EXHIBIT
CONTRACT FOR PURCHASE AND SALE
OF
INTERNATIONAL APARTMENT PROJECT
This Contract for Purchase and Sale of International Apartment Project
("Contract") dated as of October 29, 1996, is between American Real Estate
Investment, L.P., a Colorado limited partnership (the "Seller"), and Xxxxxxx
Xxxx or his permitted assignee (the "Purchaser").
RECITALS
A. The Seller is the owner of the tract of land and the improvements
thereon located in Arapahoe County, Colorado, more particularly described on
EXHIBIT A attached as a part of this Contract (the "Land").
B. The Land has been improved by the construction of apartment
buildings and certain amenities including fixtures, parking areas, landscaping
and other improvements located upon the Land (the "Improvements").
C. The Seller owns certain furniture, fixtures, furnishings, machinery,
equipment, and other personal property located on or about the Land and
Improvements and used in connection therewith, which personal property is more
particularly set forth in the list attached hereby as EXHIBIT B (the "Personal
Property").
D. The Purchaser desires to purchase from the Seller the Land,
Improvements, and Personal Property, together with all appurtenances, rights,
easements, rights of way, privileges, licenses, appurtenances, tenements and
hereditaments incident thereto (all collectively called the "Property"), and the
Seller desires to sell and convey the Property to the Purchaser.
E. In order to effect the intent of the parties as described in these
Recitals, the parties have entered into this Contract and agree as set forth
below.
AGREEMENT
NOW, THEREFORE, in consideration of the covenants and agreements set forth
below and other good and valuable consideration, the receipt and sufficiency of
which are hereby mutually acknowledged, the parties hereto agree as follows:
ARTICLE 1
PROPERTY TO BE SOLD
1.1 LAND, IMPROVEMENTS AND PERSONAL PROPERTY. The Purchaser agrees to buy,
and the Seller agrees to sell and convey to the Purchaser, the Property pursuant
to the terms and conditions set forth in this Contract.
ARTICLE 2
PURCHASE PRICE
2.1 PURCHASE PRICE. The purchase price (the "Purchase Price") for the
Property shall be Three Million One Hundred Thousand Dollars ($3,100,000.00)
payable as follows: (a) the Xxxxxxx Money of Fifty Thousand Dollars ($50,000),
plus (b) the Additional Xxxxxxx Money Deposit of One Hundred Thousand Dollars
($100,000), plus (c) a loan in the approximate amount of Two Million Four
Hundred Eighty Thousand Dollars ($2,480,000), plus (d) balance of the Purchase
Price in cash at closing. Purchaser's ability to obtain financing for a portion
of the Purchase Price on terms acceptable to Purchaser shall be considered a
condition precedent to Purchaser's obligation to perform under this Contract
through the Due Diligence Period after which time such financing shall no longer
be a condition precedent to Purchaser's obligations hereunder. Purchaser agrees
to pay for all loan closing fees, costs and expenses.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller hereby represents, warrants and covenants that:
3.1 AUTHORITY OF SELLER. The Seller is a limited partnership organized
under the laws of the State of Delaware, in good standing and qualified to do
business in the State of Colorado, and has the right, power and authority to
enter into this Contract and to sell the Property in accordance with the terms
and conditions of this Contract.
3.2 REPAIRS AND MAINTENANCE PRIOR TO CLOSING. Subject to Article 8 hereof,
prior to Closing the Seller shall maintain the Property substantially in its
present condition, reasonable wear and tear excepted.
3.3 TENANT LEASES. The Property is subject to those tenancies and leases
(sometimes collectively referred to as "Leases") listed on the certified rent
roll attached hereto as EXHIBIT C and current as of the date thereof. The Rent
Roll has been compiled and maintained by the independent property management
company engaged by Seller to manage the Property.
3.4 STATUS OF TENANT LEASES. Except as otherwise indicated on EXHIBIT C,
the Leases are substantially in good standing, valid and enforceable, in full
force and effect and, to the best of Seller's knowledge, no Tenant has any claim
or basis for any claim for free or reduced rent, except as otherwise indicated
on EXHIBIT C, or for reduction, deduction or set off against the Seller or the
rent under any Lease. The Seller has the sole right to collect the rents under
the
Leases, and neither that right nor any of the Leases have been assigned,
pledged, hypothecated or otherwise encumbered by the Seller except as shall be
released at Closing. Except as specifically set forth in EXHIBIT C, and to the
best of Seller's knowledge: (i) no Tenant has subleased or assigned any space
leased by it and each Tenant is in possession of all space leased to it and (ii)
no oral agreement or modification of the written Leases other than shown on
Exhibit C has been entered into with any tenant relating to its occupancy of the
Property. Seller shall not enter into any new rental agreements with any of the
tenants listed on EXHIBIT C, nor rent any unit to new tenants, except as
provided in Article 9 below.
3.5 MANAGEMENT AGREEMENTS AND SERVICE CONTRACTS. The Seller has furnished
or made available to the Purchaser true and accurate copies or originals of each
lease, real estate management, maintenance, security and service contract, and
all other agreements affecting the Property, known to the Seller.
3.6 INSURANCE. The Seller has in full force insurance policies covering the
Improvements for loss or damage in an amount equal to one hundred percent (100%)
of the replacement costs of the Improvements, liability and loss of rents.
Copies of the insurance binders have been or will be provided to Purchaser.
Seller agrees to maintain the policy in effect through the Closing Date.
3.7 CONDEMNATION PROCEEDINGS. The Seller knows of no condemnation or
eminent domain proceedings pending or contemplated against the Property or any
part thereof.
3.8 EMPLOYEES. Seller has made or will make available to Purchaser a list
of all persons presently employed by the Seller in connection with the operation
and maintenance of the Property, together with the amount of wages, salaries and
other compensation actually paid to them, and the amount of overtime and
vacation time due to them. Other than as disclosed in writing to Purchaser,
there are no labor disputes or disputes between Seller and its present and
former employees pending or, to the best of the Seller's knowledge, contemplated
that would have a material adverse impact on the Property. The Seller is not a
party to any union or other collective bargaining contract affecting employees
at the Property.
3.9 MANUFACTURERS WARRANTIES. Seller has made or will make available to
Purchaser all warranties of manufacturers, suppliers and/or installers relating
to the Property, or any part thereof, known to Seller.
3.10 NO DEFAULTS. To the best of Sellers' knowledge, neither the execution
of this Contract nor the consummation of the transactions contemplated hereby
will: (i) conflict with, or result in a breach of, the terms, conditions or
provisions of, or constitute a default under, any agreement or instrument to
which the Seller is a party; (ii) violate any restriction to which the Seller is
subject; (iii) constitute a violation of any applicable code, resolution, law,
statute, regulation, ordinance, rule, judgment, decree or order; or (iv) give
anyone the right to cancel any contract or lease pertaining to the Property.
3.11 EVENTS PRIOR TO CLOSING AND OTHER INFORMATION. The Seller will not
take or cause to be taken any action, or fail to perform any obligation, which
would cause any of the foregoing representations or warranties to be untrue as
of the Closing. The Seller shall
immediately notify the Purchaser, in writing, of any event or condition known to
Seller which occurs prior to Closing hereunder, which causes a material change
in the facts relating to, or the truth of, any of the representations or
warranties contained in this Contract.
3.12 OUTSTANDING CONTRACTS. At the time of Closing, to the best of Seller's
knowledge, there will be no material outstanding contracts made by Seller for
any improvements to the Property which have not been or which will not be fully
paid for, and Seller shall cause to be discharged or insured against all
mechanics' and materialmen's liens arising from any labor or materials furnished
to the Property prior to the Closing Date.
3.13 ENVIRONMENTAL. To the best of Seller's knowledge, as a result of
Sellers' actions (i) no asbestos-containing materials were installed in the
Property through demolition, renovation or otherwise, at any time during
Seller's ownership of the Property, (ii) there are no storage tanks for
gasoline, heating oil or diesel fuel or any other substances on or under the
Property, and (iii) and except as in accordance with law, no materials regulated
under any federal, state or local law or regulation, as amended from time to
time, as a toxic, hazardous, contaminated or similarly harmful or dangerous
material or substance (including, without limitation, asbestos and radon) were
placed on, in or under the Property or have affected the Property or waters on
or under the Property at any time during Seller's ownership of the Property. The
materials described in the preceding clauses (i) through (iii) shall be termed
"Hazardous Materials" herein.
3.14 AVAILABILITY OF INFORMATION. Seller has either provided Purchaser
with, or has made available to Purchaser, copies or originals of all material
documents in Seller's possession that are responsive to the requests made by the
Purchaser and that concern the Property or its operation.
3.15 PERSONAL PROPERTY INVENTORY. Seller has provided Purchaser with a
personal property inventory for the Property.
3.16 LITIGATION. Other than has been disclosed to Purchaser, there is no
litigation pending or, to the best of Seller's knowledge, threatened that would
have a material adverse impact on the Property.
3.17 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Seller's material
representations, warranties and covenants set forth in this Article 3 shall
survive the Closing and are acknowledged by Seller to be material and are being
relied upon by Purchaser.
ARTICLE 4
TITLE, INSPECTIONS AND CLOSING DATE
4.1 TITLE INSURANCE AND CERTIFICATE OF TAXES. The Seller shall, at the
Seller's expense, within the Due Diligence Period, obtain and deliver to
Purchaser a commitment (the "Title Commitment") from a title insurance company
of the Seller's choice which is licensed to do business in the State of Colorado
to issue an owner's title insurance policy on Standard ALTA Policy Form B 1992,
and to delete the standard printed exceptions appearing in such form. Copies of
all recorded documents referred to in the commitment shall also be delivered to
Purchaser by Seller. A certificate or certificates of taxes covering the
property prepared by the Treasurer of the County in which the Property is
situated shall also be delivered to Purchaser by Seller within the Due Diligence
Period. If the title commitment shows exceptions to title which are in addition
to those listed on EXHIBIT D and have a material adverse effect upon the
marketability of the title to the Property, the Purchaser shall give the Seller
notice thereof within the Due Diligence Period and, unless the Seller gives the
Purchaser written notice within such Due Diligence Period that the Seller will
cause the title defects to be cured at or prior to Closing, the Purchaser may,
within the Due Diligence Period and at its election: (i) terminate this
Contract, in which event the Xxxxxxx Money Deposit referred to in Article 12
below and all interest earned thereon shall be promptly returned to the
Purchaser, or (ii) waive all those title defects not shown on EXHIBIT D which
Seller will not cause to be cured and proceed with Closing hereunder as if the
additional title defects did not exist.
4.2 SURVEY. The Seller shall, at its expense, obtain and deliver to the
Purchaser, within the Due Diligence Period, the most recent survey of the
Property in Seller's possession prepared by a licensed surveyor registered in
the State of Colorado selected by the Seller. Seller, at its election, shall
either provide Purchaser with an update to the survey during the Due Diligence
Period or warrant to Purchaser that there have been no material changes other
than those that Seller shall disclose prior to the end of the Due Diligence
Period.
4.3 INSPECTION OF BOOKS AND RECORDS. Following the date of this Contract,
the Purchaser shall have access at reasonable times during ordinary business
hours to all documents, agreements and other information in the possession of
the Seller, or any employee, agent or independent contractor of the Seller,
pertaining to the ownership, use, rental or operations of the Property,
including, but not limited to: financial records, tax returns, tax assessments,
bills, leases, most current rent roll, detailed operating statements from
inception of ownership through year end 1995, year-to-date operating statements,
and approved management company budgets for 1996, property tax bills or
statements from inception of ownership through year end 1996, environmental
studies for the property in the Seller's possession, copy of current title
commitments, including a legal description, and one copy of all documents listed
as exceptions to the title report, if in Seller's possession, current insurance
binders, summary of all capital improvements completed from inception of
ownership through year end 1995 and year-to-date 1996, personal property
inventory, leases (to be reviewed on property), copies of the most recent
monthly utility bills, personnel list - job descriptions and salaries,
litigation for or against property, insurance claims, schedule of rents, lease
expirations, copies of all licenses, and service contracts. Purchaser shall have
the right, at its expense, to make copies of any such documents.
4.4 INSPECTION OF THE PROPERTY. During the period ending at 5:00 p.m. MDT
on December 9, 1996 (the "Due Diligence Period"), the Purchaser shall have the
right, at its expense, during ordinary business hours, to have an engineer or
other independent inspector of its choice inspect the Property, provided the
Purchaser gives the Seller reasonable notice of any inspection and provided
further that the inspection of the interior of any apartment unit is permitted
by the terms of the lease to such apartment unit or is consented to by the
occupant thereof. Any disturbance to the Property caused by the inspection shall
be promptly remedied or repaired at the expense of the Purchaser. The Purchaser
agrees to indemnify and hold Seller harmless of and from any and all liability,
costs and expenses (including reasonable counsel fees of the Seller), arising
out of or with respect to such inspections. The Purchaser shall have the right,
upon giving the Seller notice thereof within the Due Diligence Period, to
terminate this
Contract in which event the Xxxxxxx Money Deposit referred to in Article 12
below and all interest earned thereon shall be promptly returned to the
Purchaser. Purchaser's notice shall not be required to state the reasons for
termination. After the Due Diligence Period has ended on December 9, 1996, and
the Purchaser has not previously terminated this Contract, the Xxxxxxx Money
Deposit shall be non-refundable, except as provided in paragraph 12.3.
4.5 INDEMNIFICATION. Each party hereby agrees to indemnify the other party
and hold it harmless from and against any and all claims, demands, liabilities,
costs and damages, including, without limitation, reasonable attorneys' fees
(the "Liabilities"), resulting from any material misrepresentations or material
breach of a warranty or covenant made by such party in this Contract or in any
document, certificate or exhibit given or delivered to the other party pursuant
to or in connection with this Contract. All of these indemnifications shall
survive the Closing and conveyance of the Property to Purchase.
4.6 CLOSING. The purchase and sale contemplated by this Contract shall be
consummated at settlement (the "Closing"), which shall take place on December
20, 1996, or such earlier date as may be mutually agreed upon by the Seller and
the Purchaser (the "Closing Date"). The Closing shall take place at the offices
of the title company issuing the commitment referred to in paragraph 4.1 above
in the City and County of Denver.
ARTICLE 5
SELLER'S DELIVERIES AND CONDITIONS
PRECEDENT TO PURCHASER'S OBLIGATIONS
In addition to other conditions precedent set forth elsewhere in this
Contract, the Seller shall deliver to the Purchaser at the Closing all of the
following, the delivery of which shall be a condition to Purchaser's obligation
to consummate the purchase of the Property and all being considered as occurring
simultaneously.
5.1 SPECIAL WARRANTY DEED. A special warranty deed which shall convey good
and marketable title to the Land and Improvements, subject to those title
exceptions waived by the Purchaser pursuant to paragraph 4.1 and set forth as
EXHIBIT D.
5.2 XXXX OF SALE. A xxxx of sale, with warranty of title, duly executed by
the Seller and transferring, assigning and conveying to the Purchaser: (i) good
and marketable title to all the Personal Property, subject, however, to any
liens and encumbrances assumed by Purchaser (ii) all rights of the Seller as
lessee under any leases of the Personal Property; and (iii) all warranties and
guarantees pertaining to the Personal Property.
5.3 Assignment of Leases in a form acceptable to Purchaser and set forth as
Exhibit F.
5.4 Assignment of Plans, Service Contracts, Warranties and Approvals in a
form acceptable to Purchaser and set forth as Exhibit G.
5.5 Non-foreign Person Affidavit attached as Exhibit H stating that
Seller is not a "foreign person" under IRC Section 1445(f)(3).
5.6 A Certificate from Seller certifying that there has been no material
adverse change in or damage to the Property (or specifying such change or
damage) from the date of this Contract and that the material representations,
warranties and covenants described in Article 3 are substantially complete and
accurate as of the Closing Date.
5.7 POSSESSION OF RECORDS. Seller shall deliver possession of the
originals of all Leases (including lease guarantees, if any), service contracts
and originals or copies of all plans, reports and approvals, if any, as required
herein to Purchaser on the Closing date.
5.8 OPINION OF SELLER'S COUNSEL. An opinion of counsel for the Seller
stating that:
(i) the Seller is a duly organized, validly existing Delaware
limited partnership in good standing as a foreign limited partnership under the
laws of the State of Colorado;
(ii) this Contract and all deeds, bills of sale, assignments,
agreements and other documents delivered in connection herewith or at the
Closing have been duly authorized, executed and delivered to the Seller and are
valid and binding agreements of Seller, except as enforceability may be limited
by bankruptcy, moratorium, insolvency or other laws generally affecting
creditors' rights, and subject to such modification or other relief as may be
granted by a court of equity in an action for specific performance;
(iii) to the best of counsel's knowledge, there is no litigation
or investigation pending or threatened against Seller or the Property that
might result in any material, adverse change pertaining to the Property or the
operations thereof, or which questions the validity of any action taken in
connection with any of the provisions of this Contract. Counsel will not be
required to make any search of court records to support the representations set
forth in this subparagraph (iii).
5.9 ACCOUNTS PAYABLE. A list of all known accounts payable in connection
with the Property along with an estimate of any accounts payable due for which
invoices have not yet been received.
5.10 TENANT SECURITY DEPOSITS. An assignment to Purchaser of all accounts
representing tenant security deposits, including all accrued interest thereon
required by law or other agreement to be paid thereon.
5.11 MISCELLANEOUS. Such other instruments (including a joint notice from
the Seller and the Purchaser to the tenants of the Property informing them of
the conveyance of the Property to the Purchaser and of the transfer of tenants'
security deposits to Purchaser) as may reasonably be required to consummate the
transactions contemplated by this Contract. Seller shall cause the Title
Insurance Policy to be delivered to Purchaser on or after closing at its
expense.
5.12 POSSESSION. Possession of the Property shall be delivered to the
Purchaser at Closing, subject to the Leases shown on EXHIBIT C and such
replacements thereof and new leases as are entered into in conformity with the
provisions of Article 9 below.
ARTICLE 6
PURCHASER'S DELIVERIES AND CONDITIONS
PRECEDENT TO SELLER'S OBLIGATIONS
At the Closing and contemporaneously with the Seller's compliance with the
provisions of Article 5, Purchaser shall deliver to Seller at the Closing all of
the following, the delivery of which shall be a condition to Seller's obligation
to consummate the sale of the Property. Any one or more of the conditions
precedent to Seller's obligations hereunder, whether set forth in this Article 6
or elsewhere, may be waived by Seller in its absolute discretion.
6.1 PAYMENT OF PURCHASE PRICE. Pay to Seller the Purchase Price in the
manner provided in paragraph 2.1 above.
6.2 OPINION OF PURCHASER'S COUNSEL. An opinion of counsel for the
Purchaser stating that:
(i) in the case of an entity, the Purchaser is a duly organized
and validly existing limited liability company in good standing under the laws
of Colorado and qualified to do business as a limited liability company under
the laws of the State of Colorado;
(ii) this Contract and all other agreements delivered by Purchaser
in connection herewith or at the Closing, have been duly authorized, executed
and delivered by the Purchaser and are valid and binding agreements of
Purchaser except as enforceability may be limited to bankruptcy, moratorium,
insolvency or other laws generally affecting creditors' rights, and subject to
such modification or other relief as may be granted by a court of equity in an
action for specific performance;
(iii) to the best of counsel's knowledge, there is no litigation or
investigation pending or threatened against the Purchaser that might result in
any material, adverse change pertaining to the Property or the operations
thereof, or which questions the validity of any action taken in connection with
any of the provisions of this Contract. Counsel will not be required to make
any search of court records to support the representations set forth in this
subparagraph (iii).
ARTICLE 7
PRORATED ITEMS AND ADJUSTMENTS
In connection with the transactions contemplated by this Contract, the
Seller and the Purchaser shall share equally the cost of any local transfer
taxes and Closing fees; Purchaser shall pay all documentary fees; Purchaser
shall pay for recordation of the deed and any instruments relating to the loan
assumption and any other of its loans. Seller shall pay the filing fee for
recording the release of any existing encumbrances to be released at Closing.
The Purchaser and Seller shall each pay their own legal fees. At the Closing
the following adjustments and prorations shall be computed as of the date of
Closing and the cash portions of the purchase price shall be adjusted to
reflect such prorations.
7.1 RENT. All rentals collected by Seller up to the date of Closing, which
are allocable to the period from and after Closing, shall be paid by the Seller
to the Purchaser. That portion of any past due rentals payable to the Seller at
or prior to Closing which are allocable to the period prior to Closing shall be
remitted to the Seller by the Purchaser as and if collected by Purchaser.
Payments received by the Purchaser shall be applied first to current rent due
and then to past due rent starting with the most recent delinquency. The
Purchaser shall use reasonable diligence to collect past due rents.
7.2 REAL PROPERTY TAXES. Real property taxes for the year of Closing,
based on the most recent levy and most recent assessment, assessments and all
other public or governmental charges against the Land and Improvements which
are or may be payable on an annual basis (including special assessments, liens
or encumbrances for sewer, water, drainage or other public improvements
completed or commenced on or prior to the date of this Contract or subsequent
thereto) to the extent the same are not payable by tenants pursuant to tax
escalation clauses in their Leases, shall be adjusted and apportioned as of the
date of Closing and assumed and paid thereafter by the Purchaser, whether
assessments have been levied or not as of the date of Closing.
7.3 PERSONAL PROPERTY TAXES. Personal property taxes attributable to the
Personal Property for the fiscal year in which the date of Closing occurs shall
be apportioned between the parties as of the date of Closing.
7.4 ACCOUNTS PAYABLE. Purchaser shall assume all contracts and agreements
related to the Property unless it gives Seller written Notice of any such
contracts or agreements that it does not want to assume prior to the end of the
Due Diligence Period. All sums due for accounts payable which were owing or
accrued by the Property prior to the Closing and for all agreements and
contracts not assumed by Purchaser will be paid by Seller and Seller agrees to
indemnify and hold Purchaser harmless with respect thereto. Purchaser will
furnish to Seller for payment any bills received after the Closing with respect
to such accounts, agreements and contracts, and Purchaser will have no further
obligation with respect thereto. Payments due under any Service Contracts
assumed by Purchaser shall be prorated as of the Closing date and Purchaser
shall be liable for all payments accruing thereunder after the Closing.
7.5 UTILITY CHARGES. All utility charges, including, without limitation,
electricity, gas, water, sewer and telephone, will be prorated to the Closing
date. All utility security deposits, if any, will be retained by Seller.
7.6 MISCELLANEOUS. All other charges and fees customarily prorated and
adjusted in similar transactions shall be prorated at Closing and the charges
fees incurred thereafter shall be paid by the Purchaser. In the event that
accurate prorations and other adjustments cannot be made at Closing because
current bills or statements are not obtainable (as, for example, utility bills),
the parties shall prorate on the best available information, subject to
adjustment upon receipt of the final xxxx or statement.
ARTICLE 8
CONDEMNATION AND RISK OF LOSS
8.1 EMINENT DOMAIN. If, prior to the Closing, all of the Land and
Improvements are taken by eminent domain, this Contract shall be deemed
canceled. If only part of the Land or improvements are so taken, Purchaser shall
have the option of (a) proceeding with the Closing and acquiring the Property as
affected by such taking, together with all compensation and damage awarded or
the right to receive same, or (b) canceling this Contract. If Purchaser elects
option (a) above, Seller agrees to assign to Purchaser at the Closing its rights
to such compensation and damages, and will not settle any proceedings relating
to such taking without Purchaser's prior written consent. Seller shall promptly
(and in any event prior to the Closing) notify Purchaser of any actual or
threatened condemnation affecting the Property.
8.2 RISK OF LOSS.
(a) In the event of damage or destruction of the Improvements
prior to the Closing Date in an amount less than Two Hundred Fifty Thousand
Dollars ($250,000), Purchaser and Seller shall consummate this Contract as
scheduled, and Seller shall promptly proceed to repair and restore the
Improvements.
(b) In the event of damage or destruction of the Improvements
prior to the Closing date in an amount in excess of Two Hundred Fifty Thousand
Dollars ($250,000), Purchaser may elect any of the following:
(i) to terminate this Contract upon written notice to
Seller, in which event the Xxxxxxx Money Deposit shall be returned to Purchaser;
(ii) consummate this Contract as scheduled, in which
event Seller shall pay to Purchaser any and all insurance proceeds payable with
respect to such damage or destruction for costs of repair and restoration of the
Property.
ARTICLE 9
OPERATIONS PRIOR TO CLOSING
9.1 MAINTENANCE. Subject to the provisions of Article 8 concerning
repairs and replacements in the event of condemnation or casualty, until Closing
the Seller, at its expense, shall maintain the Property substantially in its
present condition, subject to normal wear and tear.
9.2 OPERATIONS. Until Closing the Seller, at its expense, shall operate
the Property in substantially the same manner as the Property is being operated
on the date of this Contract. The Seller shall use reasonable efforts to
maintain the goodwill of existing tenants and suppliers and to relet any
apartment unit on the Property which becomes vacant prior to Closing, provided
the reletting is to an unrelated third party pursuant to a bona fide lease, and
is at a rent comparable to that being charged for similar units in the Property.
9.3 THE FIRST DEED OF TRUST. Until Closing the Seller will perform all
of its obligations under the First Deed of Trust, will make all periodic
payments required thereunder, will not
prepay the same either in whole or in part, and will not consent to any
modification or amendment thereto.
9.4 OTHER ACTS. Until Closing the Seller shall not undertake or omit to
undertake any other act which would have a material adverse effect on the
Property or the operations thereof as presently conducted.
ARTICLE 10
FURTHER ASSURANCES
10.1 CONTINUING ACCESS. After Closing, the Seller shall execute and
deliver to the Purchaser any additional documents and instruments which
Purchaser may reasonably determine are necessary to further assure to the
Purchaser the consummation of the purchase and sale contemplated herein, without
additional expense to the Seller. From and after Closing each party shall afford
to the other reasonable access to any information in its possession concerning
the operations of the Property (including the right to copy the same at the
expense of the party desiring the copy) for purposes of any tax examination or
audit or other similar purpose.
ARTICLE 11
REAL ESTATE COMMISSION
11.1 REAL ESTATE COMMISSION. At Closing the Seller shall pay a real estate
commission to Unique Properties Ltd., Inc. (the "Broker") in the amount of One
Hundred Thirty Thousand Dollars ($130,000.00). This commission shall be the only
fee or compensation payable to the Broker and the commission shall be earned if,
and only if, the Closing occurs hereunder. The Seller and the Purchaser each
represent and warrant to the other that it has not used the services of any real
estate broker, agent or finder other than the Broker in connection with this
Contract and each agrees to indemnify and hold the other harmless from all
claims of any other broker, agent or finder arising by reason of the
indemnifying party's breach of its representation and warranty.
ARTICLE 12
DEFAULT AND REMEDIES
12.1 DEPOSITS.
(a) XXXXXXX MONEY DEPOSIT. Upon execution of this Contract, the
Purchaser shall pay to the title company as escrow agent (the "Escrow Agent")
Fifty Thousand Dollars ($50,000.00) in the form of cash payable to the Escrow
Agent (the "Xxxxxxx Money Deposit"). At Closing, the Xxxxxxx Money Deposit,
including all interest earned thereon, shall be paid by the Escrow Agent to the
Seller and applied to the Purchase Price. If Closing does not occur, the Xxxxxxx
Money Deposit, including all interest earned thereon, shall be paid over in
accordance with the terms of this Contract. The Escrow Agent shall deposit the
Xxxxxxx Money Deposit in an interest bearing account in a federally insured bank
or savings and loan association. The
Escrow Agent shall be reimbursed equally by the parties hereto for its fee in an
amount not to exceed Five Hundred Dollars ($500.00).
(b) ADDITIONAL XXXXXXX MONEY DEPOSIT. On or before December 10, 1996, the
Purchaser shall pay to the Seller One Hundred Thousand Dollars ($100,000.00)
(the "Additional Xxxxxxx Money Deposit") by wire transfer directly to Seller's
checking account pursuant to Seller's wire transfer instructions to be delivered
to Purchaser. At Closing, the Additional Xxxxxxx Money Deposit shall be applied
to the Purchase Price. If Closing does not occur, the Additional Xxxxxxx Money
Deposit shall be payable as provided in (S)(S) 12.2 and 12.3 below.
12.2 PURCHASER'S DEFAULT; LIQUIDATED DAMAGES. The Purchaser and the Seller
each acknowledge that it would be difficult to ascertain the actual damages
which would be suffered by the Seller if the Purchaser defaults in consummating
the purchase and sale contemplated by this Contract. Accordingly, if all
conditions precedent to the Purchaser's obligation to consummate the
transactions contemplated by this Contract have been satisfied or waived, but
the Purchaser fails, refuses or is unable to consummate the purchase and sale
contemplated by this Contract, then the Seller's sole remedy shall be to give
the Escrow Agent and the Purchaser written notice of the Purchaser's default, in
which event the Escrow Agent shall pay the Xxxxxxx Money Deposit, together with
interest earned thereon, to the Seller and Seller shall retain the Additional
Xxxxxxx Money Deposit. Upon payment of the Xxxxxxx Money Deposit and the
Additional Xxxxxxx Money Deposit, including the interest earned thereon, to the
Seller, neither party to this Contract shall have any further liability to the
other and this Contract shall be and become null and void and of no further
force and effect, either at law or in equity.
12.3 SELLER'S DEFAULT. If all conditions and other events precedent to the
Seller's obligations to consummate the transactions contemplated by this
Contract have been satisfied or waived, but the Seller fails, refuses or is
unable to consummate the purchase and sale contemplated by this Contract, then
the Purchaser, may at its election either (a) have the right to give the Escrow
Agent written notice of the Seller's default, in which event the Escrow Agent
shall pay the Xxxxxxx Money Deposit, together with interest earned thereon, to
the Purchaser and Seller shall immediately return to Purchaser the Additional
Xxxxxxx Money Deposit or (b) pursue specific performance or any other remedy to
which it may be entitled.
12.4 RIGHTS OF ESCROW AGENT. In the event of any dispute as to who is
entitled to receive the Xxxxxxx Money Deposit and interest earned thereon, the
Escrow Agent shall have the right to retain the funds and disburse them in
accordance with the final order of a court of competent jurisdiction, or to
deposit the Xxxxxxx Money Deposit and interest thereon with the court, pending a
final decision of the controversy. The parties hereto further agree that the
Escrow Agent shall not be liable for failure of the depository.
ARTICLE 13
MISCELLANEOUS PROVISIONS
13.1 COMPLETENESS. This Contract and any documents and agreements entered
into pursuant thereto, constitute the entire agreement between the parties with
respect to the transactions contemplated herein, and supersede all prior
discussions, understandings or agreements between the parties.
13.2 BINDING EFFECT. This Contract shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns.
13.3 SURVIVAL. Paragraph 7.1, Article 11, this paragraph 13.3 and all
other provisions of this Contract that by their terms are to survive the
Closing, shall survive the Closing.
13.4 WAIVER. Failure by the Purchaser or the Seller to insist upon or
enforce any of their respective rights hereunder shall not constitute a waiver
thereof, except as provided for herein.
13.5 GOVERNING LAW. This Contract shall be construed, interpreted and
enforced in accordance with the laws of the State of Colorado, without regard to
principles of conflict of laws.
13.6 ARTICLE HEADINGS. The Article and paragraph headings as herein used
are for convenience or reference only and shall not be deemed to vary the
content of this Contract or the covenants, agreements, representations and
warranties herein set forth or limit the provisions or scope of any Article or
paragraph.
13.7 COUNTERPARTS. To facilitate execution, this Contract may be executed
in as many counterparts as may be required and it shall not be necessary that
the signature of, or on behalf of, each party, or that the signatures of the
persons required to bind any party, appear on more than one counterpart. All
counterparts shall collectively constitute a single agreement.
13.8 NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing and shall be personally delivered on a business
day during business hours or mailed by first class, registered or certified
mail, return receipt requested, postage prepaid:
(a) If to the Purchaser, to
Xxxxxxx Xxxx
00 Xxxxxx xx xx Xxxxx
00000 L' Etang la Ville
France
(00-0) 00-00-00-00 FAX
or to such other address as may have been furnished by the Purchaser to the
Seller in writing, with a copy to
Xxxxx X. Xxxxx, Esq.
Xxxxxxx Rumble & Xxxxxx, P.C.
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
572-6200
570-6203 FAX
(b) If to the Seller, to
American Real Estate Investment, L.P.
Attention: Xxxx X. Xxxxxx
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 FAX
or to such other address as may have been furnished by the Seller to the
Purchaser in writing, with a copy to
Xxxxxx X. Xxxxx, Esq.
Xxxxxxx & Xxxxx, P.C.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000-0000
(000) 000-0000
(000) 000-0000
and
(c) If to Escrow Agent, to
Xxx Xxxxxxxx
North American Title Company
00 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
(000) 000-0000
(000) 000-0000
or to such other address as may have been furnished by the Escrow Agent in
writing to the Purchaser and the Seller.
Any notice, request, consent or other communication shall be deemed
received when it is personally delivered or on the third business day after it
is deposited in the United States mails, as the case may be.
13.9 ASSIGNMENT. The Purchaser shall not have the right to assign this
Contract to another person or entity, without the prior written approval of the
Seller; provided, however, that Purchaser may assign this Contract to an entity
that is wholly owned or controlled by Purchaser.
13.10 TIME OF THE ESSENCE. Time shall be of the essence with respect to
this Contract.
13.11 SPECIAL DISTRICTS. Special Taxing Districts may be subject to
general obligation indebtedness that is paid by revenues produced from annual
tax levies on the taxable property within such districts. Property owners in
such districts may be placed at risk for increased mill levies and excessive tax
burdens to support the servicing of such debt where circumstances arise
resulting in the inability of such a district to discharge such indebtedness
without such an increase in mill levies. Purchaser is aware of and understands
the debt financing requirements of the authorized general obligation
indebtedness of such districts, existing mill levies of such district servicing
such indebtedness, and the potential for an increase in such mill levies.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
and affixed their seals as of the day and year first above written.
SELLER: AMERICAN REAL ESTATE INVESTMENT, L.P.
By: American Real Estate Investment Corporation
Its: General Partner
By: _____________________________________
Xxxx Xxxxxx
Its: President
PURCHASER:
_______________________________________________
Xxxxxxx Xxxx
The Broker has joined in the execution of this Contract solely for the
purpose of binding itself to the provisions of the first two sentences of
paragraph 11.1.
BROKER: UNIQUE PROPERTIES LTD., INC.
By: ___________________________________________
The Escrow Agent has joined in the execution of this Contract to
acknowledge its appointment as Escrow Agent and hereby agrees to perform the
duties imposed upon the Escrow Agent by this Contract.
ESCROW AGENT: NORTH AMERICAN TITLE COMPANY
_______________________________________________
Xxx Xxxxxxxx
