AGREEMENT OF PURCHASE AND SALE
BY AND BETWEEN
BRE-N, INC.
AND
HOMES FOR AMERICA HOLDINGS, INC.
TABLE OF CONTENTS
ARTICLE I - PURCHASE AND SALE OF PROPERTY.......................................
Section 1.1 Sale.................................................
Section 1.2 The Property.........................................
Section 1.3 Purchase Price and Deposit...........................
Section 1.4 Title to the Property................................
ARTICLE II - CONDITIONS.........................................................
Section 2.1 Conditions Period....................................
Section 2.2 Seller's Deliveries..................................
ARTICLE III - TITLE.............................................................
Section 3.1 Preliminary Title Report and Survey..................
Section 3.2 Owner's Title Insurance Policy for the Property......
ARTICLE IV - REPRESENTATIONS AND WARRANTIES, COVENANTS,
AND INDEMNIFICATIONS..........................................
Section 4.1 Representations and Warranties of Seller.............
Section 4.2 Representations and Warranties of Buyer..............
Section 4.3 Survival of Representations and Warranties...........
Section 4.4 Buyer's Covenants and Seller's Condition.............
Section 4.5 Seller's Covenants and Buyer's Condition.............
ARTICLE V - DAMAGE..............................................................
Section 5.1 Damage...............................................
ARTICLE VI - BROKERS AND EXPENSES...............................................
Section 6.1 Broker...............................................
Section 6.2 Expenses.............................................
ARTICLE VII - LEASES AND OTHER AGREEMENTS.......................................
Section 7.1 Leasing Costs........................................
Section 7.2 Seller's Pre-Closing Operations......................
ARTICLE VIII - CLOSING AND ESCROW...............................................
Section 8.1 Escrow Instructions..................................
Section 8.2 Closing..............................................
Section 8.3 Deposit of Documents.................................
Section 8.4 Prorations...........................................
ARTICLE IX - PROVISIONS WITH RESPECT TO DEFAULT.................................
Section 9.1 Default by Seller....................................
Section 9.2 Default by Buyer.....................................
ARTICLE X - MISCELLANEOUS.......................................................
Section 10.1 Notices..............................................
Section 10.2 Entire Agreement.....................................
Section 10.3 Time.................................................
Section 10.4 Attorneys' Fees......................................
Section 10.5 No Merger............................................
Section 10.6 Assignment...........................................
Section 10.7 Counterparts.........................................
Section 10.8 Governing Law........................................
Section 10.9 Interpretation of Agreement..........................
Section 10.10 Amendments...........................................
Section 10.11 Drafts Not an Offer to Enter into a Legally Binding
Contract.............................................
Section 10.12 No Partnership.......................................
Section 10.13 No Third Party Beneficiary...........................
Section 10.14 Exhibits.............................................
EXHIBITS:
Exhibit "A" The Land
Exhibit "B" The Deed
Exhibit "C" The Xxxx of Sale
Exhibit "D" The Lease Assignment
Exhibit "E" The Designation Agreement
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE (the "Agreement") dated June ___,
1998 is made and entered into by and between BRE-N, INC., a Texas Corporation
("Seller"), and HOMES FOR AMERICA HOLDINGS, INC. ("Buyer").
RECITAL
Seller is the owner of the Property (as defined in Section1.2 below).
Seller desires to sell the Property to Buyer, and Buyer desires to purchase the
Property from Seller, all on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, Seller and Buyer hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF PROPERTY
Section 1.1. Sale. Seller agrees to sell to Buyer, and Buyer agrees to
purchase from Seller, subject to the terms, covenants and conditions
set forth herein, that certain tract or parcel of land situated in the
City of Dallas, County of Dallas, State of Texas, as more particularly
described in Exhibit "A" attached hereto and made a part hereof for
all purposes (the "Land"), together with the following:
(a) all rights, privileges and easements appurtenant to
Seller's interest in the Land, including, without limitation, (i) all
minerals, oil, gas and other hydrocarbon substances on and under the
Land, (ii) any and all development rights, air rights, sewer rights and
permits, water, water rights, riparian rights and water stock relating
to the Land and (iii) any easements, licenses, covenants and other
rights-of-way or other appurtenances used in connection with the
beneficial use and enjoyment of the Land and all of Seller's right,
title and interest, if any, in and to all roads and alleys adjoining or
servicing the Land (collectively, the "Appurtenances");
(b) all improvements and fixtures located on the Land, as well
as all buildings and structures presently located on the Land,
including without limitation, all apparatus, equipment and appliances
used in connection with the operation or occupancy of the Land or any
of the foregoing improvements, such as heating and air conditioning
systems and facilities used to provide any utility, refrigeration,
ventilation, garbage disposal or other services, and all on-site
parking (collectively, the "Improvements");
(c) all furniture, equipment, machinery and other tangible
personal property (the "Personal Property") owned by Seller located on
and used in connection with the Land or the Improvements as of the date
hereof or as of the Closing Date, as defined in Section 8.2 below; and
(d) all right, title and interest of Seller in and to any
intangible personal property, to the extent assignable, now or
hereafter owned by Seller and used in the ownership, use or operation
of the Land, Improvements, or Personal Property, including, without
limitation, (i) the right, if any, to use any trade name now used in
connection with the Property, as defined below, (ii) any and all lease
rights, including, without limitation, the lessor's interest in and to
all leases of spaces in the Property (the "Leases"), the lessor's
interest in all security deposits, prepaid rent, charges and other
sums, if any, under the Leases, and any and all guaranties of the
Leases, (iii) any and all utility contracts or other service,
maintenance and utility agreements or rights relating to the ownership,
use or operation of the Property approved by Buyer in writing (the
"Contracts"), (iv) licenses, permits, approvals, certificates of
occupancy, development rights, zoning rights and other approvals
necessary for the current ownership, use and operation of the Land and
the other Property, and (v) all warranties relating to the Property
(collectively, the "Intangible Property").
Section 1.2 The Property.
The Land and all of Seller's right, title and interest in and to the items
referred to in subparagraphs (a) through (d) above are collectively referred to
herein as the "Property."
Section 1.3 Purchase Price and Deposit.
(a) The purchase price of the Property is One Million Fifty Thousand
and No/100 Dollars ($1,050,000.00) (the "Purchase Price") and shall be paid by
Buyer to Seller by wire transfer in immediately available funds at the closing
of the purchase and sale contemplated hereunder (the "Closing").
(b) On or before the expiration of the second business day following
the date of execution of this Agreement by Buyer and Seller, Buyer shall deposit
in escrow with Safeco Land Title, 0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx,
Xxxxx 00000, Attn.: Xx. Xxxxxx Xxxxxxxx, (000) 000-0000 (the "Title Company"), a
cash deposit in the amount of Twenty-Five Thousand and No/100 Dollars
($25,000.00) (such deposit and any interest thereon, the "Deposit"). The Deposit
shall be held by the Title Company in an interest bearing account and all
interest accruing thereon shall be deemed a part of the Deposit. If the sale of
the Property as contemplated hereunder is consummated, then the Deposit shall be
paid to Seller as a credit to the Purchase Price. If this Agreement is
terminated (for reasons other than default of Buyer hereunder), the Deposit
shall be returned to Buyer; provided, however, if termination of this Agreement
is due to Buyer's default hereunder, the Deposit shall be delivered to Seller
pursuant to the terms of Section 9.2 below. In consideration for the provisions
continued in Section 2.1 herein, Buyer agrees to deposit an additional One
Hundred and No/100 Dollars with the Title Company, which additional deposit
shall be non-refundable to Buyer in any circumstances.
Section 1.4 Title to the Property.
(a) At the Closing, Seller shall convey, transfer and assign to Buyer fee
simple title to the Land, subject to the Permitted Exceptions, as defined below,
by a duly executed and acknowledged Special Warranty Deed in the form attached
hereto as Exhibit "B" and made a part hereof for all purposes (the "Deed").
(b) At the Closing, Seller shall transfer title to property other than
the Land, including the Personal Property and the Improvements, subject to the
Permitted Exceptions, by a Xxxx of Sale (the "Xxxx of Sale") and an Assignment
of Leases, Service Contracts and Warranties (the "Lease Assignment") in the
forms attached hereto as Exhibits "C" and "D", respectively.
ARTICLE II
CONDITIONS
Section 2.1
Conditions Period Buyer, or its consultants, shall commence due diligence
with respect to the Property upon Buyer's and Seller's execution hereof, and the
due diligence period shall expire at 5:00 p.m. (Dallas, Texas time) on the date
that is forty-five (45) days following the date of execution hereof (the
"Conditions Period"). During the Conditions Period, Seller shall make the
Property available to Buyer and its agents, consultants and engineers for such
inspections and tests as Buyer deems appropriate. Buyer, its agents, consultants
and engineers, shall have the right to conduct engineering and environmental
inspections and surveys of the Property, including environment studies,
soils/boring tests, removal of small samples of soil, carpet or similar samples,
air tests or other tests as Buyer may reasonably deem necessary. Buyer, its
agents and consultants, shall also have the right to inspect all books and
records maintained by the Seller in connection with the Property, including,
without limitation, all Leases, agreements, surveys, title insurance policies,
letters and proposals relating to the utilization of the Property. Due to the
confidential nature of the sale transaction contemplated hereby, Buyer must
notify Seller at least 24 hours before entering the Property and (i) if Seller
reasonably objects to such entry at the time requested by Buyer, Buyer and
Seller will agree on a mutually acceptable time for such entry, and (ii) Seller
shall have the right to accompany or have a representative of Seller accompany
Buyer (at no cost to Buyer) on each such entry upon the Property. Buyer hereby
agrees to (a) restore the Property to its previous condition promptly following
the completion of each such inspection, and (b) indemnify and hold Seller
harmless from and against all loss, cost or damage actually incurred by Seller
arising out of actions taken at or in regard to the Property by Buyer or its
agents, engineers or consultants. Notwithstanding anything to the contrary
contained in this Agreement, Seller acknowledges that Buyer shall have the
right, in its sole and absolute discretion, to terminate this Agreement on or
before the expiration of the Conditions Period. In the event Buyer shall deliver
to Seller on or before the end of the Conditions Period written notice of
Buyer's election to terminate this Agreement pursuant to this Section 2.1, the
Deposit will be immediately returned to Buyer by the Title Company and neither
party shall have any further rights or obligations hereunder, except as provided
in this Section 2.1 and Section 6.1 below.
Section 2.2 Seller's Deliveries.
Not later than seven (7) days after Buyer's and Seller's execution hereof,
Seller shall deliver or otherwise make available to Buyer and Buyer's agents,
consultants and engineers, to the extent in Seller's actual possession, all
books and records maintained by Seller in connection with the Property, which
shall include, without limitation, the following documents:
(1) copies of the 1995, 1996 and 1997 property tax bills and any
tax statements or notices relating to 1998 taxes or appraised
value;
(2) an inventory of the Personal Property, if any, to be conveyed
to Buyer;
(3) copies of all the Leases, including any and all modifications,
supplements or amendments thereto;
(4) a true and correct current rent roll for the Property showing
the total leasable area within the Property, the name of each
tenant and containing information relating to each Lease
including (i) the commencement date and scheduled expiration
date thereof; (ii) the rental paid by the tenant thereunder;
(iii) the amount of the security deposit and any other
deposits paid by the tenant thereunder; (iv) the square
footage leased thereunder (the "Rent Roll");
(5) a complete list of, and copies of, all management contracts,
laundry leases, telephone or cable t.v. agreements and other
contracts or agreements, if any currently existing with
respect to all or any part of the Property;
(6) books, records and financial information on the Property,
including without limitation bank statements for the Property
for the 6-month period preceding the date of this Agreement
and operating statements for the years 1996 and 1997 plus all
year-to-date operating information, if available;
(7) reports, tests and studies, including engineering and
environmental matters; prepared or generated within the 12
month period preceding the date of this Agreement and copies
of all other reports, tests and studies, environmental
inspection/testing reports, engineering reports, soils
reports, and site plans currently in Seller's possession with
respect to all or any portion of the Property;
(8) warranties relating to any portion of the Property;
(9) plans and specifications for the Property;
(10) any title insurance policies or surveys of the Property;
(11) copies of all utility bills for the 12 month period preceding
the date of this Agreement; and
(12) a list of any capital repairs made to the Property within the
previous 12 month period
preceding the date of this Agreement.
Failure of Seller to deliver the foregoing within the time specified above shall
not constitute a Seller default hereunder.
ARTICLE III TITLE
Section 3.1 Preliminary Title Report and Survey.
Within fifteen (15) days of complete execution hereof, Seller shall cause
the Title Company to provide Buyer a commitment of title insurance (the "Title
Commitment"), with respect to the Property, together with copies of the
documents creating exceptions to title to the Property as shown thereon and a
current survey of each tract or parcel comprising the Property, certified to
Seller, Buyer and the Title Company (the "Survey").
Buyer shall have a period (the "Title Period") expiring on ten (10) days
following the date that the later of the Title Commitment, the underlying
documents or the Survey is delivered to it in which to advise Seller in writing
of its objections to the exceptions to title to the Property as shown on the
Title Commitment and/or the Survey. Any such exception to title shown in the
Title Commitment and/or the Survey to which Buyer does not specifically object
(by delivering written notice to Seller within such Title Period specifying the
objected to exception) shall be deemed to have been approved by Buyer. Seller
shall have no obligation to cure or attempt to cure any of Buyer's objections to
the Title Commitment or the Survey. In the event Seller is unable or unwilling
to so cure Buyer's title or Survey objections, if any, within five (5) days
following the timely delivery to Seller of Buyer's list of objections to the
title to the Property, Seller shall so notify Buyer in writing of Seller's
inability or unwillingness to cure such objections. Thereafter, Buyer may, at
its option, exercised by delivering written notice to Seller within five (5)
days following the date Seller delivers written notice to Buyer that Seller is
so unable or unwilling to cure such title objections, (i) accept title to the
Property subject to the uncured objections raised by Buyer as permitted hereby,
without an adjustment in the Purchase Price, in which event said uncured
objections shall be deemed to be waived for all purposes and such uncured items
as to which Buyer had an objection shall be deemed approved by Buyer, or (ii)
terminate this Agreement, in which event the Deposit shall be immediately
returned to Buyer by the Title Company and this Agreement shall be of no further
force or effect. If Buyer fails to give such written notice to Seller within
such five (5) day period, Buyer shall be deemed to have elected option (i)
above. All matters disclosed by the Title Commitment and/or the Survey which
Buyer either approves or is deemed to have approved are herein referred to as
the "Permitted Exceptions."
Section 3.2 Owner's Title Insurance Policy for the Property.
At or promptly after the Closing, Seller will cause the Title Company to
deliver to Buyer an Owner Policy of Title Insurance (the "Title Policy") in the
full amount of the Purchase Price, insuring Buyer's fee simple title to the
Property, subject only to the Permitted Exceptions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES,COVENANTS, AND INDEMNIFICATIONS
Section 4.1 Representations and Warranties of Seller.
Seller hereby makes the following representations and warranties, which
representations and warranties shall be true and correct as of the date of
execution of this Agreement and as of the Closing Date:
(a) Seller has not (i) made a general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy
or suffered the filing of an involuntary petition by Seller's
creditors, (iii) suffered the appointment of a receiver to take
possession of all, or substantially all, of Seller's assets, (iv)
suffered the attachment or other judicial seizure of all, or
substantially all, of Seller's assets, (v) admitted in writing its
inability to pay its debts as they come due or (vi) made an offer of
settlement, extension or composition to its creditors generally.
(b) Seller is not a "foreign person" as defined in Section
1445 of the Internal Revenue Code of 1986, as amended (the "Code") and
any related regulations.
(c) This Agreement (i) has been duly executed and delivered by
Seller, (ii) is the legal, valid and binding obligation of Seller, and
(iii) does not violate any provision of any agreement or judicial order
to which Seller is a party or to which Seller is subject. All documents
to be executed by Seller which are to be delivered to Buyer at Closing
(iv) at the time of Closing will be duly executed and delivered by
Seller, (v) at the time of Closing will be legal, valid and binding
obligations of Seller, and (vi) at the time of closing will not violate
any provision of any agreement or judicial order to which Seller is a
party or to which Seller is subject.
(d) To Seller's knowledge, there is no condemnation proceeding
affecting the Property or any portion thereof currently pending nor, to
Seller's knowledge, is any such proceeding threatened.
(e) Seller has received no notice of and has no knowledge of
any violations or investigations of violations or alleged violations of
any applicable governmental requirements in respect of the use,
occupation and construction of the Property, including but not limited
to environmental, zoning, platting and other land use requirements, and
any violations thereof that occur before Closing, whether now noted or
issued, shall be complied with by Seller, so that the Property shall be
conveyed free of the same at Closing.
(f) Seller has received no notice of and has no knowledge of
any default or breach by Seller or any previous owner of the Property
under any covenants, conditions, restrictions, rights-of-way, or
easements which may affect the Property or any portion thereof. Seller
has received no notice of and has no knowledge of any condition which
would result in the termination or impairment of access to the Property
or discontinuation of necessary sewer, water, electric, gas, telephone,
or other utilities.
(g) No work has been performed or is in progress at, and no
materials have been furnished to, the Property which have not been paid
for or will not be paid for in full by Seller prior to the Closing
Date. All bills and other payments due with respect to the ownership,
operation and maintenance of the Property have been paid or will be
paid prior to Closing in the ordinary course of business.
(h) To Seller's knowledge, no special or general assessments
have been levied, other than as shown in the Title Commitment, or are
threatened against all or any part of the Property.
(i) To Seller's knowledge, there are no defaults under any
management agreements, service contracts or other agreements affecting
the Property or the operation or maintenance thereof.
(j) To Seller's knowledge, the rent-roll as provided pursuant
to Section 2.2 herein is true and correct as of the date hereof.
SELLER'S PREDECESSOR IN INTEREST ACQUIRED THE PROPERTY THROUGH
FORECLOSURE AND CONSEQUENTLY SELLER HAS LITTLE, IF ANY, KNOWLEDGE OF THE
PHYSICAL OR ECONOMIC CHARACTERISTICS OF THE PROPERTY. ACCORDINGLY, EXCEPT AS
EXPRESSLY SET FORTH HEREIN AND IN THE DEED, SELLER IS NOT MAKING AND HAS NOT AT
ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO,
ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, TITLE (OTHER THAN SELLER'S WARRANTY OF TITLE TO BE SET
FORTH IN THE DEED), ZONING, TAX CONSEQUENCES, PHYSICAL OR ENVIRONMENTAL
CONDITION, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS,
GOVERNMENTAL REGULATIONS, THE TRUTH, ACCURACY OR COMPLETENESS OF THE ITEMS OR
ANY OTHER INFORMATION PROVIDED BY OR ON BEHALF OF SELLER TO BUYER OR ANY OTHER
MATTER OR THING REGARDING THE PROPERTY. UPON CLOSING SELLER SHALL SELL AND
CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS, WITH ALL
FAULTS." BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER DIRECTLY OR
INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLER WITH RESPECT TO THE
PROPERTY. BUYER WILL CONDUCT SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT
NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS BUYER
DEEMS NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND WILL
RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF
SELLER. UPON CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE MATTERS,
INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND
ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S INVESTIGATIONS.
EXCEPT AS OTHERWISE PROVIDED HEREIN, BUYER, UPON CLOSING, HEREBY WAIVES,
RELINQUISHES AND RELEASES SELLER FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS,
CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT (I.E., NEGLIGENCE AND
STRICT LIABILITY), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING
REASONABLE ATTORNEYS' FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER,
KNOWN OR UNKNOWN, WHICH BUYER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER AT
ANY TIME BY REASON OF OR ARISING OUT OF ANY CONSTRUCTION DEFECTS, PHYSICAL AND
ENVIRONMENTAL CONDITIONS, THE VIOLATION OF ANY APPLICABLE LAWS AND ANY AND ALL
OTHER MATTERS REGARDING THE PROPERTY THAT ACCRUE FROM AND AFTER THE DATE OF
CLOSING. BUYER, UPON CLOSING, SHALL AUTOMATICALLY INDEMNIFY AND HOLD SELLER
HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION
(INCLUDING CAUSES OF ACTION IN TORT (I.E., NEGLIGENCE AND STRICT LIABILITY)),
LOSS, DAMAGE, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES AND
COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, FIXED OR
CONTINGENT, ASSERTED AGAINST OR INCURRED BY SELLER BY REASON OF OR ARISING OUT
OF THE VIOLATION OF ANY APPLICABLE LAWS PERTAINING TO ANY ADVERSE PHYSICAL OR
ENVIRONMENTAL CONDITION PLACED OR OCCURRING ON THE PROPERTY ON OR AFTER THE
CLOSING DATE. SHOULD ANY CLEAN-UP, REMEDIATION OR REMOVAL OF HAZARDOUS
SUBSTANCES OR OTHER ENVIRONMENTAL CONDITIONS ON THE PROPERTY BE REQUIRED FOR ANY
ACTIVITY OCCURRING ON THE PROPERTY AFTER THE DATE OF CLOSING, IT IS HEREBY
UNDERSTOOD AND AGREED THAT SUCH CLEAN-UP, REMOVAL OR REMEDIATION SHALL BE THE
RESPONSIBILITY OF AND SHALL BE PERFORMED AT THE SOLE COST AND EXPENSE OF BUYER.
THE TERMS, CONDITIONS, OBLIGATIONS AND INDEMNITIES OF THIS SECTION 3.1 SHALL
EXPRESSLY SURVIVE THE CLOSING AND NOT MERGE THEREIN.
BUYER REPRESENTS AND WARRANTS TO SELLER THAT BUYER HAS KNOWLEDGE AND
EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT ENABLE BUYER TO EVALUATE THE
MERITS AND RISKS OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT. FURTHER,
BUYER ACKNOWLEDGES THAT IT IS NOT IN A DISPARATE BARGAINING POSITION RELATIVE TO
SELLER WITH RESPECT TO THIS AGREEMENT. TO THE EXTENT APPLICABLE AND PERMITTED BY
LAW (AND WITHOUT ADMITTING SUCH APPLICABILITY), BUYER HEREBY WAIVES THE
PROVISIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT,
CHAPTER 17, SUBCHAPTER E, SECTIONS 17.41 THROUGH 17.63, INCLUSIVE (OTHER THAN
SECTION 17.55, WHICH IS NOT WAIVED).
Section 4.2 Representations and Warranties of Buyer.
Buyer hereby makes the following representations and warranties, which
representations and warranties shall be true and correct as of the date of
execution of this Agreement and as of the Closing Date:
(a) Buyer has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered
the filing of an involuntary petition by Buyer's creditors, (iii)
suffered the appointment of a receiver to take possession of all, or
substantially all, of Buyer's assets, (iv) suffered the attachment or
other judicial seizure of all, or substantially all, of Buyer's
assets, (v) admitted in writing its inability to pay its debts as they
come due or (vi) made an offer of settlement, extension or composition
to its creditors generally.
(b) This Agreement (i) has been duly executed and delivered by Buyer,
(ii) is the legal, valid and binding obligation of Buyer, and (iii)
does not violate any provision of any agreement or judicial order to
which Buyer is a party or to which Buyer is subject. All documents to
be executed by Buyer which are to be delivered to Seller at Closing
(iv) at the time of Closing will be duly executed and delivered by
Buyer, (v) at the time of Closing will be legal, valid and binding
obligations of Buyer, and (vi) at the time of Closing will not violate
any provision of any agreement or judicial order to which Buyer is a
party or to which Buyer is subject.
Section 4.3 Survival of Representations and Warranties.
The representations and warranties of Seller and Buyer contained herein
shall survive the Closing for a period of one (1) year after the Closing;
provided, that if a party notifies the other party during such one-year period
that any representation or warranty of such other party has been breached during
such one-year period, then the notifying party shall have until the later of (a)
a period of six (6) months following the date of such notification of the
notifying party and (b) the expiration of such one-year period in which to
initiate a lawsuit against the other party with respect to such a breach. Any
claim that a party may have at any time against the other party for breach of
any such representation or warranty, whether known or unknown, which is not
asserted by written notice to the breaching party within such one-year period
shall not be valid or effective, and the breaching party shall have no liability
with respect thereto.
Section 4.4 Buyer's Covenants and Seller's ConditionSection
(a) Buyer shall promptly notify Seller in writing of any event or
circumstance of which Buyer actually becomes aware that materially
affects the truth of any of Buyer's representations and warranties
herein.
(b) It shall be a condition to Seller's obligation to sell the
Property that as of the date of Closing there shall be no material
breach by Buyer of any of the covenants, undertakings or agreements to
be performed by Buyer prior to or at Closing pursuant to the terms of
this Agreement other than such matters as shall have been cured by
Buyer; and that each representation and warranty made in this
Agreement by Buyer shall be true in all material respects both at the
time made and as of the date of Closing. If any of the foregoing
conditions is not satisfied or waived as of the date of Closing,
Seller may, by written notice given to Buyer at or before the Closing,
elect either to (i) terminate this Agreement or (ii) waive such
condition. If Seller elects to terminate this Agreement, the Deposit
shall be promptly paid to Seller by the Title Company and neither
party shall have any further rights or obligations hereunder, except
as set forth in Sections 2.1 and 6.1 hereof.
Section 4.5 S Seller's Covenants and Buyer's Condition.
(a) Seller shall promptly notify Buyer in writing of any event or
circumstance of which Seller actually becomes aware that materially affects the
truth of any of Seller's representations and warranties herein.
(b) It shall be a condition to Buyer's obligations to purchase the
Property that as of the date of Closing there shall be no material breach by
Seller of any of the covenants, undertakings or agreements to be performed by
Seller prior to or at Closing pursuant to the terms of this Agreement other than
such matters as shall have been cured by Seller; and that each representation
and warranty made in this Agreement by Seller shall be true in all material
respects both at the time made and as of the date of Closing. If any of the
foregoing conditions is not satisfied or waived as of the date of Closing, Buyer
may, by written notice given to Seller at or before the Closing, elect either to
(i) terminate this Agreement or (ii) waive such condition. If Buyer elects to
terminate this Agreement, the Deposit shall be promptly paid to Buyer by the
Title Company and neither party shall have any further rights or obligations
hereunder, except as set forth in Sections 2.1 and 6.1 hereof.
ARTICLE V
DAMAGE
Section 5.1 Damage.
Seller agrees to give Buyer prompt written notice of any fire or other
casualty affecting the Property occurring during the term of this Agreement or
of any actual or threatened taking or condemnation of all or any portion of the
Property which occurs during the term of this Agreement and of which Seller has
actual knowledge. If prior to the Closing, there shall occur:
(a) damage to the Property caused by fire or other casualty which Seller's
insurer reasonably estimates would cost $100,000.00 or more to repair; or
(b) the taking or condemnation of all or any portion of the Property as would
materially interfere with Buyer's proposed use thereof;
then, in either of such events, Buyer may terminate this Agreement by written
notice given to Seller within five (5) days after Buyer has received the notice
referred to above or at the Closing, whichever is earlier. If Buyer does not
elect to so terminate this Agreement, then the Closing shall take place as
provided herein, except that the Purchase Price shall be reduced by the amount
of any deductible, and there shall be assigned to Buyer at the Closing all
right, title and interest of Seller in and to all insurance proceeds or
condemnation awards which may be payable on account of such occurrence, less
such amounts as are paid by Seller to pay costs related to the collection of
such proceeds and/or the repair of the damage, which shall be retained by or
paid to Seller.
If prior to the Closing there shall occur:
(i) damage to the Property caused by fire or other casualty which
Seller's insurer reasonably estimates would cost less than
$100,000.00 to repair; or
(ii) the taking or condemnation of a portion of the Property which
is not material to Buyer's proposed use thereof;
then, and in such event, Buyer shall not have any right to terminate this
Agreement pursuant to this Section 5.1 as a result of such damage, taking or
condemnation, except that the Purchase Price shall be reduced by the amount of
any deductible, but there shall be assigned to Buyer at the Closing all right,
title and interest of Seller in and to all insurance proceeds or condemnation
awards which may be payable on account of any such occurrence, less such amounts
as are paid by Seller to pay costs related to the collection of such proceeds
and/or the repair of the damage, which shall be retained by or paid to Seller.
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Broker. The parties represent and warrant to each other that,
with the exception of a commission in the amount of Thirty-One Thousand Five
Hundred and No/100 Dollars ($31,500.00) (which amount represents 3% of the
Purchase Price, as previously agreed by the parties hereto) to be paid by Seller
to Pinnacle Realty -- Xxx Xxxxx ("Broker"), such commission being due and
payable only in the event the sale of the Property pursuant to this Agreement
actually closes in accordance with the terms hereof and the Purchase Price is
unconditionally paid to Seller, no broker or finder was instrumental in
arranging or bringing about this transaction and that there are no claims or
rights for brokerage commissions or finder's fees in connection with the
transaction contemplated by this Agreement. If any person (other than Broker)
brings a claim for a commission or finder's fee based upon any contact, dealings
or communication with Buyer or Seller, then the party through whom such person
makes his claim shall defend the other party (the "Indemnified Party") from such
claim, and shall indemnify the Indemnified Party and hold the Indemnified Party
harmless from any and all costs, damages, claims, liabilities or expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
incurred by the Indemnified Party in defending against the claim. The provisions
of this Section 6.1 shall survive the Closing or, if the purchase and sale is
not consummated, any termination of this Agreement.
Section 6.2 Expenses.
Except as provided in Section 8.4(b) below or elsewhere in this Agreement,
each party hereto shall pay its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE VII LEASES AND OTHER AGREEMENTS
Section 7.1 Leasing Costs.
Subject to the terms and provisions herein and of Section 8.4 below, Seller
shall be responsible for all costs which are payable prior to Closing with
respect to Leases of space in the Property, and Buyer shall be responsible for
all costs which are payable after Closing with respect to Leases of space in the
Property.
Section 7.2. Seller's Pre-Closing Operations.
Seller will continue to manage, or cause to be managed, the Property in
accordance with Seller's current practice. After expiration of the Conditions
Period, Seller will not enter into any new service contracts that are not
terminable with thirty (30) days' notice or lease any space, other than in the
ordinary course of business, in the Property without the written consent of
Buyer, which consent shall not be unreasonably withheld, conditioned or delayed.
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions.
Seller and Buyer agree to execute such escrow instructions as may be
appropriate to enable the Title Company to comply with the terms of this
Agreement.
Section 8.2 Closing.
The Closing hereunder shall be held (either by mail or in person), and
delivery of all items to be made at the Closing under the terms of this
Agreement shall be made (either by mail or in person), at the offices of the
Title Company, or such other place mutually agreed to by the parties, at 5:00
p.m. Dallas, Texas time on the date which is thirty (30) days after expiration
of the Conditions Period, or on such other date and time as Buyer and Seller may
mutually agree upon in writing (the "Closing Date"). Such date and time may not
be extended without the written approval of both Seller and Buyer.
Notwithstanding the above, upon five (5) days' written notice to Seller and the
payment of a non-refundable extension fee in the amount of Five Thousand Dollars
($5,000.00) paid to Seller by Buyer, Buyer may elect to extend the Closing Date
for up to thirty (30) days from the scheduled Closing Date.
Section 8.3 Deposit of Documents
(a) At or before the Closing, Seller shall deposit into escrow with the
Title Company the following items:
(i) one (1) duly executed and acknowledged original Deed;
(ii) three (3) duly executed counterparts of the Xxxx of Sale;
(iii) three (3) duly executed counterparts of the Lease
Assignment;
(iv) an affidavit pursuant to Section 1445(b)(2) of the
Internal Revenue Code (the "Code") in a form
complying with the requirements of the Code, and on
which Buyer is entitled to rely, that Seller is not a
"foreign person" within the meaning of Section
1445(f)(3) of the Code;
(v) with respect to any service contract to be assumed by
Buyer, to the extent in Seller's actual possession,
the original of each service contract relating to the
Property;
(vi) all original licenses, permits and certificates of
occupancy relating to the Property in Seller's actual
possession, if any;
(vii) all original as-built plans and specifications
relating to the Property in Seller's actual
possession, if any; and
(viii) all keys to the Improvements in Seller's actual
possession.
(b) At or before Closing, Buyer shall deposit into escrow with the
Title Company and/or cause the Title Company to issue and deliver to
Seller the following items:
(i) funds necessary to close this transaction, subject to
any adjustments to be made pursuant to the terms and
provisions of this Agreement;
(ii) three (3) duly executed counterparts of the Xxxx of Sale; and
(iii) three (3) duly executed counterparts of the Lease
Assignment.
(c) Buyer and Seller shall each deposit such other instruments as
are reasonably required by the Title Company, including evidence of
organization and authorization, required to close the purchase and
sale of the Property in accordance with the terms hereof, including,
without limitation, an agreement (the "Designation Agreement")
designating the Title Company as the "Reporting Person" for the
transaction pursuant to Section 6045(e) of the Code and the
regulations promulgated thereunder, and executed by Seller, Buyer and
the Title Company. The Designation Agreement shall be substantially in
the form attached hereto as Exhibit "E" and, in any event, shall
comply with the requirements of Section 6045(e) of the Code and the
regulations promulgated thereunder.
Section 8.4 Prorations.
(a) The following shall all be prorated as of 12:01 a.m. on the date of
Closing, on the basis of a 365-day year: (i) rents, and all other income
from the Property, if any, including, without limitation, any additional
charges and expenses payable under the Leases, if any, all as and when
actually collected (whether such collection occurs prior to, on, or after
the Closing Date); (ii) real property taxes and assessments for the year in
which the Closing occurs, (iii) water, sewer and utility charges, (iv)
amounts payable under any service contracts Buyer assumes at Closing for
the month in which the Closing occurs and prior months, (v) annual permits
(to the extent same are assigned to Buyer at Closing) and/or inspection
fees (calculated on the basis of the period covered), and (vi) any other
expenses relating to the operation and maintenance of the Property. Buyer
shall include all rent arrearages, if any, on Buyer's monthly invoices or
xxxxxxxx to tenants and promptly deliver to Seller any such rent arrearages
that relate to periods prior to the Closing if and when collected by Buyer;
provided, however, that rents received from delinquent tenants after the
Closing Date that are designated for periods after Closing shall be applied
first against tenant's current rent due and then against any delinquent
rents. The amount of any security or other deposits required to be returned
to tenant's under the Leases by Seller, if any, shall be credited against
the cash portion of the Purchase Price; accordingly, Seller shall retain
the deposits and Buyer shall be responsible for handling such deposits in
accordance with the Leases and applicable law. Seller shall retain all
utility deposits, if any. Seller and Buyer hereby agree that if any of the
aforesaid prorations cannot be calculated accurately on the Closing Date,
then the same shall be calculated within thirty (30) days after the Closing
Date, or as soon as sufficient information is available to permit the
parties to accurately calculate such proration(s), and either party owing
the other party a sum of money based on such subsequent proration(s) shall
pay said sum to the other party within ten (10) days after such calculation
is made; provided, however, that the tax proration referenced in Section
(ii) herein shall be final as of the date of Closing. Seller shall be
responsible for payment in full of all real estate taxes and assessments
for years prior to the Closing.
(b) Seller shall pay the premium for the Title Policy except for that portion
to delete the so-called "survey exception." Buyer shall pay all expenses
associated with the performance of Buyer's due diligence pursuant to
Section 2.1 above. Escrow fees and recording charges and any other expenses
of the escrow for the sale shall be split equally between Buyer and Seller.
Buyer shall pay the costs of the execution and filing of the Deed. All
costs and charges described in this paragraph shall be paid at Closing. Any
bills received after the Closing and not previously prorated in escrow
shall be divided as provided herein, and shall be paid promptly upon
receipt of a xxxx therefor, and any and all other costs and expenses
relating to the purchase and sale transaction contemplated hereby shall be
paid by the party incurring same.
ARTICLE IX
PROVISIONS WITH RESPECT TO DEFAULT
Section 9.1 Default by Seller.
In the event Seller fails to consummate the transactions contemplated
herein for any reason (except in the event of a breach or violation by
Buyer of any representation or warranty of Buyer set forth herein, a
failure by Buyer to perform its obligations hereunder or to consummate the
transactions contemplated herein or the termination hereof pursuant to a
right granted to Buyer or Seller hereunder to do so) or if Seller has
materially breached a representation or warranty, Buyer may either (i)
terminate this Agreement by notifying Seller thereof, and thereupon shall
be entitled to a return of the Deposit, as its sole and exclusive remedy
and relief hereunder, or (ii) enforce specific performance of this
Agreement, as its sole and exclusive remedy and relief hereunder. Seller
shall not be liable to Buyer for any actual, punitive, speculative,
consequential or other damages; provided, however, that if specific
performance is not available Buyer shall be entitled to its reasonable, out
of pocket expenses associated with this Agreement in lieu thereof. Buyer
hereby waives any and all remedies and relief.
Section 9.2 Default by Buyer.
If the sale and purchase of the Property contemplated by this
Agreement is not consummated because of Buyer's default, Seller, as its
sole and exclusive remedy, shall terminate this Agreement by notifying
Buyer thereof, and thereupon shall be entitled to the Deposit. It is hereby
agreed that Seller's damages in the event of a default by Buyer hereunder
are uncertain and impossible to ascertain, and that the Deposit constitutes
a reasonable pre-estimate of such damages and Seller's retention thereof is
intended not as a penalty, but as full liquidated damages. The right to
retain the Deposit as full liquidated damages is Seller's sole and
exclusive remedy in the event of default hereunder by Buyer, except,
however, for the indemnification obligations of Buyer under this Agreement,
for the breach of which Seller may exercise any and all rights or remedies
available at law or in equity.
ARTICLE X
MISCELLANEOUS
Section 10.1 Notices.
Any notices required or permitted to be given hereunder shall be given
in writing and shall be delivered (i) in person, including, without
limitation, delivery by a courier that provides a receipt, (ii) by
certified mail, postage prepaid, return receipt requested, (iii) by a
commercial overnight courier that guarantees next day delivery and provides
a receipt or (iv) by telefacsimile, provided such notice is also given in
one of the methods described in clauses (i)-(iii) above, and such notices
shall be addressed as follows:
To Seller: BRE-N, Inc.
00000 X. Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxxx
Fax No.: (000) 000-0000
Tel. No.: (000) 000 0000
with a copy to: Jenkens & Xxxxxxxxx,
A Professional Corporation
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: T. Xxxxxxxx Xxxxxx
Fax No.: (000) 000-0000
Tel. No.: (000) 000-0000
To Buyer: Homes For America Holdings, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx XxxXxxxxxx
Fax No.: ---------------------
Tel. No.: ---------------------
with a copy to: Xxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx & Xxxxxxx
3400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Tel. No.: (000) 000-0000
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon delivery.
Section 10.2 Entire Agreement.
This Agreement, together with the Exhibits and Schedules hereto,
contains all representations, warranties and covenants made by Buyer and
Seller and constitutes the entire understanding between the parties hereto
with respect to the subject matter hereof. Any prior correspondence,
memoranda, letters of intent or agreements are replaced in total by this
Agreement together with the Exhibits and Schedules hereto.
Section 10.3 Time.
Time is of the essence in the performance by each of the parties of
their respective obligations contained herein. In the event that a date for
performance of any obligation under this Agreement or expiration of any
time period falls on a Saturday, Sunday or a holiday on which national
banks are required to be closed, the date for performance of such
obligation or expiration of such time period shall be adjusted to be the
next occurring calendar day which is not a Saturday, Sunday or bank
holiday.
Section 10.4 Attorneys' Fees.
If either party hereto fails to perform any of its obligations under
this Agreement or if any dispute arises between the parties hereto
concerning the meaning or interpretation of any provision of this
Agreement, then the defaulting party or the party not prevailing in such
dispute, as the case may be, shall pay any and all reasonable costs and
expenses incurred by the other party on account of such default and/or in
enforcing or establishing its rights hereunder, including, without
limitation, court costs and reasonable attorneys' fees and disbursements.
Any such attorneys' fees and other expenses incurred by either party in
enforcing a judgment in its favor under this Agreement shall be recoverable
separately from and in addition to any other amount included in such
judgment, and such attorneys' fees obligation is intended to be severable
from the other provisions of this Agreement and to survive and not be
merged into any such judgment. The provisions of this Section shall control
over any conflicting provision contained in this Agreement.
Section 10.5 No Merger.
The obligations contained herein shall not merge with the transfer of
title to the Property but shall remain in effect until fulfilled in
accordance with the terms hereof.
Section 10.6 Assignment.
Buyer's rights and obligations hereunder shall not be assignable
without the prior written consent of Seller, which consent may be given or
withheld in Seller's sole and absolute discretion; provided, however, that
Buyer may assign its rights and obligations hereunder to an entity
controlled by or affiliated with Buyer with five (5) days prior, written
notice to Seller.
Section 10.7 Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
Section 10.8 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas.
Section 10.9 Interpretation of Agreement.
The article, section and other headings of this Agreement are for
convenience of reference only and shall not be construed to affect the
meaning of any provision contained herein. Where the context so requires,
the use of the singular shall include the plural and vice versa and the use
of the masculine shall include the feminine and the neuter. The term
"Person" shall include any individual, partnership, joint venture,
corporation, trust, unincorporated association, any other entity and any
government or any department or agency thereof, whether acting in an
individual, fiduciary or other capacity.
Section 10.10 Amendments.
This Agreement may be amended or modified only by a written instrument
signed by Buyer and Seller.
Section 10.11 Drafts Not an Offer to Enter into a Legally Binding Contract.
The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an
offer to enter into a legally binding contract with respect to the purchase
and sale of the Property. The parties shall be legally bound with respect
to the purchase and sale of the Property pursuant to the terms of this
Agreement only if and when the parties have been able to negotiate all of
the terms and provisions of this Agreement in a manner acceptable to each
of the parties in their respective sole discretions, including, without
limitation, all of the Exhibits and Schedules hereto, and both Seller and
Buyer have fully executed and delivered to each other a counterpart of this
Agreement, including, without limitation, all Exhibits and Schedules
hereto.
Section 10.12 No Partnership.
The relationship of the parties hereto is solely that of seller and
buyer with respect to the Property and no joint venture or other
partnership exists between the parties hereto. Neither party has any
fiduciary relationship hereunder to the other.
Section 10.14 Exhibits.
The Exhibits and Schedules specified in the Table of Contents are
attached to this Agreement and by this reference made a part hereof.
The parties hereto have executed this Agreement as of the date first
written above.
SELLER:
BRE-N, INC.,
a Texas corporation
By: s/s Xxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxxx
-----------------------------
Title:Vice President
-----------------------------
BUYER:
HOMES FOR AMERICA HOLDINGS, INC.
By: s/s Xxxxxx X. XxxXxxxxxx
-----------------------------
Name: Xxxxxx X. XxxXxxxxxx
-----------------------------
Title:Chief Executive Officer
-----------------------------
7-13-98
JOINDER OF THE TITLE COMPANY
The Title Company joins in the execution of this Agreement for the sole
purpose of acknowledging the Title Company's receipt of (i) an executed copy of
this Agreement and (ii) the Deposit.
SAFECO LAND TITLE
By: s/s Xxxxxx Xxxxxxxx
7-14-98 -----------------------------
Name: Xxxxxx Xxxxxxxx
-----------------------------
Title: Executive Vice President
-----------------------------
JOINDER OF THE BROKER
The Brokers joins in the execution of this Agreement for the sole
purpose of evidencing its agreement with the provisions of Section 6.1 herein.
PINNACLE REALTY
By: s/s Xxx Xxxx
--------------------------
Name: Xxx Xxxx
--------------------------
Title: Vice President
--------------------------
