Exhibit 2.1
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made and entered into on
this May 7, 1998 by and between Epic Resort, Inc., a Delaware corporation
(hereinafter referred to as "Purchaser") and Scottsdale Links Apartments Limited
Partnership, an Arizona limited partnership (hereinafter referred to as
"Seller").
RECITALS
Seller is the owner of a 228 unit apartment complex known as the Scottsdale
Links which is located at 00000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx, the
legal description of which is set forth on Exhibit "A" attached hereto and made
a part hereof (hereinafter referred to as the "Land"). The Seller is currently
completing construction of the 228 unit apartment complex ("Apartment Complex")
located on the Land.
Seller has agreed to sell, and Purchaser has agreed to purchase, the Land,
including the Apartment Complex and all other improvements thereon, and all
other property associated therewith, for the price and on the terms and
conditions as more specifically set forth below.
Purchaser intends to convert the Apartment Complex into a time share
condominium. If Purchaser converts the Apartment Complex into a time share
condominium, Purchaser will attempt to sell time share intervals to retail
purchasers who as owners of time share intervals will be entitled to stay in
apartments without the payment of rental payments ("Time Share Intervals").
NOW, THEREFORE, for and in consideration of the above stated premises and
other good and valuable considerations, the receipt and sufficiency of which is
hereby acknowledged; the parties hereto agree as follows:
1. PURCHASE AND SALE. Seller agrees to sell to Purchaser and Purchaser
agrees to purchase form Seller, upon all of the terms, covenants and conditions
hereinafter set forth, the following:
(a) The Land;
(b) The Apartment Complex, including, without limitation, the
buildings, parking areas, sign structures and other structures and improvements
on the Land (collectively referred to as the "Improvements");
(c) All furniture, furnishings, supplies, equipment and fixtures,
carpeting, inventory, appliances, water fountains, elevators and all other
tangible personal property of any type which is located on the Land and/or is
used or useful in connection with any business operations of the improvements
thereon, or the repair and maintenance of the Land and Improvements, all of
which are collectively referred to as the "Personal Property";
(d) Easements and all other rights appurtenant to the Land including
without limitation, easements and rights-of-way for access, drainage, water,
utilities and other purposes incident to the use of the Land and Improvements
(collectively referred to as the "Appurtenances");
(e) All rights of the Seller in all building permits, certificates of
occupancy and other permits, licenses, governmental approvals, and agreements
which have been or are being utilized in connection with the ownership,
operation, and maintenance of the Land and Improvements (collectively referred
to as the "Licenses and Permits");
(f) Leases, tenancy agreements (but excluding any employment
contracts) which exist with respect to the ownership, operation and maintenance
of the Land, Personal Property and Improvements (collectively referred to as the
"Leases and Contracts");
(g) Sellers' interest in the name "Scottsdale Links" as well as any
logos, signs, trademarks and other rights relating to said name, telephone
number(s) of the Improvements and all intangible personal property used in the
operation, repair and maintenance of the Land, Improvements and Personal
Property (collectively referred to as the "Intangible Property");
(h) All records concerning the operation of the Property including
but not limited to accounting books and records applicable thereto (collectively
referred to as the "Records");
(i) All architectural drawings of the Improvements and plans and
specifications (e.g., including but not limited to structural, electrical,
plumbing, landscaping, etc.) utilized in the development of the Land and
construction of the Improvements (collectively referred to as the "Plans");
(j) All manufacturers, sales and service warranties applicable to the
Land, Personal Property and Improvements (collectively referred to as the
"Warranties").
For purposes of this Agreement, the conveyance of the foregoing property
shall be deemed to be all inclusive and all, the Land, Improvements, Personal
Property, Appurtenances, Licenses and Permits, Lease and Contacts, Intangible
Property, Records, Plans and Warranties (collectively referred to herein as the
"Property") shall be excluded, except as may be excluded by written consent of
the Purchaser.
2. PURCHASE PRICE
(a) The total purchase price ("Purchase Price") for the Property
shall be Twenty Five Million Five Hundred Sixty Five Thousand
Dollars ($25,565,000) payable in good funds by wire transfer at
Closing as hereafter defined. In the event that the prepayment
fee due HUD is less than 10 percent, the difference will be
deducted from the purchase price.
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(b) Out of the Purchase Price, as a condition to the Closing, the
Seller shall pay and/or satisfy all obligations which are liens
and encumbrances against the Property, including without
limitation the following:
(i) the existing Mortgage held by _________________ as
recorded on __________, in Official Records Block _____
at Page _____ of the Public Records of _______ County
("First Mortgage");
(ii) current and delinquent real estate taxes on the Property;
and
(iii) all outstanding local and state tax obligations relating
to the Property.
Purchaser assumes no liabilities, mortgages, obligations or indebtedness
relating to the Property. All liabilities, mortgages, obligations or
indebtedness which are, a lien or encumbrance on the Property which otherwise
relate to or can affect the Property shall be satisfied in full by Seller on or
before the date of Closing.
(c) Within five (5) days after execution of this Agreement by both
parties, Purchaser will deposit with Security Title Agency, Xxx Xxxxxxx, Escrow
Officer, 0000 X. Xxxxxxxxx Xx., Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (the "Escrow
Agent"), the sum of One Hundred Thousand ($100,000.00) less the amount that
Seller advanced in relation to the existing HUD financing on the land ("Net
Deposit") to serve as an escrow deposit and to secure Purchaser's performance
hereunder. If this Agreement is not terminated by the Purchaser in accordance
with Section 3 below, the Purchaser shall deposit a further One Hundred Thousand
($100,000.00) with the Escrow Agent within five days after the expiration of the
Due Diligence Period, as defined in Section 3. The initial One Hundred Thousand
Dollars and the additional One Hundred Dollars are hereafter referred to as the
"Deposit." The Net Deposit and the additional One Hundred Thousand Dollars
shall be held in an interest bearing account with a commercial bank or savings
and loan association with all earnings to accrue to Purchaser's benefit, unless
Seller retains the Deposit as a result of a default by Purchaser hereunder in
which event the Deposit, together with interest thereon, shall be paid to
Seller. The Deposit shall be credited to Purchaser against the Purchase Price,
at Closing.
3. INSPECTION RIGHTS OF PURCHASER.
From the date this Agreement is executed through the Closing Date,
Purchaser shall have the right to inspect all of Seller's records and documents
relating to the ownership, construction and condition of the Property, and to
physically inspect the Property, including any environmental, asbestos and radon
testing, and to otherwise satisfy itself as to the acceptability of the Property
for Purchaser's intended use. Purchaser and Purchaser's agents shall have the
right to ingress and egress to the Property for the inspections contemplated
herein. If for any reason the condition of the Property is not satisfactory to
Purchaser, in Purchaser's sole discretion, Purchaser may terminate this
Agreement by sending written notice of termination to the Seller within thirty
(30) days of the date this Agreement is executed by both Purchaser and Seller
("Due Diligence Period"), whereupon the Net Deposit with all interest shall be
returned to Purchaser and the parties shall thereafter have no further
responsibilities or obligations to each other. In the
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event the Purchaser terminates this Agreement and the Seller proceeds to pay
off the HUD financing on the Land, the Seller agrees to reimburse Purchaser
for the amount that Purchaser advanced, as outlined in paragraph 2(c) above.
4. CONDITION OF TITLE.
(a) At Closing, Seller shall convey to Purchaser by special warranty
deed good and marketable fee simple title to the Land and title to the other
Property by a Xxxx of Sale by an Assignment of Contracts and Warranties. Title
to the Land shall further be (i) free and clear of all liens, restriction,
easements, encumbrances, claims or liens by contractors, subcontractors,
mechanics and materialmen, leases, tenancies and other title objections except
for those listed on Schedule 4(g) attached (the "Permitted Exceptions"); and
(ii) insurable as aforesaid at ordinary rates by any reputable title insurance
company licensed to do business in the State of Arizona. Title to the Property
other than the Land shall be conveyed free of all security interests, debts and
clams by third parties.
(b) If title to the Land cannot be conveyed to Purchaser at the time
of Settlement in accordance with the requirements of this Agreement, then
Purchaser shall have the option of:
(i) taking such title as Seller can convey without abatement
of the Purchase Price provided, however, that if there are liens, encumbrances,
defects or other objections to title (other than the Permitted Exceptions) which
are or have been or reasonably can be reduced to a monetary amount, Seller shall
pay and discharge same and shall deliver to Purchaser at Closing all
instruments, in recordable form, sufficient to satisfy of record such liens,
encumbrances, defects or other objections to title together with the cost of
recording or filing said instruments, or
(ii) terminating this Agreement by giving written notice to
Seller, in which case the Deposit and all interest earned thereon shall be
returned to Purchaser whereupon, neither party shall have further rights,
liabilities or obligations hereunder. Nothing contained herein shall preclude
Purchaser from maintaining an action for specific performance and/or damages
against Seller for a breach of this Agreement, if title to the Property cannot
be conveyed by Seller to Buyer at Closing in accordance with the requirements of
this Agreement by reason of Seller's affirmative act or intentional omission
with respect only to those matter set forth in 4(c) below resulting in a failure
to comply with any term, covenant, condition or provision contained herein
relating to the condition of title.
(c) Seller warrants that at all times while this Agreement remains in
effect, Seller will not, except to the extent specifically set forth herein, (i)
execute any easements, covenants, conditions, restrictions, or rights-of-way
with respect to the Land; (ii) mortgage or encumber the Land; (iii) enter into
any recorded or unrecorded contracts or leases with respect to the Land; (iv)
lease more than seventy (70) apartments contained in the Apartment Complex;
(v) execute any lease for an apartment in the Apartment Complex for a term in
excess of one year, (vi) seek any zoning changes or other governmental approvals
with respect to the Land; or (vii) do, or voluntarily permit to be done,
anything which would adversely affect the condition of title to the Land from
and after the date of this Agreement through the completion of Settlement.
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5. SURVEY
If Seller does not have a current ALTA survey of the Property
available, Purchaser may, obtain, at Purchaser's expense, a current survey of
the Property, prepared and certified by a duly licensed land surveyor acceptable
to Purchaser. Seller will cooperate with Purchaser in obtaining a survey.
6. SELLER'S REPRESENTATIONS AND WARRANTIES.
Seller and each its partners, hereby make the representations and
warranties set forth in this Section 6. All of Seller's representations and
warranties shall be true and correct as of the date of closing, shall be deemed
ratified by Seller's act of Closing, and any Schedules, documents or information
to be furnished by Seller shall be updated and furnished to Purchaser at
Closing. From and after the date of this Agreement, and until Closing, Seller
shall not take any action or make any admission, which would have the effect of
violating any of the representations or warranties of Seller contained in this
Agreement. Seller has delivered to Purchaser, the documents listed on Exhibit C
and warrants that the same, and all information reflected therein, are
completely accurate and current in all respects. Purchaser shall rely only on
the documents listed on Exhibit C and on the representation and warranties
contained in this Agreement. All of the warranties and representations of
Seller and its partners shall survive closing and the conveyance of the Property
to Purchaser.
(a) The execution of this Agreement and the fulfillment of Seller's
obligations hereunder shall not constitute or result in a breach of any term or
provision of any existing mortgage, lease or other agreement to which Seller is
a party or by which Seller is bound. All persons or entities whose joinder in
the Deed would be necessary to convey title to Buyer hereunder have been
identified herein as "Seller." This Agreement and all other instruments and
documents to be executed and delivered by Seller to Purchaser hereunder or
pursuant hereto have been or will be duly executed and delivered by Seller and
constitute (or will constitute, as to those instruments and documents to be
executed and delivered) the legal, valid and binding obligations of Seller and
enforceable against Seller in accordance with their respective terms.
(b) Seller has received no written official notice, nor any informal
written or oral notice of any contemplated condemnation proceedings against the
whole or any part of the Property.
(c) The Seller has provided to the Buyer a copy of the approved
minutes of the Scottsdale City Council Meeting which demonstrates the Property
received approval for a use permit for time share in its R-5 zoning
classification. Seller has no knowledge of any moratoria or similar conditions
that will prevent the development and operation upon the Land of residential
time share units. Seller has no knowledge of any current violations of any
building, zoning or other requirements of any applicable governmental authority
affecting the Property.
(d) Seller has no knowledge of any fact or condition which would
result in the termination or reduction of the current access from the Land and
Improvements existing public
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streets; and Seller has no knowledge of any proposed road widening or other
construction activity within the vicinity of the Land.
(e) Seller has no knowledge of any latent or patent defect or design
deficiency in the foundation, structure, roof, paved areas or mechanical
systems of the Improvements, including, without limitation, the heating,
ventilation and cooling systems, the electrical system, the plumbing system or
the elevators.
(f) Seller has no actual knowledge of any lawsuits presently pending
or any lawsuits that have been threatened concerning the Property or any portion
thereof, or Seller's title or right to convey the Property or any portion
thereof hereunder, nor has Seller any knowledge of any claims or liens existing
or threatened against the Property or any part thereof, other than those filed
of record prior to the execution date of this Agreement.
(g) Seller is in sole and undisputed possession of the Property and
no other person or entity is entitled to possession of all or any portion of the
Property. There are no leases with respect to the Property other than the
leases set forth on Schedule 6(g).
(h) There are no other contracts, leases, agreements, understandings
or other obligations existing with respect to the Property or any portion
thereof, other than as are reflected on Exhibit C in this Agreement.
(i) No person, firm, corporation, or other entity has any right or
option to acquire the Property, or any part thereof.
(j) Seller has received notice from the City of Scottsdale regarding
the formation of the Reatta Pass Improvement District which would result in an
assessment against the property. Seller has determined to its own satisfaction
that this assessment would benefit the Property by removing it from the existing
flood zone upon completion of the improvement. Seller makes no representations
or warranties as to this opinion or conclusion and Purchaser must satisfy itself
as to this condition. Seller has received no notice and has no knowledge of any
other pending liens, increased assessments or tax rates, or any special
assessments to be made against the Property by governmental authority.
(k) Seller is current in all sales and use tax obligations relating
to the Property.
(l) Seller is neither a "foreign person" nor "foreign corporation" as
those terms are defined in the United States Internal Revenue Code, as amended,
and Seller shall ratify this warranty by affidavit at the time of closing.
(m) Public water, public sanitary sewer, electricity, and the
telephone services have been installed to the Improvements through appropriate
easements.
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(n) Except as disclosed on Schedule 6(n):
(i) To Seller's actual knowledge, the Land and Improvements
("Premises") do not contain any Hazardous Materials.
(ii) To Seller's actual knowledge, there are no underground or
above-ground storage tanks on or under the Premises, and Seller has no knowledge
of the removal of any underground or above-ground storage tanks from the
Premises.
(iii) To Seller's actual knowledge, there are no transformers
containing or contaminated with Hazardous Materials on the Premises, and Seller
has no knowledge of the removal of any such transformers from the Premises.
(iv) Seller has not engaged in or permitted any Hazardous
Materials Use in, at, under, or in connection with the Premises nor, to Seller's
knowledge, has any previous owner or tenant of the Premises engaged in or
permitted any Hazardous Materials Use in, at, under, on or in connection with
the Premises.
(v) Seller has not received notice or actual knowledge of:
(1) any claim, demand, investigation, enforcement, response, removal, remedial
or other governmental or regulatory action instituted or threatened, against
Seller or the Premises pursuant to any Hazardous Materials Law, (2) any claim,
demand, suit or action made or threatened by any person against Seller or the
Premises relating to any form of damage, loss or injury resulting from or
claimed to result from, any Hazardous Materials on, about, beneath or arising
from the Premises or any alleged violation of any Hazardous Material Law; and
(3) any communication to or from any governmental or regulatory agency arising
out of or in connection with Hazardous Materials on, about, beneath, arising
from or generated at the Premises, including without limitation, any notice of
violation, citation, complaint, order directive, request for information or
response thereto, notice letter, demand letter or compliance schedule. If
discovered prior to Closing, Seller shall immediately advise Purchaser of any of
the claims or communications listed in clauses (1) through (3) above and also
shall immediately advise Purchaser of the discovery of any Hazardous Materials
on, about, beneath, or arising from the Premises or the discovery of any
condition on, arising from the Premises or the discovery of any condition on,
about, beneath or arising from the Premises which might give rise to liability,
the imposition of a statutory lien or require response, removal or remedial
action under any Hazardous Material Law.
(vi) As used, in this Agreement, "Hazardous Materials" shall
mean "Hazardous Substances" as defined under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9501 et
seq.)
(vii) As used in this agreement, "Hazardous Material Law" shall
mean a federal, state, or local statute, law, ordinance, code, regulation, rule,
order or decree (whether by court or by a governmental or quasi-governmental
entity or agency having authority), in effect on the date hereof.
(viii) As used in this Agreement, "Hazardous Materials Use"
shall mean activities involving, directly or indirectly, the manufacture, leak,
spill, emission, deposit,
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discharge, release, use, transportation, generation, treatment, storage,
disposal or handling of Hazardous Materials.
7. CLOSING.
Closing shall be held on or before June 30, 1998. The exact date and
time of Closing shall be designated by Purchaser on not less than five (5) days
written notice to Seller. Closing shall take place at the office of Escrow
Agent at 0000 X. Xxxxxxxxx Xx., Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (the
"Closing").
8. CLOSING DOCUMENTS.
(a) At the Closing, Seller shall execute and/or deliver the following
documents all in form and content acceptable to Purchaser:
(i) A Special Warranty Deed (in the form attached as Exhibit
B) free and clear of all mortgages, liens and encumbrances and subject only to
the Permitted Exceptions;
(ii) Xxxx of Sale for all Personal Property;
(iii) An assignment of Seller's right, title and interest in
and to all Appurtenances, Licenses and Permits, those Leases and Contracts which
Purchaser has elected to assume, Intangible Property, Records, Plans and
Warranties;
(iv) An Affidavit reciting that there are no contractor's
liens against the Land and that, within the past ninety (90) days, there have
been no improvements, alterations or repairs for which the costs thereof remain
unpaid, with the exception of anything caused by Purchaser, that, except as
previously disclosed to Purchaser, the Land is free and clear of all liens,
taxes, encumbrances and claims whatsoever, with the exception of real estate
taxes for the year of closing; that there are no parties in possession or with a
right or claim to possession; and that affiant has received no notice of any
violations of County or municipal ordinances pertaining to the Property;
(v) A Standard FIRPTA affidavit acknowledging that Seller is
not a "foreign person" as defined and set forth in Section 1445 of the Internal
Revenue Code (or, in the event Seller is a "foreign person", providing Purchaser
with sufficient information for Purchaser to comply with the withholding
requirements thereof);
(vi) An affidavit of real property value as required by the
Arizona Revised Statutes;
(vii) Appropriate certificates or resolutions of authority
confirming the authority of the individual(s) executing the closing documents;
and
(viii) Such other and further documents as may be reasonably
appropriate to consummate the transaction in accordance with the provisions of
this Agreement.
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(b) At the Closing, Purchaser shall pay Seller the Purchase Price and
execute and/or deliver such documents as may be reasonably appropriate to
consummate the transaction in accordance with the provisions of this Agreement.
9. ACCESS; CONDUCT PRIOR TO CLOSING.
(a) At all times prior to Closing, Purchaser shall have complete
access to the Property for any purpose deemed necessary or appropriate by
Purchaser, provided that Purchaser shall not damage the Property or interfere
with the conduct of business thereon, and shall indemnify Seller for any loss or
damages thereby caused.
(b) Prior to Closing, Seller shall not enter into any new contracts
or other agreements affecting the Property without obtaining the prior written
consent of Purchaser. Seller agrees to finish construction of the Improvements
in accordance with the Plans and obtain a Certificate of Occupancy for the
Improvements, prior to Closing. Seller shall also continuously maintain every
part of the Property in good condition, ordinary wear and tear excepted, and to
continue the conduct of business therein, in accordance with a standard of
operation and quality consistent with present condition of the Property. Seller
further agrees to maintain all existing insurance in place through the date of
Closing.
10. CONDITIONS TO CLOSING.
(a) Purchaser's obligation to close shall be subject to the
satisfaction, in advance of Closing, of the following:
(i) All of the representations and warranties of Seller set
forth in this Agreement shall be true and correct in all respects on and as of
the date of Closing as though made at that time.
(ii) Seller shall have performed, satisfied and complied with
all of the covenants, agreements, and conditions required by this Agreement to
be performed or complied with by it on or before the date of Closing, including,
without limitation, the completion of the construction of the Improvements in
accordance with the Plans and the obtaining of a Certificate of Occupancy for
the Improvements.
(iii) Seller shall not be in receivership or dissolution or
have made any assignment for the benefit of creditors or admitted in writing its
inability to pay its debts as they mature or have been adjudicated as bankrupt
or have filed a petition in voluntary bankruptcy or a petition or answer seeking
reorganization under the Bankruptcy Act or any other similar law or statute of
the United States or any state, and no such petition shall have been filed
against it.
(b) Seller's obligation to close shall be subject to the
satisfaction, in advance of Closing, of the following:
(i) All of the representations and warranties of Purchaser
set forth in this Agreement shall be true and correct in all respects on and as
of the date of Closing as though made at that time.
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(ii) Purchaser shall have performed, satisfied and complied
with all of the covenants, agreements, and conditions required by this Agreement
to be performed or complied with by it on or before the date of Closing.
(iii) Purchaser shall not be in receivership or dissolution or
have made any assignment for the benefit of creditors or admitted in writing its
inability to pay its debts as they mature or have been adjudicated as bankrupt
or have filed a petition in voluntary bankruptcy or a petition or answer seeking
reorganization under the Bankruptcy Act or any other similar law or statute of
the United States or any state, and no such petition shall have been filed
against it.
(iv) Purchase by Xxxxx-Xxxxxxx, Inc., of all the partnership
interests of Scottsdale Links Apartments, L.P. not owned or controlled by
Xxxxx-Xxxxxxx, Inc., or its affiliates.
(v) Appropriate certificates or resolutions of authority
confirming that Purchaser is duly formed, validly existing and authorized to
enter into and perform under the Agreement.
11. CLOSING EXPENSES.
Purchaser shall be responsible for payment, at Closing, of the
following: the costs of recording the Deed; title insurance premium;
documentary stamps, including any local surtax, applicable to the Deed. Seller
shall be responsible for payment, at Closing, of the costs of recording any
corrective instruments and any transfer taxes.
12. PRORATIONS AND ADJUSTMENTS. The following shall be prorated and
adjusted as of the date of Closing:
(a) Real and personal property taxes shall be prorated based upon the
current year's tax with due allowance made for the maximum allowable discount
and exemptions if allowed for said year. If the current year's assessment is
not available, then taxes will be prorated based upon the tax assessment for the
Property for the immediately preceding year, with due allowance made for the
maximum allowable discount and exemptions if allowed for said year.
(b) Certified government liens or special assessment liens, if any,
will be paid by the Seller. Pending governmental liens, if any, will be assumed
by the Purchaser.
(c) Security deposits, if any, form tenant's leases and other
contracts, deposits, including advance booking deposits, prepaid rent and
escrows held in connection with tenancies of the Property shall be transferred
to Purchaser.
(d) Rents and other revenues shall be prorated. Proration of rents
shall be of those actually received and Purchaser shall be entitled to all rents
and other income accruing from and after the date of Closing. Any rentals or
other sums due Seller before Closing, but not yet collected as of the date of
Closing, shall be the Seller's exclusive responsibility to collect.
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(e) All utility charges, including but not limited to, telephone
service, gas, water and sewer, and electric power shall be prorated as of the
date of Closing. At least ten (10) days prior to Closing, Seller shall notify
all utilities servicing the Property of the contemplated change in ownership,
and direct that current xxxxxxxx for services rendered up to the date of Closing
be directed to Seller and that all future xxxxxxxx for services rendered on or
after the Closing Date be directed to Purchaser with no interruption of service.
Such notice shall be provided in writing and copies of same furnished by Seller
to Purchaser. Only deposits, standby charges and other prepayments which may be
assignable and are assigned to Purchaser shall be paid for by Purchaser at
Closing. Non-assignable deposits and other charges shall be refunded to Seller
and replaced by Purchaser with appropriate adjustment to the proration.
(f) All other income, receivables, claims and rights to revenue
derived from the Property accruing or relating to the period up to the date of
Closing shall belong to the Seller and it shall be Seller's exclusive
responsibility to collect same if it has not done so by Closing. All other
income relating to the Property shall be paid to the Purchaser.
(g) Insurance premiums relating to the Property shall be prorated if
Purchaser elects to assume such insurance.
(h) Any unpaid operating expenses incurred during the month of
Closing shall be prorated.
13. EMPLOYEES.
On or after Closing, Purchaser may, in its sole discretion, employ
some or all of the employees of Seller, and Seller shall cause such employees to
become employees of Purchaser; provided, however, that Purchaser shall not
assume any payroll or payroll tax obligations of Seller or the cost of any
employee benefits which may be afforded by Seller to its employees.
Notwithstanding the foregoing, Purchaser acknowledges that all employees of
Seller are employees at will, without written employment agreements, and without
any collective bargaining agreements and that Seller can make no representation
or warranty that any one or more of their existing employees will accept or
continue employment with the Seller.
14. RISK OF LOSS; POSSESSION.
Risk of loss shall remain with Seller pending completion of the
Closing. Seller shall deliver possession of the Property to Purchaser at
Closing. If the Property, or any portion thereof, is damaged by fire or other
casualty prior to Closing, Purchaser shall have the option of either taking the
Property as damaged, together with either a credit against the cash to close in
the amount of any insurance proceeds payable by virtue of such loss or damage,
or of canceling this Agreement and receiving a return of the Deposit, together
with any interest earned thereon.
15. INDEMNIFICATION.
Seller shall indemnify Purchaser and hold and save Purchaser harmless
of and from any and all loss, cost, damage, injury or expense, including
attorney's fees, arising out of or in any way related to:
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(a) any material inaccuracy in the representations and warranties of
Seller hereunder; and
(b) any claims for injury to or death of persons, damage to property,
contract liabilities, taxes, expenses or claims of any kind, whether direct or
contingent, associated with the ownership, operation, management or control of
the Property or any part thereof, arising due to or out of events or
transactions occurring prior to the Closing hereunder, except as otherwise
provided in this Agreement.
16. EMINENT DOMAIN.
If all or any portion of the Property shall be taken through the
exercise of the power of eminent domain prior to the Closing, then in such
event, the Purchaser shall have the option either:
(a) To take title at the Closing without any abatement or adjustment
in the Purchase Price, in which event the Seller shall assign its rights in any
condemnation award to the Purchaser, or the Purchaser shall receive the
condemnation award from the Seller if it is paid prior to the Closing by means
of a credit against the cash to close and any excess shall be paid in cash to
Purchaser at Closing; or
(b) To cancel this Agreement and obtain an immediate and unqualified
refund of the Deposit, together with any interest earned thereon, whereupon each
party shall be released from any and all further obligations hereunder.
17. DEFAULT BY PURCHASER.
If Purchaser fails to perform the covenants of this Agreement,
Seller's remedies shall be limited to the retention of the Deposit, together,
with any interest earned thereon, as agreed and liquidated damages in full
settlement of any claims, whereupon the parties shall be relieved and released
from all further obligations under this Agreement. The parties agree that this
provision for liquidated damages is a bona fide attempt by the parties to
resolve the amount of the damages which would be sustained by the Seller in the
event of the breach of this Agreement by the Purchaser, and the parties
recognize that at the actual amount of such damages, if any, would be
speculative and extremely difficult of ascertainment. Notwithstanding the
foregoing, Purchaser shall be entitled to written notice and ten (10) days
opportunity to cure any default, and any deadline shall be extended for the
period of cure.
18. DEFAULT BY SELLER.
If the Seller fails to perform any of the covenants of this Agreement
and/or fails to close as provided herein and/or any of the conditions of closing
set forth in Section 10(a) have not taken place by June 30, 1998 then Purchaser
may: (a) proceed to close or (b) rescind this Agreement in which event
Purchaser shall be entitled to an immediate and unqualified refund of the
Deposit, together with any interest earned thereon; or (c) obtain specific
performance of Seller's obligations hereunder; notwithstanding the foregoing,
Seller shall be entitled to written
12
notice and ten (10) days opportunity to cure any default, and any deadline shall
be extended for the period of cure.
19. WAIVER.
The waiver of any condition or provision of this Agreement or of any
breach or default under any of the terms of this Agreement by either party must
be in writing and shall not be deemed to be nor shall the same constitute a
waiver of any subsequent condition, provision, breach or default.
20. NOTICES.
Any notice required or permitted to be given by this Agreement shall
be given or made in writing, and shall be served personally by messenger or
courier service, or mailed in the United States by prepaid, registered or
certified mail return receipt requested, as follows:
If to Seller:
Xxxxx-Xxxxxxx, Inc.
0000 X. 00xx Xx.
Xxxxxxx, XX. 00000
Attn.: Xxxx Xxxxx
Fax: (000) 000-0000
If to Purchaser:
Epic Resorts, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx xx Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx
Any notice given in accordance with the provisions of this
subparagraph shall be deemed to be effective: (i) if personally delivered, on
the date of such delivery with such delivery to be confirmed by a signed
receipt, (ii) if mailed, two days after same is postmarked, postage prepaid, or
(iii) by telecopier, if telecopied to a telecopier number provided by the other
party. Each party may give notice to the other party of a change of its
address, or telecopy number, for the purpose of giving notice under this
Agreement.
21. BROKERAGE.
Each party represents and warrants to the other than neither he, nor
it, nor any of their agents has directly or indirectly dealt with, been shown or
otherwise consulted any broker or agent thereof in connection with this
transaction, and that no real estate brokerage commission is due in connection
with this transaction. Each party hereby indemnifies and holds the other party
harmless against any claim or loss (including attorney's fees) which may be
asserted against the other by reason of any claims or determinations in
contravention of the representations and
13
warranties contained in this Paragraph. Purchaser acknowledges that various
partners/officers of Seller may be licensed by the State of Arizona are real
estate salesmen or real estate brokers.
22. INTERPRETATION; SEVERABILITY.
This Agreement shall be construed and enforced in accordance with the
laws of the State of Arizona. The article headings in this Agreement are for
convenient reference only and shall not have the effect of modifying or amending
the expressed terms and provisions of this Agreement, nor shall they be used in
connection with the interpretation hereof. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular or
plural as the identity of the personal liability or obligation with respect to
same. In case any one or more of the provisions of this Agreement or the
application thereof shall be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions hereof and
any other application thereof shall in no way be affected or impaired. Any
reference herein to time periods of less than six (6) days shall in the
computation thereof exclude Saturdays, Sundays and legal holidays, and any time
period provided for herein which shall end on a Saturday, Sunday or legal
holiday shall extend to 5:00 p.m. of the next full business day.
23. COSTS; ESCROW AGENT.
All costs, including attorneys' fees, paid by either party in the
enforcement or defense of this Agreement, including proceedings in appellate
courts, shall be paid to the prevailing party. In the event of any dispute
among the parties with respect to disbursement of the Deposit, the Escrow Agent
shall have the right to render same into a court of appropriate jurisdiction and
to interplead both parties hereto and thereafter be free from further liability
to the parties or hereunder. Except for willful misconduct, the Escrow Agent
shall be excused from all responsibility, including insolvency of any
depository, absolutely.
24. ENTIRE AGREEMENT; AMENDMENT.
This Agreement and the documents and information to be furnished
pursuant hereto, contain the entire agreement between the parties with respect
to this transaction, and no representation, warranties or agreements have been
made or, if made, have not been relied upon by either party except those
specifically referred to herein. This Agreement may only be amended, modified
or supplemented by written instrument signed by the parties hereto.
25. BINDING EFFECT.
All of the terms, covenants and conditions herein contained are and
shall be binding upon and inure to the benefit of both parties, their personal
representatives, heirs, successors and assigns.
26. ASSIGNABILITY.
This Contract may be assigned by Purchaser to an affiliate.
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27. RECORDING.
Each party agrees not to record this Contract or any notice or
memorandum thereof in the public records.
28. COUNTERPART.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be an original, but all counterparts
shall together constitute one and the same instrument.
29. EFFECTIVE DATE.
This Agreement shall be binding on the date when this Purchase and
Sale Agreement has been fully executed by the Purchaser and Seller.
30. ACCEPTANCE.
At the option of Purchaser, this Agreement shall be void and the
Deposit returned to Purchaser unless Seller has delivered to Purchaser a signed
original counterpart hereof no later than 5:00 p.m., ______________, 1998.
31. CONFIDENTIALITY.
The parties hereto agree to keep this Agreement and its terms
confidential and not to disclose any terms to any third parties until Closing,
except to potential lenders, surveyors, title agent and other parties requiring
information in connection with Purchaser's inspection or other rights under this
Agreement.
32. JOINDER OF PARTNERS.
By their execution at the Closing of the Joinder of Partners in the
form attached as Exhibit D of this Agreement, each of the partners of Seller do
hereby, in their individual capacities, ratify and confirm the accuracy of each
of Seller's representations and warranties contained herein and without limiting
the provisions of Section 15 of this Agreement, do hereby agree to indemnify
Purchaser from any loss, cost, damage, injury or expense, including attorney's
fees, arising out of or in any way related to any inaccuracy in the
representations and warranties of Seller hereunder.
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IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to
be executed on the day and year indicated below.
SELLER:
WITNESSES: SCOTTSDALE LINKS APARTMENTS, LLP
By its general partner Xxxxx-Xxxxxxx, Inc.
By: /s/ Xxxx Xxxxx
-------------------------------
Name:
-----------------------------
Date: May 7, 1998
-----------------------------
PURCHASER:
EPIC RESORTS, INC.
By: /s/ T. F. Flarley
-------------------------------
Xxxxxx X. Xxxxxxx, President
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EXHIBIT A
Legal Description of the Land
That portion of the Northeast quarter of Section 1, Township 3 North, Range 4
East of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
more particularly described as follows:
COMMENCING at the North quarter corner of said Section 1;
Thence South 00 degrees 53 minutes 46 seconds West, along the West line of
said Northeast quarter, 45.00 feet to point on the Southerly right of way line
of Xxxx Road marking the POINT OF BEGINNING;
Thence South 89 degrees 52 minutes 20 seconds East, along said right of way
line, 788.10 feet;
Thence South 00 degrees 07 minutes 40 seconds West, 94.57 feet to a point
marking the beginning of a tangent curve, having a radius of 150.00 feet to the
left;
Thence Southeasterly, along the arc of said curve, through a central angle
of 69 degrees 52 minutes 27 seconds, having an arc distance of 182.93 feet;
Thence South 69 degrees 44 minutes 47 seconds East 85.64 feet to a point
marking the beginning of a tangent curve, having a radius of 150.00 feet to the
right;
Thence Southeasterly, along the arc of said curve, through a central angle
of 49 degrees 02 minutes 59 seconds, having an arc distance of 128.41 feet;
Thence South 20 degrees 41 minutes 48 seconds East 46.78 feet;
Thence South 79 degrees 15 minutes 10 seconds West 16.63 feet;
Thence South 71 degrees 34 minutes 00 seconds West 47.46 feet;
Thence South 73 degrees 16 minutes 09 seconds West 566.07 feet;
Thence South 61 degrees 23 minutes 15 seconds West 547.83 feet to a point
marking the intersection of the Northerly line of the Granite Reef Aqueduct with
the aforementioned West line of the Northeast quarter of Section 1;
Thence North 00 degrees 53 minutes 46 seconds East, along said West line,
842.03 feet (record) 842.02 (measured) to the POINT OF BEGINNING.
WHEN RECORDED, RETURN TO:
Epic Resorts, Inc.
Attn: Xxxxxx X. Xxxxxxx
0000 Xxxxx Xxx., Xxxxx 000
Xxxx xx Xxxxxxx, XX 00000
________________________________________________________________________________
EXHIBIT B
SPECIAL WARRANTY DEED
FOR THE VALUABLE CONSIDERATION OF Ten Dollars ($10.00) and other good and
valuable consideration, Scottsdale Links Apartments Limited Partnership, an
Arizona limited partnership, hereinafter called the Grantor, does hereby sell
and convey to Epic Resorts, Inc., a Delaware corporation, the real property
situated in Maricopa County, Arizona described on "Exhibit A" attached hereto
and incorporated herein by reference ("the Land"), together with all rights,
privileges and easements appurtenant thereto.
Subject to current taxes and other assessments, reservations in patents and
all easements, rights-of-way, encumbrances, liens, covenants, conditions,
restrictions, obligations and liabilities as may appear of record and other
matters which a physical inspection or an accurate and current ALTA survey of
the Land would disclose, the Grantor hereby binds itself to warrant and defend
title to said Land as against all acts of Grantor herein and none other, subject
to the matter above set forth.
DATED this ______ day of ________________, 1998.
By: SCOTTSDALE LINKS APARTMENTS, L.P.
By its general partner Xxxxx-Xxxxxxx, Inc.
By:_______________________________________
Xxxx Xxxxx, President
STATE OF Arizona )
)ss.
County of Maricopa )
This instrument was acknowledged before me this _____ day of ______________,
1998 by Xxxx Xxxxx, President of Xxxxx-Xxxxxxx, Inc., general partner of
Scottsdale Links Apartments Limited Partnership, on behalf of the partnership.
_______________________________ ___________________________________________
My Commission Expires Notary Public
EXHIBIT C
List of documents provided by Seller to Purchaser
Phase I Environmental Site Assessment dated September 22, 1995 prepared by
Environmental Site Assessments, Inc.
Property Management Agreement dated July 9, 1997 by and between Scottsdale Links
Apartments, L.P. and XxXxxxx Management Corporation
Multiple Dwelling Unit Telecommunications Service and Non-Exclusive Access
Agreement dated July 18, 1997 by and between Scottsdale Links Apartments, L.P.
and Xxx Communications Phoenix, Inc.
Marketing Agreement dated July 18, 1997 by and between Scottsdale Links
Apartments, L.P. and Xxx Communications Phoenix, Inc.
Agreement for New Multi-Tenant Residential Properties by and between U S West
Communications, Inc. and Xxxxx-Xxxxxxx Builders acting as agent for Scottsdale
Links Apartments, L.P.
Gas Main Extension Agreement dated November 5, 1997 between Southwest Gas
Corporation and Xxxxx-Xxxxxxx
Copy of Scottsdale City Council meeting minutes dated November 18, 1997
EXHIBIT D
JOINDER OF PARTNERS OF SCOTTSDALE LINKS APARTMENTS L.P.
For value received, the receipt and sufficiency of which is hereby
acknowledged, and as a material inducement to Purchaser's offer to purchase the
Property, the undersigned partners of the Scottsdale Links Apartments, LLP
("Partners") join in the execution of the foregoing Purchase and Sale Agreement
by Scottsdale Links Apartments, LLP.
Specifically, the undersigned Partners hereby represents and warrants to
Purchase that they/it are personally familiar with Seller's operation of the
Property and that each of Seller's representations and warranties contained
therein are accurate. Further, the Partners do hereby agree to be bound by the
provisions of Section 15 of the Agreement as though they were a party thereto.
General Partner:
Xxxxx-Xxxxxxx, Inc.
By:__________________________________
President
Limited Partners:
__________________________________
__________________________________
