
items as to which proration is to be made. Seller also shall
deliver to Purchaser all Plans and Specifications, if any,
relating to the Property and all such other documents, books,
records, and keys in Seller's possession which relate to the
operation, maintenance or management of the Property. Seller
also shall deliver to Purchaser its current supply, if any, of
printed leasing brochures, floor plans and other advertising
literature with respect to the Property.
12. Material Damage.
(a) Procedure. If, prior to Closing, a Property shall be
destroyed or sustain Material Damage as a result of fire or other
casualty, then, subject to the rights of Seller's lender, at
Purchaser's option exercised in the manner provided hereunder, the
following shall occur with respect to the Property:
(i) This Agreement shall become null and void and the
Earnest Money Deposit shall be returned to Purchaser, provided
that Purchaser gives notice of such election at or prior to
Closing, but in any event within ten (10) days following
receipt by Purchaser of notice of the occurrence of any such
event; or
(ii) If all other conditions precedent to Purchaser's
obligation to close have been satisfied, the purchase and sale
transaction shall close with a reduction in the cash portion
of the purchase price equal to the amount of the applicable
insurance deductible, and concurrently with such closing,
Seller and any other named insured shall assign to Purchaser,
in form reasonably satisfactory to Purchaser, all claims
arising under any policy of insurance covering such casualty,
and Seller shall have no further liability to Purchaser with
respect to such damage.
(iii) If the parties shall fail to agree on the
amount of the cost of such restoration, such cost of
restoration shall be determined by the following process:
Seller and Purchaser together shall select three (3) reputable
independent third party contractors to submit estimates for
the cost of repair of the damage and shall accept the average
of all of the estimates as the amount of the damage for
purposes of this paragraph.
(b) Damage Other Than Material Damage. In the event of any
damage to a Property other than Material Damage, the purchase and
sale transaction shall close in accordance with and subject to the
conditions of Subparagraph 10(a)(ii). If the Property is
uninsured, the cash portion of the Purchase Price shall be reduced
by the cost to restore determined in the manner provided above.
13. Condemnation. If, prior to Closing, any governmental or
similar authority shall institute eminent domain or similar
proceeding or take any steps preliminary thereto (including the
giving of any direct or indirect notice of intent to institute any
such proceeding) that, if successful, would materially, adversely
affect the value of the Property or materially interfere with the
use thereof, Purchaser shall be entitled to terminate this
Agreement upon written notice to Seller prior to Closing and to a
return of the Earnest Money Deposit. As used in this paragraph,
the term "materially" shall mean condemnation proceeds in excess of
an amount equal to five percent (5%) of the Purchase Price.
14. Brokerage and Consultants.
(a) Representation of Seller. Seller represents and warrants
that, except for Daniel V. Allen of CB Commercial Real Estate
Group, Inc. ("Broker"), it has neither employed, retained nor
consulted any broker, consultant, agent or finder in carrying on
the negotiations relative to this Agreement or the purchase and
sale referred to herein, and Seller shall indemnify and hold
Purchaser harmless from and against any and all claims, demands,
causes of action, debts, liabilities, judgments and damages
(including costs and reasonable attorney's fees) which may be
asserted or recovered against it on account of any brokerage fee,
consulting fee, commission or other compensation arising by reason
of the breach of this representation and warranty. Seller further
represents and warrants that, except for amounts to be paid to
Broker under a separate commission agreement between Seller and
Broker, no amount shall be paid by Seller to any party as a fee or
a commission, or any amount of a similar nature, whatever
designated, as a result of the purchase and sale referred to
herein. Seller acknowledges that in no event shall Purchaser be
responsible for any amounts to be paid to Broker.
(b) Representation of Purchaser. Purchaser represents and
warrants that it has neither employed, retained, nor consulted any
broker, consultant, agent or finder in carrying on the negotiations
relative to this Agreement or the purchase and sale referred to
herein, and Purchaser shall indemnify and hold Seller harmless from
and against any and all claims, demands, actions, causes of action,
debts, liabilities, judgments and damages (including costs and
reasonable attorney's fees) which may be asserted or recovered
against it on account of any brokerage fee, consulting fee,
commission or other compensation arising by reason of the breach of
this representation and warranty. Purchaser further represents and
warrants that no amount shall be paid by any Purchaser to any party
as a fee or a commission, or any amount of a similar nature,
whatever designated, as a result of the purchase and sale referred
to herein.
(c) Advice as to Title. Purchaser acknowledges that, at the
time of execution of this Agreement, Seller has advised Purchaser
by this writing that Purchaser should have the abstract covering
the Property examined by an attorney of Purchaser's own selection
or that Purchaser should be furnished with or should obtain a
policy of title insurance.
15. Indemnification.
(a) Indemnification of Purchaser. Seller hereby agrees to
indemnify, defend and hold harmless Purchaser and any other holder
of record title to the Property pursuant to Paragraph 21, their
officers, directors, general partners, agents and employees and
their respective heirs, executors, administrators, successors and
assigns, from and against any and all liability arising out of the
ownership or operation of the Property prior to Closing, including,
but not limited to, any and all claims, liabilities, damages,
penalties and losses, costs or expenses (including court costs and
reasonable attorney's fees) incurred, resulting from or in any way
arising out of any act or omission of Seller, its agents and
employees, in respect of the operation of the Property prior to
Closing, any injury to persons or damage to property happening or
occurring in, on or about the Property. Seller further agrees,
upon notice and request from Purchaser, to contest any such demand,
claim, suit or action against which Seller has hereinabove agreed
to indemnify and hold Purchaser harmless, and to defend any action
that may be brought in connection with any such demand, claim, suit
or action or with respect to which Seller has hereinabove agreed to
indemnify and hold Purchaser harmless and to bear all costs and
expenses of such contest and defense, provided, however, that
Seller shall have no obligation hereunder to indemnify or hold
Purchaser harmless from and against any claim, liability, damage,
penalty or loss, cost or expense incurred by Purchaser incident to,
resulting from or in any way arising out of any act or omission of
Purchaser, its agent or employees, it being understood and agreed,
however, that the employees engaged in the operation of the
Property prior to Closing are and shall be construed to be, for
purposes of this provision, the employees of Seller and the acts
and omissions of said employees shall in no way be attributable to
Purchaser for the purposes of this provision.
(b) Indemnification of Seller. Subject to Subparagraph
13(a), Purchaser agrees to indemnify, defend and hold Seller, its
general partner, the officers, directors, general partners, agents
and employees of the general partner and their respective heirs,
executors, administrators, successors and assigns, harmless from
and against any claim, liability, damage, penalty, loss, cost or
expense (including court costs and reasonable attorney's fees)
incurred by Seller incident to, resulting from or in any way
arising out of any act or omission of Purchaser, its agents or
employees, or arising out of, or in any way connected with,
Purchaser's inspections of the Property pursuant to this Agreement
and the operation of the Property from and after Closing and any
injury to Persons or damage to property happening on the Property
after Closing; and Purchaser further agrees, upon notice, and
request from Seller, to contest any such demand, claim, suit, or
action against which Purchaser has hereinabove agreed to indemnify
and hold Seller harmless, and to defend any action that may be
brought in connection with any such demand, claim, suit or action
or with respect to which Purchaser has hereinabove agreed to
indemnify and hold the Seller harmless and to bear all costs and
expenses of such contest and defense.
(c) Indemnification Procedure. To the extent of any claims
against Seller or Purchaser predicated upon facts which could
reasonably be interpreted as giving rise to potential liability of
Seller or Purchaser under this Paragraph 13, the party against whom
such claim is asserted shall promptly give notice thereof to the
other party hereto. Thereupon, such other party shall have the
option of retaining counsel of its choice to defend both it and the
remaining party in respect of such claim and to control, in a
manner reasonable in light of applicable circumstances, the course
and ultimate disposition of such claim. In the event that a party
to this Agreement shall elect to exercise the option provided in
the preceding sentence, the party electing such option, by reason
thereof, shall be deemed to have agreed to pay all reasonable costs
and expenses of defending against such claim and any liability of
the party against whom such claim was asserted on account thereof.
Without regard to whether any party hereto shall exercise such
option, Seller and Purchaser and their counsel shall consult with
one another concerning such claim and with due regard to both the
mutual and the independent interests of Seller and Purchaser
therein.
16. Notice to Tenants. On the date of Closing or at any time
thereafter, upon request by Purchaser, Seller agrees to give
notice, said notice to be in compliance with local law and in form
reasonably approved by Purchaser, to each of the tenants of space
located on the Property that Seller has sold and conveyed the
Property to Purchaser and that all future rental payments due under
the terms of the Tenant Leases are to be paid as directed by
Purchaser. On the date of Closing or at any time thereafter, upon
request of Seller, Purchaser agrees to give notice to all tenants
that their security deposit (if any) has been paid over to the
Purchaser, and Purchaser has assumed the liability therefor.
17. Payments.
(a) General. All payments to be made under this Agreement
shall be made by the wire transfer of immediately available funds
pursuant to written wiring instructions from the parties and shall
be deemed paid when written confirmation of receipt has been issued
by the receiving bank and not before.
(b) Deposits to Account of Title Insurer. Unless and until
the Title Insurer shall advise Purchaser and Seller to the contrary
in writing, it is represented and acknowledged that deposits to the
account of Title Insurer made hereunder by Seller and/or Purchaser
shall be made as follows:
Account Owner: Stewart Title of Tampa
Account Name: Stewart Title Escrow Account
Account Number: 2710707554
Depository: Barnett Bank, Jacksonville, Florida
ABA Routing No.: 063000047
For Further Credit: Lincoln Property Company transaction
Telephone Advice: Cathy Kalyuos - (813) 872-9898
18. Default and Remedies.
(a) Remedies of Seller. In the event that all conditions to
Purchaser's obligation to close have been satisfied and Purchaser
fails to close its purchase of the Property hereunder, the Earnest
Money Deposit shall be paid to Seller and retained by it as
liquidated damages as Seller's sole and exclusive remedy hereunder.
The parties acknowledge that Seller's damages occasioned by
Purchaser's default hereunder would be difficult to ascertain, but
agree that the amount of the Earnest Money Deposit represents a
reasonable estimate of Seller's damages.
(b) Remedies of Purchaser. In the event that all conditions
to Seller's obligation to close have been satisfied and Seller fails
to close the sale of the Property in accordance with its
obligations under the terms and conditions specified hereunder,
Purchaser, at its sole discretion, either may (i) specifically
enforce this Agreement and the sale and purchase provided for
herein according to its terms by suit filed within ninety (90)
days, or (ii) terminate this Agreement, whereupon the Earnest Money
Deposit shall be returned in full to Purchaser.
(c) Rightful Termination by Purchaser. In the event that the
conditions precedent to Purchaser's obligation to close are not
satisfied and Purchaser terminates this Agreement pursuant to the
terms hereof, the Earnest Money Deposit shall be returned in full
to Purchaser as its sole remedy, and the parties shall have no
further liability to one another, except as may otherwise be
expressly provided hereunder.
(d) Rightful Termination by Seller. In the event that the
conditions precedent to Seller's obligation to close are not
satisfied and Seller terminates this Agreement pursuant to the
terms hereof, the Earnest Money Deposit shall be returned in full
to Seller as its sole remedy, and the parties shall have no further
liability to one another, except as may otherwise be expressly
provided hereunder.
(e) Attorneys' Fees. In the event of any arbitration or other
legal or equitable proceeding for enforcement of any of the terms
or conditions of this Agreement, or any alleged disputes, breaches,
defaults or misrepresentations in connection with any provision of
this Agreement, the prevailing party in such proceeding, or the
nondismissing party where the dismissal occurs other than by reason
of a settlement, shall be entitled to recover its reasonable costs
and expenses, including, without limitation, reasonable attorneys'
fees and costs paid or incurred in good faith at the arbitration,
pre-trial, trial and appellate levels, and in enforcing any award
or judgment granted pursuant thereto. Any award, judgment or order
entered in any such proceeding shall contain a specific provision
providing for the recovery of attorneys' fees and costs incurred in
enforcing such award or judgment, including, without limitation,
(a) postaward or postjudgment motions, (b) contempt proceedings,
(c) garnishment, levy, and debtor and third party examinations, (d)
discovery and (e) bankruptcy litigation. The "prevailing party,"
for purposes of this Agreement, shall be deemed to be that party
which obtains substantially the result sought, whether by
dismissal, award or judgment.
19. Notices. All notices and other communications hereunder
shall be effective as to any party only if, concurrent with notice
to such party, notice shall be given to such party's counsel. All
notices shall be in writing and shall be deemed to have been duly
given the date deposited with a commercial air courier service,
telecopy or facsimile, or the United States Postal Service, the
latter being registered or certified mail, return receipt
requested, first class, postage prepaid, notice to be effective on
the date of receipt, as follows:
Notice to Seller:
Lincoln Property Company
5727 South Lewis, Suite 550
Tulsa, Oklahoma 74105
Attention: Jay L. Helm
Facsimile: (918) 749-2750
Phone: (918) 748-8636
with a copy to: Lincoln Property Company
3300 Lincoln Plaza
500 North Akard
Dallas, Texas 75201
Attention: Mr. Dan M. Jacks
Facsimile: (214) 740-3447
Phone: (214) 740-3403
Notice to Seller's Counsel:
Fellers, Snider, Blankenship, Bailey & Tippens, P.C.
6 East 5th Street, Suite 800
Tulsa, Oklahoma 74103
Attention: David C. Cameron, Esq.
Facsimile: (918) 583-9659
Phone: (918) 599-0621
Notice to Purchaser:
Walden Residential Properties, Inc.
One Lincoln Center
5400 LBJ Freeway, Suite 400
Dallas, Texas 75240
Attention: Mr. Marshall B. Edwards
Phone: 214/788-0510
Facsimile: 214/788-1550
Notice to Purchaser's Counsel:
Munsch Hardt Kopf Harr & Dinan, P.C.
4000 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202
Attention: Robin K. Minick, Esq.
Phone: (214) 855-7542
Fax: (214) 855-7584
20. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED,
ENFORCED AND GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF
FLORIDA. THE INITIAL DRAFT OF THIS AGREEMENT WAS PREPARED BY
PURCHASER ONLY AS A MATTER OF CONVENIENCE AND SHALL NOT BE
CONSTRUED FOR OR AGAINST EITHER PARTY ON THAT ACCOUNT.
21. Binding Effect. This Agreement and the exhibits attached
hereto shall be binding upon, and shall inure to the benefit of,
the parties hereto, their successors and permitted assigns, if any.
Purchaser shall have the right to assign this Contract to any
subsidiary or affiliate of Purchaser, upon written notice to
Seller, delivered at least ten (10) days prior to Closing.
22. Entire Agreement. This Agreement and the exhibits
attached hereto shall constitute the entire contract between the
parties and supersedes all prior and contemporaneous agreements,
representations and undertakings of the parties regarding the
subject matter of this Agreement. This Agreement may not be
modified except by a writing, one or more counterparts of which is
signed by all parties to this Agreement.
23. Vesting of Title To Property. Seller and Purchaser agree
that title to the Property will be conveyed at Closing to such
other entity as Purchaser may direct by written notice to Seller
not less than fifteen (15) days prior to Closing.
24. Waiver. Except as expressly provided in this Agreement,
no inspection by Purchaser of the Property or of any item delivered
by Seller to Purchaser as provided in this Agreement shall
constitute a waiver of any representation, warranty or covenant
made by Seller hereunder. Provided however, in the event that
during the Feasibility Period, Purchaser discovers any fact or
condition in contradiction of any representation, warranty or
covenant made by Seller hereunder and fails to disclose such fact
or condition to Seller prior to Closing, Purchaser shall be deemed
to have waived any claim against Seller arising from such fact or
condition. The waiver by a party hereto of any term, covenant,
agreement or condition herein contained shall not be deemed to be
a waiver of any subsequent breach or failure of condition as to the
same or any other term, covenant, agreement or condition herein
contained, nor shall any custom or practice which may arise between
the parties in the administration of the terms hereof be construed
as a waiver of or in such a manner as to lessen the rights of any
party to insist upon the performance by the other parties in strict
accordance with such terms.
25. Time of the Essence. The time for performance of the
obligations of the parties hereunder is of the essence in this
Agreement.
26. Survival of Agreement. Except as set forth in Paragraph
7(w), the obligation of any parties to this Agreement, including
any performance specified or anticipated to occur following the
Closing, to that extent shall survive the Closing.
27. Headings. The subject headings of paragraphs and
subparagraphs of this Agreement are included for purposes of
convenience only and shall not affect the construction or
interpretation of any of its provisions.
28. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.
29. General.
(a) Memorandum of Terms. Neither Seller nor Purchaser shall
record or cause to be recorded in the public records, at any time
prior to Closing this Agreement or any memorandum or other evidence
hereof.
(b) Time for Performance of Certain Obligations. At either
party's option, this Agreement shall be null and void unless one
copy hereof, executed by Purchaser and Seller shall have been
delivered to the Title Insurer within three (3) business days
following the date of execution hereof by Seller.
(c) Limited Liability of Purchaser's Officers. This Agreement
and all documents, agreements, understandings, and arrangements
relating to this transaction have been executed by the undersigned
in his/her capacity as an officer or director of Purchaser which
has been formed as a Maryland corporation pursuant to the Articles
of Incorporation of Purchaser, and not individually, and neither
the directors, officers or stockholders of Purchaser shall be bound
or have any personal liability hereunder or thereunder. Seller
shall look solely to the assets of Purchaser for satisfaction of
any liability of the Purchaser in respect of this Agreement and all
documents, agreements, understandings and arrangements relating to
the transaction contemplated by this Agreement and will not seek
recourse or commence any action against any of the directors,
officers or stockholders of Purchaser or any of their personal
assets for the performance or payment of any obligation hereunder
or thereunder. The foregoing shall also apply to any future
documents, agreements, understandings, arrangements and
transactions between the parties hereto.
(d) Limited Liability of Seller's Officers. This Agreement
and all documents, agreements, understandings, and arrangements
relating to this transaction have been executed by the undersigned
in his/her capacity as an officer or director of the general
partner of Seller, and not individually, and neither the directors,
officers or stockholders of Seller shall be bound or have any
personal liability hereunder or thereunder. Purchaser shall look
solely to the assets of Seller for satisfaction of any liability of
the Seller in respect of this Agreement and all documents,
agreements, understandings and arrangements relating to the
transaction contemplated by this Agreement and will not seek
recourse or commence any action against any of the directors,
officers or stockholders of the general partner of Seller or any of
their personal assets for the performance or payment of any
obligation hereunder or thereunder. The foregoing shall also apply
to any future documents, agreements, understandings, arrangements
and transactions between the parties hereto.
(e) No Further Agreements. While this Agreement is in full
force and effect, Seller shall not enter into any other agreement
or Letter of Intent to sell the Property.
(f) Confidentiality. The parties hereto hereby agree that
they will maintain the confidentiality of all information and
materials provided to each other in connection herewith and the
terms of the transaction contemplated hereby, the contents of this
Agreement and related documents, if any, except that Purchaser may
disclose material terms which are required to be disclosed by
applicable securities laws or as required by any national
securities exchange on which Purchaser's common stock may be listed
and Purchaser may include a copy of this Agreement and in its
filings with the Securities and Exchange Commission and Seller may
disclose material terms which are required to be disclosed to the
limited partners of Seller, its accountants, attorneys and lender.
30. Date of Performance. In the event the expiration date of
any review period herein specified or the expiration date of any
period of time in which a party hereto is to deliver any item to
any other party hereto should be a legal holiday in the State of
Florida or a Saturday or Sunday, such expiration date shall be
extended to the next business day which is not a legal holiday in
the State of Florida or a Saturday or Sunday, and such next
business day shall be considered such expiration date.
31. Invalid Provisions. If any one or more of the provisions
of this Agreement shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision
hereof, all of which other provisions shall remain in full force
and effect.
32. Inspections. Prior to the expiration of the Feasibility
Period, Purchaser shall have received various reports, satisfactory
to Purchaser in its sole discretion, of inspections of the Property
(including without limitation structural, mechanical,
environmental, cathodic and financial). On or prior to the
Information Delivery Date, Purchaser shall have received the items
listed in Schedule I attached hereto. Seller shall make the
Property and all reports, books and records and agreements relating
to the construction, management and operation of the Property
available to the Purchaser and its agents as provided in Paragraph
7 hereof throughout the Feasibility Period. In addition, Purchaser
agrees that during the Feasibility Period, it shall cause the
Property to be inspected for termites and other wood- destroying
insects. In the event Purchaser terminates this Agreement,
Purchaser shall deliver to Seller a copy of such inspection report.
Purchaser and Seller further agree that during the Feasibility
Period, they shall determine an amount to be credited against the
Purchase Price in the event that Seller is unsuccessful in making
a claim for replacement of the polybutaline pipes installed in the
Property. If the results of the inspections are unsatisfactory to
Purchaser, or if Purchaser and Seller are unable to reach agreement
regarding a credit for the polybutaline pipe, for any reason
whatsoever, in its sole and absolute discretion, Purchaser, at its
election, may terminate this Agreement by giving written notice to
Seller at any time prior to 5:00 P.M., C.D.T., on or before the
last day of the Feasibility Period, whereupon the Title Insurer
immediately shall return the Earnest Money Deposit to Purchaser,
this Agreement automatically shall terminate, and neither party
shall have any further obligation to the other except the
indemnities contained elsewhere herein. In the absence of such
notice by such date, the inspections shall be deemed to have been
approved by Purchaser. Except as expressly set forth herein,
Seller has not made, does not hereby make, and hereby specifically
disclaims any express or implied representations or warranties
whatsoever with respect to the condition of the Property, including
without limitation any representation or warranty regarding quality
of construction, workmanship, merchantability or fitness for any
particular purpose; and Purchaser acknowledges that Purchaser is
entering into this Agreement without relying upon any such warranty
or representation by Seller, its agents or representatives except
for those representations or warranties expressly set forth herein.
Purchaser's failure to terminate this Agreement prior to the
expiration of the Feasibility Period shall conclusively establish
that Purchaser has fully examined and inspected the Property and is
satisfied with the condition thereof.
33. Notification of Non-Delivery. In the event that either
party hereto shall become aware of the non-delivery of any item or
document required to be delivered under this Agreement, a breach of
a representation, warranty or covenant set forth herein, or other
failure of condition, the party becoming aware of such event shall
give prompt notice to the other party in accordance with Paragraph
17 hereof.
34. Radon Gas Disclosure. As required by Florida Law, the
following notification is provided regarding radon gas:
Radon Gas: Radon is a naturally-occurring
radioactive gas that, when it has accumulated
in a building in sufficient quantities, may
present health risks to persons who are
exposed to it over time. Levels of radon that
exceed federal and state guidelines have been
found in buildings in Florida. Additional
information regarding radon and radon testing
may be obtained from your county public health
unit.
35. Energy Efficient Rating Disclosure. In accordance with
Florida Law, the Energy-Efficiency Rating Disclosure is attached
hereto as Exhibit L.
[The remainder of this page has been intentionally left blank.]
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed on the day and in the year entered below, effective as
above written.
PURCHASER:
WALDEN RESIDENTIAL PROPERTIES, INC.,
a Maryland corporation
By:
Marshall B. Edwards, President
Date Executed by Purchaser:
SELLER:
FLORIDA RAINTREE I
ASSOCIATES, LTD., a Florida limited partnership
By: Lincoln Property Company No.
1244, Ltd., a Florida limited
partnership, General Partner
By: Mack Pogue, Inc., a Texas
corporation, General
Partner
By:
Name:
Its:
Date Executed by Seller:
The undersigned, constituting the Title Insurer, hereby agrees
to accept in escrow the moneys provided for in the above Agreement
to be paid into escrow and to hold and apply the same as provided
in said Agreement.
STEWART TITLE INSURANCE COMPANY
By:
Authorized Agent
Date executed by Title Insurer:
SCHEDULE I
ITEMS TO BE DELIVERED
1. Seller's most current owner's title insurance policy and
a copy of all title reports and documents in Seller's possession.
2. A list and a copy of all Service Contracts, all documents
pertaining to any leased personal property, and all warranties,
guaranties and bonds relating to the Property, or any part thereof.
3. A complete, itemized and detailed inventory of the
personal property to be conveyed by Seller to Purchaser at the
Closing, Purchaser acknowledging that serial numbers shall not be
required except to the extent readily accessible.
4. A copy of (i) all income and expense statements for the
Property, for the year to date and for the most recently completed
prior year (prepared on a monthly basis), and annual operating
statements for the two (2) most recent fiscal years, certified by
Seller or audited (when available) as having been prepared in
accordance with generally accepted accounting principles (except to
the extent prepared on a cash basis), (ii) operating budgets for
the Property for the current calendar year and if prepared, the
upcoming calendar year, and (iii) a capital expenditure budget for
the Property for the current calendar year and if prepared, for the
upcoming calendar year, and (iv) such other information as is
available in the ordinary course of business, as may be required by
Purchaser's accountants to perform a complete audit of the Property
for the twelve (12) month period ended December 31, 1995, and year-to-date 1996.
5. A copy of all ad valorem and other property tax
statements (including personal property tax statements) relating to
the Property for the current tax year and the immediately preceding
two (2) tax years, including copies of any assessments or
statements for the current or forthcoming year, including a summary
of any contested tax assessments relating to the Property for the
preceding two (2) years, and the results thereof.
6. A copy of (i) a resident rent roll for the Improvements,
showing actual occupancies, rentals, delinquencies, defaults,
security deposits, assigned parking spaces (if any), free rent,
rent concessions, tenant incentives, lease terms, unit numbers,
unit types, and unit amenities, (ii) a current schedule of rental
rates for each type of unit within the Improvements, and (iii) such
other pertinent information regarding the tenant leases and rental
units as is reasonably available to Seller, including, without
limitation a schedule of the appliances and amenities included in
each type of rental unit.
7. To the extent in Seller's possession, a copy of all site
plans, surveys, soil and substrata reports and studies, engineering
plans and studies, mechanical and structural plans, drawings,
environmental reports or studies, architectural renderings, plans
and specifications, construction documents and contracts (with all
applicable change orders), floor plans, as-built survey, landscape
plans, utility schemes and other similar plans, diagrams of
studies, if any, relating to the Property, including but not
limited to those relating to all improvements or structural and/or
major repairs.
8. If available, a copy of the architect's certificate
rendered at or after the completion of construction of the
Improvements stating that the Improvements were constructed
substantially in accordance with the plans and specifications
delivered to Purchaser hereunder.
9. A copy of all reports made by engineers, architects or
others, if any, relating to any structural problems or other
defects with respect to any part of the Property.
10. A copy of all certificates of occupancy for the
Improvements in Seller's possession, and a letter from the
appropriate city dated no earlier than the Effective Date stating
that the Property complies fully with all applicable zoning
ordinances and the operation of the Improvements as an apartment
complex is a permitted use under such ordinances, together with a
copy of such ordinances, or if the appropriate city does not issue
such compliance letters, a letter confirming the zoning currently
in effect on the Property.
11. To the extent in Seller's possession, a copy of all
swimming pool permits, boiler permits and other licenses and
permits for the Property required by law and issued by any
governmental authority having jurisdiction over the Property or
Seller.
12. A list of all employees of the property manager currently
employed in the operation of the Property, setting forth his/her
name, position, salary, benefits, bonuses, leasing commissions,
other incentives, apartment allowance (if applicable) and tenure
with the Property.
13. Invoices, contracts and/or work orders pertaining to, any
(i) carpet replacement, window replacement, and appliance
replacement over the past two (2) years relating to the
Improvements, (ii) any other capital expenditures over the past two
(2) years at the Property, showing the nature of the work, expense,
date and unit or common area where the work was done, and (iii)
regular maintenance and repair at the Property over the past twelve
(12) months.
14. A copy of the standard form of resident lease, leasing
application, security and pet deposit documents, rules and
regulations, leasing brochures, occupancy checklist, current
marketing/leasing plans and business plans for the Property, other
standard forms and documents currently used in connection with the
leasing and marketing of the Property, and a profile of existing
resident base, including data on age, income, sex, household
structure, occupation, etc., to the extent such information is
available to Seller and in Seller's possession.
15. A list of all utility deposits or bonds for the Property
and a copy of all utility bills for the Property for the previous
twelve (12) months, excluding individually metered resident utility
bills.
16. A summary of any approvals, requirements or prerequisites
(if any) imposed by any current lender having a security interest
in the Property (or any portion thereof) as a condition to the
execution of this Agreement by Seller or as a condition to the
Closing as contemplated by this Agreement, other than the
conditions set forth in Article 9(a) above.
17. Access throughout the Feasibility Period to all resident
files.
18. Copies of any pertinent litigation of safety related
issues with respect to the Property.
19. Such other books, records, leases, leasing files,
contracts, agreements, reports, studies, data and information
(including marketing information) relating to the Property or any
portion thereof, or the ownership or operation or management of the
Property, or any portion thereof, that are in Seller's possession
or are readily available to Seller in the ordinary course of
business and as may be required by Purchaser's accountant to
perform a complete audit of the Property for the twelve (12) month
period ended December 31, 1995.
20. List of any hazardous substances that to Seller's
Knowledge, may be in use on the Property.
SCHEDULE II
DESCRIPTION OF IMPROVEMENTS AND AMENITIES
____ dwelling units located in ________ buildings, consisting of
_______ one-bedroom, _________ two-bedroom and ________
three-bedroom units, a clubhouse, laundry facilities, ________
swimming pool(s), ___________ tennis court(s) and
____________________________________.
EXHIBIT A
LEGAL DESCRIPTION OF LAND
[TO BE PROVIDED]
EXHIBIT B
SURVEY
[TO BE PROVIDED]
EXHIBIT C
SURVEYOR'S CERTIFICATE
[TO BE PROVIDED]
EXHIBIT D
PLANS AND SPECIFICATIONS
[TO BE PROVIDED]
EXHIBIT E
INCLUDED PERSONAL PROPERTY
[TO BE PROVIDED]
EXHIBIT F
EXCLUDED PERSONAL PROPERTY
[TO BE PROVIDED]
EXHIBIT G
RENT ROLL
[TO BE PROVIDED]
EXHIBIT H
STREET RENTS
[TO BE PROVIDED]
EXHIBIT I
STATEMENTS OF INCOME AND EXPENSE
[TO BE PROVIDED]
EXHIBIT J
SCHEDULE OF INSURANCE
[TO BE PROVIDED]
EXHIBIT K
SCHEDULE OF SERVICE CONTRACTS
[TO BE PROVIDED]
EXHIBIT L
ENERGY EFFICIENCY RATING DISCLOSURE
EXHIBIT M
CLOSING DOCUMENTS
[TO BE PROVIDED]
EXHIBIT N
STANDARD TENANT LEASE
[TO BE PROVIDED]
PURCHASE AND SALE AGREEMENT
(Princeton Meadows II Apartments)
This PURCHASE AND SALE AGREEMENT ("Agreement") is entered into
as of the ________ day of June, 1996.
1. Parties. The parties to this Agreement are as follows:
Walden Residential Properties, Inc., a Maryland corporation,
maintaining its principal office at One Lincoln Center, 5400 LBJ
Freeway, Suite 400, Dallas, Texas 75240.
Florida Princeton Meadows II Associates, Ltd., a Florida
limited partnership maintaining offices at c/o Lincoln Property
Company, One North Dale Mabry Highway, Suite 820, Tampa, Florida
33609.
2. Definitions. As used in this Agreement, the following
terms shall have the meanings hereinafter set forth in this
Paragraph:
(a) Agencies: All governmental agencies having jurisdiction
over the construction, zoning and operation of the Property.
(b) Applicable Environmental Laws: Any and all applicable
laws pertaining to health or the environment, including, without
limitation, the Superfund Reauthorization and Amendments Act of
1986 ("SARA"), the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA"), and the
Resource Conservation and Recovery Act of 1976 ("RCRA"), as well as
any and all other laws, ordinances, rules and/or regulations
created or imposed by any governmental authority having
jurisdiction with respect to the Property, whether local, state or
federal, pertaining to environmental regulation, contamination,
clean-up or disclosure, as now existing and/or as hereafter
amended.
(c) Appurtenant Interests: All of the Seller's interest in
and to the appurtenances to the Land and in and to all streets,
alley and other public ways adjacent thereto.
(d) Closing: The consummation of the transfer of title to
the Property as contemplated hereunder and payment of the
consideration thereof in the manner provided at Paragraph 8 hereof.
(e) Current Rent Roll: The current schedule attached hereto
as Exhibit G, dated not more than thirty (30) days prior to the
Effective Date, setting forth, as of the date thereof, the Tenant
Leases.
(f) Earnest Money Deposit: An amount equal to $100,000.00 in
cash, to be delivered by Purchaser to the Title Insurer within two
(2) business days following the Effective Date, together with all
earnings (if any) thereon.
(g) Effective Date: The date upon which this Agreement,
executed by both Purchaser and Seller, shall have been delivered to
Title Insurer together with the Earnest Money Deposit.
(h) Excluded Personal Property: The tangible personal
property listed at Exhibit F hereto.
(i) Feasibility Period: The period commencing with the
Information Delivery Date (as hereinafter defined) and ending on
the thirtieth (30th) day thereafter.
(j) Hazardous Materials: Any toxic materials, hazardous
waste or hazardous substance as these terms are defined in the
Applicable Environmental Laws.
(k) Improvements: All of the buildings, fixtures and
improvements located on the Land, together with all mechanical
systems, fixtures and equipment, electrical systems, fixtures and
equipment, plumbing fixtures, systems and equipment, heating
fixtures, systems and equipment and air conditioning fixtures,
systems and equipment installed in, belonging to or constructed as
components of the Improvements.
(l) Included Personal Property: All tangible personal
property listed at Exhibit E hereto, together with, for each
apartment unit comprising the Improvements, whether or not thus
listed, all existing (or replacements thereof as required under the
terms of this Agreement) carpeting, window coverings, ranges,
ovens, dishwashers, ceiling fan(s), bookshelves, range hoods,
refrigerators, heating units, air conditioning units, sinks and
garbage disposals, and washers and dryers, the same to be in the
same condition at Closing as existed at the expiration of the
Feasibility Period, normal wear and tear excepted or as otherwise
provided under the terms of this Agreement, and all other
furniture, fixtures, equipment, machinery, supplies and other
tangible personal property and all leases of tangible personal
property located on the Land and Improvements and belonging to
Seller and used in the normal operation and maintenance of the Land
and Improvements.
(m) Information Delivery Date: The date which is fifteen
(15) days from the Effective Date, by which date Seller shall
deliver to Purchaser the documents and other items listed in
Schedule I attached hereto and incorporated herein by reference.
(n) Land: The land more particularly described at Exhibit A.
(o) Material Damage: Damage to the Property of a nature such
that the cost of restoring the Improvements located on Property to
its condition prior to the fire or other casualty, as mutually
agreed by Seller and Purchaser or as otherwise determined in
accordance with this Agreement, (but in full compliance with all
then applicable building, health, zoning, and similar laws,
ordinances, and regulations) will exceed an amount equal to five
percent (5%) of the Purchase Price, whether or not such damage is
covered by insurance.
(p) Owner Policy: An Owner Policy of Title Insurance issued
by the Title Insurer in the standard form promulgated by the
Florida Department of Insurance, as modified pursuant to Paragraph
6(d) hereof.
(q) Permitted Title Exceptions: Any items to which Purchaser
does not object within the time period provided in Paragraph 6(c)
hereof or which Purchaser approves as otherwise provided in this
Agreement.
(r) Plans and Specifications: The plans and specifications
in Seller's possession, if any, with respect to the Property.
(s) Property: The parcel of real property to be purchased
and sold pursuant to this Agreement and comprised of the Land,
Improvements, Included Personal Property, Appurtenant Interests,
Tenant Leases and all other property described in Paragraph 4
hereof.
(t) Proration Date: 12:00 a.m., Eastern Daylight Time, on the
date of Closing or such other date as shall be specified in
Paragraph 9 hereof.
(u) Purchase Price: The total consideration to be paid by
Purchaser for the Property as set forth in Paragraph 5 hereof.
(v) Purchaser: Walden Residential Properties, Inc., a
Maryland corporation, together with any designee thereof described
in Paragraph 21 hereof.
(w) Rent Roll: Collectively, the Current Rent Roll and the
Revised Rent Roll, or either of them as of the context may
required.
(x) Revised Rent Roll: A revision of the Current Rent Roll
dated not earlier than five (5) days prior to Closing.
(y) Seller: Florida Princeton Meadows II Associates, Ltd., a
Florida limited partnership.
(z) Seller's Knowledge: The term "Seller's Knowledge" as used
herein shall mean the actual knowledge of Mary Cook Detweiler,
local Property Manager for Lincoln Property Company and Fred
Cheney, National Property Manager for Lincoln Property Company.
(aa) Service Contracts: All service or maintenance contracts
relating to the Property as described at Exhibit K hereto.
(bb) Street Rents: The rents for space in the Property being
offered to the public as of the date of this Agreement.
(cc) Survey: With respect to the Property, an on-the-ground
survey of the Land and Improvements prepared by a qualified,
registered public surveyor selected by Seller and reasonably
acceptable to Purchaser and the Title Insurer (i) containing a
field note description of the Land which (A) establishes a
beginning point by reference to a permanent monument, (B) states
the distances, bearing and angles of all sides or boundaries of the
Land, (C) if appropriate, states the length of arc, central angle
and radius of circle for arc, central angle and radius of circle
for arc and chord distance and bearing of all curving sides or
boundaries of the Land, (D) establishes a single perimeter
description, and (E) references all abutting or encroaching
streets, roadways and fence lines, including a statement of width,
(ii) noting, by plat, the size and location of all Improvements and
other physical conditions affecting the Property, (iii) noting, by
plat, the size and location of all abutting or encroaching streets,
roadways and fence lines, (iv) noting, by plat, the size and
location of all encroachments or protrusions, (v) noting, by plat,
the size, location and recording data of all easements, ditches,
rights-of-way, setback lines, curb cuts and similar matters, (vi)
locating any portion of the Land or Improvements determined to be
flood prone or within the 100-year flood plain under the Flood
Disaster Protection Act of 1973 or otherwise determined to be flood
prone or within the flood plain by the Federal Emergency Management
Agency, the United States Army Corps of Engineers, a unit or
department of the United States, the engineer preparing the Survey,
or any other state or federal agency, (vii) certifying the number
of acres of land in the Land, both as to total acreage and as to
net acreage, (viii) being dated or recertified as of a date not
earlier than the Effective Date, and (ix) containing a certificate
substantially in the form attached hereto as Exhibit C.
(dd) Tenant Leases: The lease agreements relating to the Land
and Improvements and existing at Closing.
(ee) Title Commitment: A Commitment for Title Insurance
issued by the Title Insurer in the standard form promulgated by the
Florida State Board of Insurance.
(ff) Title Insurer: Stewart Title Guaranty Company, or other
title insurance company acceptable to Purchaser in its sole
discretion, 3401 W. Cypress, Suite 101, Tampa, Florida 33607-5040;
phone (813) 876-0619; fax (813) 872-2795, Attention: Harold
Hickman.
3. Agreement of Purchase and Sale. Subject to the terms and
conditions thereof and for the consideration of One Hundred and
No/100 Dollars ($100.00) paid to Seller by Purchaser on the
Effective Date, the receipt and sufficiency of which hereby is
acknowledged and which sum is non-refundable to Purchaser and in no
event shall be applied against the Purchase Price and for the
Purchase Price set forth at Paragraph 5, Purchaser hereby agrees to
purchase, and Seller hereby agrees to sell, the Property.
4. Property to be Sold. The Property to be purchased
hereunder by Purchaser shall be comprised of (i) the Land, (ii) the
Improvements, (iii) all Included Personal Property, but not the
Excluded Personal Property, (iv) the Appurtenant Interests, (v) the
Tenant Leases, and (vi) all of Seller's right, title and interest,
if any, in and to (A) warranties covering the Included Personal
Property and the Improvements, (B) the trademarks or tradenames
used by Seller in connection with the Property, including, but not
limited to, "Princeton Meadows II Apartments", but excluding the
name "Lincoln Property Company" and any of its associated logos, (C)
the Service Contracts (and any deposits thereunder) (to the extent
assignable and not terminated as provided elsewhere in this
Agreement), (D) all licenses, permits, approvals and other
intangible property rights relating to the Property and (E) all
utility, security and other deposits.
5. Purchase Price. Subject to any adjustments provided
elsewhere in this Agreement, the Purchase Price shall be SEVEN
MILLION EIGHT HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($7,850,000.00) payable as follows:
(a) Earnest Money Deposit. $100,000.00, payable by delivery
of the Earnest Money Deposit to the Title Insurer in accordance
with this Agreement; and
(b) Cash at Closing. $7,750,000.00, payable in cash or other
immediately available funds at Closing.
6. Evidence of Title.
(a) Title Commitment. Within ten (10) days from and after the
Effective Date, Seller, at Seller's sole expense, shall order and
deliver, or cause to be delivered, to Purchaser or Purchaser's
attorney, a current Title Commitment from the Title Insurer
covering the Property, in the amount of the Purchase Price covering
the Land and Improvements located on the Property. The Title
Commitment shall be issued as of or subsequent to the Effective
Date and shall include good, legible copies of all documents
constituting exceptions to the Seller's title as reflected in the
Title Commitment. The Title Commitment shall reflect good and
indefeasible fee simple title vested in the Seller.
(b) Survey. Within five (5) days from the date of delivery of
the Title Commitment, Seller, at Seller's sole expense, shall order
and deliver, or shall cause to be delivered, to Purchaser or
Purchaser's attorney, the Survey of the Land and Improvements. The
Survey shall be sufficient to permit the Title Insurer to modify
the standard printed exception in the Owner Policy pertaining to
discrepancies, conflicts, shortages in area or boundary lines,
encroachments, overlapping of improvements or similar matters, as
provided below, and shall otherwise comply with the terms hereof.
(c) Review. Purchaser shall have through and including the
expiration of the Feasibility Period in which to review the Title
Commitment, Survey and exception documents and to deliver to Seller
in writing such objections as Purchaser may have to anything
contained or set forth therein. Any items to which Purchaser does
not object to prior to the expiration of the Feasibility Period
shall be Permitted Title Exceptions. Seller may, at its sole
discretion, elect to attempt to cure any of Purchaser's title and
survey objections. If Seller so elects, Seller shall so notify
Purchaser in writing and shall have a period of fifteen (15) days
from and after receipt of Purchaser's written objections within
which to attempt to cure same. In the event that Seller fails or
refuses to cure such objections within such fifteen (15) day
period, Purchaser shall have the right to terminate this Agreement
and receive an immediate return of the Earnest Money Deposit or
proceed to Closing subject to such objections which shall be deemed
waived and shall become Permitted Title Exceptions.
(d) Owner Policy. At Closing, the special warranty deed to
the Land and Improvements referred to in Subparagraph 8(b)(i)
hereof shall be recorded, and Seller shall furnish or cause to be
furnished to Purchaser as soon as possible after Closing, at
Seller's sole expense, the Owner Policy covering the Property,
together with such endorsements as Purchaser may require, insuring
good and indefeasible fee simple title to be vested in Purchaser
and insuring Purchaser's title to the Property in an amount equal
to the Purchase Price for the Property, subject only to the
Permitted Title Exceptions and the standard printed exceptions,
except that:
(i) the exception relating to restrictions against the
Property shall be endorsed by the Title Insurer to read "None
of record" except for such restrictions as may be included in
the Permitted Title Exceptions;
(ii) the exception relating to discrepancies, conflicts,
shortages in area, boundaries, encroachments, or overlaps
shall be modified, at Seller's sole cost and expense, by
deleting such exception and referencing only specific survey
exceptions; and
(iii) the exception relating to ad valorem taxes
shall except only to taxes owing for the current year of
Closing and subsequent years and subsequent assessments for
prior years due to change in land usage or ownership, not yet
due and payable.
(e) Remedies of Purchaser. If Seller is unable to furnish
Purchaser the Title Commitment pursuant to Subparagraph 6(a) or the
Owner Policy in the manner provided at Subparagraph 6(d), then, at
Purchaser's sole discretion, Purchaser may terminate this Agreement
and receive an immediate return of the Earnest Money Deposit, and
the parties shall have no further obligation to each other, except
as is expressly provided herein.
(f) Uniform Commercial Code Search. Seller also shall
deliver at Closing, at Seller's cost and expense, Uniform Commercial
Code financing statement searches covering Seller and any general
partner of Seller for the state constituting the situs of the
Property and the county in which the Property is located showing
that all of the Included Personal Property is free and clear of all
liens and encumbrances other than the Permitted Title Exceptions
and also shall deliver copies of receipts showing payment of all
taxes levied and payable on the Property.
7. Covenants, Representations and Warranties of Seller.
Seller and Purchaser agree that, except as expressly provided
herein, the Property is being conveyed to Purchaser in an "AS IS"
condition, without representation or warranty by Seller.
Notwithstanding the foregoing, as an inducement to Purchaser to
enter into and perform this Agreement, Seller represents and
warrants to, and covenants with, Purchaser, as of the date of this
Agreement and thereafter in accordance with Paragraph 7(w), as
follows:
(a) Legal and Beneficial Title. Seller is the sole entity
holding good and indefeasible fee simple title to the Property,
free and clear of all liens and encumbrances except as set forth in
the Title Commitment.
(b) Due Authorization and Execution and Validity, Binding
Effect and Enforceability. This Agreement has been duly authorized
and executed by Seller and is a valid and binding obligation of,
and is enforceable, in accordance with its terms, against Seller.
The documents delivered to Purchaser at Closing will be duly
authorized and executed by Seller and will be a valid and binding
obligation of, and will be enforceable in accordance with their
terms against, Seller.
(c) Rent Roll. Attached hereto as Exhibit G is the Current
Rent Roll. Not earlier than five (5) days prior to Closing, Seller
shall deliver a Revised Rent Roll to Purchaser, certified by Seller
in writing as true and correct in all material respects. The
Revised Rent Roll shall set forth the following:
(i) the name of each tenant;
(ii) the lease commencement and expiration dates; the
nature of any renewal options;
(iii) the amount of any security deposits;
(iv) a list of vacant apartment units;
(v) the size and type of each vacant unit; and
(vi) the amount and description of any concessions and
any rights of first refusal.
(d) Representations as to Rent Roll. To Seller's Knowledge
and except as expressly set forth in the Rent Roll:
(i) All of the information contained on the Rent Roll is
true, correct and complete as of its date, in all material
respects.
(ii) No rent under any Tenant Lease has been, or prior to
Closing will be, prepaid for a period in excess of thirty (30)
days except as set forth on the current Rent Roll and/or
Revised Rent Roll.
(iii) No tenant has any right of first refusal or
option with respect to the leasing of any portion of the
Property.
(iv) Except as otherwise provided in Article 9(a) of this
Agreement, no one, including any tenant, has any option or
right of first refusal to purchase the Property or any part
thereof.
(v) There are no oral agreements with anyone, including
tenants, with respect to the Property or any portion thereof,
except as set forth in a Rent Roll or at Exhibit K.
(vi) All of the present Tenant Leases for rental space in
the Improvements are in writing, on a standard form (which
form is attached hereto as Exhibit N) and are (A) in full
force and effect, (B) valid and binding agreements of, and
fully enforceable in accordance with their terms against, the
tenants, and (C) duly executed by all parties.
(vii) The Tenant Leases will not be amended in any
way after the date hereof, other than in the ordinary course
of business, without the prior, written consent of Purchaser,
which consent shall not be unreasonably withheld. Purchaser,
unless it otherwise shall advise Seller in writing within five
(5) days following Seller's request for such consent, shall be
deemed to have consented to any such amendment.
(viii) There are no uncured defaults on the part of
any party to any of the Tenant Leases except as otherwise
disclosed on the current Rent Roll and/or Revised Rent Roll,
and Seller is in material compliance with all of lessor's
obligations thereunder.
(ix) None of the rentals due or to become due under the
Tenant Leases will be assigned, encumbered, or subject to any
liens at the Closing other than the Permitted Title
Exceptions.
(x) Except as set forth at Exhibit G, at the time of
Closing, all tenants will be paying charges for electricity
consumed in their space, including heating and air
conditioning, on an individually metered basis.
(e) Street Rents. The Street Rents are set forth on Exhibit
H attached hereto and incorporated herein for all purposes.
(f) Operating Statements. Attached at Exhibit I is the most
recent monthly statement of income and expense in connection with
the operation and maintenance of the Property. Such statements are
unaudited and were prepared on a modified accrual basis of
accounting by an accountant employed by Seller. There have been no
material adverse changes in the gross income from the Property from
that set forth in the most recent operating statement at Exhibit I
to the Effective Date. Seller agrees to make available to Purchaser
or its representatives, at Seller's office or at the Property, all
existing supporting documentation for such statements in Seller's
possession or control.
(g) Financial Statements. Seller has previously provided to
Purchaser such information as is available in the ordinary course
of business and required by Purchaser's accountants to perform (at
Purchaser's expense) a complete audit of the Property for the
twelve (12) month year ended December 31, 1995, as well as
information from January 1, 1996 to the current date.
Additionally, at least thirty (30) days prior to Closing, Seller
shall provide Purchaser with the then existing most current
financial statements of the Property.
(h) Compliance with Applicable Regulations.
(i) To Seller's Knowledge, there exist no commitments or
agreements between Seller and any of the Agencies affecting
the Property which have not been fully disclosed to Purchaser
in writing.
(ii) To Seller's Knowledge, Seller has received no
notices and is unaware of any facts or conditions which, with
notice or lapse of time, would constitute uncured violations
at the Property of zoning, building, fire, rent control,
tenant security or other deposits or any other applicable
statute, ordinance or regulation, relating to the Property,
its construction or any occupancy thereof, nor, to Seller's
Knowledge, are there presently pending or threatened against
Seller or against the Property any judgments relating to any
of the above matters, any judicial proceedings or
administrative actions or any state of facts which, to
Seller's Knowledge, with notice or lapse of time, could
reasonably be expected to give rise to any such proceedings or
actions.
(iii) To Seller's Knowledge, the Property and Seller
are not currently subject to (A) any existing, pending or
threatened investigation or inquiry by any governmental
authority or (B) any remedial obligations, under any
Applicable Environmental Laws; and Seller has not obtained and
to Seller's Knowledge, is not required to obtain, and Seller
has no knowledge of any reason Purchaser will be required to
obtain, any permits, licenses, or similar authorizations to
occupy, renovate, operate or use any portion of the Property
by reason of any Applicable Environmental Laws.
(iv) To Seller's Knowledge, no Hazardous Materials are
located on the Property. To Seller's Knowledge, the Property
does not contain any underground tanks for the storage or
disposal of Hazardous Materials. Further, to Seller's
Knowledge, (A) the Property during Seller's ownership has not
been used for the storage, manufacture or disposal of
Hazardous Materials, and (B) no written complaint, order,
citation or notice with regard to air emissions, water
discharges, noise emissions and Hazardous Materials, if any,
or any other Applicable Environmental Laws from any person,
government or entity has been issued to and received by
Seller.
(v) If, prior to Closing, (A) Seller has received any
written notices from any of the Agencies, or (B) any legal
action has been instituted and served upon Seller relating to
violations at the Property of zoning, building, fire, rental
controls or Applicable Environmental Laws or (C) any written
notice or advice from any current insurer of the Property or
any part thereof, requesting any improvements alterations,
additions, corrections or other work in, on or about the
Improvements, whether related to the Property or to the
activities of any occupant thereof is received by Seller, the
parties shall agree in writing on an amount to be delivered to
the Title Insurer or such other party agreed upon by Seller
and Purchaser in escrow for the cost of curing or eliminating
any such items and the amount as so determined shall be
withheld from the proceeds of sale and shall be paid over to
Seller upon completion by Seller of such items. If the
parties shall fail to agree on the cost of curing or
eliminating said items prior to Closing, either party shall
have the right to terminate this Agreement by giving written
notice thereof to the other not later than the date of Closing
and, in such event, Purchaser shall have the right to the
return of the Earnest Money Deposit, and neither party shall
have any future obligations to the other, except for
Purchaser's surviving indemnity relating to inspections. The
foregoing provision to the contrary notwithstanding, if the
notice is received or the action served within fifteen (15)
days of the Closing, Seller may elect, in its sole and
absolute discretion, to extend the Closing for a period not to
exceed thirty (30) days in order to attempt to cure or
eliminate any such matter.
(i) Liens on Property. To Seller's Knowledge, no action has
been taken with respect to work performed or delivery of material
which would give rise to a lien on the Property for which adequate
provision for payment has not been made. To Seller's Knowledge, at
Closing, there will be no claim in favor of any person or entity
which is or could become a lien on the Land, the Improvements, or
the Included Personal Property, arising out of the furnishing of
labor or materials to the Property for which adequate provision for
payment has not been made; there will be no unpaid assessments
against the Property, except for property taxes assessed but not
due and payable at the time of Closing; and there will be no claim
in favor of any person or entity (including the present management)
for any unpaid commissions or fees for leasing of the Property. In
the event of any such claims at Closing, Seller, at its option and
in lieu of the foregoing, either may (i) establish with the Title
Insurer an escrow of funds in an amount and upon conditions
reasonably acceptable to Seller and Purchaser, (ii) provide a bond
in favor of Purchaser or the Title Insurer in such amount, upon
such conditions and for such purposes as may be satisfactory to
Purchaser, Seller and the Title Insurer in either case for the
purpose of providing for such claims and/or inducing the Title
Insurer to insure Purchaser's title to the Property free and clear
of such claims, or (iii) in the event that a statutory bond process
is available, a bond in the form and amount required by applicable
statute.
(j) Insurance. To Seller's Knowledge, the insurance policies
listed and described at Exhibit J are presently in force, and all
such policies or their equivalent will be maintained in force until
Closing. Seller will not renew, amend, or reduce the coverage
under, or cancel, any existing policy or procure any new policy
without Purchaser's prior, written consent, which shall not be
unreasonably withheld or delayed. Purchaser, at Closing, shall
obtain its own insurance coverage. Seller has received no written
notices from any insurer of the Property or any part thereof
requesting any improvements, alterations, additions, correction or
other work in, on or about the Improvements, whether related to the
Property or to the operation of any occupant thereof, which have
not been cured or satisfied.
(k) Pending or Threatened Litigation. To Seller's Knowledge,
there are no lawsuits or legal proceedings threatened, instituted,
or served upon Seller regarding ownership, construction, use or
possession of the Property or any portion thereof.
(l) Inspection of Plans and Specifications, Reports and Books
and Records. The Plans and Specifications, all reports (including
but not limited to soil tests and construction inspection reports),
the books and records and all Tenant Leases and other documents
related thereto regarding the construction, management and
operation of the Property in Seller's possession or control that are
not otherwise provided to Purchaser hereunder shall be open to
inspection by Purchaser or Purchaser's agents during regular
business hours from and after the Effective Date, and Seller shall
reasonably cooperate with Purchaser or its agents with respect to
the inspection of the Plans and Specifications, all reports, the
books and records, the Tenant Leases, the Property or the
construction, management and operation thereof. Such cooperation
shall not be deemed to include incurring any cost or expense.
(m) Maintenance of Property Until Closing.
(i) Until Closing, the Property will be managed,
operated and maintained, in the ordinary course of business
and materially the same manner in which the Property is
currently being managed, operated and maintained, and Seller
will not remove any fixtures, furnishings, equipment or
personalty subject to this Agreement, except for repair or
replacement.
(ii) All vacant rental units shall be in "market-ready"
rentable condition as of the date of Closing; provided,
however, Seller and Purchaser acknowledge that rental units
that are vacated within five (5) business days prior to the
date of Closing will be in varying conditions of make-ready
for leasing, as is ordinary in Seller's course of business.
As to any units that are not in "market-ready" rentable
condition which units were vacated more than five (5) business
days prior to the date of the Closing, Purchaser and Seller
understand and agree that Purchaser shall be entitled to
credit against the Purchase Price at Closing an amount equal
to $500.00 per unit which Seller and Purchaser agree is the
amount required to put in "market-ready" rentable condition
any units that are not in such condition as of the date of the
Closing. For purposes of this paragraph, the term "market-ready"
shall mean units that are cleaned (including carpets),
painted, in good repair, with all appliances in good-working
order. Purchaser shall have the right to re-inspect the
Property during the period commencing not earlier than five
(5) days prior to the Closing and ending on the Closing solely
for purposes of verifying the maintenance of the Property in
accordance with the applicable provisions of this Agreement.
(n) Service Contracts.
(i) All Service Contracts are listed in Exhibit K.
Seller will not enter into any other service, operating or
management contracts relative to the Property that cannot be
canceled on thirty (30) days' notice and at no cost or
expense, nor will Seller make, or agree to, prior to Closing,
any material change or modification to the contracts set forth
in Exhibit K without the prior, written consent of Purchaser
which shall not be unreasonably withheld. The agreement
concerning the management of the Property currently in effect
set forth at Exhibit K shall be terminated effective on the
date of Closing. After the expiration of the Feasibility
Period, provided Purchaser has not terminated this Agreement,
Seller shall, upon written notice from Purchaser, send
termination notices with respect to such cancelable Service
Contracts specified by Purchaser.
(ii) Seller has no employees in connection with the
Property. Any persons who work at the Property (other than
pursuant to Service Contracts) are employees of the Seller's
property manager pursuant to a property management agreement
which shall be terminated at Closing. Seller agrees that
benefits or compensation accrued prior to Closing, and due or
claimed to be due either before or after Closing, to employees
or former employees of the property manager shall constitute
obligations of the property manager only, and Seller agrees to
indemnify and hold Purchaser harmless from all such
obligations and claims.
(o) Restrictions on Additional Indebtedness. Seller will not
borrow any money or do, or fail to do, any other act or thing which
would cause the Land, the Improvements or any Included Personal
Property to become pledged or otherwise utilized as collateral or
in any way stand as security for any indebtedness or obligation,
other than as presently existing or in the ordinary course of
business.
(p) Closing Not Constituting Breach. The consummation of the
transaction contemplated herein will not result in the breach of
any provision in any lease or other agreement affecting the
Property subject to the satisfaction of the conditions set forth in
Article 9(a) of this Agreement.
(q) Access to Property. Seller has received no written
notices of the existence of any fact or condition which would
result in the termination or restriction of the current access from
the Property to any presently existing highways and roadways
adjoining the Property or to any sewer or other utility serving the
Property.
(r) Improvements and Amenities.
(i) Description of Improvements and Amenities. A
description of the improvements and amenities of the Property
is more particularly set forth at Schedule II attached hereto
and incorporated herein by reference for all purposes, which
is materially correct.
(ii) Utilities. Utility systems for the transmission of
gas, telephone, electricity, storm and sanitary services, and
water are available at the property lines of the Property.
(s) Seller's Non-foreign Status. Seller is not a "foreign
person" within the meaning of Sections 1445 and 7701 of the
Internal Revenue Code of 1954, as amended; that is, Seller is not
a non-resident alien, foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the
Internal Revenue Code of 1986, as now existing or hereafter
amended).
(t) Taxes and Assessments. All ad valorem taxes and personal
property taxes which are due and payable, together with all special
assessments for improvements to the Property have been paid in
full.
(u) Exhibits. To Seller's Knowledge, all exhibits attached
hereto are true and correct in all material respects.
(v) Seller's Affidavit at Closing. The representations,
warranties and covenants of the Seller contained in this Agreement
or in any document delivered to Purchaser pursuant to the terms of
this Agreement (whether in this Paragraph 7 or elsewhere) (i) shall
be true and correct in all material respects and not in default at
the time of Closing, just as though they were made at such time,
and Seller shall deliver to Purchaser, at Closing, an Affidavit to
that effect, and (ii) in the event of a breach of such
representations, warranties or covenants prior to or at Closing,
Purchaser shall have the right to make a claim hereunder against
Seller for a period of one (1) year following the Closing.
8. Covenants, Representations and Warranties of Purchaser.
As an inducement to Seller to enter into and perform this
Agreement, Purchaser makes the following covenants, representations
and warranties which covenants, representations and warranties
shall be true and correct in all material respects on the date
hereof and on the Closing Date, and shall be a condition precedent
to Seller's obligation to close the transaction contemplated
herein:
(a) Organization and Authority. Purchaser is a corporation
duly organized, validly existing and in good standing under the
laws of Maryland, and has all requisite power, authority and
capacity to execute and enter into this Agreement; and the
transactions contemplated herein by Purchaser have been duly
authorized and approved by all requisite corporate actions, and
this Agreement has been duly executed and delivered on behalf of
Purchaser by its duly authorized officers and constitutes the
legal, valid and binding obligations of Purchaser. Purchaser has
no knowledge of any item or provision of this Agreement which is
unenforceable.
(b) No Conflict; Required Filings and Consents.
(i) The execution and delivery of this Agreement by
Purchaser does not and the transactions contemplated by this
Agreement will not (A) conflict with, or result in any
violation or breach of any provision of Purchaser's Charter or
Bylaws, (B) result in any violation or breach of, or
constitute (with or without notice or lapse of time, or both)
a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any
benefit) under any note, bond, mortgage, indenture, lease,
contract or other agreement, instrument or obligation to which
Purchaser is a party or by which Purchaser or any of its
properties or assets are bound, or (C) conflict or violate any
permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable
to Purchaser or any of its properties or assets, except in the
case of (B) and (C) for any such violations, breaches,
defaults, terminations, cancellations, accelerations or
conflicts which would not, in the aggregate, have or result in
a material adverse effect on Purchaser or impair the ability
of Purchaser to consummate the transactions contemplated by
this Agreement.
(ii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental
entity, is required with respect to Purchaser in connection
with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
9. Closing and Conditions to Closing.
(a) Conditions Precedent to Closing. It shall be a condition
precedent to Closing that Seller obtain (i) all necessary consents
of the limited partners of Seller to the transaction set forth
herein and (ii) that General Electric Capital Corporation ("GECC")
as lienholder on the Property waive its right of first refusal to
purchase the Property and agree to the release of the Property from
the lien held by GECC . In addition, Purchaser and Seller
acknowledge and agree that Purchaser shall have no right to
purchase the Property except and unless Purchaser simultaneously
purchase the property owned by Seller, located in Melbourne,
Florida known as The Raintree Apartments, pursuant to a contract of
even date herewith by and between Seller and Purchaser (the
"Raintree Contract"). A default by either party under the Raintree
Contract shall be deemed a default hereunder.
(b) The Closing Generally. The Closing shall occur at 10:00
a.m. on or before, but no later than, the fifteenth (15th) day
following the expiration of the Feasibility Period and the
satisfaction of the conditions set forth in subparagraph 8(c). The
Closing will be held at the offices of the Title Insurer, or at
such other time and place as to which the parties hereafter may
agree upon in writing. At Closing, the Purchase Price shall be
delivered to Seller in the manner provided at Paragraph 5, together
with the documents to be delivered by Purchaser to Seller
hereunder, and possession of, and title to, the Property shall be
delivered and conveyed to Purchaser by Seller in the manner
provided herein, together with all other documents to be delivered
by Seller to Purchaser hereunder.
(c) Documents Delivered By Seller at Closing. With respect
to the Property, at the Closing, Seller, at its sole cost and
expense, shall deliver, or shall cause to be delivered, to
Purchaser the documents described below:
(i) Special Warranty Deed. A special warranty deed,
duly executed and acknowledged, conveying to Purchaser good
and indefeasible fee simple title to the Land and Improvements
free and clear of all liens and encumbrances, except the
Permitted Title Exceptions, in the form attached at Exhibit M.
(ii) Bill of Sale. A bill of sale, duly executed and
acknowledged, with special warranties of title, subject only
to the Permitted Title Exceptions, conveying to Purchaser the
Included Personal Property in the form attached at Exhibit M
together with appropriate endorsements or such other
instruments as may be necessary to transfer title to Seller's
interest in the Improvements and Included Personal Property.
(iii) Assignment and Assumption Agreement. An
assignment and assumption agreement, duly executed and
acknowledged, assigning to Purchaser, and containing an
assumption by Purchaser of (A) Seller's interest in and to
all assignable Service Contracts which were not terminated as
herein provided, together with copies of the originals of each
of said contracts, if in Seller's possession, (B) all existing
warranties, if any, on the Improvements and/or the Included
Personal Property, including, but not limited to, roofs,
foundations, plumbing, heating, air conditioning, and
electrical, if any, (C) Seller's right, title and interest, if
any, in and to the trademarks or tradenames used by Seller in
connection with the Property including, but not limited to,
"Princeton Meadows II Apartments" and (D) Seller's right,
title and interest, if any, in any and all licenses, permits,
approvals and other intangible property or rights relating to
the Property including without limitation Seller's interest in
and to that certain Settlement Agreement, Release and
Assignment of Rights (Replumb) dated December 13, 1995 by and
between Lincoln Property Company as agent for Seller and
Plumbing Claims Group, Inc.
(iv) Assignment of Tenant Leases. A transfer and
assignment of the Tenant Leases (the "Assignment of Tenant
Leases"), together with all rents, other income and deposits
paid or payable thereunder, subject to the Permitted Title
Exceptions in the form attached as Exhibit M, together with
delivery of all Tenant Leases and information pertinent
thereto.
(v) Affidavit of Seller. An affidavit of Seller in the
form attached as Exhibit M, pursuant to Subparagraph 7(w) to
the effect that the representations and warranties of Seller
pursuant to Paragraph 7 continue to be true and correct in all
material respects and that all of Seller's covenants (not
otherwise waived by Purchaser) have been performed as of the
date of Closing.
(iv) Owner Policy. Seller, at its sole cost and expense,
also shall deliver or cause to be delivered, as soon as
possible following the Closing, the Owner Policy.
(d) Conditions Precedent to Purchaser's Obligations.
Purchaser shall not be obligated to consummate the transfer of
title to the Property hereunder unless and until:
(i) Closing Documents. Seller has delivered (A) to the
Title Insurer, an executed Closing Statement (in form and
substance reasonably acceptable to Seller and Purchaser), the
closing documents attached at Exhibit M and any other
documents reasonably required by the Title Insurer in order to
insure Purchaser's good and indefeasible fee simple title to
the Property free and clear of all liens and encumbrances,
except the Permitted Title Exceptions, and (B) to Purchaser
all other instruments and documents required by the terms of
this Agreement.
(ii) No Uncured Breach. There has been no uncured breach
by Seller of any of the agreements, representations,
warranties or covenants contained herein, except as may
otherwise expressly provided in this Agreement.
(iii) Title Vested in Seller. Good and indefeasible
title to the Property has been shown to be vested in Seller
subject only to the Permitted Exceptions.
(iv) Delivery of Plans and Specifications, Reports and
Books and Records. Seller shall have delivered to Purchaser,
to the extent in Seller's possession, the Plans and
Specifications and all reports and books and records
concerning the construction, management and operation of the
Property through the date of Closing required to be delivered
pursuant to this Agreement.
(v) Waiver by Purchaser. Purchaser, at any time at or
prior to Closing, may waive any one or more of the preceding
requirements by written notice to Seller to that effect.
(e) Closing Costs. The costs for obtaining and delivering to
Purchaser the Title Commitment, the Survey and all other documents
required herein to be provided to Purchaser by Seller, the premiums
for the Owner Policy in accordance with paragraph 6(d), all
applicable intangible and documentary taxes incurred as a result of
recording the special warranty deed described in Subparagraph
8(b)(i) hereof, except as otherwise provided herein, any and all
prepayment penalties or premiums with respect to existing debts
secured by the Property which will not constitute Permitted
Exceptions and the commission due to Broker described in
subparagraph 12(a) herein and the costs of obtaining any estoppel
letters shall be borne by Seller. The recording costs for the
special warranty deed described in subparagraph 8(b)(i) hereof and
any other of the Closing Documents necessary to convey good and
indefeasible fee simple title to the Property to Purchaser in
accordance with this Agreement, the escrow fees, if any, charged by
the Title Company shall be borne equally by Purchaser and Seller.
Purchaser and Seller each shall pay their respective attorneys'
fees and expenses. All other costs and expenses in connection with
the transaction contemplated by this Agreement, unless otherwise
expressly set forth herein to the contrary, shall be borne by
Seller and Purchaser in the manner in which such costs and expenses
customarily are allocated between the parties at closings of real
property similar to the situs of the Property, respectively.
10. Deliveries by Purchaser at Closing. With respect to the
Property, at the Closing, Purchaser, at its sole cost and expense,
shall deliver, or shall cause to be delivered, to Seller, the items
described below:
(a) The cash portion of the Purchase Price in accordance with
Paragraph 5 hereof;
(b) A Closing Statement in form and substance reasonably
acceptable to Seller and Purchaser;
(c) The Assignment of Tenant Leases;
(d) Such documents as may be reasonably required by the Title
Insurer to be executed and delivered by Purchaser, including
without limitation, a Mechanic's Lien Affidavit and Indemnity, Tax
Agreement and Utility Agreement;
(e) Such documents as may be reasonably required by Seller
pursuant to which Purchaser acknowledges receipt of such documents,
items and property as may be delivered to and received by Purchaser
at the Property, including books and records, contracts, plans and
specifications, licenses and permits, keys, and the like; and
(f) Other documents and instruments which Seller may
reasonably request or to which Seller may be reasonably entitled
under any of the other provisions of this Agreement.
11. Prorations and Adjustments.
(a) Items Prorated. All prorations and adjustments shall be
made and determined as of the Proration Date as follows:
(i) Rents. Collected rents shall be prorated. Seller
shall not receive any proration credit for rents accrued and
delinquent for months prior to the Proration Date, and all
rentals received after such date shall be applied, first, to
current and, then, delinquent obligations, the latter of which
shall be paid to Seller; provided, however, nothing herein
shall operate to require Purchaser to institute a lawsuit to
recover such amounts. Seller shall not be charged for
uncollected rent for the month within which the Proration Date
shall occur, it being the intent of the parties to prorate
only the rents that have been collected at such date. Any
delinquent rents for periods prior to the Proration Date and
a prorated portion of rents for the month uncollected as of
the Proration Date which are collected by Purchaser and which
are not necessary to bring a tenant current as described above
shall be forwarded to Seller.
(ii) Prepaid Rents and Security and Other Deposits.
Prepaid rents and security and other tenant deposits
(including but not limited to pet deposits and key deposits),
if any, under assigned leases shall be paid to Purchaser by
Seller (or credited against the Purchase Price) at Closing.
Purchaser shall assume full liability therefor and shall
indemnify and hold Seller harmless with respect to all such
deposits.
(iii) Service Contracts. Prepaid or unpaid amounts
under those Service Contracts listed in Exhibit K, which shall
be assigned to and assumed by Purchaser at Closing shall be
prorated. Notwithstanding the foregoing, Purchaser shall
receive no credit or proration for initial payments and
incentive compensation paid on long-term contracts including
but not limited to laundry contracts and leases.
(iv) Property Taxes. Taxes assessed upon the Property
for calendar year 1996 shall be prorated based on the
assumption that the actual taxes for the entire calendar year
1996 will be the same as calendar year 1995, which amount
Seller and Purchaser agree is a reasonable estimate of 1996
taxes. Taxes prorated at Closing shall be re-prorated between
the parties promptly upon the receipt of the 1996 real estate
tax bill and proper adjustments promptly paid.
(v) Utilities. Utility charges shall not be prorated
but, rather, instructions shall be given to the utility
companies by Seller (with a duplicate copy of such instruction
being provided concurrently to Purchaser) to read the meters
on the date of Closing and to issue separate statements
thereafter. If applicable, utility deposits will be credited
to Seller and assigned to Purchaser at Closing. In the event
that any provider of utilities shall refuse to issue separate
statements in the manner aforesaid, applicable utility charges
shall be adjusted on a prorata basis by dividing the amount
charged on the utility statement by the number of days covered
by such statement. Seller shall be responsible for payment of
utility charges accruing prior to the Proration Date and
Purchaser shall pay utility charges thereafter.
(vi) Other Adjustments. Such other items as are adjusted
pursuant to custom in the state constituting the situs of the
Property and on similar real estate transactions.
(vii) Delivery by Seller of Documents and Supplies.
Seller, at Closing, shall assign and deliver to Purchaser all
original leases, deposits, supplies, contracts, and other
items as to which proration is to be made. Seller also shall
deliver to Purchaser all Plans and Specifications, if any,
relating to the Property and all such other documents, books,
records, and keys in Seller's possession which relate to the
operation, maintenance or management of the Property. Seller
also shall deliver to Purchaser its current supply, if any, of
printed leasing brochures, floor plans and other advertising
literature with respect to the Property.
12. Material Damage.
(a) Procedure. If, prior to Closing, a Property shall be
destroyed or sustain Material Damage as a result of fire or other
casualty, then, subject to the rights of Seller's lender, at
Purchaser's option exercised in the manner provided hereunder, the
following shall occur with respect to the Property:
(i) This Agreement shall become null and void and the
Earnest Money Deposit shall be returned to Purchaser, provided
that Purchaser gives notice of such election at or prior to
Closing, but in any event within ten (10) days following
receipt by Purchaser of notice of the occurrence of any such
event; or
(ii) If all other conditions precedent to Purchaser's
obligation to close have been satisfied, the purchase and sale
transaction shall close with a reduction in the cash portion
of the purchase price equal to the amount of the applicable
insurance deductible, and concurrently with such closing,
Seller and any other named insured shall assign to Purchaser,
in form reasonably satisfactory to Purchaser, all claims
arising under any policy of insurance covering such casualty,
and Seller shall have no further liability to Purchaser with
respect to such damage.
(iii) If the parties shall fail to agree on the
amount of the cost of such restoration, such cost of
restoration shall be determined by the following process:
Seller and Purchaser together shall select three (3) reputable
independent third party contractors to submit estimates for
the cost of repair of the damage and shall accept the average
of all of the estimates as the amount of the damage for
purposes of this paragraph.
(b) Damage Other Than Material Damage. In the event of any
damage to a Property other than Material Damage, the purchase and
sale transaction shall close in accordance with and subject to the
conditions of Subparagraph 10(a)(ii). If the Property is
uninsured, the cash portion of the Purchase Price shall be reduced
by the cost to restore determined in the manner provided above.
13. Condemnation. If, prior to Closing, any governmental or
similar authority shall institute eminent domain or similar
proceeding or take any steps preliminary thereto (including the
giving of any direct or indirect notice of intent to institute any
such proceeding) that, if successful, would materially, adversely
affect the value of the Property or materially interfere with the
use thereof, Purchaser shall be entitled to terminate this
Agreement upon written notice to Seller prior to Closing and to a
return of the Earnest Money Deposit. As used in this paragraph,
the term "materially" shall mean condemnation proceeds in excess of
an amount equal to five percent (5%) of the Purchase Price.
14. Brokerage and Consultants.
(a) Representation of Seller. Seller represents and warrants
that, except for Daniel V. Allen of CB Commercial Real Estate
Group, Inc. ("Broker"), it has neither employed, retained nor
consulted any broker, consultant, agent or finder in carrying on
the negotiations relative to this Agreement or the purchase and
sale referred to herein, and Seller shall indemnify and hold
Purchaser harmless from and against any and all claims, demands,
causes of action, debts, liabilities, judgments and damages
(including costs and reasonable attorney's fees) which may be
asserted or recovered against it on account of any brokerage fee,
consulting fee, commission or other compensation arising by reason
of the breach of this representation and warranty. Seller further
represents and warrants that, except for amounts to be paid to
Broker under a separate commission agreement between Seller and
Broker, no amount shall be paid by Seller to any party as a fee or
a commission, or any amount of a similar nature, whatever
designated, as a result of the purchase and sale referred to
herein. Seller acknowledges that in no event shall Purchaser be
responsible for any amounts to be paid to Broker.
(b) Representation of Purchaser. Purchaser represents and
warrants that it has neither employed, retained, nor consulted any
broker, consultant, agent or finder in carrying on the negotiations
relative to this Agreement or the purchase and sale referred to
herein, and Purchaser shall indemnify and hold Seller harmless from
and against any and all claims, demands, actions, causes of action,
debts, liabilities, judgments and damages (including costs and
reasonable attorney's fees) which may be asserted or recovered
against it on account of any brokerage fee, consulting fee,
commission or other compensation arising by reason of the breach of
this representation and warranty. Purchaser further represents and
warrants that no amount shall be paid by any Purchaser to any party
as a fee or a commission, or any amount of a similar nature,
whatever designated, as a result of the purchase and sale referred
to herein.
(c) Advice as to Title. Purchaser acknowledges that, at the
time of execution of this Agreement, Seller has advised Purchaser
by this writing that Purchaser should have the abstract covering
the Property examined by an attorney of Purchaser's own selection
or that Purchaser should be furnished with or should obtain a
policy of title insurance.
15. Indemnification.
(a) Indemnification of Purchaser. Seller hereby agrees to
indemnify, defend and hold harmless Purchaser and any other holder
of record title to the Property pursuant to Paragraph 21, their
officers, directors, general partners, agents and employees and
their respective heirs, executors, administrators, successors and
assigns, from and against any and all liability arising out of the
ownership or operation of the Property prior to Closing, including,
but not limited to, any and all claims, liabilities, damages,
penalties and losses, costs or expenses (including court costs and
reasonable attorney's fees) incurred, resulting from or in any way
arising out of any act or omission of Seller, its agents and
employees, in respect of the operation of the Property prior to
Closing, any injury to persons or damage to property happening or
occurring in, on or about the Property. Seller further agrees,
upon notice and request from Purchaser, to contest any such demand,
claim, suit or action against which Seller has hereinabove agreed
to indemnify and hold Purchaser harmless, and to defend any action
that may be brought in connection with any such demand, claim, suit
or action or with respect to which Seller has hereinabove agreed to
indemnify and hold Purchaser harmless and to bear all costs and
expenses of such contest and defense, provided, however, that
Seller shall have no obligation hereunder to indemnify or hold
Purchaser harmless from and against any claim, liability, damage,
penalty or loss, cost or expense incurred by Purchaser incident to,
resulting from or in any way arising out of any act or omission of
Purchaser, its agent or employees, it being understood and agreed,
however, that the employees engaged in the operation of the
Property prior to Closing are and shall be construed to be, for
purposes of this provision, the employees of Seller and the acts
and omissions of said employees shall in no way be attributable to
Purchaser for the purposes of this provision.
(b) Indemnification of Seller. Subject to Subparagraph
13(a), Purchaser agrees to indemnify, defend and hold Seller, its
general partner, the officers, directors, general partners, agents
and employees of the general partner and their respective heirs,
executors, administrators, successors and assigns, harmless from
and against any claim, liability, damage, penalty, loss, cost or
expense (including court costs and reasonable attorney's fees)
incurred by Seller incident to, resulting from or in any way
arising out of any act or omission of Purchaser, its agents or
employees, or arising out of, or in any way connected with,
Purchaser's inspections of the Property pursuant to this Agreement
and the operation of the Property from and after Closing and any
injury to Persons or damage to property happening on the Property
after Closing; and Purchaser further agrees, upon notice, and
request from Seller, to contest any such demand, claim, suit, or
action against which Purchaser has hereinabove agreed to indemnify
and hold Seller harmless, and to defend any action that may be
brought in connection with any such demand, claim, suit or action
or with respect to which Purchaser has hereinabove agreed to
indemnify and hold the Seller harmless and to bear all costs and
expenses of such contest and defense.
(c) Indemnification Procedure. To the extent of any claims
against Seller or Purchaser predicated upon facts which could
reasonably be interpreted as giving rise to potential liability of
Seller or Purchaser under this Paragraph 13, the party against whom
such claim is asserted shall promptly give notice thereof to the
other party hereto. Thereupon, such other party shall have the
option of retaining counsel of its choice to defend both it and the
remaining party in respect of such claim and to control, in a
manner reasonable in light of applicable circumstances, the course
and ultimate disposition of such claim. In the event that a party
to this Agreement shall elect to exercise the option provided in
the preceding sentence, the party electing such option, by reason
thereof, shall be deemed to have agreed to pay all reasonable costs
and expenses of defending against such claim and any liability of
the party against whom such claim was asserted on account thereof.
Without regard to whether any party hereto shall exercise such
option, Seller and Purchaser and their counsel shall consult with
one another concerning such claim and with due regard to both the
mutual and the independent interests of Seller and Purchaser
therein.
16. Notice to Tenants. On the date of Closing or at any time
thereafter, upon request by Purchaser, Seller agrees to give
notice, said notice to be in compliance with local law and in form
reasonably approved by Purchaser, to each of the tenants of space
located on the Property that Seller has sold and conveyed the
Property to Purchaser and that all future rental payments due under
the terms of the Tenant Leases are to be paid as directed by
Purchaser. On the date of Closing or at any time thereafter, upon
request of Seller, Purchaser agrees to give notice to all tenants
that their security deposit (if any) has been paid over to the
Purchaser, and Purchaser has assumed the liability therefor.
17. Payments.
(a) General. All payments to be made under this Agreement
shall be made by the wire transfer of immediately available funds
pursuant to written wiring instructions from the parties and shall
be deemed paid when written confirmation of receipt has been issued
by the receiving bank and not before.
(b) Deposits to Account of Title Insurer. Unless and until
the Title Insurer shall advise Purchaser and Seller to the contrary
in writing, it is represented and acknowledged that deposits to the
account of Title Insurer made hereunder by Seller and/or Purchaser
shall be made as follows:
Account Owner: Stewart Title of Tampa
Account Name: Stewart Title Escrow Account
Account Number: 2710707554
Depository: Barnett Bank, Jacksonville, Florida
ABA Routing No.: 063000047
For Further Credit: Lincoln Property Company transaction
Telephone Advice: Cathy Kalyuos - (813) 872-9898
18. Default and Remedies.
(a) Remedies of Seller. In the event that all conditions to
Purchaser's obligation to close have been satisfied and Purchaser
fails to close its purchase of the Property hereunder, the Earnest
Money Deposit shall be paid to Seller and retained by it as
liquidated damages as Seller's sole and exclusive remedy hereunder.
The parties acknowledge that Seller's damages occasioned by
Purchaser's default hereunder would be difficult to ascertain, but
agree that the amount of the Earnest Money Deposit represents a
reasonable estimate of Seller's damages.
(b) Remedies of Purchaser. In the event that all conditions
to Seller's obligation to close have been satisfied and Seller fails
to close the sale of the Property in accordance with its
obligations under the terms and conditions specified hereunder,
Purchaser, at its sole discretion, either may (i) specifically
enforce this Agreement and the sale and purchase provided for
herein according to its terms by suit filed within ninety (90)
days, or (ii) terminate this Agreement, whereupon the Earnest Money
Deposit shall be returned in full to Purchaser.
(c) Rightful Termination by Purchaser. In the event that the
conditions precedent to Purchaser's obligation to close are not
satisfied and Purchaser terminates this Agreement pursuant to the
terms hereof, the Earnest Money Deposit shall be returned in full
to Purchaser as its sole remedy, and the parties shall have no
further liability to one another, except as may otherwise be
expressly provided hereunder.
(d) Rightful Termination by Seller. In the event that the
conditions precedent to Seller's obligation to close are not
satisfied and Seller terminates this Agreement pursuant to the
terms hereof, the Earnest Money Deposit shall be returned in full
to Seller as its sole remedy, and the parties shall have no further
liability to one another, except as may otherwise be expressly
provided hereunder.
(e) Attorneys' Fees. In the event of any arbitration or other
legal or equitable proceeding for enforcement of any of the terms
or conditions of this Agreement, or any alleged disputes, breaches,
defaults or misrepresentations in connection with any provision of
this Agreement, the prevailing party in such proceeding, or the
nondismissing party where the dismissal occurs other than by reason
of a settlement, shall be entitled to recover its reasonable costs
and expenses, including, without limitation, reasonable attorneys'
fees and costs paid or incurred in good faith at the arbitration,
pre-trial, trial and appellate levels, and in enforcing any award
or judgment granted pursuant thereto. Any award, judgment or order
entered in any such proceeding shall contain a specific provision
providing for the recovery of attorneys' fees and costs incurred in
enforcing such award or judgment, including, without limitation,
(a) postaward or postjudgment motions, (b) contempt proceedings,
(c) garnishment, levy, and debtor and third party examinations, (d)
discovery and (e) bankruptcy litigation. The "prevailing party,"
for purposes of this Agreement, shall be deemed to be that party
which obtains substantially the result sought, whether by
dismissal, award or judgment.
19. Notices. All notices and other communications hereunder
shall be effective as to any party only if, concurrent with notice
to such party, notice shall be given to such party's counsel. All
notices shall be in writing and shall be deemed to have been duly
given the date deposited with a commercial air courier service,
telecopy or facsimile, or the United States Postal Service, the
latter being registered or certified mail, return receipt
requested, first class, postage prepaid, notice to be effective on
the date of receipt, as follows:
Notice to Seller:
Lincoln Property Company
5727 South Lewis, Suite 550
Tulsa, Oklahoma 74105
Attention: Jay L. Helm
Facsimile: (918) 749-2750
Phone: (918) 748-8636
with a copy to: Lincoln Property Company
3300 Lincoln Plaza
500 North Akard
Dallas, Texas 75201
Attention: Mr. Dan M. Jacks
Facsimile: (214) 740-3447
Phone: (214) 740-3403
Notice to Seller's Counsel:
Fellers, Snider, Blankenship, Bailey & Tippens, P.C.
6 East 5th Street, Suite 800
Tulsa, Oklahoma 74103
Attention: David C. Cameron, Esq.
Facsimile: (918) 583-9659
Phone: (918) 599-0621
Notice to Purchaser:
Walden Residential Properties, Inc.
One Lincoln Center
5400 LBJ Freeway, Suite 400
Dallas, Texas 75240
Attention: Mr. Marshall B. Edwards
Phone: 214/788-0510
Facsimile: 214/788-1550
Notice to Purchaser's Counsel:
Munsch Hardt Kopf Harr & Dinan, P.C.
4000 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202
Attention: Robin K. Minick, Esq.
Phone: (214) 855-7542
Fax: (214) 855-7584
20. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED,
ENFORCED AND GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF
FLORIDA. THE INITIAL DRAFT OF THIS AGREEMENT WAS PREPARED BY
PURCHASER ONLY AS A MATTER OF CONVENIENCE AND SHALL NOT BE
CONSTRUED FOR OR AGAINST EITHER PARTY ON THAT ACCOUNT.
21. Binding Effect. This Agreement and the exhibits attached
hereto shall be binding upon, and shall inure to the benefit of,
the parties hereto, their successors and permitted assigns, if any.
22. Entire Agreement. This Agreement and the exhibits
attached hereto shall constitute the entire contract between the
parties and supersedes all prior and contemporaneous agreements,
representations and undertakings of the parties regarding the
subject matter of this Agreement. This Agreement may not be
modified except by a writing, one or more counterparts of which is
signed by all parties to this Agreement.
23. Vesting of Title To Property. Seller and Purchaser agree
that title to the Property will be conveyed at Closing to such
other entity as Purchaser may direct by written notice to Seller
not less than fifteen (15) days prior to Closing.
24. Waiver. Except as expressly provided in this Agreement,
no inspection by Purchaser of the Property or of any item delivered
by Seller to Purchaser as provided in this Agreement shall
constitute a waiver of any representation, warranty or covenant
made by Seller hereunder. Provided however, in the event that
during the Feasibility Period, Purchaser discovers any fact or
condition in contradiction of any representation, warranty or
covenant made by Seller hereunder and fails to disclose such fact
or condition to Seller prior to Closing, Purchaser shall be deemed
to have waived any claim against Seller arising from such fact or
condition. The waiver by a party hereto of any term, covenant,
agreement or condition herein contained shall not be deemed to be
a waiver of any subsequent breach or failure of condition as to the
same or any other term, covenant, agreement or condition herein
contained, nor shall any custom or practice which may arise between
the parties in the administration of the terms hereof be construed
as a waiver of or in such a manner as to lessen the rights of any
party to insist upon the performance by the other parties in strict
accordance with such terms.
25. Time of the Essence. The time for performance of the
obligations of the parties hereunder is of the essence in this
Agreement.
26. Survival of Agreement. Except as set forth in Paragraph
7(w), the obligation of any parties to this Agreement, including
any performance specified or anticipated to occur following the
Closing, to that extent shall survive the Closing.
27. Headings. The subject headings of paragraphs and
subparagraphs of this Agreement are included for purposes of
convenience only and shall not affect the construction or
interpretation of any of its provisions.
28. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.
29. General.
(a) Memorandum of Terms. Neither Seller nor Purchaser shall
record or cause to be recorded in the public records, at any time
prior to Closing this Agreement or any memorandum or other evidence
hereof.
(b) Time for Performance of Certain Obligations. At either
party's option, this Agreement shall be null and void unless one
copy hereof, executed by Purchaser and Seller shall have been
delivered to the Title Insurer within three (3) business days
following the date of execution hereof by Seller.
(c) Limited Liability of Purchaser's Officers. This Agreement
and all documents, agreements, understandings, and arrangements
relating to this transaction have been executed by the undersigned
in his/her capacity as an officer or director of Purchaser which
has been formed as a Maryland corporation pursuant to the Articles
of Incorporation of Purchaser, and not individually, and neither
the directors, officers or stockholders of Purchaser shall be bound
or have any personal liability hereunder or thereunder. Seller
shall look solely to the assets of Purchaser for satisfaction of
any liability of the Purchaser in respect of this Agreement and all
documents, agreements, understandings and arrangements relating to
the transaction contemplated by this Agreement and will not seek
recourse or commence any action against any of the directors,
officers or stockholders of Purchaser or any of their personal
assets for the performance or payment of any obligation hereunder
or thereunder. The foregoing shall also apply to any future
documents, agreements, understandings, arrangements and
transactions between the parties hereto.
(d) Limited Liability of Seller's Officers. This Agreement
and all documents, agreements, understandings, and arrangements
relating to this transaction have been executed by the undersigned
in his/her capacity as an officer or director of the general
partner of Seller, and not individually, and neither the directors,
officers or stockholders of Seller shall be bound or have any
personal liability hereunder or thereunder. Purchaser shall look
solely to the assets of Seller for satisfaction of any liability of
the Seller in respect of this Agreement and all documents,
agreements, understandings and arrangements relating to the
transaction contemplated by this Agreement and will not seek
recourse or commence any action against any of the directors,
officers or stockholders of the general partner of Seller or any of
their personal assets for the performance or payment of any
obligation hereunder or thereunder. The foregoing shall also apply
to any future documents, agreements, understandings, arrangements
and transactions between the parties hereto.
(e) No Further Agreements. While this Agreement is in full
force and effect, Seller shall not enter into any other agreement
or Letter of Intent to sell the Property.
(f) Confidentiality. The parties hereto hereby agree that
they will maintain the confidentiality of all information and
materials provided to each other in connection herewith and the
terms of the transaction contemplated hereby, the contents of this
Agreement and related documents, if any, except that Purchaser may
disclose material terms which are required to be disclosed by
applicable securities laws or as required by any national
securities exchange on which Purchaser's common stock may be listed
and Purchaser may include a copy of this Agreement and in its
filings with the Securities and Exchange Commission and Seller may
disclose material terms which are required to be disclosed to the
limited partners of Seller, its accountants, attorneys and lender.
30. Date of Performance. In the event the expiration date of
any review period herein specified or the expiration date of any
period of time in which a party hereto is to deliver any item to
any other party hereto should be a legal holiday in the State of
Florida or a Saturday or Sunday, such expiration date shall be
extended to the next business day which is not a legal holiday in
the State of Florida or a Saturday or Sunday, and such next
business day shall be considered such expiration date.
31. Invalid Provisions. If any one or more of the provisions
of this Agreement shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision
hereof, all of which other provisions shall remain in full force
and effect.
32. Inspections. Prior to the expiration of the Feasibility
Period, Purchaser shall have received various reports, satisfactory
to Purchaser in its sole discretion, of inspections of the Property
(including without limitation structural, mechanical,
environmental, cathodic and financial). On or prior to the
Information Delivery Date, Purchaser shall have received the items
listed in Schedule I attached hereto. Seller shall make the
Property and all reports, books and records and agreements relating
to the construction, management and operation of the Property
available to the Purchaser and its agents as provided in Paragraph
7 hereof throughout the Feasibility Period. In addition, Purchaser
agrees that during the Feasibility Period, it shall cause the
Property to be inspected for termites and other wood- destroying
insects. In the event Purchaser terminates this Agreement,
Purchaser shall deliver to Seller a copy of such inspection report.
If the results of the inspections are unsatisfactory to Purchaser,
or for any reason whatsoever, in its sole and absolute discretion,
Purchaser, at its election, may terminate this Agreement by giving
written notice to Seller at any time prior to 5:00 P.M., C.D.T., on
or before the last day of the Feasibility Period, whereupon the
Title Insurer immediately shall return the Earnest Money Deposit to
Purchaser, this Agreement automatically shall terminate, and
neither party shall have any further obligation to the other except
the indemnities contained elsewhere herein. In the absence of such
notice by such date, the inspections shall be deemed to have been
approved by Purchaser. Except as expressly set forth herein,
Seller has not made, does not hereby make, and hereby specifically
disclaims any express or implied representations or warranties
whatsoever with respect to the condition of the Property, including
without limitation any representation or warranty regarding quality
of construction, workmanship, merchantability or fitness for any
particular purpose; and Purchaser acknowledges that Purchaser is
entering into this Agreement without relying upon any such warranty
or representation by Seller, its agents or representatives except
for those representations or warranties expressly set forth herein.
Purchaser's failure to terminate this Agreement prior to the
expiration of the Feasibility Period shall conclusively establish
that Purchaser has fully examined and inspected the Property and is
satisfied with the condition thereof.
33. Notification of Non-Delivery. In the event that either
party hereto shall become aware of the non-delivery of any item or
document required to be delivered under this Agreement, a breach of
a representation, warranty or covenant set forth herein, or other
failure of condition, the party becoming aware of such event shall
give prompt notice to the other party in accordance with Paragraph
17 hereof.
34. Radon Gas Disclosure. As required by Florida Law, the
following notification is provided regarding radon gas:
Radon Gas: Radon is a naturally-occurring
radioactive gas that, when it has accumulated
in a building in sufficient quantities, may
present health risks to persons who are
exposed to it over time. Levels of radon that
exceed federal and state guidelines have been
found in buildings in Florida. Additional
information regarding radon and radon testing
may be obtained from your county public health
unit.
35. Energy Efficient Rating Disclosure. In accordance with
Florida Law, the Energy-Efficiency Rating Disclosure is attached
hereto as Exhibit L.
36. Property Exchange. Purchaser hereunder desires to
exchange other property of like kind and qualifying use within the
meaning of section 1031 of the Internal Revenue Code of 1986, as
amended and the regulations promulgated thereunder (the "Code"), for
fee title in the Property which is the subject of this Contract.
Purchaser expressly reserves the right to assign its rights, but
not its obligations, hereunder to a Qualified Intermediary as
provided in Reg. Section 1.103(k)-1(g)(4) on or before Closing. Seller
specifically agrees that Purchaser may assign this Contract as it
may deem necessary or desirable to consummate the exchange and
agrees to cooperate with Purchaser in connection therewith provided
that such exchange shall be at no cost to Seller. Purchaser
acknowledges that Seller has not represented to Purchaser that the
exchange contemplated hereunder will qualify under the Code.
[The remainder of this page has been intentionally left blank.]
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed on the day and in the year entered below, effective as
above written.
PURCHASER:
WALDEN RESIDENTIAL PROPERTIES, INC.,
a Maryland corporation
By:
Marshall B. Edwards, President
Date Executed by Purchaser:
SELLER:
FLORIDA PRINCETON MEADOWS II
ASSOCIATES, LTD., a Florida limited
partnership
By: Lincoln Property Company No.
1193, Ltd., a Florida limited
partnership, General Partner
By: Mack Pogue, Inc., a Texas
corporation, General
Partner
By:
Name:
Its:
Date Executed by Seller:
The undersigned, constituting the Title Insurer, hereby agrees
to accept in escrow the moneys provided for in the above Agreement
to be paid into escrow and to hold and apply the same as provided
in said Agreement.
STEWART TITLE INSURANCE COMPANY
By:
Authorized Agent
Date executed by Title Insurer:
SCHEDULE I
ITEMS TO BE DELIVERED
1. Seller's most current owner's title insurance policy and
a copy of all title reports and documents in Seller's possession.
2. A list and a copy of all Service Contracts, all documents
pertaining to any leased personal property, and all warranties,
guaranties and bonds relating to the Property, or any part thereof.
3. A complete, itemized and detailed inventory of the
personal property to be conveyed by Seller to Purchaser at the
Closing, Purchaser acknowledging that serial numbers shall not be
required except to the extent readily accessible.
4. A copy of (i) all income and expense statements for the
Property, for the year to date and for the most recently completed
prior year (prepared on a monthly basis), and annual operating
statements for the two (2) most recent fiscal years, certified by
Seller or audited (when available) as having been prepared in
accordance with generally accepted accounting principles (except to
the extent prepared on a cash basis), (ii) operating budgets for
the Property for the current calendar year and if prepared, the
upcoming calendar year, and (iii) a capital expenditure budget for
the Property for the current calendar year and if prepared, for the
upcoming calendar year, and (iv) such other information as is
available in the ordinary course of business, as may be required by
Purchaser's accountants to perform a complete audit of the Property
for the twelve (12) month period ended December 31, 1995, and year-to-date 1996.
5. A copy of all ad valorem and other property tax
statements (including personal property tax statements) relating to
the Property for the current tax year and the immediately preceding
two (2) tax years, including copies of any assessments or
statements for the current or forthcoming year, including a summary
of any contested tax assessments relating to the Property for the
preceding two (2) years, and the results thereof.
6. A copy of (i) a resident rent roll for the Improvements,
showing actual occupancies, rentals, delinquencies, defaults,
security deposits, assigned parking spaces (if any), free rent,
rent concessions, tenant incentives, lease terms, unit numbers,
unit types, and unit amenities, (ii) a current schedule of rental
rates for each type of unit within the Improvements, and (iii) such
other pertinent information regarding the tenant leases and rental
units as is reasonably available to Seller, including, without
limitation a schedule of the appliances and amenities included in
each type of rental unit.
7. To the extent in Seller's possession, a copy of all site
plans, surveys, soil and substrata reports and studies, engineering
plans and studies, mechanical and structural plans, drawings,
environmental reports or studies, architectural renderings, plans
and specifications, construction documents and contracts (with all
applicable change orders), floor plans, as-built survey, landscape
plans, utility schemes and other similar plans, diagrams of
studies, if any, relating to the Property, including but not
limited to those relating to all improvements or structural and/or
major repairs.
8. If available, a copy of the architect's certificate
rendered at or after the completion of construction of the
Improvements stating that the Improvements were constructed
substantially in accordance with the plans and specifications
delivered to Purchaser hereunder.
9. A copy of all reports made by engineers, architects or
others, if any, relating to any structural problems or other
defects with respect to any part of the Property.
10. A copy of all certificates of occupancy for the
Improvements in Seller's possession, and a letter from the
appropriate city dated no earlier than the Effective Date stating
that the Property complies fully with all applicable zoning
ordinances and the operation of the Improvements as an apartment
complex is a permitted use under such ordinances, together with a
copy of such ordinances, or if the appropriate city does not issue
such compliance letters, a letter confirming the zoning currently
in effect on the Property.
11. To the extent in Seller's possession, a copy of all
swimming pool permits, boiler permits and other licenses and
permits for the Property required by law and issued by any
governmental authority having jurisdiction over the Property or
Seller.
12. A list of all employees of the property manager currently
employed in the operation of the Property, setting forth his/her
name, position, salary, benefits, bonuses, leasing commissions,
other incentives, apartment allowance (if applicable) and tenure
with the Property.
13. Invoices, contracts and/or work orders pertaining to, any
(i) carpet replacement, window replacement, and appliance
replacement over the past two (2) years relating to the
Improvements, (ii) any other capital expenditures over the past two
(2) years at the Property, showing the nature of the work, expense,
date and unit or common area where the work was done, and (iii)
regular maintenance and repair at the Property over the past twelve
(12) months.
14. A copy of the standard form of resident lease, leasing
application, security and pet deposit documents, rules and
regulations, leasing brochures, occupancy checklist, current
marketing/leasing plans and business plans for the Property, other
standard forms and documents currently used in connection with the
leasing and marketing of the Property, and a profile of existing
resident base, including data on age, income, sex, household
structure, occupation, etc., to the extent such information is
available to Seller and in Seller's possession.
15. A list of all utility deposits or bonds for the Property
and a copy of all utility bills for the Property for the previous
twelve (12) months, excluding individually metered resident utility
bills.
16. A summary of any approvals, requirements or prerequisites
(if any) imposed by any current lender having a security interest
in the Property (or any portion thereof) as a condition to the
execution of this Agreement by Seller or as a condition to the
Closing as contemplated by this Agreement, other than the
conditions set forth in Article 9(a) above.
17. Access throughout the Feasibility Period to all resident
files.
18. Copies of any pertinent litigation of safety related
issues with respect to the Property.
19. Such other books, records, leases, leasing files,
contracts, agreements, reports, studies, data and information
(including marketing information) relating to the Property or any
portion thereof, or the ownership or operation or management of the
Property, or any portion thereof, that are in Seller's possession
or are readily available to Seller in the ordinary course of
business and as may be required by Purchaser's accountant to
perform a complete audit of the Property for the twelve (12) month
period ended December 31, 1995.
20. List of any hazardous substances that to Seller's
Knowledge, may be in use on the Property.
SCHEDULE II
DESCRIPTION OF IMPROVEMENTS AND AMENITIES
____ dwelling units located in ________ buildings, consisting of
_______ one-bedroom, _________ two-bedroom and ________
three-bedroom units, a clubhouse, laundry facilities, ________
swimming pool(s), ___________ tennis court(s) and
____________________________________.
EXHIBIT A
LEGAL DESCRIPTION OF LAND
[TO BE PROVIDED]
EXHIBIT B
SURVEY
[TO BE PROVIDED]
EXHIBIT C
SURVEYOR'S CERTIFICATE
[TO BE PROVIDED]
EXHIBIT D
PLANS AND SPECIFICATIONS
[TO BE PROVIDED]
EXHIBIT E
INCLUDED PERSONAL PROPERTY
[TO BE PROVIDED]
EXHIBIT F
EXCLUDED PERSONAL PROPERTY
[TO BE PROVIDED]
EXHIBIT G
RENT ROLL
[TO BE PROVIDED]
EXHIBIT H
STREET RENTS
[TO BE PROVIDED]
EXHIBIT I
STATEMENTS OF INCOME AND EXPENSE
[TO BE PROVIDED]
EXHIBIT J
SCHEDULE OF INSURANCE
[TO BE PROVIDED]
EXHIBIT K
SCHEDULE OF SERVICE CONTRACTS
[TO BE PROVIDED]
EXHIBIT L
ENERGY EFFICIENCY RATING DISCLOSURE
EXHIBIT M
CLOSING DOCUMENTS
[TO BE PROVIDED]
EXHIBIT N
STANDARD TENANT LEASE
[TO BE PROVIDED]
REAL ESTATE SALES CONTRACT
THIS REAL ESTATE SALES CONTRACT (hereinafter referred to as
the "Contract") is entered into by and between QUAYLE WALK
APARTMENTS PARTNERS, a Texas general partnership (hereinafter
referred to as "Seller") and WALDEN RESIDENTIAL PROPERTIES, INC.,
(hereinafter referred to as "Purchaser").
FOR AND IN CONSIDERATION OF the premises and the respective
covenants, agreements and obligations hereinafter set forth, Seller
and Purchaser do hereby agree as follows:
1.
SALE AND PURCHASE
1.1 Upon and subject to the terms and conditions hereinafter
set forth, Purchaser agrees to purchase from Seller, and Seller
agrees to sell to Purchaser, the following (hereinafter
collectively referred to as the "Property"):
(a) The real property being approximately 10.320 acres
in the David Strickland Survey, Abstract 1376, and being all
of Lot 2R, Block 2, Treepoint Addition, an Addition to the
City of Arlington, Tarrant County, Texas which real property
is more particularly described on Exhibit "A" attached hereto,
and incorporated herein, together with all rights, ways,
privileges and appurtenances pertaining thereto, including any
right, title and interest of Seller in and to any streets,
alleys or rights-of-way adjoining said real property
(hereinafter collectively referred to as the "Real Property");
(b) All improvements and fixtures located on the Real
Property, including, without limitation, the buildings located
thereon, which are more commonly referred to as Quayle Walk
Apartments located at 6601 Treepoint, Arlington, Tarrant
County, Texas (hereinafter referred to as the "Improvements");
(c) All personal property of every kind and character
owned by Seller and situated on or used in connection with the
Real Property and Improvements (hereinafter collectively
referred to as the "Personal Property");
(d) All leases and rental agreements with tenants of the
Improvements (hereinafter collectively referred to as the
"Tenant Leases"), and all security deposits paid by the
Tenants in connection with the Tenant Leases (hereinafter
collectively referred to as the "Tenant Deposits");
(e) All management, employment, maintenance, service,
equipment, garbage disposal, guard, security, pest control,
and all other agreements, contracts, and leases (except Tenant
Leases) concerning the operation, use, management, maintenance
or lease of the Real Property, Improvements, and/or Personal
Property, or any portion thereof (hereinafter collectively
referred to as the "Collateral Agreements").
2.
PURCHASE PRICE
2.1 The Purchase Price for the Property (hereinafter referred
to as the "Purchase Price") shall be Six Million One Hundred
Thousand and 00/100 Dollars ($6,100,000.00), payable all in cash at
Closing.
3.
EARNEST MONEY
3.1 Upon execution of this Contract, Purchaser shall deposit
with American Title Company located at 4950 Westgrove, Suite 100,
Dallas, Texas 75248, to the attention of Ann Sutton (hereinafter
referred to as the "Title Company"), cash in the amount of
$25,000.00 (the "Initial Deposit") to assure prompt observance of
this Contract by Purchaser.
3.2 On the date of the expiration of the Inspection Period
(as that term is defined in Paragraph 6.1 herein) and if Purchaser
has not terminated this Contract pursuant to Paragraph 6.1 herein,
then Purchaser shall deposit an additional Twenty-Five Thousand
Dollars ($25,000.00) as earnest money with the Title Company (the
"Additional Deposit"). The Additional Deposit together with the
Initial Deposit shall be collectively referred to herein as the
"Earnest Money Deposit".
3.3 The Earnest Money Deposit shall be deposited by the Title
Company and placed in an interest bearing account. All interest
accruing thereon shall be for the benefit of Purchaser.
3.4 The Earnest Money Deposit shall apply to the Purchase
Price at Closing.
4.
TITLE STATUS
4.1 Within ten (10) days after the Effective Date (as
hereinafter defined in Paragraph 14.11), Seller shall deliver to
Purchaser a Commitment for Title Insurance, Texas standard form
(hereinafter referred to as the "Commitment"), together with copies
of all instruments and documents referred to therein as exceptions
to title covering the Property, in the amount of the Purchase
Price, in favor of Purchaser, pursuant to which the Title Company
agrees, subject to the provisions thereof, to issue at Closing an
Owner Policy of Title Insurance (hereinafter referred to as the
"Owner Policy") to Purchaser.
4.2 Purchaser shall have fifteen (15) days after the latest
to be received of the Commitment, legible copies of all exception
matters referenced in the Commitment and the survey (as hereinafter
defined in Paragraph 5.1), to provide to Seller written objections
to the status of title to the Property. If such written objections
have not been received by Seller prior to the end of the said
fifteen (15) day period, Purchaser shall be deemed to have
conclusively accepted and approved the status of title to the
Property, as shown by the Commitment. If Purchaser does timely
deliver to Seller such written objections, Seller shall have ten
(10) days from the receipt of the objections to attempt to cure
such objections. If Seller is unable or unwilling to cure such
objections within such ten (10) day period, Purchaser may either
(i) waive such objections in writing and purchase the Property
notwithstanding such objections, (ii) extend Seller additional
time, not later than the date of Closing, to cure such objections
or (iii) terminate this Contract by written notice to Seller, in
which event the Earnest Money Deposit shall be returned to
Purchaser on demand, and neither Seller nor Purchaser shall have
any further obligations hereunder.
4.3 Seller shall deliver to Purchaser, at Closing, a Special
Warranty Deed (hereinafter referred to as the "Deed") conveying fee
simple title to the Property to Purchaser, subject to the
exceptions to title contained in the Commitment approved, or
waived, by Purchaser pursuant to Paragraph 4.2 hereof.
5.
SURVEY
5.1 Seller shall provide to Purchaser, within five (5) days
after the Effective Date, Seller's most recent survey (hereinafter
referred to as the "Survey") of the Property prepared by a licensed
surveyor or professional engineer. Upon the expiration of the
Inspection Period, if Purchaser has not terminated this Contract,
Seller will provide Purchaser with an updated and recertified
survey, which survey shall be in form and content sufficient to
delete the standard survey exception from the Owner Policy.
Notwithstanding the foregoing, if Purchaser desires to have a
current survey prior to the expiration of the Inspection Period,
Purchaser shall notify Seller of said desire and Seller will order
the updated Survey for Purchaser, however, Purchaser will pay for
the cost of the updated Survey if Purchaser does not close this
transaction.
5.2 Purchaser shall provide to Seller, in writing, within
fifteen (15) days after receipt of the latest to be received of the
Commitment, legible copies of all exception matters referenced in
the Commitment and the Survey, any objections to the Survey
referred to in Paragraph 5.1 hereof. If such written notice has
not been received by Seller prior to the end of said fifteen (15)
day period, Purchaser shall be deemed to have conclusively accepted
and approved the Survey. If Purchaser does timely deliver to
Seller such written objections, Seller shall have ten (10) days
from receipt of the objections to attempt to cure such objections.
If Seller is unable or unwilling to cure such objections within
such ten (10) day period, Purchaser may either: (i) waive such
objections in writing and purchase the Property notwithstanding
such objections, or (ii) terminate this Contract by written notice
to Seller, in which event the Earnest Money Deposit shall be
returned to Purchaser and neither Seller nor Purchaser shall have
any further obligations hereunder. Upon receipt of the updated and
recertified Survey, Purchaser shall have five (5) days to object in
writing to any material items which appear on the Survey for the
first time. If Purchaser so objects, Seller shall have until
Closing to cure the objections or notify Purchaser of Seller's
unwillingness to cure. If Seller is unable or unwilling to cure
such material objections, Purchaser shall either: (i) waive such
objections in writing and purchase the Property notwithstanding
such objections, or (ii) terminate this Contract by written notice
to Seller, in which event the Earnest Money Deposit shall be
returned to Purchaser and neither Seller nor Purchaser shall have
any further obligations hereunder.
6.
INSPECTION AND EXAMINATION
6.1 Purchaser shall have until the expiration of the sixtieth
(60th) day after the Effective Date (hereinafter referred to as the
"Inspection Period"), during which time, Purchaser, or Purchaser's
authorized agent or representative, shall be entitled to enter upon
the Property for the purpose of inspecting, examining and making
tests upon the Property. If Purchaser, in Purchaser's sole
discretion, is dissatisfied with the results of Purchaser's
inspection of the Property, Purchaser may, by written notice
delivered to Seller prior to the expiration of the Inspection
Period, terminate this Contract in which event the Earnest Money
Deposit shall be returned to Purchaser on demand, and neither
Seller nor Purchaser shall have any further obligations hereunder.
If Purchaser does not terminate this Contract by delivery of such
written notice prior to the expiration of the Inspection Period,
Purchaser shall be conclusively deemed to have accepted the
Property in its present condition.
6.2 Purchaser shall have the right to obtain an updated
Environmental Report. In the event such Environmental Report is
not acceptable to Purchaser, in Purchaser's reasonable discretion,
Purchaser shall have the right to terminate the Contract prior to
the expiration of the Inspection Period and receive a full refund
of the Earnest Money Deposit. Purchaser agrees to commission this
study within fifteen (15) days from the Effective Date.
6.3 To facilitate Purchaser's inspection of the Property,
Seller shall provide to Purchaser, at Seller's sole expense, within
five (5) days from the Effective Date, the following:
(a) Access to obtain copies of all tenant leases, at
Purchaser's expense, and a Rent Roll, herein so called, for
the Property, prepared as of the first day of the month in
which this Contract is executed. Additionally, Seller will
provide Purchaser access to Seller's records regarding expense
and income in order to enable Purchaser to complete an audit
of such records;
(b) True copies of the most recent tax statements (both
real estate and personal property taxes) on the Property;
(c) An accurate schedule (the "Operating Schedule" )
reflecting, with respect to the Property for the twelve (12)
month period preceding the month of execution of this Contract
(i) all operating expenses and capital expenditures of the
Property (ii) the aggregate rent collected from tenants of the
Property during such period;
(d) A true and complete inventory of all furnishings,
fixtures, equipment and other personal property located upon
and/or comprising the tangible items used in connection with
the Property;
(e) A true and complete list of all service and other
agreements (the "Third Party Agreements") pertaining to the
Property on which Seller is obligated showing: (i) the names
of the parties to each agreement, (ii) the service rendered or
to be rendered under each agreement, (iii) the compensation
payable by Seller under each agreement, and (iv) the term and
expiration date of each agreement;
(f) Copies of all certificates of occupancy, licenses
and permits required by law and issued by all governmental
authorities having jurisdiction, if any, which may be in
Seller's possession;
(g) All environmental, engineering, pest control and
other professional reports in the possession of Seller;
(h) A copy of a tenant rent roll for the Property,
showing actual occupancies, rentals, security deposits,
assigned parking spaces (if any), free rent, rent concessions,
tenant incentives, lease terms, unit numbers, and unit types.
A current schedule of rental rates for each type of unit
within the Property, and such other pertinent information
regarding the tenant leases and rental units as is reasonably
available to Seller;
(i) A copy of the standard form of tenant lease;
(j) A copy of all utility bills for the Property for the
previous twelve (12) months, excluding individually metered
tenant utility bills; and a letter from each of the utility
providers stating that the utilities are available to the
Property; and
(k) Copies of any pertinent litigation of safety related
issues with respect to the Property.
6.4 Purchaser agrees that if for any reason the Closing is
not consummated, Purchaser will promptly return to Seller all
materials furnished to Purchaser pursuant to Paragraph 6.2.
6.5 Purchaser shall have the right to approve or disapprove
during the Inspection Period any of the Third Party Agreements
described in Paragraph 6.2(e) above existing on the Effective Date.
Seller will not enter into any Third Party Agreements after the
Effective Date that do not contain a clause that grants to Seller
the right to terminate such agreement upon thirty (30) days notice.
Any Third Party Agreement not acceptable to Purchaser must have a
thirty (30) day cancellation clause and Seller will notify such
third party of Purchaser's desire to terminate such agreement. If
such Third Party Agreement cannot be terminated within thirty (30)
days, Purchaser must purchase the Property subject to the terms of
such Third Party Agreement or terminate the Contract.
7.
CLOSING
7.1 The date of closing (hereinafter referred to as the
"Closing Date") shall be, and the event of closing (hereinafter
referred to as the "Closing"), shall occur on the thirtieth (30th)
day following the expiration of the Inspection Period, in the
offices of the Title Company, at such hour as Seller and Purchaser
may mutually agree, but otherwise at 10:00 a.m., local time.
Provided, however, Purchaser shall have the right to a single
extension of the Closing and the Closing Date of thirty (30) days
if Purchaser shall provide Seller with written notice of
Purchaser's election to so extend the Closing Date (and the
Closing) before the fifth (5th) day preceding the originally
scheduled Closing Date.
7.2 All recordation fees and closing cost shall be borne by
Seller and Purchaser in accordance with custom in the area in which
the Property is situated. Provided, however, Seller shall pay for
the Owner Policy and Purchaser shall pay the extra premium for the
survey deletion in connection with the Title Policy.
7.3 Real and personal property taxes for the then current tax
year shall be prorated to the Closing Date. The proration shall be
based on the taxes paid for the tax year 1995. No future
adjustments for real and personal property taxes shall be made
between the parties.
7.4 In addition to the taxes, all rents paid under the tenant
leases, expenses pursuant to the Third Party Agreements and
municipal utilities shall be prorated as of the Closing Date.
Provided, however, Seller shall be entitled to the full amount of
any deposits then held by any utility companies and the amount
thereof shall be an addition to the Purchase Price unless Seller
elects, at its sole option, to obtain a refund of any deposit
directly from any utility company holding same, in which event
Purchaser shall be required to replace any such deposit if
requested or required by the respective utility company. Any
delinquent rents for the current month collected after Closing
shall be delivered to Seller, in Seller's pro rata share. All
tenant deposits paid to Seller under the Tenant Leases as reflected
on the Rent Roll shall be paid to Purchaser at Closing.
7.5 At Closing, Seller shall deliver to Purchaser the
following documents which shall be duly executed and, where
appropriate, acknowledged, together with any and all items or
instruments necessary or appropriate thereto:
(a) The Deed;
(b) The Owner Policy, containing no exception to title
other than (i) the standard printed exceptions in Schedule B
to the Commitment, the tax exception shall refer to taxes for
the year 1996 and subsequent years, and subsequent assessments
for prior years due to change in land usage or ownership and
shall be endorsed "not yet due and payable" and (ii) those
exceptions to title contained in Schedule B to the Commitment
which are approved by Purchaser or waived by Purchaser
pursuant to Paragraph 4.2 hereof;
(c) An Affidavit required pursuant to Section 1445 of
the Internal Revenue Code stating, under penalties of perjury,
that Seller nor any other party so swearing, is a foreign
person within the meaning of Section 1445 of the Internal
Revenue Code;
(d) A Bill of Sale transferring to Purchaser all of the
Personal Property including but not limited to, tangible
personal property and Third Party Agreements;
(e) An Assignment of Tenant Leases and Deposits
assigning all of Seller's right, title and interest in and to
all Tenant Leases and security deposits, and other leases
covering the Property. Seller shall also deliver to Purchaser
the original leases, security deposit agreements, insurance
policies and Third Party Agreements to Purchaser; and
(f) A Tenant Notification Agreement, dated the date of
Closing, executed by Seller, notifying the tenants of the
Property that the Property has been sold to Purchaser.
7.6 At Closing, Purchaser shall deliver to Seller the cash
funds referred to in Paragraph 2.1 hereof and the statutory notice
to tenants as required by Section 92.105(b) of the Texas Property
Code.
7.7 Possession of the Property shall be delivered to
Purchaser at Closing.
8.
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 Seller's Representations and Warranties. Seller
represents and warrants to Purchaser the following:
(a) Seller has or will have at Closing good,
indefeasible, and fee simple title to the Property, free and
clear of all mortgages, liens, encumbrances, leases,
tenancies, security interest, covenants, conditions
restrictions, rights-of-way, easements, judgments or other
matters affecting title other than those shown on Schedule B
of the Commitment and otherwise permitted herein.
(b) This Contract has been duly authorized and executed
by Seller and is a valid and binding obligation of, and is
enforceable, in accordance with its terms, against Seller.
The documents delivered to Purchaser at Closing will be duly
authorized and executed by Seller and will be a valid and
binding obligation of, and will be enforceable in accordance
with their terms, against Seller.
(c) There is no pending or threatened condemnation or
similar proceeding affecting the Property or any portion
thereof, or pending public improvements, liens, or special
assessments, in, about or outside the Property which will in
any manner affect the Property or access to the Property, nor
any legal action of any kind or character whatsoever affecting
the Property which will in any manner affect Purchaser upon
the consummation hereof, nor is any such action presently
contemplated.
(d) To the best of Seller's knowledge, Seller has
complied with all applicable laws, ordinances, regulations,
statutes, rules and restrictions pertaining to and affecting
the Property. Performance of this Contract will not result in
any breach of, or constitute any default under, or result in
imposition of, any lien or encumbrance upon the Property under
any agreement or other instrument to which Seller is a party
or by which Seller or the Property might be bound.
(e) Seller will operate and manage the Property in
substantially the same manner it has been operated and managed
and will maintain the physical condition of the Property in
the same or better condition as it presently exists to the
date of Closing, reasonable wear and tear excepted.
(f) The rent roll delivered pursuant to Paragraph 6.2(h)
is the Current Rent Roll. Not earlier than five (5) days
prior to Closing, Seller shall deliver a Revised Rent Roll to
Purchaser, certified by Seller in writing as true and correct
which Revised Rent Roll shall set forth the following:
(i) the name of each tenant;
(ii) the lease commencement and expiration dates;
(iii) the amount of any security deposits;
(iv) a list of vacant space;
(v) the size and type of each vacant area; and
(vi) the amount and description of any concessions.
(g) Except as expressly set forth in the Rent Roll:
(i) To the best of Seller's knowledge, all of the
information contained on the Rent Roll is, and will
be, true, correct and complete as of its date.
(ii) No rent under any Tenant Lease has been, or
prior to Closing will be, prepaid for a period in
excess of thirty (30) days.
(iii) No tenant has any right of first refusal
or option with respect to the leasing of any
portion of the Property.
(iv) No one, including any tenant, has any option
or right of first refusal to purchase the Property
or any part thereof.
(v) To the best of Seller's knowledge, there are
no oral agreements with anyone, including tenants,
with respect to the Property or any portion
thereof.
(vi) All of the present Tenant Leases for rental
space in the Property are in writing, on a standard
form (which form has been provided to Purchaser)
and duly executed by all parties thereto, and, to
the best of Seller's knowledge, are (A) in full
force and effect and (B) valid and binding
agreements of, and fully enforceable in accordance
with their terms against, the tenants.
(vii) The Tenant Leases will not be amended in
any way after the Effective Date, other than in the
ordinary course of business, without the prior,
written consent of Purchaser, which consent shall
not be unreasonably withheld. Purchaser, unless it
otherwise shall advise Seller in writing within
five (5) days following Seller's request for such
consent, shall be deemed to have consented to any
such amendment.
(viii) Except as stated in the Rent Roll, there
are no uncured defaults on the part of any party to
any of the Tenant Leases, and Seller is in full
compliance with all of lessor's obligations
thereunder.
(ix) None of the rentals due or to become due under
such leases will be assigned, encumbered, or
subject to any liens at the Closing other than the
Permitted Exceptions.
(x) Except as disclosed to Purchaser by Seller in
writing, at the time of Closing, all tenants will
be paying charges for electricity consumed in their
space, including heating and air conditioning, on
an individually metered basis.
(h) The Operating Statement delivered pursuant to
Paragraph 6.2(c) is the most recent monthly statement of
income and expense in connection with the operation and
maintenance of the Property. The balance of such statements
for the preceding months shall be made available to Purchaser
promptly upon request.
(i) No action has been taken with respect to work
performed or delivery of material which would give rise to a
lien on the Property. At Closing, there will be no claim in
favor of any person or entity which is or could become a lien
on the Real Property, the Improvements, or the Personal
Property, arising out of the furnishing of labor or materials,
other than claims or liens arising from acts of Purchaser;
there will be no unpaid assessments against the Property,
except for Property taxes assessed but not due and payable at
the time of Closing; and there will be no claim in favor of
any person or entity (including the present management
company) for any unpaid commissions or fees for leasing of the
Property. In the event of any such claims at Closing, Seller,
at its option and in lieu of the foregoing, either may: (i)
establish with the Title Company an escrow of funds in an
amount and upon conditions reasonably acceptable to Seller and
Purchaser, or (ii) provide a bond in favor of purchaser or
Title Company (or Title Company's underwriter) in such amount,
upon such conditions and for such purposes as may be
satisfactory to Purchaser, Seller and Title Company, in either
case for the purpose of providing for such claims and/or
inducing the Title Company to insure Purchaser's title to the
Property free and clear of such claims.
(j) Seller agrees that benefits or compensations accrued
prior to Closing, and due or claimed to be due either before
or after Closing, to employees or former employees of Seller
shall constitute obligations of Seller only, and Seller agrees
to indemnify and hold Purchaser harmless from all such
obligations and claims.
(k) Seller will not borrow any money or do, or fail to
do, any other act or thing which would cause the Real
Property, the Improvements or any Personal Property to become
pledged or otherwise utilized as collateral or in any way
stand as security for any indebtedness or obligation.
(l) All ad valorem taxes and personal property taxes,
together with all assessments or other charges for utilities,
roads or the widening of such roads, or any other fees imposed
by any governmental authority with respect to the Property,
have been paid in full. The ad valorem taxes, personal
property taxes and special assessments pertaining to the
Property for calendar year 1995 were in the aggregate amount
of $__________ except to the extent that any invoices for any
of such taxes and special assessments have not yet been
received by Seller as of the date of Seller's execution
hereof. In the event Seller receives any further invoices,
notices or assessments that should be included in the figure
listed in this Subparagraph (1), Seller will provide copies of
same to Purchaser on or prior to the Closing Date.
(m) The representations, warranties and covenants of the
Seller contained in this Agreement or in any document
delivered to Purchaser pursuant to the terms of this Agreement
(whether in this Section 8 or elsewhere): (i) shall be true
and correct in all material respects and not in default at the
time of Closing, just as though they were made at such time,
and Seller shall deliver to Purchaser, at Closing, an
affidavit to that effect. However, it is expressly agreed and
understood that the representations, warranties, and covenants
will merge with the Deed and will not survive the Closing of
this transaction.
(n) All rental units shall be in "market ready",
rentable condition as of the date of Closing. Provided,
however, Seller and Purchaser acknowledge that rental units
that are vacated within five (5) business days prior to the
date of Closing, will be in varying conditions of "make-ready"
for leasing, as is ordinary in Seller's course of business.
As to any units that are not in "market ready", rentable
condition as of the date of Closing, Purchaser and Seller
understand and agree that Purchaser shall be entitled to a
credit against the Purchase Price at Closing an amount equal
to the amount agreed upon at Closing by Purchaser and Seller
as being required to put in "market ready", rentable condition
any units that are not in such condition as of the date of the
Closing. Notwithstanding the foregoing, Seller will not be
required to pay an amount in excess of $500.00 per unit not in
"market ready", rentable condition. Purchaser shall have the
right to re-inspect the Property during the period commencing
not earlier than five (5) days prior to the Closing and ending
on the Closing solely for purposes of verifying the
maintenance of the Property in accordance with this Contract.
(o) To the best of Seller's knowledge, no Hazardous
Materials are located on or about the Property. For purposes
of this Paragraph the phrase, "To the best of Seller's
knowledge", is strictly limited to the information contained
in an environmental report prepared in connection with
Seller's acquisition of the Property. Seller agrees to
provide Purchaser with a copy of such environmental report.
(p) To the best of Seller's knowledge, the Improvements
and Personal Property are in good working order and are
structurally sound. For purposes of this Paragraph, the
phrase, "To the best of Seller's knowledge", is strictly
limited to the information contained in an engineer's report
prepared in connection with Seller's acquisition of the
Property. Seller agrees to provide Purchaser with a copy of
such engineer's report.
(q) Except as otherwise specifically stated in this
Contract, Seller shall disclose to Purchaser any and all
information Seller may have in its possession regarding the
following, but Seller hereby specifically disclaims any
warranty, guaranty or representation, oral or written, past,
present or future, of, as to, or concerning: (i) the nature
and condition of the Property, including, "without limitation,
the water, soil and geology, and the suitability thereof and
of the Property for any and all activities and uses which
Purchaser may elect to conduct thereon, and the existence of
any environmental hazards or conditions thereon (including the
presence of asbestos) or compliance with all applicable laws,
rules or regulations; (ii) except for any warranties contained
in the Deed to be delivered by Seller at the Closing, the
nature and extent of any right-of-way, lease, possession,
lien, encumbrance, license, reservation, condition or
otherwise; and (iii) the compliance of the Property or its
operation with any laws, ordinances or regulations of any
government or other body. Purchaser acknowledges that it will
inspect the Property and, except for the specific
representations, warranties and covenants contained herein,
Purchaser will rely solely on its own investigation of the
Property and not on any information provided or to be provided
by Seller. Purchaser further acknowledges that the
information provided and to be provided with respect to the
Property was obtained from a variety of sources and Seller:
(i) has not made any independent investigation or verification
of such information; and (ii) does not make any
representations as to the accuracy or completeness of such
information, except for the specific representations,
warranties and covenants contained herein. THE SALE OF THE
PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS" BASIS,
AND PURCHASER EXPRESSLY ACKNOWLEDGES THAT, IN CONSIDERATION OF
THE AGREEMENTS OF SELLER HEREIN, EXCEPT AS OTHERWISE SPECIFIED
HEREIN, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, OR ARISING BY OPERATION OF LAW, INCLUDING, BUT NOT
LIMITED TO, ANY WARRANTY OF CONDITION, HABITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, IN
RESPECT OF THE PROPERTY. NOTHING IN THIS PARAGRAPH SHALL BE
CONSTRUED OR DEEMED TO CONSTITUTE OR CREATE AN AFFIRMATIVE
OBLIGATION OF SELLER TO UNDERTAKE ANY ACTION OR TO INCUR ANY
EXPENSE IN PROCURING ANY INFORMATION OR REPORT RELATING TO
SELLER'S OBLIGATIONS HEREUNDER.
8.2 Notwithstanding the provisions of Paragraph 8.1, if,
within ten (10) days from the date this Contract is fully executed,
Seller gives written notice that any representation or warranty
contained in this Paragraph 8.1 is incorrect, Seller will not be
bound by such representation or warranty. However, within ten (10)
days after Seller's delivery of such notice to Purchaser, Purchaser
may terminate this Contract (in which event the Earnest Money
Deposit shall be immediately returned to Purchaser).
9.
DEFAULT
9.1 In the event that Purchaser shall fail to purchase the
Property in accordance with the terms and conditions of this
Contract, or otherwise default in the performance of Purchaser's
obligations pursuant to this Contract, for any reason whatsoever
other than Seller's default or as otherwise permitted hereunder,
Seller shall be paid and shall retain the Earnest Money Deposit as
liquidated damages as Seller's sole remedy hereunder.
9.2 In the event that Seller shall default in the performance
of Seller's obligations hereunder, for any reason whatsoever other
than Purchaser's default or as otherwise permitted hereunder, as
Purchaser's only remedies hereunder, Purchaser may, at Purchaser's
option: (i) purchase the Property notwithstanding such default
pursuant to the remaining terms and provisions of this Contract, in
which event such default shall be deemed waived, (ii) terminate
this Contract, in which event Purchaser shall be entitled to return
of Purchaser's Earnest Money Deposit, and neither Seller nor
Purchaser shall have any further obligation hereunder, or (iii)
seek specific performance of this Contract.
10.
CASUALTY LOSS
10.1 If, prior to the date of the Closing, all or any material
portion of the Property is either destroyed, damaged by fire or
other casualty, Purchaser shall have the right to cancel this
Contract by written notice to Seller and the Title Company within
ten (10) days after delivery to Purchaser of notice of the
occurrence of any such event (and the Closing shall be extended
such additional time as is necessary to make such election).
Provided, however, failure to so elect shall be deemed an election
by Purchaser to complete Purchaser's purchase obligations
hereunder. If, upon any such occurrence, Purchaser elects or is
deemed to have elected to complete Purchaser's purchase obligations
hereunder, Purchaser shall be entitled to receive all insurance
proceeds, as compensation for such loss and Seller shall, in this
regard, execute all documents and perform such acts as shall be
necessary or proper for Purchaser to receive such proceeds. In the
event Purchaser elects to complete the purchase of the Property and
accept an assignment of the insurance proceeds, Seller agrees to
pay to Purchaser an amount equal to the insurance policy
deductible.
11.
BROKER FEES AND COMMISSIONS
11.1 Seller and Purchaser each hereby warrant and represent to
the other that all claims for brokerage fees, commissions or
finders' or other similar fees in connection with the transactions
contemplated in this Contract, insofar as such claims shall be
based on agreements made by either of the parties, shall be paid by
the party making such agreements, and the party hereto making such
agreement does hereby indemnify and hold the party hereto which
does not make such agreement harmless from and against all
liability, loss, cost, damage or expense (including but not limited
to reasonable attorney's fees and costs of litigation) which the
party hereto which does not make such agreement shall suffer or
incur because of any claim by any broker, agent or finder claiming
any compensation pursuant to such agreement with respect to the
sale and purchase of the Property or the execution of this
Contract. The provision of this Paragraph 11.1 shall survive
Closing.
11.2 Seller shall pay to Windsor Realty Advisors, Inc. (R.J.
Hall) (hereinafter referred to as "Realtor"), a commission in cash
equal to three percent (3%) of the Purchase Price. Provided,
however, such commission shall be payable only in the event that
the sale of the Property as contemplated in this Contract is
consummated.
12.
NOTICE
12.1 All notices, objections and approvals referred to in this
Contract must be given in writing and will be effective on the day
the notice is: (i) actually received by the addressee thereof after
being sent by overnight delivery (such as Federal Express) or
having been personally hand delivered by the sender or (ii)
deposited in the United States Mail, postage prepaid, registered or
certified mail, return receipt requested, and properly addressed to
the party to receive said notice, or (iii) sent to the addressee by
telecopier, facsimile or similar transmitting machine. The notice
addresses of the parties shall be those specified below unless
modified in writing by the appropriate party:
SELLER:
Quayle Walk Apartments Partners
4950 Westgrove, Suite 120
Dallas, Texas 75248
(214) 931-2131
(214) 248-1637 (Facsimile)
With a copy to:
W. R. Steven Jones
Hesse & Jones, P.C.
4950 Westgrove, Suite 100
Dallas, Texas 75248
(214) 733-3117
(214) 733-3119 (Facsimile)
PURCHASER:
Walden Residential Properties, Inc.
13601 Preston Road
Suite 800 W
Dallas, Texas 75240
(214) 788-0510
(214) 788-1550 (Facsimile)
With a copy to:
Ms. Robin Minick
Munsch, Hardt, Kopf, Harr & Dinan
4000 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202-2790
(214) 855-7500
(214) 855-7584 (Facsimile)
13.
CONTINGENCY
13.1 This Contract is expressly subject to the provisions of
Addendum Eight of the First Deed of Trust and Security Agreement
recorded in Volume 9955, Page 1812 of the Deed of Trust Records,
Tarrant County, Texas, executed by Seller which grants General
Electric Capital Corporation a "First Option to Purchase" the
Property. Seller will use Seller's best efforts to secure within
ten (10) days from the Effective Date, the waiver of General
Electric Capital Corporation of its First Option to Purchase. In
the event General Electric Capital Corporation exercises the First
Option to Purchase in accordance with the terms of the above
described deed of trust, this Contract shall terminate and the
Earnest Money Deposit shall be returned to Purchaser and neither
Purchaser nor Seller shall have any further obligations to the
other.
13.2 This Contract is expressly contingent upon Seller using
Seller's best efforts to obtain the approval and consent of any
lienholder to the herein proposed sale and the agreement of such
lienholder to release any and all liens or security interests it
holds with regard to the Property on or before ten (10) days from
the Effective Date. In the event Seller is unable to obtain the
approval within the above described time period, this Contract
shall terminate and the Earnest Money Deposit shall be returned to
Purchaser and neither Purchaser nor Seller shall have any further
obligations to the other.
14.
MISCELLANEOUS
14.1 The execution of this Contract by the first party
constitutes an offer to buy or sell the Property. Unless this
Contract is accepted by the other party within five (5) working
days from the execution of this Contract by the first party, and a
fully executed copy is delivered to the Title Company, the offer of
this Contract shall be automatically revoked and terminated.
14.2 This Contract and all of the terms, provisions and
covenants contained herein shall apply to, be binding upon and
inure to the benefit of the parties hereto, their respective
successors and assigns.
14.3 The captions employed in this Contract are for
convenience only and are not intended in any way to limit or
amplify the terms and provisions of this Contract.
14.4 Time is of the essence of this Contract.
14.5 This Contract shall be construed in accordance with the
laws of the State of Texas, and venue for any cause of action
arising hereunder shall lie in Dallas County, Texas.
14.6 This Contract contains the entire agreement of the
parties with respect to the subject matter hereof, and shall not be
varied, amended, or superseded except by written agreement between
the parties hereto.
14.7 This Contract may be executed in counterparts, each of
which shall constitute an original and all which taken together
shall constitute an original and all which taken together shall
constitute a single agreement.
14.8 The Purchaser hereby acknowledges that, at the time of
the execution of this Contract, the undersigned Realtor advised the
Purchaser by this writing that the Purchaser should have the
abstract covering the real estate which is the subject of this
Contract examined by an attorney of the Purchaser's own selection
or that the Purchaser should be furnished with or obtain a policy
of title insurance.
14.9 The Realtor, its agents and/or employee's may act in the
dual capacity of broker and undisclosed principal in the
transaction described hereunder.
14.10 If any date of significance hereunder falls upon a
Saturday, Sunday or recognized Federal holiday, such date will be
deemed moved forward to the next day which is not a Saturday,
Sunday or recognized Federal holiday. The terms "working day"
shall mean days elapsed exclusive of Saturday, Sunday or recognized
Federal holidays.
14.11 This Contract (or a counter part hereof) must be
executed by Purchaser and Seller and a fully executed copy hereof
(or executed counterparts) deposited with the Title Company not
later than five (5) days after execution hereof by the latter of
Purchaser or Seller (the actual date of deposit being herein
referred to as the "Effective Date"), or this Contract shall become
null, void and of no effect whatsoever.
SELLER:
QUAYLE WALK APARTMENTS PARTNERS,
a Texas general partnership
Date Executed by Seller By: Q.W. Apartments, Inc.,
a Texas corporation
Its: Managing Partner
By:
R. Mark Pitzer
President
PURCHASER:
WALDEN RESIDENTIAL PROPERTIES, INC.
Date Executed by Purchaser By:
Printed Name: Marshall B. Edwards
Title: President
REALTOR:
WINDSOR REALTY ADVISORS, INC.
By:
R.J. Hall
<PAGE>
ACCEPTANCE BY TITLE COMPANY
The undersigned title company, AMERICAN TITLE COMPANY,
referred to in the foregoing Contract as the "Title Company",
hereby acknowledges receipt of a fully executed copy (or executed
counterparts) of the foregoing Contract and accepts the obligations
of the Title Company as set forth therein.
By:
Date:
"Effective Date"
<PAGE>
EXHIBIT "A"
BEING all of a tract of land conveyed by Trustee's Deed by
Substitute Trustee in Volume 09342, Page 0809 of the Deed Records
of Tarrant County, Texas being situated in the DAVID STRICKLAND
SURVEY, Abstract 1376, and being all of Lot 2R, Block 2, of the
revised plat, TREEPOINT ADDITION, an addition to the City of
Arlington, Texas, as recorded in Volume 338-156, Page 53. Plat
Records of Tarrant County, Texas, said tract of land being more
particularly described as follows:
BEGINNING at an iron rod found with cap for the Southeast corner of
the aforementioned Lot 2R. TREEPOINT ADDITION, said point also
being on the platted Northerly right-of-way line of Treepoint Drive
(70' R.O.W.), the radius point being situated S 14 00'35" W, a
distance of 2900.00 feet;
THENCE, Northwesterly with said right-of-way of Treepoint Drive,
through a central angle of 10 36'18", an arc distance of 536.77
feet to a 1/2" iron rod set for a corner;
THENCE, departing said right-of-way of Treepoint Drive, N 00 23'45"
W, a distance of 817.48 feet, to a Texas Highway Department right-of-way
monument for a corner on the platted Southerly right-of-way
line of Interstate Highway 20, the radius point being situated S
05 17'39" E, a distance of 1879.86 feet;
THENCE, Southeasterly with said right-of-way line of Interstate
Highway 20 through a central angle of 16 14'32" an arc distance of
532.90 feet to a 5/8" iron rod found for a corner;
THENCE, departing said right-of-way line of Interstate Highway 20,
S 00 06'05' W, a distance of 118.44 feet to a 1/2" iron rod found for
a corner;
THENCE S 00 28'14" E, a distance of 160.31 feet to a 1/2" iron rod
set for a corner;
THENCE, S 00 18'58" E, a distance of 143.80 feet to an iron rod
found with cap for a corner:
THENCE, S 00 23'45" E, a distance of 449.88 feet to the POINT OF
BEGINNING and CONTAINING an area of 449,548 square feet of 10.320
acres of land, more or less.
A:\QUAYLE.AGT
1 RM:dl 11/6/96
REAL ESTATE SALES CONTRACT
THIS REAL ESTATE SALES CONTRACT (hereinafter referred to as
the "Contract") is entered into by and between TIMBER CREEK
APARTMENTS PARTNERS, a Texas general partnership (hereinafter
referred to as "Seller") and WALDEN RESIDENTIAL PROPERTIES, INC.,
(hereinafter referred to as "Purchaser").
FOR AND IN CONSIDERATION OF the premises and the respective
covenants, agreements and obligations hereinafter set forth, Seller
and Purchaser do hereby agree as follows:
1.
SALE AND PURCHASE
1.1 Upon and subject to the terms and conditions hereinafter
set forth, Purchaser agrees to purchase from Seller, and Seller
agrees to sell to Purchaser, the following (hereinafter
collectively referred to as the "Property"):
(a) The real property being Lot 3, Block 3 of Treepoint
Addition, an Addition to the Cities of Arlington and
Kennedale, Tarrant County, Texas which real property is more
particularly described on Exhibit "A" attached hereto, and
incorporated herein, together with all rights, ways,
privileges and appurtenances pertaining thereto, including any
right, title and interest of Seller in and to any streets,
alleys or rights-of-way adjoining said real property
(hereinafter collectively referred to as the "Real Property");
(b) All improvements and fixtures located on the Real
Property, including, without limitation, the buildings located
thereon, which are more commonly referred to as Timber Creek
Apartments located at 6518 Treepoint Drive, Arlington, Tarrant
County, Texas (hereinafter referred to as the "Improvements");
(c) All personal property of every kind and character
owned by Seller and situated on or used in connection with the
Real Property and Improvements (hereinafter collectively
referred to as the "Personal Property");
(d) All leases and rental agreements with tenants of the
Improvements (hereinafter collectively referred to as the
"Tenant Leases"), and all security deposits paid by the
Tenants in connection with the Tenant Leases (hereinafter
collectively referred to as the "Tenant Deposits");
(e) All management, employment, maintenance, service,
equipment, garbage disposal, guard, security, pest control,
and all other agreements, contracts, and leases (except Tenant
Leases) concerning the operation, use, management, maintenance
or lease of the Real Property, Improvements, and/or Personal
Property, or any portion thereof (hereinafter collectively
referred to as the "Collateral Agreements").
2.
PURCHASE PRICE
2.1 The Purchase Price for the Property (hereinafter referred
to as the "Purchase Price") shall be Four Million Eight Hundred
Fifty Thousand and 00/100 Dollars ($4,850,000.00), payable all in
cash at Closing.
3.
EARNEST MONEY
3.1 Upon execution of this Contract, Purchaser shall deposit
with American Title Company located at 4950 Westgrove, Suite 100,
Dallas, Texas 75248, to the attention of Ann Sutton (hereinafter
referred to as the "Title Company"), cash in the amount of
$25,000.00 (the "Initial Deposit") to assure prompt observance of
this Contract by Purchaser.
3.2 On the date of the expiration of the Inspection Period
(as that term is defined in Paragraph 6.1 herein) and if Purchaser
has not terminated this Contract pursuant to Paragraph 6.1 herein,
then Purchaser shall deposit an additional Twenty-Five Thousand
Dollars ($25,000.00) as earnest money with the Title Company (the
"Additional Deposit"). The Additional Deposit together with the
Initial Deposit shall be collectively referred to herein as the
"Earnest Money Deposit".
3.3 The Earnest Money Deposit shall be deposited by the Title
Company and placed in an interest bearing account. All interest
accruing thereon shall be for the benefit of Purchaser.
3.4 The Earnest Money Deposit shall apply to the Purchase
Price at Closing.
4.
TITLE STATUS
4.1 Within ten (10) days after the Effective Date (as
hereinafter defined in Paragraph 14.11), Seller shall deliver to
Purchaser a Commitment for Title Insurance, Texas standard form
(hereinafter referred to as the "Commitment"), together with copies
of all instruments and documents referred to therein as exceptions
to title covering the Property, in the amount of the Purchase
Price, in favor of Purchaser, pursuant to which the Title Company
agrees, subject to the provisions thereof, to issue at Closing an
Owner Policy of Title Insurance (hereinafter referred to as the
"Owner Policy") to Purchaser.
4.2 Purchaser shall have fifteen (15) days after the latest
to be received of the Commitment, legible copies of all exception
matters referenced in the Commitment and the survey (as hereinafter
defined in Paragraph 5.1), to provide to Seller written objections
to the status of title to the Property. If such written objections
have not been received by Seller prior to the end of the said
fifteen (15) day period, Purchaser shall be deemed to have
conclusively accepted and approved the status of title to the
Property, as shown by the Commitment. If Purchaser does timely
deliver to Seller such written objections, Seller shall have ten
(10) days from the receipt of the objections to attempt to cure
such objections. If Seller is unable or unwilling to cure such
objections within such ten (10) day period, Purchaser may either
(i) waive such objections in writing and purchase the Property
notwithstanding such objections, (ii) extend Seller additional
time, not later than the date of Closing, to cure such objections
or (iii) terminate this Contract by written notice to Seller, in
which event the Earnest Money Deposit shall be returned to
Purchaser on demand, and neither Seller nor Purchaser shall have
any further obligations hereunder.
4.3 Seller shall deliver to Purchaser, at Closing, a Special
Warranty Deed (hereinafter referred to as the "Deed") conveying fee
simple title to the Property to Purchaser, subject to the
exceptions to title contained in the Commitment approved, or
waived, by Purchaser pursuant to Paragraph 4.2 hereof.
5.
SURVEY
5.1 Seller shall provide to Purchaser, within five (5) days
after the Effective Date, Seller's most recent survey (hereinafter
referred to as the "Survey") of the Property prepared by a licensed
surveyor or professional engineer. Upon the expiration of the
Inspection Period, if Purchaser has not terminated this Contract,
Seller will provide Purchaser with an updated and recertified
survey, which survey shall be in form and content sufficient to
delete the standard survey exception from the Owner Policy.
Notwithstanding the foregoing, if Purchaser desires to have a
current survey prior to the expiration of the Inspection Period,
Purchaser shall. notify Seller of said desire and Seller will order
the updated Survey for Purchaser, however, Purchaser will pay for
the cost of the updated Survey if Purchaser does not close this
transaction.
5.2 Purchaser shall provide to Seller, in writing, within
fifteen (15) days after receipt of the latest to be received of the
Commitment, legible copies of all exception matters referenced in
the Commitment and the Survey, any objections to the Survey
referred to in Paragraph 5.1 hereof. If such written notice has
not been received by Seller prior to the end of said fifteen (15)
day period, Purchaser shall be deemed to have conclusively accepted
and approved the Survey. If Purchaser does timely deliver to
Seller such written objections, Seller shall have ten (10) days
from receipt of the objections to attempt to cure such objections.
If Seller is unable or unwilling to cure such objections within
such ten (10) day period, Purchaser may either: (i) waive such
objections in writing and purchase the Property notwithstanding
such objections, or (ii) terminate this Contract by written notice
to Seller, in which event the Earnest Money Deposit shall be
returned to Purchaser and neither Seller nor Purchaser shall have
any further obligations hereunder. Upon receipt of the updated and
recertified Survey, Purchaser shall have five (5) days to object in
writing to any material items which appear on the Survey for the
first time. If Purchaser so objects, Seller shall have until
Closing to cure the objections or notify Purchaser of Seller's
unwillingness to cure. If Seller is unable or unwilling to cure
such material objections, Purchaser shall either: (i) waive such
objections in writing and purchase the Property notwithstanding
such objections, or (ii) terminate this Contract by written notice
to Seller, in which event the Earnest Money Deposit shall be
returned to Purchaser and neither Seller nor Purchaser shall have
any further obligations hereunder.
6.
INSPECTION AND EXAMINATION
6.1 Purchaser shall have until the expiration of the sixtieth
(60th) day after the Effective Date (hereinafter referred to as the
"Inspection Period"), during which time, Purchaser, or Purchaser's
authorized agent or representative, shall be entitled to enter upon
the Property for the purpose of inspecting, examining and making
tests upon the Property. If Purchaser, in Purchaser's sole
discretion, is dissatisfied with the results of Purchaser's
inspection of the Property, Purchaser may, by written notice
delivered to Seller prior to the expiration of the Inspection
Period, terminate this Contract in which event the Earnest Money
Deposit shall be returned to Purchaser on demand, and neither
Seller nor Purchaser shall have any further obligations hereunder.
If Purchaser does not terminate this Contract by delivery of such
written notice prior to the expiration of the Inspection Period,
Purchaser shall be conclusively deemed to have accepted the
Property in its present condition.
6.2 Purchaser shall have the right to obtain an updated
Environmental Report. In the
event such Environmental Report is not acceptable to Purchaser, in
Purchaser's reasonable discretion, Purchaser shall have the right
to terminate the Contract prior to the expiration of the Inspection
Period and receive a full refund of the Earnest Money Deposit.
Purchaser agrees to commission this study within fifteen (15) days
from the Effective Date.
6.3 To facilitate Purchaser's inspection of the Property,
Seller shall provide to Purchaser, at Seller's sole expense, within
five (5) days from the Effective Date, the following:
(a) Access to obtain copies of all tenant leases, at
Purchaser's expense, and a Rent Roll, herein so called, for
the Property, prepared as of the first day of the month in
which this Contract is executed. Additionally, Seller will
provide Purchaser access to Seller's records regarding expense
and income in order to enable Purchaser to complete an audit
of such records;
(b) True copies of the most recent tax statements (both
real estate and personal property taxes) on the Property;
(c) An accurate schedule (the "Operating Schedule")
reflecting, with respect to the Property for the twelve (12)
month period preceding the month of execution of this Contract
(i) all operating expenses and capital expenditures of the
Property (ii) the aggregate rent collected from tenants of the
Property during such period;
(d) A true and complete inventory of all furnishings,
fixtures, equipment and other personal property located upon
and/or comprising the tangible items used in connection with
the Property;
(e) A true and complete list of all service and other
agreements (the "Third Party Agreements") pertaining to the
Property on which Seller is obligated showing: (i) the names
of the parties to each agreement, (ii) the service rendered or
to be rendered under each agreement, (iii) the compensation
payable by Seller under each agreement, and (iv) the term and
expiration date of each agreement;
(f) Copies of all certificates of occupancy, licenses
and permits required by law and issued by all governmental
authorities having jurisdiction, if any, which may be in
Seller's possession;
(g) All environmental, engineering, pest control and
other professional reports in the possession of Seller;
(h) A copy of a tenant rent roll for the Property,
showing actual occupancies, rentals, security deposits,
assigned parking spaces (if any), free rent, rent concessions,
tenant incentives, lease terms, unit numbers, and unit types.
A current schedule of rental rates for each type of unit
within the Property, and such other pertinent information
regarding the tenant leases and rental units as is reasonably
available to Seller;
(i) A copy of the standard form of tenant lease;
(j) A copy of all utility bills for the Property for the
previous twelve (12) months, excluding individually metered
tenant utility bins; and a letter from each of the utility
providers stating that the utilities are available to the
Property; and
(k) Copies of any pertinent litigation of safety related
issues with respect to the Property.
6.4 Purchaser agrees that if for any reason the Closing is
not consummated, Purchaser
will promptly return to Seller all materials furnished to Purchaser
pursuant to Paragraph 6.2.
6.5 Purchaser shall have the right to approve or disapprove
during the Inspection Period any of the Third Party Agreements
described in Paragraph 6.2(e) above existing on the Effective Date.
Seller will not enter into any Third Party Agreements after the
Effective Date that do not contain a clause that grants to Seller
the right to terminate such agreement upon thirty (30)days notice.
Any Third Party Agreement not acceptable to Purchaser must have a
thirty (30) day cancellation clause and Seller will notify such
third party of Purchaser's desire to terminate such agreement. If
such Third Party Agreement cannot be terminated within thirty (30)
days, Purchaser must purchase the Property subject to the terms of
such Third Party Agreement or terminate the Contract.
7.
CLOSING
7.1 The date of closing (hereinafter referred to as the
"Closing Date") shall be, and the event of closing (hereinafter
referred to as the "Closing"), shall occur on the thirtieth (30th)
day following the expiration of the Inspection Period, in the
offices of the Title Company, at such hour as Seller and Purchaser
may mutually agree, but otherwise at 10:00 a.m., local time.
Provided, however, Purchaser shall have the right to a single
extension of the Closing and the Closing Date of thirty (30) days
if Purchaser shall provide Seller with written notice of
Purchaser's election to so extend the Closing Date (and the
Closing) before the fifth (5th) day preceding the originally
scheduled Closing Date.
7.2 All recordation fees and closing cost shall be borne by
Seller and Purchaser in accordance with custom in the area in which
the Property is situated. Provided, however, Seller shall pay for
the Owner Policy and Purchaser shall pay the extra premium for the
survey deletion in connection with the Title Policy.
7.3 Real and personal property taxes for the then current tax
year shall be prorated to the Closing Date. The proration shall be
based on the taxes paid for the tax year 1995. No future
adjustments for real and personal property taxes shall be made
between the parties.
7.4 In addition to the taxes, all rents paid under the tenant
leases, expenses pursuant to the Third Party Agreements and
municipal utilities shall be prorated as of the Closing Date.
Provided, however, Seller shall be entitled to the full amount of
any deposits then held by any utility companies and the amount
thereof shall be an addition to the Purchase Price unless Seller
elects, at its sole option, to obtain a refund of any deposit
directly from any utility company holding same, in which event
Purchaser shall be required to replace any such deposit if
requested or required by the respective utility company. Any
delinquent rents for the current month collected after Closing
shall be delivered to Seller, in Seller's pro rata share. All
tenant deposits paid to Seller under the Tenant Leases as reflected
on the Rent Roll shall be paid to Purchaser at Closing.
7.5 At Closing, Seller shall deliver to Purchaser the
following documents which shall be duly executed and, where
appropriate, acknowledged, together with any and all items or
instruments necessary or appropriate thereto:
(a) The Deed;
(b) The Owner Policy, containing no exception to title
other than (i) the standard printed exceptions in Schedule B
to the Commitment, the tax exception shall refer to taxes for
the year 1996 and subsequent years, and subsequent assessments
for prior years due to change in land usage or ownership and
shall be endorsed "not yet due and payable" and (ii) those
exceptions to title contained in Schedule B to the Commitment
which are approved by Purchaser or waived by Purchaser
pursuant to Paragraph 4.2 hereof;
(c) An Affidavit required pursuant to Section 1445 of
the Internal Revenue Code stating, under penalties of perjury,
that Seller nor any other party so swearing, is a foreign
person within the meaning of Section 1445 of the Internal
Revenue Code;
(d) A Bill of Sale transferring to Purchaser all of the
Personal Property including but not limited to, tangible
personal property and Third Party Agreements;
(e) An Assignment of Tenant Leases and Deposits
assigning all of Seller's right, title and interest in and to
all Tenant Leases and security deposits, and other leases
covering the Property. Seller shall also deliver to Purchaser
the original leases, security deposit agreements, insurance
policies and Third Party Agreements to Purchaser; and
(f) A Tenant Notification Agreement, dated the date of
Closing, executed by Seller, notifying the tenants of the
Property that the Property has been sold to Purchaser.
7.6 At Closing, Purchaser shall deliver to Seller the cash
funds referred to in Paragraph 2.1 hereof and the statutory notice
to tenants as required by Section 92.105(b) of the Texas Property
Code.
7.7 Possession of the Property shall be delivered to
Purchaser at Closing.
8.
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 Seller's Representations and Warranties. Seller
represents and warrants to Purchaser the following:
(a) Seller has or will have at Closing good,
indefeasible, and fee simple title to the Property, free and
clear of all mortgages, liens, encumbrances, leases,
tenancies, security interest, covenants, conditions
restrictions, rights-of-way, easements, judgments or other
matters affecting title other than those shown on Schedule B
of the Commitment and otherwise permitted herein.
(b) This Contract has been duly authorized and executed
by Seller and is a valid and binding obligation of, and is
enforceable, in accordance with its terms, against Seller.
The documents delivered to Purchaser at Closing will be duly
authorized and executed by Seller and will be a valid and
binding obligation of, and will be enforceable in accordance
with their terms, against Seller.
(c) There is no pending or threatened condemnation or
similar proceeding affecting the Property or any portion
thereof, or pending public improvements, liens, or special
assessments, in, about or outside the Property which will in
any manner affect the Property or access to the Property, nor
any legal action of any kind or character whatsoever affecting
the Property which will in any manner affect Purchaser upon
the consummation hereof, nor is any such action presently
contemplated.
(d) To the best of Seller's knowledge, Seller has
complied with all applicable laws, ordinances, regulations,
statutes, rules and restrictions pertaining to and affecting
the Property. Performance of this Contract will not result in
any breach of, or constitute any default under, or result in
imposition of, any lien or encumbrance upon the Property under
any agreement or other instrument to which Seller is a party
or by which Seller or the Property might be bound.
(e) Seller will operate and manage the Property in
substantially the same manner it has been operated and managed
and will maintain the physical condition of the Property in
the same or better condition as it presently exists to the
date of Closing, reasonable wear and tear excepted.
(f) The rent roll delivered pursuant to Paragraph 6.2(h)
is the Current Rent Roll. Not earlier than five (5) days
prior to Closing, Seller shall deliver a Revised Rent Roll to
Purchaser, certified by Seller in writing as true and correct
which Revised Rent Roll shall set forth the following:
(i) the name of each tenant;
(ii) the lease commencement and expiration dates;
(iii) the amount of any security deposits;
(iv) a list of vacant space;
(v) the size and type of each vacant area; and
(vi) the amount and description of any concessions.
(g) Except as expressly set forth in the Rent Roll:
(i) To the best of Seller's knowledge, all of the
information contained on the Rent Roll is, and will
be, true, correct and complete as of its date.
(ii) No rent under any Tenant Lease has been, or
prior to Closing will be, prepaid for a period in
excess of thirty (30) days.
(iii) No tenant has any right of first refusal
or option with respect to the leasing of any
portion of the Property.
(iv) No one, including any tenant, has any option
or right of first refusal to purchase the Property
or any part thereof.
(v) To the best of Seller's knowledge, there are
no oral agreements with anyone, including tenants,
with respect to the Property or any portion
thereof.
(vi) All of the present Tenant Leases for rental
space in the Property are in writing, on a standard
form (which form has been provided to Purchaser)
and duly executed by all parties thereto, and, to
the best of Seller's knowledge, are (A) in full
force and effect and (B) valid and binding
agreements of, and fully enforceable in accordance
with their terms against, the tenants.
(vii) The Tenant Leases will not be amended in
any way after the Effective Date, other than in the
ordinary course of business, without the prior,
written consent of Purchaser, which consent shall
not be unreasonably withheld. Purchaser, unless it
otherwise shall advise Seller in writing within
five (5) days following Seller's request for such
consent, shall be deemed to have consented to any
such amendment.
(viii) Except as stated in the Rent Roll, there
are no uncured defaults on the part of any party to
any of the Tenant Leases, and Seller is in full
compliance with all of lessor's obligations
thereunder.
(ix) None of the rentals due or to become due under
such leases will be assigned, encumbered, or
subject to any liens at the Closing other than the
Permitted Exceptions.
(x) Except as disclosed to Purchaser by Seller in
writing, at the time of Closing, all tenants will
be paying charges for electricity consumed in their
space, including heating and air conditioning, on
an individually metered basis.
(h) The Operating Statement delivered pursuant to
Paragraph 6.2(c) is the most recent monthly statement of
income and expense in connection with the operation and
maintenance of the Property. The balance of such statements
for the preceding months shall be made available to Purchaser
promptly upon request.
(i) No action has been taken with respect to work
performed or delivery of material which would give rise to a
lien on the Property. At Closing, there will be no claim in
favor of any person or entity which is or could become a lien
on the Real Property, the Improvements, or the Personal
Property, arising out of the furnishing of labor or materials,
other than claims or hens arising from acts of Purchaser;
there will be no unpaid assessments against the Property,
except for Property taxes assessed but not due and payable at
the time of Closing; and there will be no claim in favor of
any person or entity (including the present management
company) for any unpaid commissions or fees for leasing of the
Property. In the event of any such claims at Closing, Seller,
at its option and in lieu of the foregoing, either may: (i)
establish with the Title Company an escrow of funds in an
amount and upon conditions reasonably acceptable to Seller and
Purchaser, or (ii) provide a bond in favor of purchaser or
Title Company (or Title Company's underwriter) in such amount,
upon such conditions and for such purposes as may be
satisfactory to Purchaser, Seller and Title Company, in either
case for the purpose of providing for such claims and/or
inducing the Title Company to insure Purchaser's title to the
Property free and clear of such claims.
(j) Seller agrees that benefits or compensations accrued
prior to Closing, and due or claimed to be due either before
or after Closing, to employees or former employees of Seller
shall constitute obligations of Seller only, and Seller agrees
to indemnify and hold Purchaser harmless from all such
obligations and claims.
(k) Seller will not borrow any money or do, or fail to
do, any other act or thing which would cause the Real
Property, the Improvements or any Personal Property to become
pledged or otherwise utilized as collateral or in any way
stand as security for any indebtedness or obligation.
(l) All ad valorem taxes and personal property taxes,
together with all assessments or other charges for utilities,
roads or the widening of such roads, or any other fees imposed
by any governmental authority with respect to the Property,
have been paid in full. The ad valorem taxes, personal
property taxes and special assessments pertaining to the
Property for calendar year 1995 were in the aggregate amount
of $___________ except to the extent that any invoices for any
of such taxes and special assessments have not yet been
received by Seller as of the date of Seller's execution
hereof. In the event Seller receives any further invoices,
notices or assessments that should be included in the figure
listed in this Subparagraph (1), Seller will provide copies of
same to Purchaser on or prior to the Closing Date.
(m) The representations, warranties and covenants of the
Seller contained in this Agreement or in any document
delivered to Purchaser pursuant to the terms of this Agreement
(whether in this Section 8 or elsewhere): (i) shall be true
and correct in all material respects and not in default at the
time of Closing, just as though they were made at such time,
and Seller shall deliver to Purchaser, at Closing, an
affidavit to that effect. However, it is expressly agreed and
understood that the representations, warranties, and covenants
will merge with the Deed and will not survive the Closing of
this transaction.
(n) All rental units shall be in "market ready",
rentable condition as of the date of Closing. Provided,
however, Seller and Purchaser acknowledge that rental units
that are vacated within five (5) business days prior to the
date of Closing, will be in varying conditions of "make-ready"
for leasing, as is ordinary in Seller's course of business.
As to any units that are not in "market ready', rentable
condition as of the date of Closing, Purchaser and Seller
understand and agree that Purchaser shall be entitled to a
credit against the Purchase Price at Closing an amount equal
to the amount agreed upon at Closing by Purchaser and Seller
as being required to put in "market ready", rentable condition
any units that are not in such condition as of the date of the
Closing. Notwithstanding the foregoing, Seller will not be
required to pay an amount in excess of $500.00 per unit not in
"market ready", rentable condition. Purchaser shall have the
right to re-inspect the Property during the period commencing
not earlier than five (5) days prior to the Closing and ending
on the Closing solely for purposes of verifying the
maintenance of the Property in accordance with this Contract.
(o) To the best of Seller's knowledge, no Hazardous
Materials are located on or about the Property. For purposes
of this Paragraph the phrase, "To the best of Seller's
knowledge", is strictly limited to the information contained
in an environmental report prepared in connection with
Seller's acquisition of the Property. Seller agrees to
provide Purchaser with a copy of such environmental report.
(p) To the best of Seller's knowledge, the Improvements
and Personal Property are in good working order and are
structurally sound. For purposes of this Paragraph, the
phrase, "To the best of Seller's knowledge", is strictly
limited to the information contained in an engineer's report
prepared in connection with Seller's acquisition of the
Property. Seller agrees to provide Purchaser with a copy of
such engineer's report.
(q) Except as otherwise specifically stated in this
Contract, Seller shall disclose to Purchaser any and all
information Seller may have in its possession regarding the
following, but Seller hereby specifically disclaims any
warranty, guaranty or representation, oral or written, past,
present or future, of, as to, or concerning: (i) the nature
and condition of the Property, including, "without limitation,
the water, soil and geology, and the suitability thereof and
of the Property for any and all activities and uses which
Purchaser may elect to conduct thereon, and the existence of
any environmental hazards or conditions thereon (including the
presence of asbestos) or compliance with all applicable laws,
rules or regulations; (ii) except for any warranties contained
in the Deed to be delivered by Seller at the Closing, the
nature and extent of any right-of-way, lease, possession,
lien, encumbrance, license, reservation, condition or
otherwise; and (iii) the compliance of the Property or its
operation with any laws, ordinances or regulations of any
government or other body. Purchaser acknowledges that it will
inspect the Property and, except for the specific
representations, warranties and covenants contained herein,
Purchaser will rely solely on its own investigation of the
Property and not on any information provided or to be provided
by Seller. Purchaser further acknowledges that the
information provided and to be provided with respect to the
Property was obtained from a variety of sources and Seller:
(i) has not made any independent investigation or verification
of such information; and (ii) does not make any
representations as to the accuracy or completeness of such
information, except for the specific representations,
warranties and covenants contained herein. THE SALE OF THE
PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS" BASIS,
AND PURCHASER EXPRESSLY ACKNOWLEDGES THAT, IN CONSIDERATION OF
THE AGREEMENTS OF SELLER HEREIN, EXCEPT AS OTHERWISE SPECIFIED
HEREIN, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, OR ARISING BY OPERATION OF LAW, INCLUDING, BUT NOT
LIMITED TO, ANY WARRANTY OF CONDITION, HABITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, IN
RESPECT OF THE PROPERTY. NOTHING IN THIS PARAGRAPH SHALL BE
CONSTRUED OR DEEMED TO CONSTITUTE OR CREATE AN AFFIRMATIVE
OBLIGATION OF SELLER TO UNDERTAKE ANY ACTION OR TO INCUR ANY
EXPENSE IN PROCURING ANY INFORMATION OR REPORT RELATING TO
SELLER'S OBLIGATIONS HEREUNDER.
8.2 Notwithstanding the provisions of Paragraph 8.1, if,
within ten (10) days from the date this Contract is fully executed,
Seller gives written notice that any representation or warranty
contained in this Paragraph 8.1 is incorrect, Seller will not be
bound by such representation or warranty. However, within ten (10)
days after Seller's delivery of such notice to Purchaser, Purchaser
may terminate this Contract (in which event the Earnest Money
Deposit shall be immediately returned to Purchaser).
9.
DEFAULT
9.1 In the event that Purchaser shall fail to purchase the
Property in accordance with the terms and conditions of this
Contract, or otherwise default in the performance of Purchaser's
obligations pursuant to this Contract, for any reason whatsoever
other than Seller's default or as otherwise permitted hereunder,
Seller shall be paid and shall retain the Earnest Money Deposit as
liquidated damages as Seller's sole remedy hereunder.
9.2 In the event that Seller shall default in the performance
of Seller's obligations hereunder, for any reason whatsoever other
than Purchaser's default or as otherwise permitted hereunder, as
Purchaser's only remedies hereunder, Purchaser may, at Purchaser's
option: (i) purchase the Property notwithstanding such default
pursuant to the remaining terms and provisions of this Contract, in
which event such default shall be deemed waived, (ii) terminate
this Contract, in which event Purchaser shall be entitled to return
of Purchaser's Earnest Money Deposit, and neither Seller nor
Purchaser shall have any further obligation hereunder, or (iii)
seek specific performance of this Contract.
10.
CASUALTY LOSS
10.1 If, prior to the date of the Closing, all or any material
portion of the Property is either destroyed, damaged by fire or
other casualty, Purchaser shall have the right to cancel this
Contract by written notice to Seller and the Title Company within
ten (10) days after delivery to Purchaser of notice of the
occurrence of any such event (and the Closing shall be extended
such additional time as is necessary to make such election).
Provided, however, failure to so elect shall be deemed an election
by Purchaser to complete Purchaser's purchase obligations
hereunder. If, upon any such occurrence, Purchaser elects or is
deemed to have elected to complete Purchaser's purchase obligations
hereunder, Purchaser shall be entitled to receive all insurance
proceeds, as compensation for such loss and Seller shall, in this
regard, execute all documents and perform such acts as shall be
necessary or proper for Purchaser to receive such proceeds. In the
event Purchaser elects to complete the purchase of the Property and
accept an assignment of the insurance proceeds, Seller agrees to
pay to Purchaser an amount equal to the insurance policy
deductible.
11.
BROKER FEES AND COMMISSION
11.1 Seller and Purchaser each hereby warrant and represent to
the other that all claims for brokerage fees, commissions or
finders' or other similar fees in connection with the transactions
contemplated in this Contract, insofar as such claims shall be
based on agreements made by either of the parties, shall be paid by
the party making such agreements, and the party hereto making such
agreement does hereby indemnify and hold the party hereto which
does not make such agreement harmless from and against all
liability, loss, cost, damage or expense (including but not limited
to reasonable attorney's fees and costs of litigation) which the
party hereto which does not make such agreement shall suffer or
incur because of any claim by any broker, agent or finder claiming
any compensation pursuant to such agreement with respect to the
sale and purchase of the Property or the execution of this
Contract. The provision of this Paragraph 11.1 shall survive
Closing.
11.2 Seller shall pay to Windsor Realty Advisors, Inc. (R.J.
Hall) (hereinafter referred to as "Realtor"), a commission in cash
equal to three percent (3%) of the Purchase Price. Provided,
however, such commission shall be payable only in the event that
the sale of the Property as contemplated in this Contract is
consummated.
12.
NOTICE
12.1 All notices, objections and approvals referred to in this
Contract must be given in writing and will be effective on the day
the notice is: (i) actually received by the addressee thereof after
being sent by overnight delivery (such as Federal Express) or
having been personally hand delivered by the sender or (ii)
deposited in the United States Mail, postage prepaid, registered or
certified mail, return receipt requested, and properly addressed to
the party to receive said notice, or (iii) sent to the addressee by
telecopier, facsimile or similar transmitting machine. The notice
addresses of the parties shall be those specified below unless
modified in writing by the appropriate party:
SELLER:
Timber Creek Apartments Partners
4950 Westgrove, Suite 120
Dallas,. Texas 75248
(214) 931-2131
(214) 248-1637 (Facsimile)
With a copy to:
Mr. R. Steven Jones
Hesse & Jones, P.C.
4950 Westgrove, Suite 100
Dallas, Texas 75248
(214) 733-3117
(214) 733-3119 (Facsimile)
PURCHASER:
Walden Residential Properties, Inc.
13601 Preston Road
Suite 800 W
Dallas, Texas 75240
(214) 788-0510
(214) 788-1550 (Facsimile)
With a copy to:
Ms. Robin Minick
Munsch, Hardt, Kopf, Harr & Dinan
4000 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202-2790
(214) 855-7500
(214) 855-7584 (Facsimile)
13.
CONTINGENCY
13.1 This Contract is expressly subject to the provisions of
Addendum Eight of the First Deed of Trust and Security Agreement
recorded in Volume 9962, Page 1169 of the Deed of Trust Records,
Tarrant County, Texas, executed by Seller which grants General
Electric Capital Corporation a "First Option to Purchase" the
Property. Seller will use Seller's best efforts to secure within
ten (10) days from the Effective Date, the waiver of General
Electric Capital Corporation of its First Option to Purchase. In
the event General Electric Capital Corporation exercises the First
Option to Purchase in accordance with the terms of the above
described deed of trust, this Contract shall terminate and the
Earnest Money Deposit shall be returned to Purchaser and neither
Purchaser nor Seller shall have any further obligations to the
other.
13.2 This Contract is expressly contingent upon Seller using
Seller's best efforts to obtain the approval and consent of any
lienholder to the herein proposed sale and the agreement of such
lienholder to release any and all liens or security interests it
holds with regard to the Property on or before ten (10) days from
the Effective Date. In the event Seller is unable to obtain the
approval within the above described time period, this Contract
shall terminate and the Earnest Money Deposit shall be returned to
Purchaser and neither Purchaser nor Seller shall have any further
obligations to the other.
14.
MISCELLANEOUS
14.1 The execution of this Contract by the first party
constitutes an offer to buy or sell the Property. Unless this
Contract is accepted by the other party within five (5) working
days from the execution of this Contract by the first party, and a
fully executed copy is delivered to the Title Company, the offer of
this Contract shall be automatically revoked and terminated.
14.2 This Contract and all of the terms, provisions and
covenants contained herein shall apply to, be binding upon and
inure to the benefit of the parties hereto, their respective
successors and assigns.
14.3 The captions employed in this Contract are for
convenience only and are not intended in any way to limit or
amplify the terms and provisions of this Contract.
14.4 Time is of the essence of this Contract.
14.5 This Contract shall be construed in accordance with the
laws of the State of Texas, and venue for any cause of action
arising hereunder shall lie in Dallas County, Texas.
14.6 This Contract contains the entire agreement of the
parties with respect to the subject matter hereof, and shall not be
varied, amended, or superseded except by written agreement between
the parties hereto.
14.7 This Contract may be executed in counterparts, each of
which shall constitute an original and all which taken together
shall constitute an original and all which taken together shall
constitute a single agreement.
14.8 The Purchaser hereby acknowledges that, at the time of
the execution of this Contract, the undersigned Realtor advised the
Purchaser by this writing that the Purchaser should have the
abstract covering the real estate which is the subject of this
Contract examined by an attorney of the Purchaser's own selection
or that the Purchaser should be furnished with or obtain a Policy
of title insurance.
14.9 The Realtor, its agents and/or employee's may act in the
dual capacity of broker and undisclosed principal in the
transaction described hereunder.
14.10 If any date of significance hereunder falls upon a
Saturday, Sunday or recognized Federal holiday, such date will be
deemed moved forward to the next day which is not a Saturday,
Sunday or recognized Federal holiday. The terms "working day"
shall mean days elapsed exclusive of Saturday, Sunday or recognized
Federal holidays.
14.11 This Contract (or a counterpart hereof) must be
executed by Purchaser and Seller and a fully executed copy hereof
(or executed counterparts) deposited with the Title Company not
later than five (5) days after execution hereof by the latter of
Purchaser or Seller (the actual date of deposit being herein
referred to as the "Effective Date"), or this Contract shall become
null, void and of no effect whatsoever.
[SIGNATURES ARE ON THE FOLLOWING PAGE]
SELLER:
TIMBER CREEK APARTMENTS PARTNERS,
a Texas general partnership
Date Executed by Seller By: T.C. Apartments, Inc.,
a Texas corporation
Its: Managing Partner
By:
Ron E. Collins
President
PURCHASER:
WALDEN RESIDENTIAL PROPERTIES, INC.
Date Executed by Purchaser
By:
Printed Name: Marshall B. Edwards
Title: President
REALTOR:
WINDSOR REALTY ADVISORS, INC.
By:
R. J. Hall
ACCEPTANCE BY TITLE COMPANY
The undersigned title company, AMERICAN TITLE COMPANY,
referred to in the foregoing Contract as the "Title Company",
hereby acknowledges receipt of a fully executed copy (or executed
counterparts) of the foregoing Contract and accepts the obligations
of the Title Company as set forth therein.
By:
Date:
"Effective Date"
EXHIBIT A
Property Description
Lot Three (3), in Block Three (3) of TREEPOINT, an Addition to the
Cities of Arlington and Kennedale, Tarrant County, Texas, according
to plat recorded in Volume 388-115-2, Page 71 of the Deed Records
of Tarrant County, Texas.
REAL ESTATE SALES CONTRACT
THIS REAL ESTATE SALES CONTRACT (hereinafter referred to as
the "Contract") is entered into by and between WATERFORD PARTNERS,
a Texas general partnership (hereinafter referred to as "Seller")
and WALDEN RESIDENTIAL PROPERTIES, INC., (hereinafter referred to
as "Purchaser").
FOR AND IN CONSIDERATION OF the premises and the respective
covenants, agreements and obligations hereinafter set forth, Seller
and Purchaser do hereby agree as follows:
1.
SALE AND PURCHASE
1.1 Upon and subject to the terms and conditions
hereinafter set forth, Purchaser agrees to purchase from Seller,
and Seller agrees to sell to Purchaser, the following (hereinafter
collectively referred to as the "Property"):
(a) The real property being part of Lot 1, Block A,
Waterford on the Meadow, an addition in the City of Plano,
Collin County, Texas which real property is more particularly
described on Exhibit "A" attached hereto, and incorporated
herein, together with all rights, ways, privileges and
appurtenances pertaining thereto, including any right, title
and interest of Seller in and to any streets, alleys or
rights-of-way adjoining said real property (hereinafter
collectively referred to as the "Real Property");
(b) All improvements and fixtures located on the Real
Property, including, without limitation, the buildings located
thereon, which are more commonly referred to as Waterford on
the Meadow Apartments located at 1414 Shiloh Road, Plano,
Collin County, Texas (hereinafter referred to as the
"Improvements");
(c) All personal property of every kind and character
owned by Seller and situated on or used in connection with the
Real Property and Improvements (hereinafter collectively
referred to as the "Personal Property");
(d) All leases and rental agreements with tenants of the
Improvements (hereinafter collectively referred to as the
"Tenant Leases"), and all security deposits paid by the
Tenants in connection with the Tenant Leases (hereinafter
collectively referred to as the "Tenant Deposits");
(e) All management, employment, maintenance, service,
equipment, garbage disposal, guard, security, pest control,
and all other agreements, contracts, and leases (except Tenant
Leases) concerning the operation, use, management, maintenance
or lease of the Real Property, Improvements, and/or Personal
Property, or any portion thereof (hereinafter collectively
referred to as the ("Collateral Agreements").
2.
PURCHASE PRICE
2.1 The Purchase Price for the Property (hereinafter referred
to as the "Purchase Price") shall be Thirteen Million Five Hundred
Fifty Thousand and 00/100 Dollars ($13,550,000.00), payable all in
cash at Closing.
3.
EARNEST MONEY
3.1 Upon execution of this Contract, Purchaser shall deposit
with American Title Company located at 4950 Westgrove, Suite 100,
Dallas, Texas 75248, to the attention of Ann Sutton (hereinafter
referred to as the "Title Company"), cash in the amount of
$25,000.00 (the "Initial Deposit") to assure prompt observance of
this Contract by Purchaser.
3.2 On the date of the expiration of the Inspection Period
(as that term is defined in Paragraph 6.1 herein) and if Purchaser
has not terminated this Contract pursuant to Paragraph 6.1 herein,
then Purchaser shall deposit an additional Twenty-Five Thousand
Dollars ($25,000.00) as earnest money with the Title Company (the
"Additional Deposit"). The Additional Deposit together with the
Initial Deposit shall be collectively referred to herein as the
"Earnest Money Deposit".
3.3 The Earnest Money Deposit shall be deposited by the Title
Company and placed in an interest bearing account. All interest
accruing thereon shall be for the benefit of Purchaser.
3.4 The Earnest Money Deposit shall apply to the Purchase
Price at Closing.
4.
TITLE STATUS
4.1 Within ten (10) days after the Effective Date (as
hereinafter defined in Paragraph 14.11), Seller shall deliver to
Purchaser a Commitment for Title Insurance, Texas standard form
(hereinafter referred to as the "Commitment"), together with copies
of all instruments and documents referred to therein as exceptions
to title covering the Property, in the amount of the Purchase
Price, in favor of Purchaser, pursuant to which the Title Company
agrees, subject to the provisions thereof, to issue at Closing an
Owner Policy of Title Insurance (hereinafter referred to as the
"Owner Policy") to Purchaser.
4.2 Purchaser shall have fifteen (15) days after the latest
to be received of the Commitment, legible copies of all exception
matters referenced in the Commitment and the survey (as hereinafter
defined in Paragraph 5. 1), to provide to Seller written objections
to the status of title to the Property. If such written objections
have not been received by Seller prior to the end of the said
fifteen (15) day period, Purchaser shall be deemed to have
conclusively accepted and approved the status of title to the
Property, as shown by the Commitment. If Purchaser does timely
deliver to Seller such written objections, Seller shall have ten
(10) days from the receipt of the objections to attempt to cure
such objections. If Seller is unable or unwilling to cure such
objections within such ten (10) day period, Purchaser may either
(i) waive such objections in writing and purchase the Property
notwithstanding such objections, (ii) extend Seller additional
time, not later than the date of Closing, to cure such objections
or (iii) terminate this Contract by written notice to Seller, in
which event the Earnest Money Deposit shall be returned to
Purchaser on demand, and neither Seller nor Purchaser shall have
any further obligations hereunder.
4.3 Seller shall deliver to Purchaser, at Closing, a Special
Warranty Deed (hereinafter referred to as the "Deed") conveying fee
simple title to the Property to Purchaser, subject to the
exceptions to title contained in the Commitment approved, or
waived, by Purchaser pursuant to Paragraph 4.2 hereof.
5.
SURVEY
5.1 Seller shall provide to Purchaser, within five (5) days
after the Effective Date, Seller's most recent survey (hereinafter
referred to as the "Survey") of the Property prepared by a licensed
surveyor or professional engineer. Upon the expiration of the
Inspection Period, if Purchaser has not terminated this Contract,
Seller will provide Purchaser with an updated and recertified
survey, which survey shall be in form and content sufficient to
delete the standard survey exception from the Owner Policy.
Notwithstanding the foregoing, if Purchaser desires to have a
current survey prior to the expiration of the Inspection Period,
Purchaser shall notify Seller of said desire and Seller will order
the updated Survey for Purchaser, however, Purchaser will pay for
the cost of the updated Survey if Purchaser does not close this
transaction.
5.2 Purchaser shall provide to Seller, in writing, within
fifteen (15) days after receipt of the latest to be received of the
Commitment, legible copies of all exception matters referenced in
the Commitment and the Survey, any objections to the Survey
referred to in Paragraph 5.1 hereof. If such written notice has
not been received by Seller prior to the end of said fifteen (15)
day period, Purchaser shall be deemed to have conclusively accepted
and approved the Survey. If Purchaser does timely deliver to
Seller such written objections, Seller shall have ten (10) days
from receipt of the objections to attempt to cure such objections.
If Seller is unable or unwilling to cure such objections within
such ten (10) day period, Purchaser may either: (i) waive such
objections in writing and purchase the Property notwithstanding
such objections, or (ii) terminate this Contract by written notice
to Seller, in which event the Earnest Money Deposit shall be
returned to Purchaser and neither Seller nor Purchaser shall have
any further obligations hereunder. Upon receipt of the updated and
recertified Survey, Purchaser shall have five (5) days to object in
writing to any material items which appear on the Survey for the
first time. If Purchaser so objects, Seller shall have until
Closing to cure the objections or notify Purchaser of Seller's
unwillingness to cure. If Seller is unable or unwilling to cure
such material objections, Purchaser shall either: (i) waive such
objections in writing and purchase the Property notwithstanding
such objections, or (ii) terminate this Contract by written notice
to Seller, in which event the Earnest Money Deposit shall be
returned to Purchaser and neither Seller nor Purchaser shall have
any further obligations hereunder.
6.
INSPECTION AND EXAMINATION
6.1 Purchaser shall have until September 15, 1996
(hereinafter referred to as the "Inspection Period"), during which
time, Purchaser, or Purchaser's authorized agent or representative,
shall be entitled to enter upon the Property for the purpose of
inspecting, examining and making tests upon the Property. If
Purchaser, in Purchaser's sole discretion, is dissatisfied with the
results of Purchaser's inspection of the Property, Purchaser may,
by written notice delivered to Seller prior to the expiration of
the Inspection Period, terminate this Contract in which event the
Earnest Money Deposit shall be returned to Purchaser on demand, and
neither Seller nor Purchaser shall have any further obligations
hereunder. If Purchaser does not terminate this Contract by
delivery of such written notice prior to the expiration of the
Inspection Period, Purchaser shall be conclusively deemed to have
accepted the Property in its present condition.
6.2 Purchaser shall have the right to obtain an updated
Environmental Report. In the event such Environmental Report is
not acceptable to Purchaser, in Purchaser's reasonable discretion,
Purchaser shall have the right to terminate the Contract prior to
the expiration of the Inspection Period and receive a full refund
of the Earnest Money Deposit. Purchaser agrees to commission this
study within fifteen (15) days from the Effective Date.
6.3 To facilitate Purchaser's inspection of the Property,
Seller shall provide to Purchaser, at Seller's sole expense, within
five (5) days from the Effective Date, the following:
(a) Access to obtain copies of all tenant leases, at
Purchaser's expense, and a Rent Roll, herein so called, for
the Property, prepared as of the first day of the month in
which this Contract is executed. Additionally, Seller will
provide Purchaser access to Seller's records regarding expense
and income in order to enable Purchaser to complete an audit
of such records;
(b) True copies of the most recent tax statements (both
real estate and personal property taxes) on the Property;
(c) An accurate schedule (the "Operating Schedule" )
reflecting, with respect to the Property for the twelve (12)
month period preceding the month of execution of this Contract
(i) all operating expenses and capital expenditures of the
Property (ii) the aggregate rent collected from tenants of the
Property during such period;
(d) A true and complete inventory of all furnishings,
fixtures, equipment and other personal property located upon
and/or comprising the tangible items used in connection with
the Property;
(e) A true and complete list of all service and other
agreements (the "Third Party Agreements") pertaining to the
Property on which Seller is obligated showing: (i) the names
of the parties to each agreement, (ii) the service rendered or
to be rendered under each agreement, (iii) the compensation
payable by Seller under each agreement, and (iv) the term and
expiration date of each agreement;
(f) Copies of all certificates of occupancy, licenses
and permits required by law and issued by all governmental
authorities having jurisdiction, if any, which may be in
Seller's possession;
(g) All environmental, engineering, pest control and
other professional reports in the possession of Seller;
(h) A copy of a tenant rent roll for the Property,
showing actual occupancies, rentals, security deposits,
assigned parking spaces (if any), free rent, rent concessions,
tenant incentives, lease terms, unit numbers, and unit types.
A current schedule of rental rates for each type of unit
within the Property, and such other pertinent information
regarding the tenant leases and rental units as is reasonably
available to Seller;
(i) A copy of the standard form of tenant lease;
(j) A copy of all utility bills for the Property for the
previous twelve (12) months, excluding individually metered
tenant utility bills; and a letter from each of the utility
providers stating that the utilities are available to the
Property; and
(k) Copies of any pertinent litigation of safety related
issues with respect to the Property.
6.4 Purchaser agrees that if for any reason the Closing is
not consummated, Purchaser will promptly return to Seller all
materials furnished to Purchaser pursuant to Paragraph 6.2.
6.5 Purchaser shall have the right to approve or disapprove
during the Inspection Period any of the Third Party Agreements
described in Paragraph 6.2(e) above existing on the Effective Date.
Seller will not enter into any Third Party Agreements after the
Effective Date that do not contain a clause that grants to Seller
the right to terminate such agreement upon thirty (30) days notice.
Any Third Party Agreement not acceptable to Purchaser must have a
thirty (30) day cancellation clause and Seller will notify such
third party of Purchaser's desire to terminate such agreement. If
such Third Party Agreement cannot be terminated within thirty (30)
days, Purchaser must purchase the Property subject to the terms of
such Third Party Agreement or terminate the Contract.
7.
CLOSING
7.1 The date of closing (hereinafter referred to as the
"Closing Date") shall be, and the event of closing (hereinafter
referred to as the "Closing'), shall occur on November 15, 1996, in
the offices of the Title Company, at such hour as Seller and
Purchaser may mutually agree, but otherwise at 10:00 a.m., local
time. Provided, however, Purchaser shall have the right to a
single extension of the Closing and the Closing Date of thirty (30)
days if Purchaser shall provide Seller with written notice of
Purchaser's election to so extend the Closing Date (and the
Closing) before the fifth (5th) day preceding the originally
scheduled Closing Date.
7.2 All recordation fees and closing cost shall be borne by
Seller and Purchaser in accordance with custom in the area in which
the Property is situated. Provided, however, Seller shall pay for
the Owner Policy and Purchaser shall pay the extra premium for the
survey deletion in connection with the Title Policy.
7.3 Real and personal property taxes for the then current tax
year shall be prorated to the Closing Date. The proration shall be
based on the taxes paid for the tax year 1996. No future
adjustments for real and personal property taxes shall be made
between the parties.
7.4 In addition to the taxes, all rents paid under the tenant
leases, expenses pursuant to the Third Party Agreements and
municipal utilities shall be prorated as of the Closing Date.
Provided, however, Seller shall be entitled to the full amount of
any deposits then held by any utility companies and the amount
thereof shall be an addition to the Purchase Price unless Seller
elects, at its sole option, to obtain a refund of any deposit
directly from any utility company holding same, in which event
Purchaser shall be required to replace any such deposit if
requested or required by the respective utility company. Any
delinquent rents for the current month collected after Closing
shall be delivered to Seller, in Seller's pro rata share. All
tenant deposits paid to Seller under the Tenant Leases as reflected
on the Rent Roll shall be paid to Purchaser at Closing.
7.5 At Closing, Seller shall deliver to Purchaser the
following documents which shall be duly executed and, where
appropriate, acknowledged, together with any and all items or
instruments necessary or appropriate thereto:
(a) The Deed;
(b) The Owner Policy, containing no exception to title
other than (i) the standard printed exceptions in Schedule B
to the Commitment, the tax exception shall refer to taxes for
the year 1996 and subsequent years, and subsequent assessments
for prior years due to change in land usage or ownership and
shall be endorsed "not yet due and payable" and (ii) those
exceptions to title contained in Schedule B to the Commitment
which are approved by Purchaser or waived by Purchaser
pursuant to Paragraph 4.2 hereof;
(c) An Affidavit required pursuant to Section 1445 of
the Internal Revenue Code stating, under penalties of perjury,
that Seller nor any other party so swearing, is a foreign
person within the meaning of Section 1445 of the Internal
Revenue Code;
(d) A Bill of Sale transferring to Purchaser all of the
Personal Property including but not limited to, tangible
personal property and Third Party Agreements;
(e) An Assignment of Tenant Leases and Deposits
assigning all of Seller's right, title and interest in and to
all Tenant Leases and security deposits, and other leases
covering the Property. Seller shall also deliver to Purchaser
the original leases, security deposit agreements, insurance
policies and Third Party Agreements to Purchaser; and
(f) A Tenant Notification Agreement, dated the date of
Closing, executed by Seller, notifying the tenants of the
Property that the Property has been sold to Purchaser.
7.6 At Closing, Purchaser shall deliver to Seller the cash
funds referred to in Paragraph 2.1 hereof and the statutory notice
to tenants as required by Section 92.105(b) of the Texas Property
Code.
7.7 Possession of the Property shall be delivered to
Purchaser at Closing.
8.
SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 Seller's Representation and Warranties. Seller
represents and warrants to Purchaser the following:
(a) Seller has or will have at Closing good,
indefeasible, and fee simple title to the Property, free and
clear of all mortgages, liens, encumbrances, leases,
tenancies, security interest, covenants, conditions
restrictions, rights-of-way, easements, judgments or other
matters affecting title other than those shown on Schedule B
of the Commitment and otherwise permitted herein.
(b) This Contract has been duly authorized and executed
by Seller and is a valid and binding obligation of, and is
enforceable, in accordance with its terms, against Seller.
The documents delivered to Purchaser at Closing will be duly
authorized and executed by Seller and will be a valid and
binding obligation of, and will be enforceable in accordance
with their terms, against Seller.
(c) There is no pending or threatened condemnation or
similar proceeding affecting the Property or any portion
thereof, or pending public improvements, liens, or special
assessments, in, about or outside the Property which will in
any manner affect the Property or access to the Property, nor
any legal action of any kind or character whatsoever affecting
the Property which will in any manner affect Purchaser upon
the consummation hereof, nor is any such action presently
contemplated.
(d) To the best of Seller's knowledge, Seller has
complied with all applicable laws, ordinances, regulations,
statutes, rules and restrictions pertaining to and affecting
the Property. Performance of this Contract will not result in
any breach of, or constitute any default under, or result in
imposition of, any lien or encumbrance upon the Property under
any agreement or other instrument to which Seller is a party
or by which Seller or the Property might be bound.
(e) Seller will operate and manage the Property in
substantially the same manner it has been operated and managed
and will maintain the physical condition of the Property in
the same or better condition as it presently exists to the
date of Closing, reasonable wear and tear excepted.
(f) The rent roll delivered pursuant to Paragraph 6.2(h)
is the Current Rent Roll. Not earlier than five (5) days
prior to Closing, Seller shall deliver a Revised Rent Roll to
Purchaser, certified by Seller in writing as true and correct
which Revised Rent Roll shall set forth the following:
(i) the name of each tenant;
(ii) the lease commencement and expiration dates;
(iii) the amount of any security deposits;
(iv) a list of vacant space;
(v) the size and type of each vacant area; and
(vi) the amount and description of any concessions.
(g) Except as expressly set forth in the Rent Roll:
(i) To the best of Seller's knowledge, all of the
information contained on the Rent Roll is, and
will be, true, correct and complete as of its
date.
(ii) No rent under any Tenant Lease has been, or
prior to Closing will be, prepaid for a period
in excess of thirty (30) days.
(iii) No tenant has any right of first refusal
or option with respect to the leasing of
any portion of the Property.
(iv) No one, including any tenant, has any option
or right of first refusal to purchase the
Property or any part thereof.
(v) To the best of Seller's knowledge, there are
no oral agreements with anyone, including
tenants, with respect to the Property or any
portion thereof.
(vi) All of the present Tenant Leases for rental
space in the Property are in writing, on a
standard form (which form has been provided to
Purchaser) and duly executed by all parties
thereto, and, to the best of Seller's
knowledge, are (A) in full force and effect
and (B) valid and binding agreements of, and
fully. enforceable in accordance with their
terms against, the tenants.
(vii) The Tenant Leases will not be amended in
any way after the Effective Date, other
than in the ordinary course of business,
without the prior, written consent of
Purchaser, which consent shall not be
unreasonably withheld. Purchaser, unless
it otherwise shall advise Seller in
writing within five (5) days following
Seller's request for such consent, shall
be deemed to have consented to any such
amendment.
(viii) Except as stated in the Rent Roll, there
are no uncured defaults on the part of
any party to any of the Tenant Leases,
and Seller is in full compliance with all
of lessor's obligations thereunder.
(ix) None of the rentals due or to become due under
such leases will be assigned, encumbered, or
subject to any liens at the Closing other than
the Permitted Exceptions.
(x) Except as disclosed to Purchaser by Seller in
writing, at the time of Closing, all tenants
will be paying charges for electricity
consumed in their space, including heating and
air conditioning, on an individually metered
basis.
(h) The Operating Statement delivered pursuant to
Paragraph 6.2(c) is the most recent monthly statement of
income and expense in connection with the operation and
maintenance of the Property. The balance of such statements
for the preceding months shall be made available to Purchaser
promptly upon request.
(i) No action has been taken with respect to work
performed or delivery of material which would give rise to a
lien on the Property. At Closing, there will be no claim in
favor of any person or entity which is or could become a lien
on the Real Property, the Improvements, or the Personal
Property, arising out of the furnishing of labor or materials,
other than claims or liens arising from acts of Purchaser;
there will be no unpaid assessments against the Property,
except for Property taxes assessed but not due and payable at
the time of Closing; and there will be no claim in favor of
any person or entity (including the present management
company) for any unpaid commissions or fees for leasing of the
Property. In the event of any such claims at Closing, Seller,
at its option and in lieu of the foregoing, either may: (i)
establish with the Title Company an escrow of funds in an
amount and upon conditions reasonably acceptable to Seller and
Purchaser, or (ii) provide a bond in favor of purchaser or
Title Company (or Title Company's underwriter) in such amount,
upon such conditions and for such purposes as may be
satisfactory to Purchaser, Seller and Title Company, in either
case for the purpose of providing for such claims and/or
inducing the Title Company to insure Purchaser's title to the
Property free and clear of such claims.
(j) Seller agrees that benefits or compensations accrued
prior to Closing, and due or claimed to be due either before
or after Closing, to employees or former employees of Seller
shall constitute obligations of Seller only, and Seller agrees
to indemnify and hold Purchaser harmless from all such
obligations and claims.
(k) Seller will not borrow any money or do, or fail to
do, any other act or thing which would cause the Real
Property, the Improvements or any Personal Property to become
pledged or otherwise utilized as collateral or in any way
stand as security for any indebtedness or obligation.
(l) All ad valorem taxes and personal property taxes,
together with all assessments or other charges for utilities,
roads or the widening of such roads, or any other fees imposed
by any governmental authority with respect to the Property,
have been paid in full. The ad valorem taxes, personal
property taxes and special assessments pertaining to the
Property for calendar year 1995 were in the aggregate amount
of $242,107.00. The ad valorem and personal property taxes
pertaining to the Property for the calendar year 1996 have
been assessed at $10,318,000.00. However, invoices for any ad
valorem or personal property taxes and special assessments
have not yet been received by Seller for calendar year 1996 as
of the date of Seller's execution hereof. In the event Seller
receives any further invoices, notices or assessments that
should be included in the figure listed in this Subparagraph
(1), Seller will provide copies of same to Purchaser on or
prior to the Closing Date.
(m) The representations, warranties and covenants of the
Seller contained in this Agreement or in any document
delivered to Purchaser pursuant to the terms of this Agreement
(whether in this Section 8 or elsewhere): (i) shall be true
and correct in all material respects and not in default at the
time of Closing, just as though they were made at such time,
and Seller shall deliver to Purchaser, at Closing, an
affidavit to that effect. However, it is expressly agreed and
understood that the representations, warranties, and covenants
will merge with the Deed and will not survive the Closing of
this transaction.
(n) All rental units shall be in "market ready",
rentable condition as of the date of Closing. Provided,
however, Seller and Purchaser acknowledge that rental units
that are vacated within five (5) business days prior to the
date of Closing, will be in varying conditions of "make-ready"
for leasing, as is ordinary in Seller's course of business.
As to any units that are not in "market ready", rentable
condition as of the date of Closing, Purchaser and Seller
understand and agree that Purchaser shall be entitled to a
credit against the Purchase Price at Closing an amount equal
to the amount agreed upon at Closing by Purchaser and Seller
as being required to put in "market ready", rentable condition
any units that are not in such condition as of the date of the
Closing. Notwithstanding the foregoing, Seller will not be
required to pay an amount in excess of $500.00 per unit not in
"market ready", rentable condition. Purchaser shall have the
right to re-inspect the Property during the period commencing
not earlier than five (5) days prior to the Closing and ending
on the Closing solely for purposes of verifying the
maintenance of the Property in accordance with this Contract.
(o) To the best of Seller's knowledge, no Hazardous
Materials are located on or about the Property. For purposes
of this Paragraph the phrase, "To the best of Seller's
knowledge", is strictly limited to the information contained
in an environmental report prepared in connection with
Seller's acquisition of the Property. Seller agrees to
provide Purchaser with a copy of such environmental report.
(p) To the best of Seller's knowledge, the Improvements
and Personal Property are in good working order and are
structurally sound. For purposes of this Paragraph, the
phrase, "To the best of Seller's knowledge", is strictly
limited to the information contained in an engineer's report
prepared in connection with Seller's acquisition of the
Property. Seller agrees to provide Purchaser with a copy of
such engineer's report.
(q) Except as otherwise specifically stated in this
Contract, Seller shall disclose to Purchaser any and all
information Seller may have in its possession regarding the
following, but Seller hereby specifically disclaims any
warranty, guaranty or representation, oral or written, past,
present or future, of, as to, or concerning: (i) the nature
and condition of the Property, including, "without limitation,
the water, soil and geology, and the suitability thereof and
of the Property for any and all activities and uses which
Purchaser may elect to conduct thereon, and the existence of
any environmental hazards or conditions thereon (including the
presence of asbestos) or compliance with all applicable laws,
rules or regulations; (ii) except for any warranties contained
in the Deed to be delivered by Seller at the Closing, the
nature and extent of any right-of-way, lease, possession,
lien, encumbrance, license, reservation, condition or
otherwise; and (iii) the compliance of the Property or its
operation with any laws, ordinances or regulations of any
government or other body. Purchaser acknowledges that it will
inspect the Property and, except for the specific
representations, warranties and covenants contained herein,
Purchaser will rely solely on its own investigation of the
Property and not on any information provided or to be provided
by Seller. Purchaser further acknowledges that the
information provided and to be provided with respect to the
Property was obtained from a variety of sources and Seller:
(i) has not made any independent investigation or verification
of such information; and (ii) does not make any
representations as to the accuracy or completeness of such
information, except for the specific representations,
warranties and covenants contained herein. THE SALE OF THE
PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS" BASIS,
AND PURCHASER EXPRESSLY ACKNOWLEDGES THAT, IN CONSIDERATION OF
THE AGREEMENTS OF SELLER HEREIN, EXCEPT AS OTHERWISE SPECIFIED
HEREIN, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, OR ARISING BY OPERATION OF LAW, INCLUDING, BUT NOT
LIMITED TO, ANY WARRANTY OF CONDITION, HABITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, IN
RESPECT OF THE PROPERTY. NOTHING IN THIS PARAGRAPH SHALL BE
CONSTRUED OR DEEMED TO CONSTITUTE OR CREATE AN AFFIRMATIVE
OBLIGATION OF SELLER TO UNDERTAKE ANY ACTION OR TO INCUR ANY
EXPENSE IN PROCURING ANY INFORMATION OR REPORT RELATING TO
SELLER'S OBLIGATIONS HEREUNDER.
8.2 Notwithstanding the provisions of Paragraph 8.1, if,
within ten (10) days from the date this Contract is fully executed,
Seller gives written notice that any representation or warranty
contained in this Paragraph 8.1 is incorrect, Seller will not be
bound by such representation or warranty. However, within ten (10)
days after Seller's delivery of such notice to Purchaser, Purchaser
may terminate this Contract (in which event the Earnest Money
Deposit shall be immediately returned to Purchaser).
9.
DEFAULT
9.1 In the event that Purchaser shall fail to purchase the
Property in accordance with the terms and conditions of this
Contract, or otherwise default in the performance of Purchaser's
obligations pursuant to this Contract, for any reason whatsoever
other than Seller's default or as otherwise permitted hereunder,
Seller shall be paid and shall retain the Earnest Money Deposit as
liquidated damages as Seller's sole remedy hereunder.
9.2 In the event that Seller shall default in the performance
of Seller's obligations hereunder, for any reason whatsoever other
than Purchaser's default or as otherwise permitted hereunder, as
Purchaser's only remedies hereunder, Purchaser may, at Purchaser's
option: (i) purchase the Property notwithstanding such default
pursuant to the remaining terms and provisions of this Contract, in
which event such default shall be deemed waived, (ii) terminate
this Contract, in which event Purchaser shall be entitled to return
of Purchaser's Earnest Money Deposit, and neither Seller nor
Purchaser shall have any further obligation hereunder, or (iii)
seek specific performance of this Contract.
10.
CASUALTY LOSS
10.1 If, prior to the date of the Closing, all or any material
portion of the Property is either destroyed, damaged by fire or
other casualty, Purchaser shall have the right to cancel this
Contract by written notice to Seller and the Title Company within
ten (10) days after delivery to Purchaser of notice of the
occurrence of any such event (and the Closing shall be extended
such additional time as is necessary to make such election).
Provided, however, failure to so elect shall be deemed an election
by Purchaser to complete Purchaser's purchase obligations
hereunder. If, upon any such occurrence, Purchaser elects or is
deemed to have elected to complete Purchaser's purchase obligations
hereunder, Purchaser shall be entitled to receive all insurance
proceeds, as compensation for such loss and Seller shall, in this
regard, execute all documents and perform such acts as shall be
necessary or proper for Purchaser to receive such proceeds. In the
event Purchaser elects to complete the purchase of the Property and
accept an assignment of the insurance proceeds, Seller agrees to
pay to Purchaser an amount equal to the insurance policy
deductible.
11.
BROKER FEES AND COMMISSIONS
11.1 Seller and Purchaser each hereby warrant and represent to
the other that all claims for brokerage fees, commissions or
finders' or other similar fees in connection with the transactions
contemplated in this Contract, insofar as such claims shall be
based on agreements made by either of the parties, shall be paid by
the party making such agreements, and the party hereto making such
agreement does hereby indemnify and hold the party hereto which
does not make such agreement harmless from and against all
liability, loss, cost, damage or expense (including but not limited
to reasonable attorney's fees and costs of litigation) which the
party hereto which does not make such agreement shall suffer or
incur because of any claim by any broker, agent or finder claiming
any compensation pursuant to such agreement with respect to the
sale and purchase of the Property or the execution of this
Contract. The provision of this Paragraph 11.1 shall survive
Closing.
11.2 Seller shall pay to Windsor Advisors, L.C. d/b/a Windsor
Realty Advisors (R.J. Hall) (hereinafter referred to as "Realtor"),
a commission in cash equal to three percent (3%) of the Purchase
Price. Provided, however, such commission shall be payable only in
the event that the sale of the Property as contemplated in this
Contract is consummated.
12.
NOTICE
12.1 All notices, objections and approvals referred to in this
Contract must be given in writing and will be effective on the day
the notice is: (i) actually received by the addressee thereof after
being sent by overnight delivery (such as Federal Express) or
having been personally hand delivered by the sender or (ii)
deposited in the United States Mail, postage prepaid, registered or
certified mail, return receipt requested, and properly addressed to
the party to receive said notice, or (iii) sent to the addressee by
telecopier, facsimile or similar transmitting machine. The notice
addresses of the parties shall be those specified below unless
modified in writing by the appropriate party:
SELLER:
Waterford Apartments Partners
4950 Westgrove, Suite 120
Dallas, Texas 75248
(214) 931-2131
(214) 248-1637 (Facsimile)
With a copy to:
Mr. R. Steven Jones
Hesse & Jones, P.C.
4950 Westgrove, Suite 100
Dallas, Texas 75248
(214) 733-3117
(214) 733-3119 (Facsimile)
PURCHASER:
Walden Residential Properties, Inc.
5400 LBJ Freeway
Suite 400, L.B. 45
Dallas, Texas 75240
(214) 788-0510
(214) 788-1550 (Facsimile)
With a copy to:
Ms. Robin Minick
Munsch, Hardt, Kopf, Harr & Dinan
4000 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202-2790
(214) 855-7500
(214) 855-7584 (Facsimile)
13.
CONTINGENCY
13.1 This Contract is expressly subject to the provisions of
Addendum Eight of the First Deed of Trust and Security Agreement
recorded under Clerk's File Number 24586 of the Deed Records,
Collin County, Texas, executed by Seller which grants General
Electric Capital Corporation a "First Option to Purchase" the
Property. Seller will use Seller's best efforts to secure within
ten (10) days from the Effective Date, the waiver of General
Electric Capital Corporation of its First Option to Purchase. In
the event General Electric Capital Corporation exercises the First
Option to Purchase in accordance with the terms of the above
described deed of trust, this Contract shall terminate and the
Earnest Money Deposit shall be returned to Purchaser and neither
Purchaser nor Seller shall have any further obligations to the
other.
13.2 This Contract is expressly contingent upon Seller using
Seller's best efforts to obtain the approval and consent of any
lienholder to the herein proposed sale and the agreement of such
lienholder to release any and all liens or security interests it
holds with regard to the Property on or before ten (10) days from
the Effective Date. In the event Seller is unable to obtain the
approval within the above described time period, this Contract
shall terminate and the Earnest Money Deposit shall be returned to
Purchaser and neither Purchaser nor Seller shall have any further
obligations to the other.
14.
MISCELLANEOUS
14.1 The execution of this Contract by the first party
constitutes an offer to buy or sell the Property. Unless this
Contract is accepted by the other party within five (5) working
days from the execution of this Contract by the first party, and a
fully executed copy is delivered to the Title Company, the offer of
this Contract shall be automatically revoked and terminated.
14.2 This Contract and all of the terms, provisions and
covenants contained herein shall apply to, be binding upon and
inure to the benefit of the parties hereto, their respective
successors and assigns.
14.3 The captions employed in this Contract are for
convenience only and are not intended in any way to limit or
amplify the terms and provisions of this Contract.
14.4 Time is of the essence of this Contract.
14.5 This Contract shall be construed in accordance with the
laws of the State of Texas, and venue for any cause of action
arising hereunder shall lie in Dallas County, Texas.
14.6 This Contract contains the entire agreement of the
parties with respect to the subject matter hereof, and shall not be
varied, amended, or superseded except by written agreement between
the parties hereto.
14.7 This Contract may be executed in counterparts, each of
which shall constitute an original and all which taken together
shall constitute an original and all which taken together shall
constitute a single agreement.
14.8 The Purchaser hereby acknowledges that, at the time of
the execution of this Contract, the undersigned Realtor advised the
Purchaser by this writing that the Purchaser should have the
abstract covering the real estate which is the subject of this
Contract examined by an attorney of the Purchaser's own selection
or that the Purchaser should be furnished with or obtain a policy
of title insurance.
14.9 The Realtor, its agents and/or employee's may act in the
dual capacity of broker and undisclosed principal in the
transaction described hereunder.
14.10 If any date of significance hereunder falls upon a
Saturday, Sunday or recognized Federal holiday, such date will be
deemed moved forward to the next day which is not a Saturday,
Sunday or recognized Federal holiday. The terms "working day"
shall mean days elapsed exclusive of Saturday, Sunday or recognized
Federal holidays.
14.11 This Contract (or a counterpart hereof) must be
executed by Purchaser and Seller and a fully executed copy hereof
(or executed counterparts) deposited with the Title Company not
later than five (5) days after execution hereof by the latter of
Purchaser or Seller (the actual date of deposit being herein
referred to as the "Effective Date"), or this Contract shall become
null, void and of no effect whatsoever.
[SIGNATURE OF PARTIES ON THE FOLLOWING PAGE]
SELLER:
WATERFORD APARTMENTS PARTNERS,
a Texas general partnership
Date Executed by Seller By: W.M. Apartments, Inc.,
a Texas corporation
Its: Managing Partner
By:
R. Mark Pitzer
President
PURCHASER:
WALDEN RESIDENTIAL PROPERTIES, INC.
Date Executed by Purchaser By:
Printed Name:
Title:
REALTOR:
WINDSOR REALTY ADVISORS, INC.
By:
R. J. Hall
ACCEPTANCE BY TITLE COMPANY
The undersigned title company, AMERICAN TITLE COMPANY,
referred to in the foregoing Contract as the "Title Company",
hereby acknowledges receipt of a fully executed copy (or executed
counterparts) of the foregoing Contract and $25,000.00 of the
Earnest Money Deposit referred to therein, and accepts the
obligations of the Title Company as set forth therein.
By:
Date:
"Effective Date"
GF# 165133
Mortgagee Policy No. 44-J3-51-165133
DESCRIPTION
BEING part of Lot 1, Block A. Waterford on the Meadow, an addition
in the city of Plano, according to the Plat recorded in Volume D,
Page 144, Map Records, Collin County, Texas and being more
particularly described by metes and bounds as follows:
BEGINNING at a 1/2 inch iron rod set for corner, said iron rod being
at the intersection of the South Right-of-Way line of Shorecrest
Drive and the East Right-of-Way line of Shiloh Road ( 140' ROW);
THENCE North 88 degrees 33 minutes 10 seconds East following the
South ROW line of said Shorecrest Drive a distance of 578.91 feet
to a 1/2 inch iron rod set for corner at the Northeast corner of said
Lot 1, said iron rod also being in the West line of Ridgewood Sixth
Section as recorded in Volume B, Page 318, Plat Records, Collin
County, Texas;
THENCE South 01 degrees 26 minutes 50 seconds East passing at
152.34 feet the southwest corner of said Ridgewood Sixth Section
and the northwest corner of Ridgewood No. 7 (Replat) as recorded in
Volume C, Page 718, Plat Records, Collin County, Texas, also
passing at 1139.89 feet the southwest corner of said Ridgewood No.
7 in all a distance of 1724.88 feet to a 1/2 inch iron rod set for
corner at the southeast corner of said Lot 1, said iron rod also
being in the North Right-of-Way line of F.M. 544 (a 95' ROW);
THENCE South 88 degrees 19 minutes 30 seconds West following the
North ROW line of said F.M. 544 a distance of 268.08 feet to a 1/2
inch iron rod set for corner;
THENCE South 88 degrees 50 minutes 30 seconds West following the
North ROW line of said F.M. 544 a distance of 21.30 feet to a 1/2
inch iron rod set for corner;
THENCE North 01 degrees 09 minutes 30 seconds West a distance of
205.00 feet to a 1/2 inch iron rod set for corner;
THENCE South 88 degrees 33 minutes 10 seconds West a distance of
332.09 feet to a 1/2 inch iron rod set for corner in the East Right-of-Way
line of said Shiloh Road;
THENCE North 01 degrees 05 minutes 30 seconds West following the
East ROW line of said Shiloh Road a distance of 68.89 feet to a 1/2
inch iron rod set for corner at the beginning of a curve to the
right which center bears North 88 degrees 54 minutes 30 seconds
East a radius distance of 1872.52 feet;
THENCE along said curve to the right following the East ROW line of
said Shiloh Road, through a central angle of 7 degrees 59 minutes
00 seconds and an arc distance of 260.91 feet to a 1/2 inch iron rod
set for corner, said iron rod being at the point of reverse curve
which center bears North 83 degrees 06 minutes 30 seconds West a
radius distance of 2016.38 feet;
THENCE along said curve to the left following the East ROW line of
said Shiloh Road through a central angle of 8 degrees 20 minutes 20
seconds and an arc distance of 293.47 feet to a 1/2 inch iron rod set
for corner;
THENCE North 01 degrees 26 minutes 50 seconds West following the
East ROW line of said Shiloh Road a distance of 899.58 feet to the
POINT OF BEGINNING and containing 953,377 square feet or 21.887
acres of land.
PURCHASE AND SALE AGREEMENT
(Oak Forest Apartments)
This PURCHASE AND SALE AGREEMENT ("Agreement") is entered into
as of the ________ day of August, 1996.
1. Parties. The parties to this Agreement are as follows:
Walden Residential Properties, Inc., a Maryland corporation,
maintaining its principal office at One Lincoln Center, 5400 LBJ
Freeway, Suite 400, Dallas, Texas 75240.
Marc Paskin and Marcia Paskin, maintaining offices at 2412
Meadow Park Circle, Bedford, Texas 76021.
2. Definitions. As used in this Agreement, the following
terms shall have the meanings hereinafter set forth in this
Paragraph:
(a) Agencies: All governmental agencies having
jurisdiction over the construction, zoning and operation of the
Property.
(b) Applicable Environmental Laws: Any and all
applicable laws pertaining to health or the environment, including,
without limitation, the Superfund Reauthorization and Amendments
Act of 1986 ("SARA"), the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA"), the Resource
Conservation and Recovery Act of 1976 ("RCRA"), the Texas Water
Code, the Texas Solid Waste Disposal Act, and the Texas Toxic
Substances Control Act ("TSCA"), as well as any and all other laws,
ordinances, rules and/or regulations created or imposed by any
governmental authority having jurisdiction with respect to the
Property, whether local, state or federal, pertaining to
environmental regulation, contamination, clean-up or disclosure, as
now existing and/or as hereafter amended.
(c) Appurtenant Interests: All Seller's interest in and
to the appurtenances to the Land and in and to all streets, alley
and other public ways adjacent thereto.
(d) Closing: The consummation of the transfer of title
to the Property as contemplated hereunder and payment of the
consideration thereof in the manner provided at Paragraph 8 hereof.
(e) Current Rent Roll: The current schedule attached
hereto as Exhibit G, dated not more than thirty (30) days prior to
the Effective Date, setting forth, as of the date hereof, the
Tenant Leases.
(f) Earnest Money Deposit: An amount equal to $50,000
in cash, to be delivered by Purchaser to Title Company on or before
two (2) days following the execution by both Purchaser and Seller
of this Agreement, together with all earnings (if any) thereon.
(g) Effective Date: The date upon which this Agreement,
executed by both Purchaser and Seller, shall have been delivered to
Title Insurer together with the Earnest Money Deposit.
(h) Excluded Personal Property: The tangible personal
property listed at Exhibit F hereto.
(i) Existing Indebtedness: All indebtedness currently
outstanding and secured by, or related to, the Property, all as
more particularly described on Schedule IV attached hereto and
incorporated herein by reference for all purposes.
(j) Existing Lender(s): Whether one or more, the
holder(s) of the Existing Indebtedness.
(k) Existing Lender Estoppel Letter(s): Whether one or
more, the executed letter obtained from the Existing Lender(s)
confirming that Existing Lender(s) will accept payment in full of
the Existing Indebtedness and deliver a corresponding release of
any liens held by Existing Lender securing the Existing
Indebtedness on or before the Closing Date or, at Purchaser's
option, consent to Purchaser's assumption of the Existing
Indebtedness.
(l) Feasibility Period: The period commencing with the
delivery to Purchaser of the documents and other items listed in
Schedule I attached hereto and incorporated herein by reference,
and ending on the thirtieth (30th) day thereafter.
(m) Hazardous Materials: Any toxic materials, hazardous
waste or hazardous substance as these terms are defined in the
Applicable Environmental Laws.
(n) Improvements: All of the buildings, fixtures and
improvements located on the Land, together with all mechanical
systems, fixtures and equipment, electrical systems, fixtures and
equipment, plumbing fixtures, systems and equipment, heating
fixtures, systems and equipment and air conditioning fixtures,
systems and equipment installed in, belonging to or constructed as
components of the Improvements.
(o) Included Personal Property: All tangible personal
property listed at Exhibit E hereto, together with, for each
apartment unit comprising the Improvements, whether or not thus
listed, if installed by Seller or Seller's predecessors in title,
all carpeting, window coverings, ranges, ovens, dishwashers,
ceiling fan(s), bookshelves, range hoods, refrigerators, heating
units, air conditioning units, sinks and garbage disposals, and
washers and dryers, the same to be in the same condition at Closing
as existed at the expiration of the Feasibility Period, normal wear
and tear excepted, and all other furniture, fixtures, equipment,
machinery, supplies and other tangible personal property and all
leases of tangible personal property located on the Land and
Improvements and belonging to the Property and/or used in the
normal operation and maintenance of the Land and Improvements.
(p) Land: The land more particularly described at
Exhibit A.
(q) Material Damage: Damage to the Property of a nature
such that the cost of restoring the Improvements located on such
Property to its condition prior to the fire or other casualty, as
mutually agreed by the Seller and Purchaser or as otherwise
determined in accordance with this Agreement, (but in full
compliance with all then applicable building, health, zoning, and
similar laws, ordinances, and regulations) will exceed an amount
equal to ten percent (10%) of the Purchase Price, whether or not
such damage is covered by insurance.
(r) Owner Policy: An Owner Policy of Title Insurance
issued by the Title Insurer in the standard form promulgated by the
Texas State Board of Insurance, as modified pursuant to Paragraph
6(d) hereof.
(s) Permitted Title Exceptions: Any items to which
Purchaser does not object within the time period provided in
Paragraph 6(c) hereof.
(t) Plans and Specifications: The plans and
specifications, if any in the possession or control of Seller,
described in Exhibit D attached hereto.
(u) Property: The parcel of real property to be
purchased and sold pursuant to this Agreement and comprised of the
Land, Improvements, Included Personal Property, Appurtenant
Interests, Tenant Leases and all other property described in
Paragraph 4 hereof.
(v) Proration Date: 12:01 a.m., Central Daylight Time,
on the date immediately preceding the date of Closing or such other
date as shall be specified in Paragraph 9 hereof.
(w) Purchase Price: The total consideration to be paid
by Purchaser for the Property as set forth in Paragraph 5 hereof.
(x) Purchaser: Walden Residential Properties, Inc., a
Maryland corporation, together with any assignee thereof described
in Paragraph 21 hereof.
(y) Rent Roll: Collectively, the Current Rent Roll and
the Revised Rent Roll, or either of them as of the context may
required.
(z) Revised Rent Roll: A revision of the Current Rent
Roll dated not earlier than five (5) days prior to Closing.
(aa) Seller: Marc Paskin and Marcia Paskin
(bb) Service Contracts: All service or maintenance
contracts relating to the Property as described at Exhibit K
hereto.
(cc) Street Rents: The rents for space in the Property
being offered to the public as of the date of this Agreement.
(dd) Survey: An on-the-ground survey of the Land and
Improvements prepared by a qualified, registered public surveyor
selected by Seller and reasonably acceptable to Purchaser and the
Title Insurer (I) containing a field note description of the Land
which (A) establishes a beginning point by reference to a permanent
monument, (B) states the distances, bearing and angles of all sides
or boundaries of the Land, if appropriate, states the length of
arc, central angle and radius of circle for arc, central angle and
radius of circle for arc and chord distance and bearing of all
curving sides or boundaries of the Land, (D) establishes a single
perimeter description, and (E) references all abutting or
encroaching streets, roadways and fence lines, including a
statement of width, (ii) noting, by plat, the size and location of
all Improvements and other physical conditions affecting the
Property, (iii) noting, by plat, the size and location of all
abutting or encroaching streets, roadways and fence lines, (iv)
noting, by plat, the size and location of all encroachments or
protrusions, (v) noting, by plat, the size, location and recording
data of all easements, ditches, rights-of-way, setback lines, curb
cuts and similar matters, (vi) locating any portion of the Land or
Improvements determined to be flood prone or within the 100-year
flood plain under the Flood Disaster Protection Act of 1973 or
otherwise determined to be flood prone or within the flood plain by
the Federal Emergency Management Agency, the United States Army
Corps of Engineers, a unit or department of the United States, the
engineer preparing the Survey, or any other state or federal
agency, (vii) certifying the number of acres of land in the Land,
both as to total acreage and as to net acreage, (viii) certified by
the surveyor as conforming to the current Texas Surveyor's
Association Standards and Specifications for a Category 1A
Condition II Survey, (ix) being dated or recertified as of a date
not earlier than the Effective Date, (x) containing a certificate
substantially in the form attached hereto as Exhibit C, and (xi)
otherwise containing such items and revisions as Purchaser's lender
may require.
(ee) Tenant Leases: The lease agreements relating to
the Land and Improvements and existing at Closing.
(ff) Title Commitment: A Commitment for Title Insurance
issued by the Title Insurer in the standard form promulgated by the
Texas State Board of Insurance.
(gg) Title Insurer: Chicago Title Insurance Company, or
other title insurance company acceptable to Purchaser in its sole
discretion, acting through its agent, American Title Company, 717
N. Harwood St., 2610 Maxus Energy Tower, Dallas, Texas 75201,
Attention: Mr. Tim Hardin.
3. Agreement of Purchase and Sale. Subject to the terms and
conditions thereof and for the consideration of One Hundred and
No/100 Dollars ($100.00) paid to Seller by Purchaser on the
Effective Date, the receipt and sufficiency of which hereby is
acknowledged and which sum is non-refundable to Purchaser and in no
event shall be applied against the Purchase Price and for the
Purchase Price set forth at Paragraph 5, Purchaser hereby agrees to
purchase, and Seller hereby agrees to sell, the Property, as more
particularly described at Schedule III attached hereto and
incorporated herein by reference.
4. Property to be Sold. The Property to be purchased
hereunder by Purchaser shall be comprised of (I) the Land, (ii) the
Improvements, (iii) all Included Personal Property, but not the
Excluded Personal Property, (iv) the Appurtenant Interests, (v) the
Tenant Leases, and (vi) all of Seller's right, title and interest,
if any, in and to (A) warranties covering the Included Personal
Property and the Improvements, (B) the trademarks or tradenames set
forth on Schedule III attached hereto and incorporated herein by
reference for all purposes and any other trademark or tradename
used by Seller in connection with the Property; (C) the Service
Contracts and (D) all licenses, permits, approvals and other
intangible property rights relating to the Property.
5. Purchase Price. Subject to the adjustments provided
in subparagraphs (b) and (c) below and elsewhere in this Agreement,
the Purchase Price for the Property shall be FOUR MILLION SEVEN
HUNDRED SIXTY-FIVE THOUSAND AND NO/100 DOLLARS ($4,765,000),
payable as follows:
(a) Earnest Money Deposit. $50,000, payable by
delivery of the Earnest Money Deposit to the Title Insurer in
accordance with this Agreement.
(b) Cash at Closing. $4,765,000, payable in cash at
Closing, less any sum paid Seller at Closing from the Earnest Money
Deposit.
Notwithstanding the foregoing, at Purchaser's option prior to
Closing, Purchaser may seek from Lender the consent of Lender to an
assumption of the Existing Indebtedness by Purchaser on such terms
and conditions as may be acceptable to Purchaser and Existing
Lender. In the event that Purchaser elects to assume the Existing
Indebtedness, the cash portion of the Purchase Price shall be
reduced by an amount equal to the amount of the Existing
Indebtedness so assumed.
<PAGE>
6. Evidence of Title.
(a) Title Commitment. Within five (5) days from and
after the Effective Date, Purchaser shall order and deliver, or
cause to be delivered, to Purchaser or Purchaser's attorney, a
current Title Commitment from the Title Insurer covering the
Property, in the amount of the Purchase Price covering the Land and
Improvements located on the Property. The Title Commitment shall
be issued as of or subsequent to the Effective Date and shall
include good, legible copies of all documents constituting
exceptions to Seller's title as reflected in the Title Commitment.
The Title Commitment shall reflect good and indefeasible fee simple
title vested in Seller.
(b) Survey. Within ten (10) days from the Effective
Date, Purchaser, at Seller's sole expense, shall order and deliver,
or shall cause to be delivered, to Purchaser or Purchaser's
attorney, the Survey of the Land and Improvements. The Survey
shall be sufficient to permit the Title Insurer to modify the
standard printed exception in the Owner Policy pertaining to
discrepancies, conflicts, shortages in area or boundary lines,
encroachments, overlapping of improvements or similar matters.
(c) Review. Purchaser shall have through and including
the expiration of the Feasibility Period in which to review such
items and to deliver to Seller in writing such objections as
Purchaser may have to anything contained or set forth therein. Any
items to which Purchaser does not object to prior to the expiration
of the Feasibility Period shall be Permitted Title Exceptions.
(d) Owner Policy. At Closing, the special warranty deed
to the Land and Improvements referred to in Subparagraph 8(b)(I)
hereof shall be recorded, and Seller shall furnish or cause to be
furnished to Purchaser, at Purchaser's sole expense, the Owner
Policy covering the Property, insuring good and indefeasible fee
simple title to be vested in Purchaser and insuring Purchaser's
title to the Property in an amount equal to the Purchase Price,
subject only to the Permitted Title Exceptions and the standard
printed exceptions, except that:
(i) the exception relating to restrictions against
the Property shall be endorsed by Title Insurer to read "None of
record" except for such restrictions as may be included in the
Permitted Title Exceptions;
(ii) the exception relating to discrepancies,
conflicts, shortages in area, boundaries, encroachments, or
overlaps shall be modified, at Purchaser's sole cost and expense,
by deleting such exception, save any shortages in area; and
<PAGE>
(iii) the exception relating to ad valorem taxes
shall except only to taxes owing for the current year of Closing
and subsequent years and subsequent assessments for prior years due
to change in land usage or ownership, not yet due and payable.
(e) Intentionally Deleted.
(f) Remedies of Purchaser. If Seller is unable to
furnish Purchaser the Title Commitment pursuant to Subparagraph
6(a) or the Owner Policy in the manner provided at Subparagraph
6(d), then, at Purchaser's sole discretion, Purchaser may cancel
this Agreement and shall have the right to the return of the
Earnest Money Deposit, and the parties shall have no further
obligation to each other, except as is expressly provided in
Subparagraph 16(c). Except as expressly set forth in this
Subparagraph 6(f), Seller shall have no liability for its inability
to deliver the Title Commitment or Owner Policy.
(g) Uniform Commercial Code Search. Seller also shall
deliver at Closing, at Seller's cost and expense, Uniform Commercial
Code financing statement searches covering Seller and any general
partner of Seller for the state constituting the situs of the
Property and the county in which the Property is located showing
that all of the Included Personal Property is free and clear of all
liens and encumbrances other than the Permitted Title Exceptions
and also shall deliver copies of receipts showing payment of all
taxes levied and payable on the Property.
7. Representations and Warranties of Seller. Seller
represents and warrants to, and covenants with, Purchaser, as of
the date of this Agreement and thereafter in accordance with
Paragraph 7(w), as follows:
(a) Legal and Beneficial Title. Seller is, and at
Closing will be, the sole person holding good and indefeasible fee
simple title to the Property, free and clear of all liens and
encumbrances except the Permitted Title Exceptions.
(b) Due Authorization and Execution and Validity,
Binding Effect and Enforceability. This Agreement has been duly
authorized and executed by Seller and is a valid and binding
obligation of, and is enforceable, in accordance with its terms,
against Seller. The documents delivered to Purchaser at Closing
will be duly authorized and executed by Seller and will be a valid
and binding obligation of, and will be enforceable in accordance
with their terms against, Seller.
(c) The Rent Roll. Attached hereto as Exhibit G is the
Current Rent Roll. Not earlier than five (5) days prior to
Closing, Seller shall deliver a Revised Rent Roll to Purchaser,
certified by Seller in writing as true and correct. The Revised
Rent Roll shall set forth the following:
(i) the name of each tenant;
(ii) the lease commencement and expiration dates and
the nature of any renewal options;
(iii) the amount of any security deposits;
(iv) a list of vacant space;
(v) the size and type of each vacant area; and
(vi) the amount and description of any concessions
and any rights of first refusal.
(d) Representations as to Rent Roll. Except as
expressly set forth in a Rent Roll:
(i) All of the information contained on the Rent
Roll is, and will be, true, correct and complete as of its date.
(ii) No rent under any Tenant Lease has been, or
prior to Closing will be, prepaid for a period in excess of thirty
(30) days.
(iii) No tenant has any right of first refusal
or option with respect to the leasing of any portion of the
Property, other than renewal options contained in tenant leases.
(iv) No one, including any tenant, has any option or
right of first refusal to purchase the Property or any part
thereof.
(v) To the best of Seller's knowledge, there are no
oral agreements with anyone, including tenants, with respect to the
Property or any portion thereof, except as set forth in a Rent Roll
or at Exhibit K.
(vi) All of the present Tenant Leases for rental
space in the Improvements are in writing, on a standard form (which
form is attached hereto as Exhibit N) and duly executed by all
parties thereto, and, to the best of Seller's knowledge, are (A) in
full force and effect and (B) valid and binding agreements of, and
fully enforceable in accordance with their terms against, the
tenants.
(vii) The Tenant Leases will not be amended in
any way after the date hereof, other than in the ordinary course of
business, without the prior, written consent of Purchaser, which
consent shall not be unreasonably withheld. Purchaser, unless it
otherwise shall advise Seller in writing within ten (10) days
following Seller's request for such consent, shall be deemed to
have consented to any such amendment.
(viii) Except as stated in a Rent Roll, there are
no uncured defaults on the part of any party to any of the Tenant
Leases, and Seller is in full compliance with all of lessor's
obligations thereunder.
(ix) None of the rentals due or to become due under
such leases will be assigned, encumbered, or subject to any liens
at the Closing other than the Permitted Title Exceptions.
(x) Except as set forth at Exhibit G, at the time
of Closing, all tenants will be paying charges for electricity
consumed in their space, including heating and air conditioning, on
an individually metered basis.
(e) Street Rents. Set forth below is a current schedule
of the Street Rents. Seller represents, to the best of its
knowledge after due investigation and inquiry, that the Street
Rents, under leases averaging six (6) months in duration,
constitute the fair rental value of apartment units in the
Improvements as of such date in light of current rental market
conditions in the relevant market area and that the same is
evidenced by the pace at which such space is being leased by the
public at the Street Rents. The Street Rents are as follows:
Unit Type Number Square Feet Monthly Rent
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
Total __________ ___________ $___________
(f) Operating Statements. Attached at Exhibit I is
the most recent monthly statement of income and expense in
connection with the operation and maintenance of the Property. The
balance of such statements for the preceding months shall be made
available to Purchaser promptly upon request. Such statements are
unaudited, were assembled by Seller and were prepared on the cash
basis of accounting by an employee or bookkeeper of Seller who is
not an accountant. There have been no material adverse changes to
the Effective Date in the gross income from the Property from that
set forth in the most recent operating statement at Exhibit I.
Seller agrees to make available to Purchaser or its
representatives, at Seller's office (or to provide Purchaser with
photocopies thereof upon request), all supporting documentation for
such statements, such documentation to be in a condition that is
adequate to enable the Property's financial records to be audited
by Purchaser's financial representatives.
(g) Intentionally Deleted.
(h) Intentionally Deleted.
(i) Liens on Property. No action has been or will be,
prior to Closing, taken by Seller with respect to work performed or
delivery of material which would give rise to a lien on the
Property.
(j) Insurance. The insurance policies listed and
described at Exhibit J are presently in force, and all such
policies or their equivalent will be maintained in force until
Closing. Seller will not renew, amend, or reduce the coverage
under, or cancel, any existing policy or procure any new policy
without Purchaser's prior, written consent, which shall not be
unreasonably withheld. Purchaser, at Closing, shall obtain its own
insurance coverage. Seller has received no notices from any
insurer of the Property or any part thereof requesting any
improvements, alterations, additions, correction or other work in,
on or about the Improvements, whether related to the Property or to
the operation of any occupant thereof, which have not been cured or
satisfied.
(k) Pending or Threatened Litigation. There are no
lawsuits or proceedings pending or, to the best of Seller's
knowledge, threatened, or any present state of facts which
reasonably could give rise to any lawsuits or proceedings,
regarding ownership, construction, use or possession of the
Property or any portion thereof.
(l) Mechanical Systems and Structural Components. To
the best of Seller's knowledge, the Improvements and Personal
Property are in good working order and there are no material
defects therein except inconsequential items requiring repair due
to normal wear and tear, and no condition exists which could
adversely affect in a material way the operation of the Property
with respect to the following:
(i) Water, sewer, plumbing, heating, air
conditioning, and other mechanical and electrical systems in the
Improvements; and
(ii) Roofs and other structural portions of the
Improvements, including walls and foundations.
(m) Inspection of Plans and Specifications, Reports and
Books and Records. The Property and the Plans and Specifications,
all reports (including but not limited to soil tests and
construction inspection reports), the books and records and all
Tenant Leases and other documents related thereto regarding the
construction, ownership, management and operation of the Property
shall be open to inspection by Purchaser or Purchaser's agents
during regular business hours from and after the Effective Date,
and Seller shall cooperate with Purchaser or its agents with
respect to the inspection of the Plans and Specifications, all
reports, the books and records, the Tenant Leases, the Property or
the construction, management and operation thereof.
(n) Maintenance of Property Until Closing.
(i) Seller, at its expense, will maintain the
Property in a first class condition until Closing excepting only
ordinary wear and tear and damage or loss thereto covered by
insurance. In the event of any breakdown, malfunction or other
similar event (other than of a type covered, and to the extent
covered, by insurance) occurring prior to the Closing, whether or
not the same is covered by any service warranty or contract, the
parties hereto will determine the cost of repairing or restoring
the same, and Seller will cause the same to be repaired and
restored at no cost to Purchaser within a reasonable time after
Closing. The amount of the estimated cost thus determined and
agreed to by the parties shall be withheld by the Title Insurer
from the cash proceeds of sale and shall be paid over to Seller,
together with any accrued interest thereon, upon completion by
Seller of such items.
(ii) Until Closing, Seller shall continue the
operation of the Property in the normal and usual manner, will not
remove any fixtures, furnishings, equipment or personalty subject
to this Agreement, except for repair or replacement, and the
Property will be managed, operated, maintained, repaired and
redecorated in the ordinary course of business and in such manner
as to maintain the Property completed in all material respects as
of the date hereof in no less satisfactory condition than the same
exists as of such date.
(iii) All rental units shall be in "market
ready" rentable condition as of the date of Closing; provided,
however, Seller and Purchaser acknowledge that rental units that
are vacated within five (5) business days prior to the date of
Closing will be in varying conditions of make-ready for leasing, as
is ordinary in Seller's course of business. As to any units that
are not in "market-ready" rentable condition as of the date of the
Closing, Purchaser and Seller understand and agree that Purchaser
shall be entitled to credit against the Purchase Price at Closing
an amount equal to the amount agreed upon at Closing by Purchaser
and Seller as being required to put in "market-ready" rentable
condition any units that are not in such condition as of the date
of the Closing. Purchaser shall have the right to re-inspect the
Property during the period commencing not earlier than five (5)
days prior to the Closing and ending on the Closing solely for
purposes of verifying the maintenance of the Property in accordance
with Subparagraphs 7(p)(I) and (ii). Purchaser hereby acknolwedges
that one (1) "down" unit located on the Property is currently being
used for maintenance and storage and shall constitute an exception
to this paragraph.
(o) Service Contracts.
(i) At Closing, no contract of any kind, including
contracts for servicing, operating or managing the Property, will
be effective and binding upon the Property or Purchaser, except as
may be approved in writing by Seller during the Feasibility Period.
Seller will not enter into any other service, operating or
management contracts relative to the Property that cannot be
canceled on thirty (30) days' notice without cost to Purchaser, nor
will Seller make, or agree to, prior to Closing, any change or
modification to the contracts set forth in Exhibit K without the
prior, written consent of Purchaser. If an agreement concerning
the management of the Property currently is in effect and is not
set forth at Exhibit K, it shall be terminated effective on the
date of Closing.
(ii) Seller agrees that benefits or compensation
accrued prior to Closing, and due or claimed to be due either
before or after Closing, to employees or former employees of Seller
shall constitute obligations of Seller only, and Seller agrees to
indemnify and hold Purchaser harmless from all such obligations and
claims.
(p) Restrictions on Additional Indebtedness. Seller
will not borrow any money or do, or fail to do, any other act or
thing which would cause the Land, the Improvements or any Included
Personal Property to become pledged or otherwise utilized as
collateral or in any way stand as security for any indebtedness or
obligation.
(q) Closing Not Constituting Breach. The consummation
of the transaction contemplated herein will not result in the
breach of any provision in any lease or other agreement affecting
the Property.
(r) Access to Property. Seller has received no notices
of the existence of any fact or condition which would result in the
termination or restriction of the current access from the Property
to any presently existing highways and roadways adjoining, situated
on or otherwise serving the Property or to any sewer or other
utility adjoining, situated or otherwise serving the Property.
(s) Improvements and Amenities. A description of the
improvements and amenities of the Property is more particularly set
forth at Schedule V attached hereto and incorporated herein by
reference for all purposes.
(t) Seller's Non-foreign Status. Seller is not a
"foreign person" within the meaning of Sections 1445 and 7701 of
the Internal Revenue Code of 1954, as amended; that is, Seller is
not a non-resident alien, foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the
Internal Revenue Code of 1986, as now existing or hereafter
amended).
(u) Taxes and Assessments. All ad valorem taxes and
personal property taxes, together with all assessments or other
charges for utilities, roads or the widening of such roads, or any
other fees imposed by any governmental authority with respect to
the Property, have been paid in full. The ad valorem taxes,
personal property taxes and special assessments pertaining to the
Property for calendar year 1995 were in the aggregate amount of
$[to be determined].
(v) Exhibits. All exhibits attached hereto are true and
correct in all material respects.
(w) Seller's Affidavit at Closing. The representations,
warranties and covenants of the Seller contained in this Agreement
or in any document delivered to Purchaser pursuant to the terms of
this Agreement (whether in this Paragraph 7 or elsewhere) (I) shall
be true and correct in all material respects and not in default at
the time of Closing, just as though they were made at such time,
and Seller shall deliver to Purchaser, at Closing, an Affidavit to
that effect, and (ii) in the event of a breach of such
representations, warranties or covenants prior to or at Closing,
Purchaser shall have the right to make a claim hereunder against
Seller for a period of one (1) year after the date as of which such
Affidavit was delivered to Purchaser.
(x) Disclaimers. Purchaser acknowledges that, except
as otherwise set forth herein or in the Deed, neither Seller nor
his representatives have made any representations or warranties as
to the property or its environmental or physical condition upon
which Purchaser has relied. This includes not only the condition
of the land itself, but all improvements constructed thereon,
including without limitation, any and all equipment and fixtures
which are included in this conveyance. Purchaser further
acknowledges and agrees that, except as otherwise set forth herein
or in the Deed, SELLER HAS NOT MADE, DOES NOT MAKE, AND EXPRESSLY
DISCLAIMS ANY WARRANTIES, REPRESENTATIONS, COVENANTS OR GUARANTEES,
EXPRESS OR IMPLIED, ARISING BY OPERATION OF LAW AS TO THE
MERCHANTABILITY, HABITABILITY, QUANTITY, QUALITY OR ENVIRONMENTAL
CONDITION OF THE PROPERTY OR ITS SUITABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OR USE. Purchaser affirms that it (1) will
thoroughly investigate and inspect the Property and will become
familiar and satisfied with the physical condition of the Property,
and (2) will make its own determination as to (a) the
merchantability, quantity, quality and condition of the Property,
including without limitation, the possible presence of toxic or
hazardous substances or waste, or other environmental
contamination, and (b) the Property's suitability or fitness for any
particular purpose or use. The Purchaser hereby accepts the
Property in its present condition on and "AS IS," "WHERE IS," and
"WITHOUT FAULTS" and acknowledges that without this acceptance this
Sale would not be made and that Seller shall be under no obligation
whatsoever to undertake any repair, alteration, remediation or
other work of any kind with respect to any portion of the Property.
8. Closing and Conditions to Closing.
(a) The Closing Generally. The Closing shall occur at
10:00 a.m. on or before ten (10) days following the expiration of
the Feasibility Period. The Closing will be held at the offices of
the Title Insurer, or at such other time and place as to which the
parties hereafter may agree upon in writing. At Closing, the
Purchase Price shall be delivered to Seller in the manner provided
at Paragraph 5, and possession of, and title to, the Property shall
be delivered and conveyed to Purchaser in the manner provided
herein, together with all other documents to be delivered by Seller
to Purchaser hereunder.
(b) Documents Delivered By Seller at Closing. At the
Closing, Seller, at its sole cost and expense, shall deliver, or
shall cause to be delivered, to Purchaser the conveyance,
assignment and other documents described below (Purchaser and
Seller agreeing to negotiate and agree upon the form of such
documents, including, but not limited to, the documents to be
attached to this Agreement as Exhibit M, as soon as possible after
the Effective Date and no later than the expiration of the
Feasibility Period):
(i) Special Warranty Deed. A special warranty
deed, duly executed and acknowledged, conveying to Purchaser good
and indefeasible fee simple title to the Land and Improvements free
and clear of all liens and encumbrances, except the Permitted Title
Exceptions, in the form attached at Exhibit M.
(ii) Bill of Sale and Assignment. A bill of sale,
duly executed and acknowledged, with general warranties of title,
subject only to the Permitted Title Exceptions, conveying to
Purchaser (A) the Included Personal Property, (B) Seller's interest
in and to all assignable Service Contracts as have been approved by
Purchaser, together with copies of the originals of each of said
contracts, (C) all existing warranties on the Improvements,
including, but not limited to, roofs, foundations, plumbing,
heating, air conditioning, and electrical, if any, (D) Seller's
right, title and interest, if any, in and to the names of the
apartment complexes set forth on Schedule III attached hereto and
other applicable trade names or trademarks used by Seller in
connection with the Property, and (E) Seller's right, title and
interest in any and all licenses, permits, approvals and other
intangible property or rights relating to the Property, together
with appropriate endorsements or such other instruments as may be
necessary to transfer title to Seller's interest in the Included
Personal Property in the form attached at Exhibit M.
(iii) Assignment of Tenant Leases. A transfer
and assignment of the Tenant Leases, together with all rents, other
income and deposits paid or payable thereunder, subject to the
Permitted Title Exceptions in the form attached as Exhibit M,
together with delivery of all Tenant Leases and information
pertinent thereto.
(iv) Affidavit of Seller. An affidavit of Seller in
the form attached as Exhibit M, pursuant to Subparagraph 7(w) to
the effect that the representations and warranties of Seller
pursuant to Paragraph 7 and as limited by Subparagraph 7(x)
continue to be true and correct in all material respects and that
all of Seller's covenants (not otherwise waived by Purchaser) have
been performed as of the date of Closing.
(v) Owner Policy. Seller, at Purchaser's sole cost
and expense, also shall deliver or cause to be delivered the Owner
Policy.
(vi) Intentionally Deleted.
(vii) Audit Letter. Seller shall deliver or
cause to be delivered the letter ("Audit Letter") in the form
attached hereto as Schedule II.
(c) Conditions Precedent to Purchaser's Obligations.
Purchaser shall not be obligated to consummate the transfer of
title to the Property hereunder unless and until:
(i) Closing Documents. Seller has delivered (A) to
the Title Insurer the closing documents attached at Exhibit M and
any other documents required by the Title Insurer in order to
insure Purchaser's good and indefeasible fee simple title to the
Property free and clear of all liens and encumbrances, except the
Permitted Title Exceptions, and (B) to Purchaser all other
instruments required to the terms of this Agreement.
(ii) No Uncured Breach. There has been no uncured
breach by Seller of any of the agreements, representations,
warranties or covenants contained in Paragraph 7.
(iii) Title Vested in Seller. Good and
indefeasible title to the Property has been shown to be vested in
Seller in accordance with and subject to the matters stated in
Paragraph 6(a).
(iv) Appraisal. On or before the expiration of the
Feasibility Period, Purchaser shall have obtained, at its sole cost
and expense, from a member of the American Institute of Real Estate
Appraisers, an independent appraisal of the fair market value of
the Property acceptable to Purchaser. Seller shall fully cooperate
with the appraiser and shall furnish such documents or materials
reasonably requested in connection with such appraisal.
(v) Termite Inspection. Purchaser shall have
obtained, at Seller's sole cost and expense, a termite inspection
report indicating no live infestation by termites or other pests in
or damage to the Improvements. If such inspection reveals live
infestation or damage, then Seller shall take such action as may be
necessary to exterminate the termites and repair the damage in a
workmanlike manner; provided, however, that Seller shall not be
required to spend more than $10,000.00 with respect to such
extermination and repair.
(vi) Delivery of Plans and Specifications, Reports
and Books and Records. To the extent in Seller's possession and
control, Seller shall have delivered to Purchaser the Plans and
Specifications and all reports and books and records concerning the
construction, ownership, management and operation of the Property
through the date of Closing.
(vii) Existing Lender Estoppel Letter. Prior to
the expiration of the Feasibility Period, Seller, at
its sole cost and expense, shall deliver or shall cause to be
delivered, the Existing Lender Estoppel Letter in form and content
acceptable to Purchaser in Purchaser's sole discretion.
9. Prorations and Adjustments. All prorations and
adjustments shall be made and determined as of the Proration Date
as follows:
(a) Rents. Collected rents shall be prorated. Seller
shall not receive any proration credit for rents accrued and
delinquent for months prior to the Proration Date, and all rentals
received after such date shall be applied, first, to current and,
then, delinquent obligations, the latter of which shall be paid to
Seller; provided, however, nothing herein shall operate to require
Purchaser to institute a lawsuit to recover such amounts. Seller
shall not be charged for uncollected rent for the month within
which the Proration Date shall occur, it being the intent of the
parties to prorate only the rents that have been collected at such
date. Any delinquent rents for periods prior to the Proration Date
and a prorated portion of rents for the month uncollected as of the
Proration Date which are collected by Purchaser and which are not
necessary to bring a tenant current as described above shall be
forwarded to Seller.
(b) Prepaid Rents and Security and Other Deposits.
Prepaid rents and security and other tenant deposits (including but
not limited to pet deposits and key deposits), if any, under
assigned leases shall be paid to Purchaser by Seller at Closing.
Purchaser shall assume full liability therefor and hold Seller
harmless with respect to all such deposits.
(c) Service Contracts. Prepaid or unpaid amounts under
those Service Contracts listed in Exhibit K which shall be assigned
to and assumed by Purchaser at Closing shall be prorated,
including, but not limited to, all amounts prepaid to Seller under
long-term Service Contracts (e.g., laundry contracts), which shall
be prorated over the entire term of such long-term contracts.
(d) Property Taxes. Taxes assessed upon the Property
for calendar year 1996 shall be prorated based on the assumption
that the actual taxes for the entire calendar year 1996 will be the
same as calendar year 1995 with an increase of five percent (5%),
which amount Seller and Purchaser agree is a reasonable estimate of
1996 taxes. Taxes prorated at Closing shall be re-prorated between
the parties promptly upon the receipt of the 1996 real estate tax
bill.
(e) Intentionally Deleted.
(f) Utilities. Utility charges shall not be prorated
but, rather, instructions shall be given to the utility companies
by Seller (with a duplicate copy of such instruction being provided
concurrently to Purchaser) to read the meters on the date of
Closing and to issue separate statements thereafter. Utility
deposits will be credited to Seller and assigned to Purchaser at
Closing. In the event that any provider of utilities shall refuse
to issue separate statements in the manner aforesaid, applicable
utility charges shall be adjusted in the manner of rents.
(g) Other Adjustments. Such other items as are adjusted
pursuant to custom in the state constituting the situs of the
Property and on similar real estate transactions.
(h) Delivery by Seller of Documents and Supplies.
Seller, at Closing, shall assign and deliver to Purchaser all
original leases, deposits, supplies, contracts, and other items as
to which proration is to be made. Seller also shall deliver to
Purchaser all Plans and Specifications (including cost breakdowns)
relating to the Property and all such other documents, books,
records, and keys which relate to the operation, maintenance or
management of the Property. Seller also shall deliver to Purchaser
its current supply of printed leasing brochures, floor plans and
other advertising literature with respect to the Property.
10. Material Damage.
(a) Procedure. If, prior to Closing, the Property shall
be destroyed or sustain Material Damage as a result of fire or
other casualty, then, at Purchaser's option exercised in the manner
provided hereunder, the following shall occur with respect to the
Property:
(i) This Agreement shall become null and void and
the Earnest Money Deposit shall be returned to Purchaser, provided
that Purchaser gives notice of such election at or prior to
Closing, but in any event within ten (10) days following receipt by
Purchaser of notice of the occurrence of any such event; or
(ii) If all other conditions precedent to
Purchaser's obligation to close have been satisfied, the purchase
and sale transaction shall close with a reduction in the cash
portion of the Purchase Price equal to the amount of the applicable
insurance deductible, and concurrently with the Closing, Seller,
Existing Lender and any other named insured shall assign to
Purchaser, in form satisfactory to Purchaser, all claims arising
under any policy of insurance covering such casualty, and Seller
shall have no further liability to Purchaser with respect to such
damage.
If the parties shall fail to agree on the amount of the cost
of such restoration, either party may terminate this Agreement by
giving written notice to the other prior to Closing and, in such
event, the Purchaser shall have the right to the return of the
Earnest Money Deposit, and neither party shall have any further
obligations to the other.
(b) Damage Other Than Material Damage. In the event of
any damage to the Property other than Material Damage, the purchase
and sale transaction shall close in accordance with and subject to
the conditions of Subparagraph 10(a)(ii). If the cost to restore
the Property to its condition before the casualty, as mutually
agreed by Seller and Purchaser is not more than $50,000 and is
uninsured, the cash portion of the Purchase Price shall be reduced
by the cost to restore thus determined.
11. Condemnation. If, prior to Closing, any governmental or
similar authority shall institute eminent domain or similar
proceeding or take any steps preliminary thereto (including the
giving of any direct or indirect notice of intent to institute any
such proceeding), Purchaser shall be entitled to terminate this
Agreement upon written notice to Seller prior to Closing and to a
return of the Earnest Money Deposit.
12. Brokerage and Consultants.
(a) Representation of Seller. Seller represents and
warrants that it has neither employed, retained nor consulted any
broker, consultant, agent or finder in carrying on the negotiations
relative to this Agreement or the purchase and sale referred to
herein, and Seller shall indemnify and hold Purchaser harmless from
and against any and all claims, demands, causes of action, debts,
liabilities, judgments and damages (including costs and reasonable
attorney's fees) which may be asserted or recovered against it on
account of any brokerage fee, consulting fee, commission or other
compensation arising by reason of the breach of this representation
and warranty. Seller further represents and warrants that no
amount shall be paid by Seller to any party as a fee or a
commission, or any amount of a similar nature, whatever designated,
as a result of the purchase and sale referred to herein.
(b) Representation of Purchaser. Purchaser represents
and warrants that it has neither employed, retained, nor consulted
any broker, consultant, agent or finder in carrying on the
negotiations relative to this Agreement or the purchase and sale
referred to herein, and Purchaser shall indemnify and hold Seller
harmless from and against any and all claims, demands, actions,
causes of action, debts, liabilities, judgments and damages
(including costs and reasonable attorney's fees) which may be
asserted or recovered against it on account of any brokerage fee,
consulting fee, commission or other compensation arising by reason
of the breach of this representation and warranty. Purchaser
further represents and warrants that no amount shall be paid by
Purchaser to any party as a fee or a commission, or any amount of
a similar nature, whatever designated, as a result of the purchase
and sale referred to herein.
(c) Advice as to Title. Purchaser acknowledges that, at
the time of execution of this Agreement, Seller has advised
Purchaser by this writing that Purchaser should have the abstract
covering the Property examined by an attorney of Purchaser's own
selection or that Purchaser should be furnished with or should
obtain a policy of title insurance.
13. Indemnification.
(a) Indemnification of Purchaser. Seller hereby agrees
to indemnify, defend and hold harmless the Purchaser and any other
holder of record title to the Property pursuant to Paragraph 21,
their officers, directors, general partners, agents and employees
and their respective heirs, executors, administrators, successors
and assigns, from and against any and all indebtedness or other
liability arising out of ownership or operation of the Property
prior to Closing, including, but not limited to, any and all
claims, liabilities, damages, penalties and losses, costs or
expenses (including court costs and reasonable attorney's fees)
incurred, resulting from or in any way arising out of any act or
omission of Seller, its agents and employees, in respect of the
construction or operation of the Property prior to Closing, any
injury to persons or damage to property happening or occurring in,
on or about the Property. Seller further agrees, upon notice and
request from Purchaser, to contest any such demand, claim, suit or
action against which Seller has hereinabove agreed to indemnify and
hold Purchaser harmless, and to defend any action that may be
brought in connection with any such demand, claim, suit or action
or with respect to which Seller has hereinabove agreed to indemnify
and hold Purchaser harmless and to bear all costs and expenses of
such contest and defense, provided, however, that Seller shall have
no obligation hereunder to indemnify or hold Purchaser harmless
from and against any claim, liability, damage, penalty or loss,
cost or expense incurred by Purchaser incident to, resulting from
or in any way arising out of any act or omission of Purchaser, its
agent or employees, it being understood and agreed, however, that
the employees of Seller engaged in the operation of the Property
prior to Closing are and shall be construed to be, for purposes of
this provision, the employees of Seller and the acts and omissions
of said employees shall in no way be attributable to Purchaser for
the purposes of this provision.
(b) Indemnification of Seller. Subject to Subparagraph
13(a), Purchaser agrees to indemnify, defend and hold Seller
harmless from and against any claim, liability, damage, penalty,
loss, cost or expense (including court costs and reasonable
attorney's fees) incurred by Seller incident to, resulting from or
in any way arising out of any act or omission of Purchaser, its
agents or employees, or arising out of, or in any way connected
with, the operation of the Property from and after Closing; and
Purchaser further agrees, upon notice, and request from Seller, to
contest any such demand, claim, suit, or action against which
Purchaser has hereinabove agreed to indemnify and hold Seller
harmless, and to defend any action that may be brought in
connection with any such demand, claim, suit or action or with
respect to which Purchaser has hereinabove agreed to indemnify and
hold Seller harmless and to bear all costs and expenses of such
contest and defense.
(c) Indemnification Procedure. To the extent of any
claims against Seller or Purchaser predicated upon facts which
could reasonably be interpreted as giving rise to potential
liability of Seller or Purchaser under this Paragraph 13, the party
against whom such claim is asserted shall promptly give notice
thereof to the other party hereto. Thereupon, such other party
shall have the option of retaining counsel of its choice to defend
both it and the remaining party in respect of such claim and to
control, in a manner reasonable in light of applicable
circumstances, the course and ultimate disposition of such claim.
In the event that a party to this Agreement shall elect to exercise
the option provided in the preceding sentence, the party electing
such option, by reason thereof, shall be deemed to have agreed to
pay all reasonable costs and expenses of defending against such
claim and any liability of the party against whom such claim was
asserted on account thereof. Without regard to whether any party
hereto shall exercise such option, Seller and Purchaser and their
counsel shall consult with one another concerning such claim and
with due regard to both the mutual and the independent interests of
Seller and Purchaser therein.
14. Notice to Tenants. On the date of Closing or at any time
thereafter, upon request by Purchaser, Seller agrees to give
notice, said notice to be in compliance with local law and inform
approved by Purchaser, to each of the tenants of space located on
the Property that Seller has sold and conveyed the Property to
Purchaser and that all future rental payments due under the terms
of the Tenant Leases are to be paid as directed by Purchaser. Upon
request of Seller, Purchaser agrees to give notice to all tenants
that their security deposit (if any) has been paid over to the
Purchaser, and Purchaser shall assume the liability therefor.
15. Payments.
(a) General. All payments to be made under this
Agreement shall be made by the wire transfer of immediately
available funds. Notwithstanding any provision to the contrary,
whether express or implied, the payment required under Paragraph 5
hereof shall be deemed made to Seller by payment thereof to the
Title Insurer, as escrow agent for Seller and Purchaser, to be held
by the Title Insurer in escrow until the earlier of (I) the Closing
(or such later date in respect to which explicit provision is
herein made), (ii) such time as Purchaser shall be entitled to a
refund thereof or (iii) such time as Seller shall be entitled to
demand the same as liquidated damages in accordance with
subparagraph 16(a). At whichever of such times first occurs, the
Title Insurer shall pay such amounts to the party then entitled
thereto. Except in connection with a Closing, the Title Insurer
shall not pay such funds to either party unless both (A) the party
claiming to be entitled thereto gives notice of such entitlement to
the Title Insurer and to the other party, including an affidavit
containing the facts on which such claim is based, and (B) the
other party does not, within fifteen (15) days of such notice, give
notice to the Title Insurer that the claim of the first party is
disputed. If the Title Insurer receives notice within such fifteen
(15) day period that the claim of entitlement is disputed, the
Title Insurer shall continue to hold such amounts in escrow and
shall not pay such amounts to either party until such dispute is
finally resolved by written agreement signed by both parties or by
final unappealable judgment of a court of law, and when such
dispute is finally resolved, the Title Insurer then shall pay such
amounts to the party or parties entitled thereto pursuant to such
final resolution.
(b) Deposits to Account of Title Insurer. Unless and
until the Title Insurer shall advise Purchaser and Seller to the
contrary in writing, it is represented and acknowledged that
deposits to the account of Title Insurer made hereunder by Seller
and/or Purchaser shall be made as follows:
Account Owner: [to be provided]
Account Name:
Account Number:
Depository:
ABA Routing No.:
Telephone Advice:
(c) Deposits to Account of Purchaser. Unless and until
the Title Insurer shall advise Purchaser and Seller to the
contrary, it is represented and acknowledged that deposits to the
account of Purchaser hereunder, at or after Closing or otherwise,
shall be made by federal wire transfer of immediately available
funds as follows:
Account Owner: [to be provided]
Account Name:
Account Number:
Depository:
ABA Routing No.:
Telephone Advice:
(d) Deposits to Account of Seller. Unless and until
Seller shall advise Purchaser and the Title Insurer to the
contrary, it is represented and acknowledged that deposits to the
account of Seller hereunder, at or after Closing or otherwise,
shall be made by federal wire transfer of immediately available
funds as follows:
Account Owner: [to be provided]
Account Name:
Account Number:
Depository:
ABA Routing No.:
Telephone Advice:
16. Default and Remedies.
(a) Remedies of Seller. In the event that all
conditions to Purchaser's obligation to close have been satisfied
and Purchaser fails to close its purchase of the Property
hereunder, the Earnest Money Deposit shall be paid to Seller and
retained by them as liquidated damages as Seller's sole and
exclusive remedy hereunder. The parties acknowledge that Seller's
damages occasioned by Purchaser's default hereunder would be
difficult to ascertain, but agree that the amount of the Earnest
Money Deposit represents a reasonable estimate of Seller's damages.
(b) Remedies of Purchaser. In the event that all
conditions to Seller's (whether one or more of them) obligation to
close have been satisfied and Seller fail to close the sale of the
Property hereunder, Purchaser, at its sole discretion, either may
(I) specifically enforce this Agreement and the sale and purchase
provided for herein according to its terms by suit filed within
ninety (90) days, or (ii) terminate this Agreement, whereupon the
Earnest Money Deposit shall be returned in full to Purchaser.
(c) Rightful Termination by Purchaser. In the event
that the conditions precedent to Purchaser's obligation to close
are not satisfied and Purchaser terminates this Agreement pursuant
to the terms hereof, the Earnest Money Deposit shall be returned in
full to Purchaser as its sole remedy, and the parties shall have no
further liability to one another.
(d) Expense of Default. In the event either party
hereto is required to employ an attorney because of the default of
the other party, then the defaulting party shall pay to the
nondefaulting party court costs and a reasonable attorney's fee
incurred in the enforcement of this Agreement.
(e) Arbitration. The Purchaser and Seller hereby agree
that any controversy or claim or matters in question between the
parties including, but not limited to, any matter arising out of or
relating to (a) this Contract, and any amendments thereto, (b) any
breach thereof, (c) the sales transaction reflected in the
Contract, (d) any alleged misrepresentations or breach of
warranties, express or implied, (e) violations of the Texas
Deceptive Trade Practices-Consumer Protection Act, and/or (f) any
other cause of action relating to or arising out of the
construction and/or sale of the Improvements by Seller to Buyer,
(herein referred to collectively as a "Dispute"), shall be submitted
to mediation with the American Arbitration Association (the"AAA")
where the parties will endeavor to resolve the Dispute in an
amicable manner. In the event any Dispute cannot be resolved by
mediation, the Dispute shall be submitted to binding arbitration
pursuant to Title 9 of the United States Code, which the parties
hereto acknowledge and agree applies to the transaction involved
herein, and in accordance with the Rules of the AAA. If Title 9 of
the United States Code is inapplicable to any such claim, dispute
or controversy for any reason, such arbitration shall be conducted
by the AAA pursuant to the Texas General Arbitration Act and in
accordance with the Rules of the AAA. In any such arbitration
proceeding (i) all statues of limitations which would otherwise be
applicable shall apply, and (ii) the proceeding shall be conducted
by a single arbitrator. The arbitrator shall be selected by the
process of appointment from a panel pursuant to the applicable
procedures of the AAA. Any award rendered in any such arbitration
proceeding shall be final and binding, and judgment upon any such
award may be entered in any court having jurisdiction.
17. Notices. All notices and other communications hereunder
shall be effective as to any party only if, concurrent with notice
to such party, notice shall be given to such party's counsel. All
notices shall be in writing and shall be deemed to have been duly
given the date deposited with a commercial air courier service or
the United States Postal Service, the latter being registered or
certified mail, return receipt requested, first class, postage
prepaid, as follows:
Notice as to Seller:
Marc Paskin and Marcia Paskin
269 Pacific Avenue
Solana Beach, California 92075
Ph.: (619) 259-6743
Fax: (619) 259-6743
Notice to Seller's Counsel:
Robert L. Bush, Esq.
4025 Woodland Park Blvd., Suite 190
Arlington, Texas 76013
Ph.: 817/274-5992
Fax: 817/261-1671
Notice as to Purchaser:
Walden Residential Properties, Inc.
One Lincoln Center
5400 LBJ Freeway, Suite 400
Dallas, Texas 75240
Attention: Mr. Marshall B. Edwards
<PAGE>
Notice to Purchaser's Counsel:
Munsch Hardt Kopf Harr & Dinan
4000 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202
Attention: Robin K. Minick, Esq.
18. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED,
ENFORCED AND GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF
TEXAS. THE INITIAL DRAFT OF THIS AGREEMENT WAS PREPARED BY
PURCHASER ONLY AS A MATTER OF CONVENIENCE AND SHALL NOT BE
CONSTRUED FOR OR AGAINST EITHER PARTY ON THAT ACCOUNT.
19. Binding Effect. This Agreement and the exhibits attached
hereto shall be binding upon, and shall inure to the benefit of,
the parties hereto, their successors and assigns.
20. Entire Agreement. This Agreement and the exhibits
attached hereto shall constitute the entire contract between the
parties and supersedes all prior and contemporaneous agreements,
representations and undertakings of the parties regarding the
subject matter of this Agreement. This Agreement may not be
modified except by a writing, one or more counterparts of which is
signed by all parties to this Agreement.
21. Vesting of Title To Property. Seller and Purchaser agree
that title to the Property will be vested at Closing in such other
entity as Purchaser may direct by written notice to Seller. For
purposes of this Agreement, "Purchaser" shall mean Purchaser and
its successors and assigns.
22. Waiver. No inspection by Purchaser of the Property or of
any item delivered by Seller to Purchaser as provided in this
Agreement shall constitute a waiver of any representation, warranty
or covenant made by Seller hereunder. The waiver by a party hereto
of any term, covenant, agreement or condition herein contained
shall not be deemed to be a waiver of any subsequent breach or
failure of condition as to the same or any other term, covenant,
agreement or condition herein contained, nor shall any custom or
practice which may arise between the parties in the administration
of the terms hereof be construed as a waiver of or in such a manner
as to lessen the rights of any party to insist upon the performance
by the other parties in strict accordance with such terms.
23. Time of the Essence. The time for performance of the
obligations of the parties hereunder is of the essence in this
Agreement.
24. Survival of Agreement. The obligation of any parties to
this Agreement, including any performance specified or anticipated
to occur following the Closing, to that extent shall survive the
Closing.
25. Headings. The subject headings of paragraphs and
subparagraphs of this Agreement are included for purposes of
convenience only and shall not affect the construction or
interpretation of any of its provisions.
26. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.
27. General.
(a) Waiver by Purchaser. Purchaser, at any time at or
prior to Closing, may waive any one or more of the requirements or
conditions of this Agreement by written notice to Seller to that
effect.
(b) Time for Performance of Certain Obligations. At
Purchaser's option, this Agreement shall be null and void unless
one copy hereof, executed by Purchaser and Seller, together with
the Earnest Money Deposit, shall have been delivered to Title
Insurer within three (3) business days following the date of
execution hereof by Purchaser.
(c) Limited Liability of Officers. This Agreement
and all documents, agreements, understandings, and arrangements
relating to this transaction have been executed by the undersigned
in his/her capacity as an officer or director of Purchaser which
has been formed as a Maryland corporation pursuant to the Articles
of Incorporation of Purchaser, and not individually, and neither
the directors, officers or stockholders of Purchaser shall be bound
or have any personal liability hereunder or thereunder. Seller
shall look solely to the assets of Purchaser for satisfaction of
any liability of the Purchaser in respect of this Agreement and all
documents, agreements, understandings and arrangements relating to
the transaction contemplated by this Agreement and will not seek
recourse or commence any action against any of the directors,
officers or stockholders of Purchaser or any of their personal
assets for the performance or payment of any obligation hereunder
or thereunder. The foregoing shall also apply to any future
documents, agreements, understandings, arrangements and
transactions between the parties hereto.
(d) No Further Agreements. From and after the date
hereof, Seller shall not enter into any agreement or Letter of
Intent to sell the Property other than this Agreement.
(e) Confidentiality. The parties hereto hereby agree
that they will maintain the confidentiality of all information and
materials provided to each other in connection herewith and the
terms of the transaction contemplated hereby, the contents of this
Agreement and related documents, if any, except that Purchaser may
disclose material terms which are required to be disclosed by
applicable securities laws or as required by any national
securities exchange on which Purchaser's common stock may be listed
and Purchaser may include a copy of this Agreement and in its
filings with the Securities and Exchange Commission.
28. 1031 Exchange. Purchaser and Seller agree that Seller may
substitute an intermediary ("Intermediary") to act in place of
Seller as the seller of the Property. Intermediary shall be
designated in writing by Seller. Upon identification of
Intermediary, Intermediary shall be substituted for Seller as the
seller of the property. Buyer agrees to accept the property and
all other required performance from Intermediary to render its
performance of all of its obligations to Intermediary. Buyer
agrees that performance by Intermediary will be treated as
performance by Seller, and Seller agrees that Buyer's performance
to Seller. Seller shall unconditionally guarantee the full and
timely performance by Intermediary of each and every one of the
representations, warranties, indemnities, obligations and
undertakings of Intermediary. As guarantor, Seller shall be
treated as a primary obligor with respect to these representations,
warranties, indemnities, obligations and undertakings, and, in the
event of breach, Buyer may proceed directly against Seller on this
guarantee without the need to join Intermediary as a party to any
action against Seller. Seller unconditionally waives any defense
that it might have as guarantor that it would not have if it had
made or undertaken these representations, warranties, indemnities,
obligations and undertakings directly. In the event of the breach
of any representation, warranties, obligations and undertakings by
Seller of Intermediary or in the event of any claim upon any
indemnity by Seller or Intermediary (whether the representation,
warranty, indemnity, obligation or undertaking is express or
implied). Buyer's exclusive recourse shall be against the Seller,
Buyer shall have no recourse of any type against the Intermediary
arising from this transaction.
29. Inspections. Prior to the expiration of the Feasibility
Period, Purchaser shall have received various reports, satisfactory
to Purchaser in its sole discretion, of inspections of the Property
(including without limitation structural, mechanical,
environmental, cathodic and financial). On the Effective Date,
Purchaser shall have received the items listed in Schedule I
attached hereto. Seller shall make the Property and all reports,
books and records and agreements relating to the construction,
ownership, management and operation of the Property available to
the Purchaser and its agents as provided in Paragraph 7(o) hereof
throughout the Feasibility Period. If the results of the
inspections are unsatisfactory to Purchaser, or for any reason
whatsoever, in its sole and absolute discretion, Purchaser, at its
election, may terminate this Agreement by giving written notice to
Seller at any time prior to 5:00 P.M., C.D.T., on or before the
last day of the Feasibility Period, whereupon the Title Insurer
immediately shall return the Earnest Money Deposit to Purchaser,
this Agreement automatically shall terminate, and neither party
shall have any further obligation to the other. In the absence of
such notice by such date, the inspections shall be deemed to have
been approved by Purchaser.
30. Closing Costs. The recording costs for the special
warranty deed described in Subparagraph 8(b)(I) hereof and the
recording costs for any other of the Closing documents necessary to
convey good and indefeasible fee simple title to the Property to
Purchaser in accordance with this Agreement, except as otherwise
provided herein, any and all prepayment penalties or premiums with
respect to existing debts secured by the Property which will not
constitute Permitted Exceptions and the costs of obtaining any
Estoppel Letter shall be borne by Seller. The premiums for the
Owner Policy shall be paid by Purchaser. The escrow fees, if any,
charged by the Title Company shall be borne equally by Purchaser
and Seller. Purchaser and Seller each shall pay their respective
attorneys' fees and expenses. All other costs and expenses in
connection with the transaction contemplated by this Agreement,
unless otherwise expressly set forth herein to the contrary, shall
be borne by Seller and Purchaser in the manner in which such costs
and expenses customarily are allocated between the parties at
closings of real property similar to the situs of the Property.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed on the day and in the year entered below, effective as
above written.
PURCHASER:
WALDEN RESIDENTIAL PROPERTIES, INC.,
a Maryland corporation
By:______________________________
Marshall B. Edwards
President
Date Executed by Purchaser:_________
SELLER:
__________________________________
MARC PASKIN
__________________________________
MARCIA PASKIN
Date Executed by Seller:__________
The undersigned, constituting the Title Insurer, hereby agrees
to accept in escrow the moneys provided for in the above Agreement
to be paid into escrow and to hold and apply the same as provided
in said Agreement.
AMERICAN TITLE COMPANY,
in its separate capacity and
as agent for Chicago Title Insurance
Company
By:_____________________________
Authorized Agent
Date executed by Title
Insurer:____________
SCHEDULE I
ITEMS TO BE DELIVERED
In accordance with the Agreement, to the extent in Seller's
possession or control, Seller shall deliver to Purchaser the
following items:
1. Seller's most current owner's title insurance policy and a
copy of all title reports and documents in Seller's possession.
2. A list and a copy of all Service Contracts, all documents
pertaining to any leased Personalty, and all warranties, guaranties
and bonds, including termite inspections and treatments, relating
to the Property, or any part thereof.
3. A complete, itemized and detailed inventory of the Personalty
to be conveyed by Seller to Purchaser at the Closing.
4. A copy of (I) all income and expense statements for the
Property, for the year to date and for the most recently completed
prior year (prepared on a monthly basis), and annual operating
statements for the two (2) most recent fiscal years, certified by
Seller or audited (when available) as having been prepared in
accordance with generally accepted accounting principles (except to
the extent prepared on a cash basis), (ii) operating budgets for
the Property for the current calendar year and the upcoming
calendar year, (iii) a capital expenditure budget for the Property
for the current calendar year and the upcoming calendar year, and
(iv) such other information as may be required by Purchaser's
accountants to perform a complete audit of the Property for the
twelve (12) month period ended December 31, 1995, and year-to-date
1996.
5. A copy of all ad valorem and other property tax statements
(including personal property tax statements) relating to the
Property for the current tax year and the immediately preceding two
(2) tax years, including copies of any assessments or statements
for the current or forthcoming year, including a summary of any
contested tax assessments relating to the Property for the
preceding two (2) years, and the results thereof.
6. A copy of (i) a resident rent roll for the Improvements,
showing actual occupancies, rentals, delinquencies, defaults,
security deposits, assigned parking spaces (if any), free rent,
rent concessions, resident incentives, lease terms, unit numbers,
unit types, and unit amenities, (ii) a current schedule of rental
rates for each type of unit within the Improvements, and (iii) such
other pertinent information regarding the resident leases and
rental units as is reasonably available to Seller, including,
without limitation a schedule of the appliances and amenities
included in each type of rental unit.
7. A copy of all site plans, surveys, soil and substrata reports
and studies, engineering plans and studies, environmental reports
or studies, architectural renderings, plans and specifications,
construction contracts (with all applicable change orders), floor
plans, landscape plans, utility schemes and other similar plans,
diagrams of studies, if any, relating to the Property.
8. If available, a copy of the architect's certificate rendered
at or after the completion of construction of the Improvements
stating that the Improvements were constructed substantially in
accordance with the plans and specifications delivered to Purchaser
hereunder.
9. A copy of all reports made by engineers, architects or others,
if any, relating to any structural problems or other defects with
respect to any part of the Property.
10. A copy of all certificates of occupancy for the Improvements,
and a letter from the cities in which the Property are located
dated no earlier than the Effective Date stating that the Property
complies fully with all applicable zoning ordinances and the
operation of the Improvements as an apartment complex is a
permitted use under such ordinances, together with a copy of such
ordinances.
11. A copy of all swimming pool permits, boiler permits and other
licenses and permits for the Property required by law and issued by
any governmental authority having jurisdiction over the Property or
Seller.
12. A list of all employees currently employed in the operation of
the Property, setting forth his/her name, address, telephone
number, position, salary, benefits, bonuses, leasing commissions,
other incentives, apartment allowance (if applicable) and tenure
with the Property.
13. A schedule outlining, and invoices, contracts and/or work
orders pertaining to, any (i) carpet replacement, window
replacement, and appliance replacement over the past two (2) years
relating to the Improvements, (ii) any other capital expenditures
over the past two (2) years at the Property, showing the nature of
the work, expense, date and unit or common area where the work was
done, and (iii) regular maintenance and repair at the Property over
the past twelve (12) months.
14. A copy of the standard form of tenant lease, leasing
application, security and pet deposit documents, rules and
regulations, leasing brochures, occupancy checklist, current
marketing/leasing plans and business plans for the Property, other
standard forms and documents currently used in connection with the
leasing and marketing of the Property, and, to the extent such
information is available to Seller, a profile of existing tenant
base, including data on age, income, sex, household structure,
occupation, etc..
15. A list of all utility deposits or bonds for the Property and
a copy of all utility bills for the Property for the previous
twelve (12) months, excluding individually metered tenant utility
bills; and a letter from each of the utility providers stating that
the utilities are available to the Property.
16. A summary of any approvals, requirements or prerequisites (if
any) imposed by any current lender having a security interest in
the Property (or any portion thereof) as a condition to the
execution of this Agreement by Seller or as a condition to the
Closing as contemplated by this Agreement.
17. Copies of any documents related to any loans affecting the
Property, including, promissory notes, deeds of trust, guarantee
agreements, appraisals and other such documents pertaining to any
such loans.
18. Copies of and/or access throughout the Feasibility Period to
all resident files.
19. Copies of any pertinent litigation of safety related issues
with respect to the Property.
20. Such other books, records, leasing files, contracts,
agreements and information relating to the Property that are in
Seller's possession or are readily available to Seller and as may
be required by Purchaser's accountants to perform a complete audit
of the Property for the twelve (12) month period ended December 31,
1995, and year-to-date 1996.
21. Copies of any and all existing contractor bids and proposals
for anticipated future repair work and/or proposed capital
improvements indicating bidder and estimated scope, specifications
and costs for same.
22. Copies of contractor agreements (contracts for repairs or
capital improvement projects) in progress and/or recently
completed/performed work at the Property, including, but not
limited to, any guaranteed work still within any warranty period
(i.e., roofing, painting, paving pools, etc.) Said contracts will
indicate contractor and performed scope, specification, warranty
periods and contract cost.
23. Copies of all documents evidencing, representing or securing
the Existing Indebtedness.<PAGE>
SCH EDULE II
AUDIT LETTER
Date
Deloitte & Touche LLP
2200 Ross Avenue
Suite 1600
Dallas, Texas 75201-6778
Dear Sirs:
In connection with your audit of the combined statement of revenues
and certain expenses of __________________ Apartments (the
"Property") for the year ended December 31, 1995, (the "Statement")
for the purpose of expressing an opinion as to whether the combined
statement presents fairly, in all material respects, the revenues
and certain expenses of the Property in conformity with generally
accepted accounting principles, we acknowledge that such statement
is prepared, in part, using the financial data made available to
Walden Residential Properties, Inc., the purchaser of the Property.
The responsibility for the fair presentation of the statement in
conformity with generally accepted accounting principles rests with
Walden Residential Properties, Inc. We are responsible for the
fair presentation of the financial information provided to them in
the limited capacity as management company for the Property. In
connection thereto, we confirm, to the best of our current, actual
knowledge the following:
1. The financial information provided to you was prepared on an
accrual basis.
2. We have made available to you all relevant financial records
and data relating to the financial information requested by
you.
3. There have been no matters discussed or actions taken as
documented in the minutes of the meeting of stockholders,
directors, and committees of directors that have not been
appropriately reflected in the financial data provided to you.
4. There have been no irregularities involving management or
employees who have significant roles in the internal control
structure of the entities which own the Property and relating
to such Property.
5. There have been no irregularities involving employees (other
than management or those who have significant roles in the
internal control structure) that could have a material adverse
effect on the financial data provided to you.
6. There are no related party transactions relating to revenues
or expenses except for management fees relating to the
Property.
7. There are no violations or possible violations of laws or
regulations relating to the Property which has resulted in a
material adverse effect on the financial data provided to you.
8. There are no transactions relating to revenues and certain
expenses that have not been properly recorded in the
accounting records of the Property.
9. The Property has complied with all aspects of contractual
agreements that would have a material, adverse effect on the
financial data in the event of material noncompliance.
10. No material events have occurred subsequent to December 31,
1995, that require consideration or adjustments to, or
disclosures in, the financial data provided to you.
11. There are no unasserted claims or assessments that legal
counsel has advised us are probable of assertion and that
would pass to the purchaser of the Property.
, President
, Vice President
, Controller
SCHEDULE III
PROPERTY
Oak Forest Apartments
170 Units/134,800 NRSF/8.73 Acres
2414 Meadow Park Circle, Bedford, Texas
SCHEDULE IV
EXISTING INDEBTEDNESS
[TO BE PROVIDED]
SCHEDULE V
DESCRIPTION OF IMPROVEMENTS AND AMENITIES
(A) ____ acres of land, more or less,
(B) ____ dwelling units located in ________ buildings,
consisting of _______ one-bedroom, _________ two-bedroom and
________ three-bedroom units,
(C) __________ square feet of rentable space,
(D) uncovered parking on the premises for _______
vehicles, and
(E) a clubhouse, laundry facilities, ________ swimming
pool(s), ___________ tennis court(s) and
____________________________________.
EXHIBIT A
LEGAL DESCRIPTIONS OF LAND
[TO BE PROVIDED]
EXHIBIT B
SURVEY
[TO BE PROVIDED]
EXHIBIT C
SURVEYOR'S CERTIFICATE
[TO BE PROVIDED]
EXHIBIT D
PLANS AND SPECIFICATIONS
[TO BE PROVIDED]
EXHIBIT E
INCLUDED PERSONAL PROPERTY
[TO BE PROVIDED]
EXHIBIT F
EXCLUDED PERSONAL PROPERTY
[TO BE PROVIDED]
EXHIBIT G
RENT ROLL
[TO BE PROVIDED]
EXHIBIT H
ESTOPPEL LETTERS
[TO BE PROVIDED]
EXHIBIT I
STATEMENTS OF INCOME AND EXPENSE
[TO BE PROVIDED]
EXHIBIT J
SCHEDULE OF INSURANCE
[TO BE PROVIDED]
EXHIBIT K
SCHEDULE OF SERVICE CONTRACTS
[TO BE PROVIDED]
EXHIBIT L
Intentionally Omitted
EXHIBIT M
CLOSING DOCUMENTS
[TO BE PROVIDED]
EXHIBIT N
STANDARD TENANT LEASE
[TO BE PROVIDED]
Exhibit 11.1
WALDEN RESIDENTIAL PROPERTIES, INC.
COMPUTATION OF NET INCOME PER SHARE (1)
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Income before extraordinary item. . . . . . $ 5,487 $ 2,791 $14,124 $ 7,041
Extraordinary loss on debt extinguishment . (488) -- (1,072) (465)
------- ------- ------- -------
Net income. . . . . . . . . . . . . . . . . 4,999 2,791 13,052 6,576
Preferred distributions . . . . . . . . . . (1,409) (461) (2,693) (461)
------- ------- ------- -------
Net income available to common
stockholders. . . . . . . . . . . . . . . 3,590 2,330 10,359 6,115
======= ======= ======= =======
Income per share -- Primary:
Before extraordinary item, less
preferred distributions . . . . . . . . $ .28 $ .17 $ .80 $ .57
Extraordinary loss on debt extinguishment (.03) -- (.08) (.04)
------- ------- ------- -------
Net income available to common
stockholders . . . . . . . . . . . . . $ .25 $ .17 $ .72 $ .53
======= ======= ======= =======
Income per share -- Additional Primary (2):
Before extraordinary item, less
preferred distributions . . . . . . . . $ .27 $ .17 $ .79 $ .57
Extraordinary loss on debt extinguishment (.03) -- (.07) (.04)
------- ------- ------- -------
Net income available to common
stockholders . . . . . . . . . . . . . $ .24 $ .17 $ .72 $ .53
======= ======= ======= =======
Weighted average number of shares
outstanding:
Primary. . . . . . . . . . . . . . . . . 14,645 13,945 14,335 11,484
Dilutive effect of outstanding options . 61 -- 60 --
------- ------- ------- -------
Additional Primary (2). . . . . . . . . . 14,706 13,945 14,395 11,484
======= ======= ======= =======
</TABLE>
(1) Fully diluted net income per share is not presented because the convertible
equity securities and preferred stock are anti-dilutive.
(2) This calculation is submitted in accordance with Securities Exchange Act of
1934 Release No. 9083, although not required by APB Opinion No. 15,
because it results in dilution of less than three percent.
Exhibit 12.1
WALDEN RESIDENTIAL PROPERTIES, INC.
COMPUTATION OF RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Income before extraordinary item. . . . . $ 5,487 $ 2,791 $14,124 $ 7,041
Add:
Interest on indebtedness. . . . . . . . 5,123 4,730 14,810 12,121
Amortization. . . . . . . . . . . . . . 272 235 666 671
------- ------- ------- -------
Earnings . . . . . . . . . . . . . . $10,882 $ 7,756 $29,600 $19,833
======= ======= ======= =======
Fixed charges and preferred stock dividends:
Interest on indebtedness. . . . . . . . $ 5,123 $ 4,730 $14,810 $12,121
Amortization. . . . . . . . . . . . . . 272 235 666 671
------- ------- ------- -------
Fixed charges. . . . . . . . . . . . 5,395 4,965 15,476 12,792
Add:
Preferred stock dividends (1). . . . 1,409 461 2,693 461
------- ------- ------- -------
Combined fixed charges and preferred
stock dividends . . . . . . . . $ 6,804 $ 5,426 $18,169 $13,253
======= ======= ======= =======
Ratio of earnings to fixed charges. . . . 2.02x 1.56x 1.91x 1.55x
Ratio of earnings to fixed charges and
preferred stock dividends . . . . . . . 1.60x 1.43x 1.63x 1.50x
</TABLE>
(1) Includes preferred stock dividends on convertible equity securities
and preferred stock.
October 29, 1996
Walden Residential Properties, Inc.
One Lincoln Centre
5400 LBJ Freeway
Suite 400, LB 45
Dallas, Texas 75240
Dear Sirs:
At your request, we have read the description included in your Form 10-Q
to the Securities and Exchange Commission for the quarter ended September
30, 1996, of the facts relating to the capitalization of carpeting replaced
after initial rehabilitation of properties acquired. Because such change
is a change in estimate affected by a change in accounting principle, we
understand that this change is being applied prospectively commencing with
the quarter of the change. We believe, on the basis of the facts so set
forth and other information furnished to us by appropriate officials of
the Company, that the accounting change described in your Form 10-Q is to
an alternative accounting principle that is preferable under the
circumstances.
We have not audited any consolidated financial statements of Walden
Residential Properties, Inc. and its consolidated subsidiaries as of any
date or for any period subsequent to December 31, 1995. Therefore, we
are unable to express, and we do not express, an opinion on the facts set
forth in the above-mentioned Form 10-Q, on the related information furnished
to us by officials of the Company, or on the financial position, results
of operations, or cash flows of Walden Residential Properties, Inc. and
its consolidated subsidiaries as of any date or for any period subsequent to
December 31, 1995.
Yours truly,
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
