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PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
BY AND BETWEEN
AOKI CONSTRUCTION (CA) CO., LTD.,
A CALIFORNIA CORPORATION
AS SELLER
AND
IRVINE APARTMENT COMMUNITIES, L.P.,
A DELAWARE LIMITED PARTNERSHIP
AS BUYER
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TABLE OF CONTENTS
Page
1. Agreement to Purchase and Sell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5. Closing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6. Prorations and Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7. Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8. Representations and Warranties of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9. Representations and Warranties of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10. Seller's Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11. Buyer's Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
12. Right to Enter Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
13. Loss by Fire, Other Casualty or Condemnation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
14. Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
15. Assignment of Leases, Contracts, Warranties, Permits, Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
16. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
17. Broker's Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
18. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
19. Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
("AGREEMENT"), dated for reference purposes only April 18, 1997, is entered
into by and between AOKI CONSTRUCTION (CA) CO., LTD., a California corporation
("SELLER") and IRVINE APARTMENT COMMUNITIES, L.P., a Delaware limited
partnership ("BUYER").
R E C I T A L S
A. Prior to April 7, 1997, Seller was a 99.5% general partner and Aoki
Pacific Corporation ("APC") was a 0.5% general partner in Renaissance
Villas Associates, a California general partnership ("RVA").
Immediately prior to that date, both legal title to, and beneficial
ownership of, the Property (as defined below) was in RVA. On April 7,
1997, APC assigned its interest in RVA to Seller, thus making Seller
the sole remaining partner in RVA and causing a dissolution (but not
the termination) of RVA. At the same time, Seller, APC and RVA
entered into an Agreement for Dissolution, Distribution and Winding-up
of Renaissance Villas Associates (the "DISSOLUTION AGREEMENT").
Pursuant to the Dissolution Agreement, Seller was appointed the
"Liquidating Trustee", and as such, agreed to distribute all RVA
property either to Seller or at Seller's direction. As a result of
these transactions, Seller became the sole beneficial owner of the
Property; however, no deed has been delivered to Seller, pending
approval by the five lenders with a security interest in the Property,
and RVA therefore remains the legal and record owner of the Property.
Seller agrees that it will cause the fee interest in the Property to
be conveyed to Buyer upon the Close of Escrow.
B. The land which is the subject of this Agreement is that certain real
property located in the City of San Diego ("CITY"), County of San
Diego ("COUNTY"), State of California, commonly known as "The Villas
of Renaissance" and as more particularly described in Exhibit A
attached hereto (the "LAND").
C. The Land is improved with certain buildings and other improvements
(the "IMPROVEMENTS") as to which Seller holds beneficial ownership and
which comprise an apartment project containing 923 units.
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D. The term "PROPERTY" as used herein includes all of Seller's and/or
RVA's rights, title and interest in and to the following: (i) the
Land, together with all rights, privileges (to the extent
transferrable by Seller and/or RVA), easements, rights of way, mineral
and water rights and other appurtenances to the Land held by Seller
and/or RVA; (ii) all Improvements located on the Land and all fixtures
of a permanent nature currently affixed to the Land or the
Improvements; (iii) all of Seller's and/or RVA's right, title and
interest as lessor in all Leases (as hereinafter defined), including,
without limitation, any lease, occupancy agreement or other contract
affecting any unit considered to be a "corporate rental unit"; (iv)
all of Seller's and/or RVA's rights to all outstanding Contracts,
Warranties, Permits, Plans and Reports and Claims (each as hereinafter
defined) pertaining to the Land or the Improvements; (v) all of
Seller's and/or RVA's right, title and interest in and to the name
"Villas of Renaissance" and all other intangible property used or
intended to be used in connection with the Property, including,
without limitation, trademarks and tradenames; (vi) all crops, bushes,
trees and other flora now or at the Close of Escrow (as hereinafter
defined) affixed to or on the Land or the Improvements; and (vii) all
personal property owned (or to the extent of Seller's and/or RVA's
interest therein, leased) by Seller and/or RVA and used or intended to
be used in connection with the operation of the Land or the
Improvements, as such personal property is described on Exhibit B
attached hereto (the "PERSONAL PROPERTY"). It is the intent of Seller
and Buyer that the Personal Property include, without limitation, all
of Seller's and/or RVA's right, title and interest in all recreation
equipment, pool and spa furniture and equipment, equipment and
furnishings in any rental units, on-site leasing facility, clubhouse
and fitness center, all air conditioners, refrigerators, dishwashers,
ovens/ranges, microwaves and washer/dryer units located in the rental
units, and any equipment or operating system (or lease of equipment or
operating system) for cable television, telephone, security or similar
service provided to the Property.
E. Seller, APC and RVA intend that, prior to the Close of Escrow, RVA
will transfer all of its right, title, and interest in and to the
Property to Seller. Nevertheless, the references to RVA have been
included in Recital D to ensure that to the extent any such right,
title or interest is not transferred to Seller by RVA, Seller will
cause it to be transferred by RVA to Buyer at the Close of Escrow.
F. Buyer and RVA have previously entered into that certain letter of
intent dated April 1, 1997 relating to the acquisition of the Property
by Buyer (the "LETTER OF INTENT"). Seller has opened Escrow No.
7338099-48 with Chicago Title Company for
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the purpose of consummating the transaction described in this
Agreement, and Buyer has deposited the sum of One Million Seven
Hundred Seventy-Eight and 34/100 Dollars ($1,000,778.34) in such
escrow as further described in Section 2(a) of this Agreement.
AGREEMENT
NOW, THEREFORE, taking into account the foregoing Recitals, and in
consideration of the mutual covenants, agreements and conditions set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Buyer and Seller agree as
follows:
1. AGREEMENT TO PURCHASE AND SELL.
Seller hereby agrees to sell, convey and assign all of Seller's and/or
RVA's right, title and interest in and to the Property to Buyer, and Buyer
agrees to buy and accept all of Seller's and/or RVA's right, title and interest
in and to the Property from Seller, under the terms and conditions and for the
purchase price hereinafter set forth.
2. PURCHASE PRICE.
The Purchase Price to be paid for the Property by Buyer at the Close
of Escrow ("PURCHASE PRICE") is One Hundred Twenty-Seven Million Dollars
($127,000,000) and shall be paid in the following increments at the following
times:
(a) Prior to the execution of this Agreement, Buyer deposited
funds in the amount of One Million Seven Hundred Seventy-Eight
and 34/100 Dollars ($1,000,778.34) into Escrow;
(b) Cash or other form of funds as immediately available as cash
("IMMEDIATELY AVAILABLE FUNDS") in the amount of Four Million
Dollars ($4,000,000) will be delivered to Escrow Holder and
deposited into Escrow by Buyer on the first business day
following the Due Diligence Termination Date (as defined in
Section 3(b)(v)); and
(c) The balance of the Purchase Price as well as all sums
necessary to pay Buyer's costs, expenses and prorations in
connection with this transaction shall be deposited by Buyer
into Escrow in Immediately Available Funds at the Close of
Escrow.
So much of the cash sums as have been actually deposited into Escrow
pursuant to Sections 2(a) and 2(b) above, together with all interest earned
thereon, shall sometimes collectively be referred
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to herein as the "DEPOSIT." In the event this Agreement is terminated as a
result of Buyer's timely disapproval of any of the contingencies set forth in
Section 3 below or for any reason other than a Liquidated Damages Event (as
hereinafter defined), the Deposit shall be released by Escrow Holder to Buyer
upon demand by Buyer. Concurrently with the second deposit by Buyer pursuant
to Section 2(b) above, the entire Deposit shall be released from Escrow to
Seller. In the event that the purchase and sale of the Property is consummated
as contemplated hereunder, the Deposit shall be applied against the Purchase
Price at the Close of Escrow. In the event that the purchase and sale of the
Property is not consummated because of a Liquidated Damages Event, the Deposit
shall be non-refundable to Buyer and shall constitute the liquidated damages of
Seller pursuant to Section 14 below. In the event that the purchase and sale
of the Property is not consummated for any reason other than a Liquidated
Damages Event, the Deposit shall be immediately released to Buyer by Escrow
Holder or returned to Buyer by Seller, as applicable. For purposes of this
Agreement, a "LIQUIDATED DAMAGES EVENT" shall be deemed to occur if each of the
following three conditions is satisfied: (i) the Seller is in material
compliance with all of its obligations under this Agreement and all
representations of Seller hereunder are true and correct in all material
respects; (ii) Buyer is in default under this Agreement; and (iii) the purchase
and sale of the Property is not consummated because of Buyer's default. All
deposits made by Buyer into Escrow pursuant to this Section 2 or Section 4
below shall, prior to release from Escrow, be placed in a federally insured
interest-bearing account by Escrow Holder upon terms acceptable to Buyer to be
held by Escrow Holder in trust for the benefit of Buyer.
3. CONTINGENCIES.
Buyer's obligation to purchase the Property and the remainder of
Buyer's obligations under this Agreement shall be subject to (1) Seller's and
Escrow Holder's receipt, on or before 5:00 p.m., Pacific Time, on April 25,
1997 of written notice (which notice may be in the form of a facsimile) from
Buyer that the Board of Directors of Irvine Apartment Communities, Inc. has
approved the terms and conditions of this Agreement, and (2) Buyer's approval
of the following contingencies within the time periods indicated below.
(a) TITLE AND SURVEY.
(i) Within five (5) business days after the Opening of
Escrow, Buyer shall have received from Chicago Title
Company (the "TITLE COMPANY") an extended coverage
preliminary title report or commitment on the
Property, dated no earlier than seven (7) days prior
to the Opening of Escrow (the "PTR"),
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together with legible copies of all documents
("EXCEPTION DOCUMENTS") relating to the title
exceptions referred to in the PTR.
(ii) Within ten (10) business days after the Opening of
Escrow, Seller shall cause to be delivered to Buyer
and to Title Company, at Seller's sole cost and
expense, an ALTA survey of the Property sufficient to
enable the Title Company to issue an ALTA owner's
policy of title insurance (the "SURVEY"), together
with a certificate as to whether the Property lies
within (A) a flood zone as determined by the U.S.
Department of Housing and Urban Development, or (B)
an "Earthquake Special Studies Zone" as designated
under the "Xxxxxxx-Xxxxxx Special Studies Zone Act,"
Sections 2621-2630, inclusive, of the California
Public Resources Code.
(iii) Within ten (10) business days after the later of (A)
Opening of Escrow, or (B) the day Buyer receives the
PTR and the Exception Documents, Buyer shall notify
Seller in writing of any disapproved title exceptions
(the "DISAPPROVED PTR MATTERS"); provided, however,
that the time period set forth in this sentence shall
not apply to any title exception which cannot be
fully analyzed by Buyer without the Survey. Within
ten (10) business days after Buyer receives the
Survey, Buyer shall notify Seller in writing of any
disapproved Survey matters (the "DISAPPROVED SURVEY
MATTERS") and of any additional Disapproved PTR
Matters which Buyer disapproves based on information
contained in the Survey. The Disapproved PTR Matters
and the Disapproved Survey Matters are hereinafter
collectively referred to as the "DISAPPROVED
MATTERS." Any lien or other encumbrance against the
Land or Improvements which secures a claim for the
payment of money (other than a lien for taxes and
assessments not due and payable as of the Close of
Escrow) shall be deemed to be a Disapproved PTR
Matter and shall, in no event, be deemed to be a
Permitted Exception (as hereinafter defined). All
title exceptions set forth in the PTR other than the
Disapproved PTR Matters, together with all survey
matters set forth in the Survey other than the
Disapproved Survey Matters, shall collectively
constitute the "PERMITTED EXCEPTIONS." On or before
the Close of Escrow, Seller shall remove, or cause to
be removed, all claims, liens or encumbrances against
the Land or Improvements which
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secure a claim for the payment of money, other than
liens for real property taxes and assessments which
are not, as of the Close of Escrow, due and payable.
In addition, Seller shall use its best efforts (but
shall not be required to expend more than de minimis
sums) to remove, or cause to be removed, all
Disapproved Matters not involving a claim for the
payment of money; provided, however, in the
alternative, Seller, at its sole cost and expense,
may elect to obtain title insurance in a form
satisfactory to Buyer and its counsel insuring
against the effect of such Disapproved Matters (and
any Disapproved Matter which is so insured against
also shall be deemed to be a "Permitted Exception").
Within five (5) business days after Buyer notifies
Seller of any Disapproved Matters, Seller shall
notify Buyer in writing of the Disapproved Matters
(other than a claim for the payment of money which
Seller shall be obligated to remove) which Seller is
willing and able to cause to be removed or
satisfactorily insured against (Seller's failure to
give such notice as to any Disapproved Matter shall
be deemed to mean Seller will not cause such
Disapproved Matter to be removed or insured against
to the satisfaction of Buyer and its counsel). If
Seller fails to give such notice with respect to any
Disapproved Matter, Buyer shall, within two (2)
business days after the expiration of the five (5)
business day period referred to in the preceding
sentence, elect, by giving written notice to Seller
and Escrow Holder, (x) to terminate this Agreement,
or (y) to waive its disapproval of any such
Disapproved Matters (and such Disapproved Matters
shall then be deemed to be Permitted Exceptions).
Buyer's failure to give such notice shall be deemed
an election to terminate this Agreement.
(iv) If the Title Company, prior to Close of Escrow,
discloses to Buyer or Seller a new exception, or
materially amends any exception previously approved
by Buyer, or materially amends the terms under which
the Title Company is willing to issue its policy of
title insurance, or if the Survey is materially
amended, then Buyer shall have five (5) business days
from its receipt of notice of such disclosure or
amendment, together with legible copies of all
documents mentioned in such disclosure or amendment,
to disapprove the same by written notice to Seller.
Such disapproved disclosure or amendment shall be
treated as a Disapproved Matter pursuant to
Subsection (iii)
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above and the Close of Escrow shall be extended for
such period as is necessary to accommodate the
resolution of such Disapproved Matter in accordance
with Subsection (iii).
(v) On or before the Close of Escrow, the Title Company
shall have given Buyer written notice, in form and
substance satisfactory to Buyer, that it is
irrevocably committed to issue the Title Policy upon
the recordation of the Grant Deed.
(b) BUYER'S DUE DILIGENCE. On or before the Due Diligence
Termination Date (as defined in Section 3(b)(vi)), Buyer shall
have completed its due diligence investigation of the Property
at its sole cost and expense and shall have approved or
disapproved such matters as Buyer deems appropriate with
respect to the Property, including without limitation the
following:
(i) An environmental audit of the Property;
(ii) A soils report regarding the Property;
(iii) A Uniform Commercial Code search with respect to
Seller and the Property;
(iv) The physical condition of the Improvements, including
without limitation, structural and mechanical
elements, the roof and the heating, ventilation and
air conditioning systems; and
(v) All information material to the use and value of the
Property which Seller and/or RVA possesses,
including, without limitation, all of the following
documents, all such information to be delivered by
Seller as set forth below:
(A) The current standard lease form and all
leases, licenses, concessionaire agreements
and any other agreement for use or occupancy
of the Property or any portion thereof and
any other agreements which are in effect
thereto, together with all exhibits and
riders attached thereto any and all
amendments, modifications, or supplements
thereto (the "LEASES");
(B) A rent schedule (the "RENT SCHEDULE") in the
form of Exhibit C attached hereto prepared
and certified as true and correct by Seller,
and a summary setting forth identification of
those Leases which cover units considered to
be
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"corporate rental units" (the "CORPORATE
LEASES"), any rent concessions or other
benefits given to any tenant, options to
purchase all or any part of the Property, any
uncured delinquencies and defaults by tenant
under the Leases and the nature and amounts
thereof, and any notices of bankruptcy,
insolvency or other impairment of credit
received by Seller or R&B Realty Group in
respect of tenants under Leases;
(C) Financial statements of the operation of the
Property for the 1994, 1995 and 1996 calendar
years, showing in reasonable detail all
income and expenses of the Property for each
of the aforementioned periods, audited by a
certified public accountant, and a
year-to-date financial statement of the
operation of the Property certified by Seller
as true and correct in all material respects,
showing in reasonable detail the year-to-
date income and expenses of the Property;
(D) All plans, specifications, renderings, soils,
engineering, environmental or architectural
notices, studies, reports or plans,
construction contracts and all other reports
concerning the Property which Seller and/or
RVA may possess or control which relate to
the physical condition or operation of the
Property or recommended improvements thereto,
without regard as to the party for whom such
material or contracts were prepared
(collectively, the "PLANS AND REPORTS");
(E) All licenses, permits, authorizations,
approvals, certificates and entitlements
(collectively, the "PERMITS") related to the
Property and/or the use thereof, including
without limitation, a certificate of
occupancy (or equivalent certificate)
authorizing the current use of the Property;
(F) All guarantees and warranties made to or
inuring to the benefit of Seller and/or RVA
regarding the Property or its operation
("WARRANTIES");
(G) All contracts relating to the Property and/or
the use thereof together with any and all
amendments, modifications or supplements
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thereto including, but not limited to, all
outstanding employment, brokerage, scavenger,
management, leasing, cable television,
security or telephone service, maintenance,
repair, service, pest control, supply and
similar contracts (including, without
limitation, janitorial, elevator, refuse
removal, landscaping and equipment rental
agreements), relating to or affecting the
Property, all contracts for repair or capital
replacement to be performed for or on the
Property, or covering such work performed
since the Improvements were completed with
respect to which the contract price was in
excess of Ten Thousand Dollars ($10,000)
(collectively the "CONTRACTS");
(H) The most recent tax, utility, water, sewage
and insurance bills for the Property
including, but not limited to, bills for real
estate taxes and personal property taxes, if
any, and all notices received by Seller
and/or RVA within the two (2) years
immediately preceding the date hereof and
pertaining to real estate taxes or
assessments applicable to the Property.
Seller shall promptly deliver to Buyer a copy
of any such bills or notices received by
Seller and/or RVA after the date hereof (even
if received by Seller and/or RVA after the
Close of Escrow);
(I) A statement identifying, by policy type, the
insurance coverage relating to the Property
(the "EXISTING INSURANCE POLICIES") and the
amount of the corresponding premiums,
together with copies of insurance policies
for the fire, extended coverage and public
liability insurance maintained by or for the
benefit of Seller and/or RVA;
(J) All payroll records and all union,
employment, compensation and other similar
contracts and agreements, including, without
limitation, all riders, exhibits, amendments
and supplements thereto (the "LABOR
AGREEMENTS");
(K) All insurance claims and litigation documents
relating to the Property with respect to each
insurance claim and/or litigation matter
disclosed to Buyer pursuant to Subsections
9(l) and (m) below. For purposes of this
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Subsection (K), the term "litigation
documents" shall mean all complaints,
cross-complaints and settlement agreements,
and such other non-privileged documents as
Buyer may specifically and reasonably
request;
(L) A list of all fixtures, personal property and
equipment used, leased or owned by Seller
and/or RVA in connection with the Property or
the operation thereof and not otherwise
described on Exhibit B attached hereto,
together with a copy of all leases relating
to such property and to the property
described on Exhibit B;
(M) A report from a qualified, independent
extermination firm stating that the Property
is free from infestation by rodents,
termites, or other insects or animals or, if
the Property is not free from infestation,
setting forth the corrective work required
and/or recommended to be performed in
connection with such infestation.
(N) Copies of all notices, citations and other
papers from any federal, state or local
government authority or agency, or from any
insurer or underwriter's fire, safety,
environmental, health or other laws,
ordinances, rules, regulations or
requirements or of rules or requirements for
insurance coverage, in respect of the
Property, its operations, leasing,
maintenance, use and management, whether or
not heretofore corrected or otherwise
resolved;
(O) Copies of all covenants, conditions and
restrictions affecting the Property, the
articles, by-laws and rules and regulations
of any master owners association affecting
the Property, the financial statements of
such master association for the last five
years and a current budget for such
association.
(vi) On or before the Due Diligence Date (as hereinafter
defined), Seller shall make available to Buyer, at a
central location acceptable to Buyer, for Buyer's
inspection, copying and removal, a legible copy of
all of the foregoing information and documents. For
purposes of this Agreement, the "DUE DILIGENCE DATE"
shall be the date which is ten (10) business
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days following the Opening of Escrow; provided,
however, that Seller may elect to cause the Due
Diligence Date to occur earlier by (A) making
available to Buyer a legible copy of all of the
foregoing information and documents, and (B) giving
written notice to Buyer of the date on which all of
the foregoing information and documents were made
available. In such event, the Due Diligence Date
shall be the date specified in Seller's notice. For
purposes of this Agreement, the "DUE DILIGENCE
TERMINATION DATE" shall be the date which is thirty
(30) days following the Due Diligence Date; provided,
however, that if Buyer needs additional time to
obtain or review third party studies, reports or
inspection results, Buyer may, by giving written
notice to Seller, extend the Due Diligence
Termination Date for a period of up to ten (10)
additional days. Furthermore, the Due Diligence
Termination Date shall be automatically extended to
the extent necessary to accommodate the title and
survey review periods set forth in Section 3(a).
(c) EVIDENCE OF TRANSFER TO SELLER. At least five (5) business
days prior to the Due Diligence Termination Date, Seller shall
provide to Buyer evidence reasonably satisfactory to Buyer
that all of RVA's right, title and interest in and to the
Property has been (or concurrently with the Close of Escrow
will be) transferred to Seller. It is currently anticipated
by Buyer and Seller that this contingency will be satisfied by
(i) the delivery by Seller to Buyer of a xxxx of sale,
assignment of leases, and assignment of contracts
substantially in the form of Exhibits F, G and H attached
hereto, respectively, executed by RVA in favor of Seller, and
(ii) the delivery by the Title Company to Buyer of a
commitment to issue the Title Policy upon the recordation of
the Grant Deed.
(d) DOCUMENTS TO BE PROVIDED BY ESCROW HOLDER. At least two (2)
business days prior to the scheduled Close of Escrow, but no
more than seven (7) business days prior to the scheduled Close
of Escrow, Escrow Holder shall prepare and deliver to Buyer
and Seller a proforma closing statement (the "CLOSING
STATEMENT") relating to the consummation of the transaction
contemplated by this Agreement, which statement shall include,
without limitation, calculations of estimated prorations
pursuant to Section 6 below. Buyer's written approval of the
Closing Statement shall be a condition precedent to the Close
of Escrow for the benefit of Buyer. Seller's written approval
of the Closing Statement shall be a condition precedent to the
Close of Escrow for the benefit of Seller.
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(e) REPRESENTATIONS AND WARRANTIES. As of the Close of Escrow,
all of Seller's representations and warranties set forth
herein shall be true and correct as if made on the date
thereof and Seller shall not otherwise be in breach of any of
its obligations hereunder.
(f) CONDITIONS PRECEDENT. The contingencies set forth in this
Section 3 are for the sole benefit of Buyer. The satisfaction
of all contingencies set forth herein is a condition precedent
to the Close of Escrow and to the performance of Buyer's
obligation to purchase the Property. Buyer may approve or
disapprove any or all of the documents, materials, items and
matters identified in this Section 3 in its sole but
reasonable discretion. If Buyer disapproves any of such
documents, materials, items or matters, it shall deliver
written notice of such disapproval to Seller and Escrow Holder
within the time periods specified herein. The failure by
Buyer to approve in writing any of the documents, materials,
items or matters referred to in this Section 3, within the
time periods provided herein, shall be deemed a disapproval by
Buyer of such documents, materials, items or matters as to
which such notice of approval has not been given. In the
event of such disapproval or deemed disapproval, upon the
delivery of a written notice from Buyer, the Escrow shall
terminate and Escrow Holder shall immediately remit to Buyer
the Deposit and any other sums deposited in Escrow by Buyer,
less fifty percent (50%) of the escrow fees and cost of the
PTR. Upon the approval and/or the waiver of all of the
foregoing contingencies by Buyer, and concurrently with the
second deposit by Buyer pursuant to Section 2(b) above, the
Deposit shall be released from Escrow to Seller. Thereafter,
the Deposit shall be applied to the Purchase Price (if the
Close of Escrow occurs), retained by Seller as Seller's
liquidated damages pursuant to Section 14 hereof (if the Close
of Escrow does not occur due to a Liquidated Damages Event),
or returned to Buyer by Seller (if the Close of Escrow does
not occur for any reason other than a Liquidated Damages
Event). Nothing in the foregoing shall require Buyer to
deposit into Escrow any additional sums, documents or deposits
if it has disapproved any of the contingencies in its favor
set forth in this Section 3 until such disapproved contingency
has been waived or satisfied or otherwise approved by Buyer.
(g) SELLER'S RIGHT TO STUDIES. If the Close of Escrow fails to
occur for any reason other than the breach of this Agreement
by Seller, Seller shall have the option to acquire from Buyer
any and all studies, audits, reports, investigations, test
results and information obtained by Buyer with respect to the
Property (or any part thereof)
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(collectively, the "STUDIES") by paying to Buyer an amount
equal to the actual costs and expenses incurred by Buyer in
connection with the Studies. Notwithstanding the foregoing,
Seller shall not be entitled to obtain from Buyer any Study
which Buyer is contractually prohibited from transferring,
assigning or disclosing, which constitutes attorney work
product, or which is protected by the attorney-client
privilege. Buyer agrees to reasonably cooperate with Seller
(at no cost or expense to Buyer) to determine the utility to
Seller of any Study prior to Seller's acquisition of such
Study.
4. ESCROW.
(a) ESCROW HOLDER. Escrow No. 7338099-48 for the purchase and
sale of the Property (the "ESCROW") has been established at
Chicago Title Company, 000 X Xxxxxx, Xxx Xxxxx, Xxxxxxxxxx
00000, Attention: Xx. Xxxxx Xxxxxxxx (the "ESCROW HOLDER").
(b) OPENING OF ESCROW. The Escrow shall be deemed open ("OPENING
OF ESCROW") as of the date on which both Buyer and Seller
deliver to Escrow Holder fully executed counterparts of this
Agreement and the Printed Escrow Instructions. Upon receipt
by Escrow Holder of counterparts of this Agreement and the
Printed Escrow Instructions fully executed by both Buyer and
Seller, Escrow Holder shall give written notice to Buyer and
Seller of the date on which the Opening of Escrow occurred,
which date will be used for purposes of establishing the time
periods described in Section 3. If the Opening of Escrow does
not occur on or before May 2, 1997, this Agreement shall
automatically terminate and the Deposit shall be returned to
Buyer.
(c) ESCROW INSTRUCTIONS. This Agreement, together with the
printed instructions attached hereto as Exhibit D (the
"PRINTED ESCROW INSTRUCTIONS") and further instructions, if
any, as the parties shall provide to Escrow Holder by written
agreement, shall constitute the escrow instructions to the
Escrow Holder.
(d) SELLER DEPOSITS INTO ESCROW. As a condition precedent to the
Close of Escrow in favor of Buyer, Seller shall deliver, or
cause to be delivered, to Escrow Holder in a timely manner to
permit the closing of the transaction contemplated hereby by
the Close of Escrow the following:
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(i) A duly executed and acknowledged Grant Deed (the
"GRANT DEED") in the form attached hereto as Exhibit
E;
(ii) A duly executed Xxxx of Sale in the form attached
hereto as Exhibit F (the "XXXX OF SALE");
(iii) Two (2) duly executed counterparts of the Assignment
and Assumption of Leases in the form attached hereto
as Exhibit G (the "ASSIGNMENT OF LEASES");
(iv) Two (2) duly executed counterparts of the Assignment
and Assumption of Contracts in the form attached
hereto as Exhibit H (the "ASSIGNMENT OF CONTRACTS");
(v) A duly executed Non-Foreign Affidavit in the form
attached hereto as Exhibit I (the "NON-FOREIGN
AFFIDAVIT");
(vi) The certified Rent Schedule which shall have been
updated by Seller to a date not earlier then five (5)
business days prior to the Close of Escrow with no
material changes from the Rent Schedule delivered by
Seller pursuant to Section 3(b)(v)above;
(vii) A City of San Diego Water Conservation Certificate
(the "CERTIFICATE") executed by Seller certifying
that each toilet, showerhead, sink faucet, urinal and
reverse osmosis system at the Property is in
compliance with applicable City of San Diego water
conservation ordinances. Seller acknowledges that
Seller shall bear all costs and expenses incurred in
connection with any retrofit work necessary to cause
compliance with such water conservation ordinances;
and
(viii) Any other executed or other documents reasonably
required by the Title Company to consummate this
transaction.
(e) BUYER DEPOSITS INTO ESCROW. As a condition precedent to the
Close of Escrow in favor of Seller, Buyer shall deliver, or
cause to be delivered, to Escrow Holder in a timely manner to
permit the closing of the transaction contemplated hereby by
the Close of Escrow, the following:
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(i) Immediately Available Funds in an amount equal to:
(A) the Purchase Price less any credits against the
Purchase Price (including, without limitation, the
Deposit and Buyer's share of any prorations pursuant
to Section 6 below); plus (B) any other sums required
for costs to be paid by Buyer pursuant to the terms
of this Agreement;
(ii) A duly executed preliminary change of ownership
statement (the "PCO STATEMENT") relating to the
Property;
(iii) Any executed or other documents reasonably required
by the Title Company to consummate this transaction;
and
(iv) Two (2) duly executed counterparts of each of the
Assignment of Leases and the Assignment of Contracts.
(f) CLOSE OF ESCROW. Escrow shall close on or before the day
which is five (5) business days after the Due Diligence
Termination Date ("CLOSE OF ESCROW"). If Escrow shall not
close because of a Liquidated Damages Event, the Deposit shall
be treated as liquidated damages as provided in Section 14 of
this Agreement. The Close of Escrow shall be deemed to have
occurred at the time the Grant Deed is filed for record in the
Official Records of the County.
(g) AUTHORIZATION TO CLOSE ESCROW. Provided that Escrow Holder
shall not have received written notice from Buyer or Seller of
the failure of any conditions precedent or of the termination
of the Escrow, Buyer and Seller have deposited into the Escrow
the items required by this Agreement and Title Company can and
will issue the Title Policy concurrently with the Close of
Escrow, Escrow Holder shall:
(i) Deliver to Buyer the Grant Deed by causing the same
to be recorded in the Official Records of the Office
of the County Recorder of the County and by causing
the Grant Deed to be mailed to Buyer after the same
has been recorded.
(ii) Deliver to Buyer the Xxxx of Sale, the Non-Foreign
Affidavit, and one fully executed original of each of
the Assignment of Leases and the Assignment of
Contracts.
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(iii) Deliver to Seller the Purchase Price, less (A) the
Deposit, (B) all amounts to be paid by Seller
hereunder, including but not limited to those amounts
specified in Sections 5 and 17, (C) Seller's share of
liabilities and/or expenses to be prorated by Escrow
Holder to Seller's account under Section 6, and (D)
all amounts paid by Escrow Holder in satisfaction of
liens and encumbrances on the Property in order to
put title to the Property into the state required by
this Agreement.
(iv) Deliver to Seller one fully executed original of each
of the Assignment of Leases and the Assignment of
Contracts.
(v) Cause the Title Policy to be issued to Buyer by Title
Company.
(vi) Cause the PCO Statement to be filed with the Tax
Assessor for the County or with any other
governmental official or agency as required by
applicable law.
(vii) Cause the Certificate to be delivered to the
appropriate governmental agency.
(h) U.S. TREASURY REGULATIONS. The purchase and sale of the
Property is the sale of "reportable real estate" within the
meaning of U.S. Treasury Regulations Section 1.6045-4 (the
"REGULATION"). Escrow Holder is the "real estate reporting
person" within the meaning of the Regulation and shall make
all reports to the federal government as required by the
Regulation.
5. CLOSING COSTS.
(a) Seller shall pay (i) any documentary transfer tax, revenue tax
or excise tax (and any surtax thereon) due in connection with
the consummation of this transaction, and (ii) fifty percent
(50%) of all escrow fees of the Escrow Holder.
(b) Buyer shall pay (i) the fees for recording the Grant Deed and
(ii) fifty percent (50%) of all escrow fees of the Escrow
Holder.
(c) The cost of the Title Policy shall be allocated between Buyer
and Seller as described in Subsection 7(d) below.
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(d) Any other costs of the Escrow or of closing pertaining to this
transaction not otherwise expressly allocated among Buyer and
Seller under this Agreement shall be apportioned in the manner
customary in the County.
(e) Notwithstanding the provisions of this Section 5, if the
Escrow fails to close for any reason (other than the breach of
this Agreement by one or both of the parties), the costs
incurred through the Escrow, including the cost of the PTR,
shall be borne equally by Buyer and Seller. Otherwise, the
party who breached this Agreement first shall bear all the
costs of the Escrow, including the cost of the PTR.
(f) In the event Escrow fails to close because of a failure of a
condition precedent intended to benefit Buyer, Buyer may elect
to terminate the Escrow by the delivery of written notice to
Escrow Holder and Seller, in which event the Escrow shall
terminate and the Escrow Holder shall immediately remit to
Buyer the Deposit and all other sums deposited in Escrow by
Buyer (less amounts due from Buyer pursuant to Subsection (e)
above)
6. PRORATIONS AND ADJUSTMENTS.
The following shall be prorated and adjusted between Seller and Buyer
as of the Close of Escrow except as otherwise specified:
(a) Rents and other charges, all as more particularly set forth in
the Rental Schedule ("RENTS"), other than Delinquent Rents (as
hereinafter defined), shall be prorated and Buyer's share of
such Rents shall be credited against the Purchase Price if
such Rents are due and payable as of the Close of Escrow
whether or not such Rents actually have been collected by
Seller as of such time. Prepaid Rents together with all
interest earned thereon, if any, shall be credited against the
Purchase Price. Rents which at the Close of Escrow are thirty
(30) or more days past due ("DELINQUENT RENTS") shall not be
prorated. Buyer will cooperate with Seller in the collection
of Delinquent Rents at Seller's expense, provided, however,
that Buyer shall in no way be obligated to collect or be
responsible for collecting such Delinquent Rents. Any Rents
collected by Buyer after the Close of Escrow will apply first
to Rents which accrue after the Close of Escrow and then to
the Rents which have accrued prior to the Close of Escrow.
Notwithstanding the foregoing, if Buyer receives Rents after
the Close of Escrow which relate to the period prior to the
Close of Escrow to which Seller is entitled under this Section
6, Buyer shall promptly remit to
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Seller all of such amounts. Likewise, Seller shall promptly
remit to Buyer all Rents received by Seller and/or RVA after
the Close of Escrow to which Buyer is entitled under this
Section 6.
(b) An amount equal to the aggregate amount of all security and
other deposits to Seller and/or RVA (collectively, the "TENANT
DEPOSITS") by tenants of the Property (the "TENANTS") under
the Leases as shown on the Rental Schedule, together with such
interest thereon as may be required by law or contract, shall
be credited against the Purchase Price at the Close of Escrow.
Seller shall retain as Seller's own funds any Tenant Deposits
held by Seller and/or RVA, but such Tenant Deposits shall be
deemed transferred to Buyer as if a cash payment were made by
Seller to Buyer. Seller represents and warrants that (i) all
Tenant Deposits are accurately identified in the Rental
Schedule and are held by Seller in cash, and (ii) no Tenant or
any other party has any claim (other than for customary refund
at the expiration of a Lease) to all or any part of any Tenant
Deposit. Seller hereby covenants that no Tenant or any other
party shall have any claim (other than for customary refund at
the expiration of a Lease) to all or any part of any Tenant
Deposit resulting from actions which occur prior to the Close
of Escrow. Without in any way limiting the generality of any
other indemnity contained herein, Seller hereby agrees to
indemnify, defend and hold harmless Buyer from any and all
losses, costs, expenses and damages (including, without
limitation, attorneys' fees) incurred, suffered by or claimed
against Buyer by reason of any claim by any Tenant or any
other party to all or any part of any Tenant Deposit resulting
from actions which occur prior to the Close of Escrow.
(c) All operating expenses of the Property shall be prorated as of
the Close of Escrow. As used herein, the term "operating
expenses" shall include, without limitation:
(i) utility, water and sewage charges as shown on the
last ascertainable bills (if current bills are not
available) if and to the extent that utility meters
are not read as of the Close of Escrow:
(ii) charges and deposits (including, without limitation,
utility deposits) under any Contracts assumed by
Buyer. Seller's share of all such prorations of
operating expenses shall be credited against the
Purchase Price at the Close of Escrow, or, to the
extent such operating expenses have been paid by
Seller and/or RVA, Buyer's share of all
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such prorations of operating expenses shall be
credited to the account of Seller. Such prorations of
operating expenses shall be subject to adjustment
outside of Escrow within sixty (60) days after the
Close of Escrow to the extent new information becomes
available to Buyer or Seller.
(d) All real property taxes, assessments, personal property taxes
and any premiums for insurance policies on the Property
assumed by Buyer shall be prorated as of the Close of Escrow
and Seller's share of such taxes, assessments and insurance
premiums shall be credited against the Purchase Price, or, to
the extent such taxes, assessments and insurance premiums have
been paid by Seller and/or RVA, Buyer's share of such taxes,
assessments and insurance premiums shall be credited to the
account of Seller.
(e) For purposes of calculating prorations, Buyer shall be deemed
to be vested with title to the Property, and, therefore,
entitled to the income therefrom and responsible for the
expenses thereof for the entire day upon which the Close of
Escrow occurs. All such prorations shall be made on the basis
of the actual number of days of the month which shall have
elapsed as of the Close of Escrow and based upon a three
hundred sixty-five (365) day year. Seller shall provide to
Escrow Holder such operating statements and other documents or
information as may be reasonably required by Escrow Holder and
Buyer to calculate such prorations and to prepare the Closing
Statement.
7. TITLE.
(a) POSSESSION. Concurrently with the Close of Escrow, Seller
shall deliver to Buyer actual possession of the Property,
subject only to the rights of Tenants under the Leases.
Concurrently with the Close of Escrow, Seller shall deliver to
Buyer the originals of the documents described in Section
3(b)(v); provided, however, that to the extent copies of such
documents have been made available to Buyer for Buyer's due
diligence, Seller shall be entitled to retain such copies upon
delivery of the originals of such documents to Buyer.
Notwithstanding the preceding sentence, Seller shall be
entitled to retain the original of any insurance policy in
effect prior to the Close of Escrow.
(b) GRANT DEED. Title to the fee simple interest in the Property
shall be conveyed to Buyer by the Grant Deed.
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(c) TITLE POLICY. The title to be conveyed to Buyer shall be
insured by an ALTA Standard Coverage Owner's Policy of Title
Insurance with standard Western Region exceptions (the
"STANDARD COVERAGE POLICY") with liability in the amount of
the Purchase Price, dated the date of the Close of Escrow,
issued by the Title Company, insuring that title to the fee
interest in the Property is vested in Buyer, subject only to
nondelinquent real estate taxes and assessments and the
Permitted Exceptions, together with such endorsements as Buyer
may reasonably require; provided, however, that Buyer, at its
sole option, may require in lieu of the Standard Coverage
Policy an ALTA extended coverage owner's policy of title
insurance Form 1970 without modification or its equivalent by
endorsement (the "EXTENDED COVERAGE POLICY"). The Standard
Coverage Policy or the Extended Coverage Policy, as
applicable, shall sometimes be referred to herein as the
"TITLE POLICY." The Title Policy shall include the basic
endorsements described below.
(d) COST OF TITLE POLICY. Seller shall pay the cost of the Title
Policy up to the amount of the premium for a Standard Coverage
Policy with liability in the amount of the Purchase Price, and
the cost of title endorsements which are either basic or which
are used for title curative purposes under Section 3. Buyer
shall pay the cost differential of the premium for the
Extended Coverage Policy over the cost of the premium paid for
a Standard Coverage Policy, and the cost of any title
endorsement other than (i) basic endorsements or (ii) an
endorsement for title curative purposes under Section 3. As
used herein, "basic" title endorsements shall mean the
following CLTA endorsements: 100 (modified to reflect an owner
rather than a lender); 103.5 (if applicable); 103.7; 116;
116.1 referencing the Survey as approved by Buyer pursuant to
Section 3(a) above; 123.2; and a Subdivision Map Act
endorsement.
8. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to Seller that the following
matters are true and correct as of the execution of this Agreement and also
will be true and correct as of the Close of Escrow:
(a) Buyer is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of
Delaware. The persons executing this Agreement and related
documents on behalf of Buyer are duly authorized to do so.
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(b) This Agreement and all the documents to be executed and
delivered by Buyer to Seller pursuant to the terms of this
Agreement, (i) have been or will be duly authorized, executed
and delivered by Buyer, (ii) are or will be legal and binding
obligations of Buyer as of the date of their respective
executions (iii) are or will be enforceable in accordance with
their respective terms (except to the extent that such
enforcement may be limited by applicable bankruptcy,
insolvency, moratorium and other principles relating to or
limiting the rights of contracting parties generally), and
(iv) do not, and will not at the Close of Escrow, violate any
provisions of any agreement to which Buyer is a party.
(c) Buyer is not a licensed real estate broker or salesperson.
It shall be a condition precedent to the Close of Escrow in
favor of Seller that Buyer's representations and warranties be true and correct
as of the date thereof. No representation or warranty made by Buyer in this
Agreement shall merge into any instrument of conveyance delivered at the Close
of Escrow but shall survive the Close of Escrow for a period of one (1) year.
9. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Buyer that the following
matters are true and correct as of the execution of this Agreement:
(a) Seller is a corporation, duly organized and validly existing
under the laws of the State of California, and is not
insolvent. The persons executing this Agreement and related
documents on behalf of Seller are duly authorized to do so.
(b) This Agreement and all the documents and items to be executed
and delivered by Seller to Buyer pursuant to the terms of this
Agreement, (i) have been or will be duly authorized, executed
and delivered by Seller, (ii) are or will be legal and binding
obligations of Seller as of the date of their respective
executions, (iii) are or will be enforceable in accordance
with their respective terms (except to the extent that such
enforcement may be limited by applicable bankruptcy,
insolvency, moratorium and other principles relating to or
limiting the rights of contracting parties generally); (iv) do
not and will not at the Close of Escrow, violate any
provisions of any agreement to which Seller is a party; and
(v) will be sufficient to convey title (if they purport to do
so).
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(c) Except as disclosed in writing to Buyer on or prior to the Due
Diligence Date, Seller has no knowledge of any material
physical, structural, or mechanical defects in the Property,
including, without limitation, the plumbing, heating, air
conditioning and electrical systems. All such items are in
good operating condition and repair (ordinary wear and tear
excepted).
(d) Except as disclosed in writing to Buyer on or prior to the Due
Diligence Date, to Seller's knowledge, the development and
construction of the Property complied in all material respects
with the then-applicable building codes, environmental,
zoning, subdivision, and land use laws, and other
then-applicable local, state and federal laws and regulations,
including, without limitation, the Americans With Disabilities
Act. Without in any way limiting the generality of the
foregoing, to Seller's knowledge the Property then complied
and now complies with the California Subdivision Map Act (Cal.
Gov't Code Section Section 66410-66499.37), and no final
subdivision map, parcel map or division of land is required to
validly transfer the Property to Buyer. Except as disclosed
in writing to Buyer on or before the Due Diligence Date,
neither Seller nor RVA has received any notice from any
governmental authority advising Seller and/or RVA of a
violation of any current building codes, environmental,
zoning, subdivision, and land use laws or other applicable
local, state and federal laws and regulations, including,
without limitation, the Americans with Disabilities Act.
Except as disclosed in writing to Buyer on or before the Due
Diligence Date, Seller has no knowledge that the Property or
its use and operation are currently in violation of any of the
current laws and regulations referred to in the preceding
sentence. Seller does not have knowledge of any condemnation,
environmental, zoning or other land-use regulation proceeding,
either instituted or planned to be instituted, which would
affect the Property in any material respect, nor has Seller
any knowledge of any assessments affecting the Property other
than as set forth in the PTR.
(e) On or prior to the Due Diligence Date, Seller delivered to
Buyer all information, documents, Contracts, Leases, schedules
and items ("AGREEMENT DOCUMENTS") known to Seller and material
to the use and value of the Property which are in Seller's
and/or RVA's possession or control. Seller has no knowledge
of any Agreement Documents which are not in Seller's and/or
RVA's possession or control. The Agreement Documents
delivered to Buyer by Seller pursuant to this Agreement are,
in all material respects, true, correct and complete copies
and (as to all agreements or legal instruments) are in full
force and
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effect, without, to Seller's knowledge, default or violation
by any party and, to Seller's knowledge, without any right of
set-off except as disclosed in writing at the time of such
delivery. To Seller's knowledge, there are no existing
events, which with the passage of time or giving of notice or
both would constitute a material default under such Agreement
Documents. All material facts known to Seller pertaining to
such Agreement Documents, or this transaction, have been
disclosed and there are no material omissions by Seller. The
Contracts constitute the entire agreements with third parties
relating to the Property, have not been amended, modified or
supplemented, except for such amendments, modifications and
supplements delivered to Buyer on or prior to the Due
Diligence Date, and there are no oral occupancy or other
agreements of any kind with any third parties (excluding,
however, the written Leases and Permitted Exceptions)
affecting the Property which will survive the Close of Escrow.
(f) Except as disclosed to Buyer in writing prior to the Due
Diligence Termination Date, all water, sewer, gas, electric,
telephone, and drainage facilities and all other utilities
required by law for the present use and operation of the
Property as an apartment complex containing not less than 923
units are installed across public property or valid easements
to the boundary lines of the Land, and are connected pursuant
to valid permits, and Seller has received no notice from
Tenants that such facilities are inadequate to service the
Property or are not in good operating condition. Except as
disclosed to Buyer in writing prior to the Due Diligence
Termination Date, all cable television, telephone or security
service equipment and operating systems are in good operating
condition.
(g) Except as may be disclosed by the Survey, Seller has obtained
all licenses, permits, easements, and rights-of-way, including
proof of dedication, required from all governmental
authorities having jurisdiction over the Property or from
private parties for the present use and operation of the
Property and to assure vehicular and pedestrian ingress to and
egress from the Land at all access points currently being
used.
(h) Seller is the sole beneficial owner of the Property and will
convey, or cause to be conveyed, to Buyer at the Close of
Escrow, good, valid and marketable title to the Property free
and clear of all liens, encumbrances, rights, reservations,
easements and other exceptions except of record. Without
limiting the foregoing, there are no federal, state or local
tax liens encumbering the
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Property other than non-delinquent real estate taxes and
assessments which may be shown on the PTR.
(i) Except as disclosed to Buyer in writing prior to the Due
Diligence Termination Date, Seller has no knowledge of any
material violations of any covenants, conditions or
restrictions applicable to the Property, and neither Seller
nor RVA has received any notice or complaint with respect to
any violation of any covenants, conditions or restrictions
applicable to the Property. Except as disclosed to Buyer in
writing prior to the Due Diligence Termination Date, all
reserves required to be held by any master owners association
applicable to the Property are fully funded.
(j) Except with respect to the transfer from RVA to Seller, no
previous sale, assignment, transfer, pledge or other
encumbrance of Seller's and/or RVA's interest in any of the
Leases, Contracts, Warranties, Permits, Plans and Reports or
Claims has been made. Seller's and/or RVA's interest in the
Leases, Contracts, Warranties, Permits, Plans and Reports and
Claims is freely assignable by Seller. Except as expressly
set forth in any Contract delivered to Buyer by Seller prior
to the Due Diligence Date, all Contracts may be cancelled
without penalty and with no more than thirty (30) days notice.
(k) HAZARDOUS MATERIALS.
(i) Except as disclosed to Buyer in writing, (A) Seller
does not now use the Property nor knowingly permit
the Property to be used in a manner which violates
any Environmental Enactment (as hereinafter defined),
nor has Seller or RVA ever done so in the past; (B)
Seller has no knowledge of any violation of an
Environmental Enactment on the Property by any other
prior owner of the Property; (C) Seller has no
knowledge of any discharge, seepage or release of
Hazardous Materials onto the Property from adjoining
property; and (D) neither Seller, nor (to Seller's
knowledge) any prior owner, has used the Property or
knowingly allowed the Property to be used in a way
which would require notice or reporting to a
governmental agency of such use under any
Environmental Enactment;
(ii) Without limitation of the foregoing, except as
disclosed to Buyer in writing prior to the Due
Diligence Termination Date, Seller has no knowledge
that any asbestos, polychlorinated biphenyls, radon,
urea or formaldehyde are contained in or stored on
the Property, that there are any
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Hazardous Materials on the Property in violation of
any Environmental Enactments, and that there are any
storage tanks containing or previously containing
Hazardous Materials located in or under the Property;
(iii) Except as disclosed to Buyer in writing, Seller has
no knowledge that the Property has been designated as
"border zone property" under the provisions of
California Health and Safety Code Sections 25220 et
seq., or any regulation adopted in accordance
therewith, or that there has been any occurrence or
condition on any real property adjoining or in the
vicinity of the Property that could cause the
Property or any part thereof to be designated as
"border zone property";
(iv) As used herein, "ENVIRONMENTAL ENACTMENT" shall mean
any federal, state or local law, regulation or
ordinance or any judicial decisions, rules,
regulations or publications promulgated thereunder,
or any common law, authorizations, judgments,
decrees, concessions, grants, franchises, agreements,
or other governmental restrictions or requirements,
regarding or related to the environment,
environmental matters or Hazardous Materials;
(v) As used herein, "HAZARDOUS MATERIALS" shall mean any
flammable substances, explosives, radioactive
materials, pollutants, contaminants, medical waste
materials, petroleum, petroleum products, hazardous
or toxic materials or any related materials or
substances at, on or beneath the Property, including
but not limited to, substances defined as "EXTREMELY
HAZARDOUS SUBSTANCES," "HAZARDOUS SUBSTANCES,"
"HAZARDOUS WASTE," "HAZARDOUS MATERIALS," "TOXIC
SUBSTANCES" OR "INFECTIOUS WASTE" in any
Environmental Enactment or in the regulations adopted
and publications promulgated pursuant to said
Environmental Enactments; and
(vi) As used herein, "a violation of an Environmental
Enactment" or words of similar import shall mean the
existence, use, storage, discharge, treatment,
release, transportation or disposition of, whether
temporarily or permanently, any Hazardous Materials
on the Property other than in compliance with the
requirements of any Environmental Enactment.
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(l) Except as disclosed to Buyer in writing prior to the Due
Diligence Termination Date, neither Seller nor RVA has
received any notice from any insurance carrier, any of the
Tenants or any other third party of any defects or
inadequacies in the Property, or in any portion thereof, which
would adversely affect the insurability thereof or the cost of
such insurance. Except as previously disclosed to Buyer in
writing on or prior to the Due Diligence Date, there are no
settled or pending insurance claims relating to the Property.
(m) Except as previously disclosed to Buyer in writing on or prior
to the Due Diligence Date, there are no settled, adjudicated,
pending or, to the best of Seller's knowledge, threatened
legal proceedings or actions of any kind or character
affecting the Property or Seller's interest therein.
(n) Seller is neither a "foreign person" within the meaning of
Section 1445(f)(3) of the United States Internal Revenue Code
of 1986, nor a non-resident seller of a "California real
property interest" within the meaning of Sections 18805 or
26131 of the California Revenue and Taxation Code.
(o) Seller is not a licensed real estate broker or salesperson.
(p) Neither Seller nor RVA has received notice that any portion of
the Property is subject to a redevelopment plan or agreement
or is to be included within any redevelopment area. Seller has
not entered into a disposition and development agreement,
owner's participation agreement, or any similar agreement with
any governmental or quasi-governmental authority concerning
the use and development of any portion of the Property except
as disclosed in the PTR or otherwise disclosed in writing by
Seller to Buyer.
(q) Except to the extent set forth in any Contract delivered to
Buyer by Seller prior to the Due Diligence Date or as
otherwise disclosed in writing to Buyer prior to such date,
Seller does not provide to the Tenants any telephone service,
cable television service, security service or maid service.
(r) Except as disclosed to Buyer in writing prior to the Due
Diligence Date, no contract exists with respect to the
"corporate rental units" which is not terminable by either
party upon notice of thirty (30) days or less. Except as
disclosed to Buyer in writing prior to the Due
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Diligence Date, the furniture and appliances located within
the "corporate rental units" are owned by Seller free of any
lien, charge, lease or encumbrance, and will be transferred to
Buyer at the Close of Escrow pursuant to the Xxxx of Sale.
Except as disclosed to Buyer in writing prior to the Due
Diligence Date, linens, housewares and maid services are
provided to Seller in connection with the "corporate rental
units" pursuant to Contracts which have been or will be made
available to Buyer on or before the Due Diligence Date.
No representation or warranty made by Seller in this Agreement
shall merge into any instrument of conveyance delivered at the
Close of Escrow but shall survive the Close of Escrow for a
period of one (1) year, with the exception of the
representations and warranties made in Section 9(k) above,
which shall survive the Close of Escrow for a period of five
(5) years. The representations, warranties and limited
survival periods set forth herein shall not be deemed or
construed as limiting, waiving or relinquishing any statutory
or common law right or remedy, and the effect of the
representations and warranties made in this Agreement shall
not be diminished or deemed to be waived by any inspections,
tests or investigations made by Buyer or its agents.
Moreover, the provisions of this Section 9 with respect to
Hazardous Materials and Environmental Enactments are not
intended as, nor shall the same be construed to be, a waiver
or release by Buyer of any rights which Buyer may have after
the Close of Escrow as to the Property or Seller under any
Environmental Enactments.
10. SELLER'S COVENANTS.
Seller hereby covenants with Buyer as follows.
(a) Each of the matters with respect to which Seller has made a
representation and warranty to Buyer in Section 9 above shall
be continuing, shall be true and correct as of the Close of
Escrow and shall be deemed remade by Seller as of the Close of
Escrow with the same force and effect as if in fact made at
that time; provided, however, that Seller shall not be in
breach of this provision if an event beyond the reasonable
control of Seller causes a representation or warranty set
forth in Section 9 above to become untrue and if Seller gives
immediate notice to Buyer of such event upon Seller's
discovery of such event. The foregoing provision shall in no
way limit Section 3(e) of this Agreement which makes the truth
and accuracy of Seller's representations and warranties a
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contingency to Buyer's obligation to purchase the Property.
(b) During the period between Seller's execution of this Agreement
and the Close of Escrow or termination of this Agreement,
Seller shall execute only those new Leases which are on terms
and conditions and at rental rates which are consistent with
Seller's customary practice at the Property and existing
Leases. Seller shall not terminate, renew, amend or modify
any existing Lease except in the ordinary course and in
accordance with Seller's past practice at the Property.
Subject to the foregoing, Seller shall diligently seek tenants
for all space which is or will become vacant prior to the end
of the month following the Close of Escrow. Except in
accordance with Seller's past practice at the Property as such
past practice has been disclosed in writing to Buyer, prior to
the Close of Escrow, Seller shall not, without Buyer's prior
written consent, accept from any of the Tenants payment of
rent or other charges more than one month in advance or apply
any Tenant Deposit to rent due from any Tenant
(c) Except in accordance with Seller's past practice at the
Property as such past practice has been disclosed in writing
to Buyer, during the period between Seller's execution of this
Agreement and the Close of Escrow or termination of this
Agreement, Seller shall not, without the prior written consent
of Buyer, enter into any Contract with respect to the Property
which will survive the Close of Escrow or will otherwise
affect the use, operation or enjoyment of the Property after
the Close of Escrow. Unless Buyer provides Seller with
written notice to the contrary, after the Close of Escrow,
Buyer shall not retain any existing employees or management
agents of Seller and/or RVA. Accordingly, upon the written
request of Buyer delivered to Seller after the Due Diligence
Termination Date and the release of the Deposit to Seller,
Seller shall cause all employment and management agreements
respecting the Property to be terminated as quickly as
permitted by the applicable contract, deliver evidence of such
termination to Buyer, and remove all employees and management
personnel from the Property. Furthermore, upon the written
request of Buyer delivered to Seller after the Due Diligence
Termination Date and the release of the Deposit to Seller,
Seller shall cause one of the following to occur within thirty
(30) days of Seller's receipt of such notice from Buyer with
respect to any rental unit within the Property occupied prior
to the Close of Escrow by an employee and/or management
personnel of Seller and/or RVA: (i) such employee or
management personnel shall enter into a Lease with Buyer
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on the current standard lease form and at a market rental rate
relating to the occupancy of the rental unit by such employee
or management personnel; or (ii) such employee or management
personnel shall deliver the rental unit to Buyer in a vacant
condition. Notwithstanding the preceding sentence in the
event any Contract or Lease requires Seller and/or RVA to give
more than thirty (30) days' notice to any employees or
management personnel with respect to the occupancy of rental
units by such employees or management personnel, the thirty
(30) day time period shall be extended as required by such
Contract or Lease; provided, however, that Seller shall
reimburse Buyer by way of a credit against the Purchase Price
for any loss of rental income resulting from extension of the
time period. In the event any employees and/or management
personnel of Seller and/or RVA do not comply with either
clause (i) or clause (ii) above, Seller shall indemnify Buyer
for any cost or expense (including reasonable attorneys' fees)
incurred by Buyer in evicting such employees and/or management
personnel.
(d) During the period between Seller's execution of this Agreement
and the Close of Escrow or termination of this Agreement,
Seller shall not, without the prior written consent of Buyer,
sell, assign, transfer, pledge or otherwise encumber its
interest in any of the Leases, Contracts, Warranties, Permits,
Plans and Reports or Claims.
(e) The Existing Insurance Policies, or equivalent coverage, shall
remain continuously in force through the day of the Close of
Escrow.
(f) At all times prior to the Close of Escrow, Seller shall
operate and manage the Property in the ordinary course of its
business and consistent with Seller's existing management
policies and procedures, shall maintain present services,
shall maintain the Property in good repair and working order,
shall keep on hand sufficient materials, supplies, equipment
and other personal property for the efficient operation and
management of the Property in such manner, and shall perform
when due all of Seller's and/or RVA's obligations under the
Leases, any deed of trust, mortgage or other lien encumbering
the Property, the Contracts, the Permits and other agreements
relating to the Property and otherwise in accordance with
applicable laws, ordinances, rules and regulations affecting
the Property. Except as otherwise provided herein, Seller
shall deliver the Property at the Close of Escrow in
substantially the same condition as it was on the date hereof,
reasonable wear and tear excepted. None of the Personal
Property shall be removed
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from the Land or the Improvements, unless replaced by personal
property of equal or greater utility and value.
(g) Seller has paid, or will pay in full prior to the Close of
Escrow, all bills and invoices for labor, goods, material and
services of any kind relating to the Property, utility
charges, and employee salary and other accrued benefits
relating to the period prior to the Close of Escrow.
(h) All alterations, installations, decorations and other tenant
improvement work required to be performed prior to the Close
of Escrow under the Leases or other agreements affecting the
Property, which have not been completed and paid in full shall
be completed and paid in full on or prior to the Close of
Escrow.
(i) Upon Buyer's request, and upon reasonable notice by Buyer, for
a period of one (1) year after the Close of Escrow, Seller
shall make all of Seller's and/or RVA's records with respect
to the Property available during normal business hours to
Buyer for inspection, copying and audit by Buyer's designated
representatives.
(j) Seller shall promptly (and in any event prior to the Close of
Escrow) notify Buyer of any change in any condition with
respect to the Property or of any event or circumstance which
makes any representation or warranty of Seller to Buyer under
this Agreement materially untrue or misleading, or any
covenant of Seller under this Agreement incapable or less
likely of being performed.
(k) During the pendency of the Escrow and until the Escrow and
this Agreement is terminated as provided herein, Seller shall
not solicit any offer for, negotiate the purchase and sale of,
accept or discuss any "back-up" offer to purchase or otherwise
market the Property to any person other than Buyer. Without
limiting the generality of the foregoing, during such period
of xxxx Xxxxxx shall not offer the Property for sale, discuss
the terms of any possible sale of the Property with any
person, accept or discuss back-up offers or list the Property
with any brokers. As used in the foregoing, a "sale" shall
include any long term lease other than any lease of space in
the ordinary course of managing the Property (which leases in
the ordinary course are subject to the requirements of Section
10(b) above), and shall also include any joint venture or
equity participating loan. Nothing in this Section 10(k)
shall restrict Seller's efforts to refinance on a conventional
non-participating basis any loan which currently encumbers the
Property.
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(l) During the period prior to the Close of Escrow, upon
reasonable notice to Seller, Buyer shall have the right to
audit Seller's and/or RVA's records during normal business
hours to verify any information provided by Seller to Buyer or
to confirm Seller's compliance with its representations,
warranties and covenants as contained herein.
The liability of Seller for a breach of any covenant shall not be
merged into any instrument of conveyance delivered at the Close of Escrow. The
covenants and survival periods set forth herein shall not be deemed or
construed as limiting, waiving or relinquishing any statutory or common law
right or remedy, and the effect of the covenants made in this Agreement shall
not be diminished or deemed to be satisfied by any inspections, tests or
investigations made by Buyer or its agents.
11. BUYER'S COVENANT.
Buyer hereby covenants and agrees that Buyer and its successors and
assigns shall not record or cause the recordation of a condominium map with
respect to any building on the Property subdividing the individual units of
such building into separate condominium units at any time prior to the
expiration of the ten (10) year construction defect statute of limitations with
respect to such building. Notwithstanding the preceding sentence, Buyer's
covenant hereunder shall expire with respect to the entire Property no later
than March 1, 2003. Buyer agrees to indemnify, protect and hold harmless
Seller from and against any and all loss, costs or expense (including
reasonable attorneys' fees) incurred by Buyer as a result of Buyer's breach of
the foregoing covenant. The covenant and indemnity of Buyer set forth in this
Section 11 shall survive the Close of Escrow. Buyer shall not be relieved from
its personal liability for the indemnity obligation set forth in this Section
11 by reason of its sale or transfer of the Property.
12. RIGHT TO ENTER PROPERTY.
Commencing on the Opening of Escrow, and continuing thereafter until
the Close of Escrow or termination of this Agreement, Buyer and its agents and
contractors shall have the right, at Buyer's sole cost and expense, to: (i)
enter onto the Property (including the rental units) at reasonable times and in
a reasonable manner for the purpose of making such tests and inspections as
Buyer deems necessary in connection with this Agreement; and (ii) interview the
Tenants. Without limiting the generality of the preceding sentence, Buyer may
conduct invasive tests and inspections, subject to the rights of tenants under
the Leases and subject to obtaining Seller's prior consent, which consent will
not be unreasonably withheld. Buyer shall not unreasonably disturb or annoy
any Tenants in the course of making such tests and inspections and/or
interviews and shall cooperate with Seller in meeting any
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requirements Seller may have with respect to notifying tenants of such
interviews or inspections. Buyer shall maintain, or cause its contractors or
subcontractors to maintain, liability insurance coverage applicable to such
tests and inspections with coverage in an amount equal to One Million Dollars
($1,000,000) per occurrence. After making such tests and inspections, Buyer
shall immediately restore the Property to its condition prior to such tests and
inspections. Buyer hereby agrees to indemnify, defend and hold Seller harmless
from any loss, damage, costs or expenses (including without limitation
attorneys' fees) incurred by Seller by reason of any actual physical damage to
the Property or injury to persons caused by Buyer or its agents or contractors
in exercising its rights under Sections (i) and (ii) above. As a condition to
the Close of Escrow (solely for the benefit of Buyer), Buyer and its agents and
contractors shall have the right to enter onto the Property to determine that
the condition of the Property with respect to the contingencies set forth in
Section 3 has not materially and adversely changed from the date of the
approval of said contingencies.
13. LOSS BY FIRE, OTHER CASUALTY OR CONDEMNATION.
In the event that prior to the Close of Escrow, the Property, or any
part thereof, is destroyed or damaged by fire or other casualty, or is subject
to a taking by a public authority, then Buyer shall have the right, exercisable
by giving notice to Seller within fifteen (15) business days after receiving
written notice of such damage or destruction or taking either (a) to terminate
this Agreement, in which case neither party shall have any further rights or
obligations hereunder and any money (including, without limitation, the
Deposit) or documents in Escrow or released to Seller shall be returned to the
party depositing the same, except that Buyer and Seller shall each be
responsible for one-half of any title or Escrow cancellation fee, or (b) to
accept the Property in its then condition and proceed to close this transaction
with an abatement or reduction in the Purchase Price in the amount of any
uninsured loss plus the deductible for the applicable insurance coverage, if
any, and to receive an assignment of all of Seller's and/or RVA's rights to any
insurance proceeds payable by reason of such damage or destruction or
condemnation awards payable by reason of such taking and the Close of Escrow
shall be extended for a reasonable period of time to accommodate Buyer's
election to close. If Buyer elects to proceed under clause (b) above, Seller
shall not compromise, settle or adjust any claims to such proceeds or awards
without Buyer's prior written consent. Seller agrees to give Buyer prompt
notice of any taking, damage or destruction of the Property.
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14. DEFAULT.
(a) BUYER'S DEFAULT. IN THE EVENT THAT BUYER DEFAULTS IN ITS
OBLIGATIONS TO CLOSE THE PURCHASE OF THE PROPERTY FOR ANY REASON OTHER THAN
SELLER'S DEFAULT, BUYER'S DISAPPROVAL OF ANY CONTINGENCY OR BUYER'S EXERCISE OF
ITS RIGHT TO TERMINATE THIS AGREEMENT PURSUANT TO THE TERMS OF THIS AGREEMENT,
AND BUYER FAILS TO CURE SUCH DEFAULT WITHIN TEN (10) BUSINESS DAYS AFTER
RECEIVING WRITTEN NOTICE OF SUCH DEFAULT FROM SELLER, OR, IF SUCH DEFAULT IS
NOT REASONABLY SUSCEPTIBLE OF BEING CURED WITHIN SUCH TEN (10) DAY PERIOD, IF
BUYER FAILS TO COMMENCE TO CURE SUCH DEFAULT WITHIN SUCH TEN (10) DAY PERIOD,
THEN, UPON DEMAND BY SELLER, THE DEPOSIT SHALL BE PAID TO AND RETAINED BY
SELLER AS LIQUIDATED DAMAGES. THE PARTIES HERETO EXPRESSLY AGREE AND
ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN THE EVENT OF A DEFAULT BY BUYER
WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO ASCERTAIN AND THAT THE AMOUNT
OF THE DEPOSIT REPRESENTS THE PARTIES' REASONABLE ESTIMATE OF SUCH DAMAGES. IN
ANY AND ALL ACTIONS BROUGHT PURSUANT TO OR TO ENFORCE BUYER'S OBLIGATIONS UNDER
THIS AGREEMENT, IT SHALL BE CONCLUSIVELY PRESUMED THAT THE ABOVE-DESCRIBED
LIQUIDATED DAMAGES SHALL BE THE SOLE REMEDY OF SELLER IN THE EVENT OF BUYER'S
DEFAULT HEREUNDER AND IT SHALL NOT BE PROPER UNDER ANY CIRCUMSTANCES THAT
BUYER'S OBLIGATION TO PURCHASE THE PROPERTY BE SPECIFICALLY ENFORCED.
SELLER'S INITIALS: _____ BUYER'S INITIALS: _____
(b) SELLER'S DEFAULT. In the event that Escrow fails to close by
reason of Seller's default or Seller otherwise breaches any of its obligations
hereunder, Buyer shall have the right (i) to terminate the Escrow by the
delivery of written notice to Escrow Holder and Seller, in which event the
Deposit and all other sums deposited in Escrow by the Buyer shall be
immediately remitted to Buyer and (ii) to pursue whatever remedies Buyer may
have against Seller, at law or in equity. Seller and Buyer hereby agree that
the Property is of a special and unique character which gives it a peculiar
value, and that Buyer cannot reasonably or adequately be compensated in damages
in an action at law in the event that Seller breaches its obligation to sell
the Property to Buyer. Therefore, Seller expressly agrees that Buyer shall be
entitled to injunctive and other equitable relief (including, without
limitation, the right to specifically enforce Seller's obligation to sell the
Property to Buyer) in the event of such breach in addition to any other rights
or remedies which may be available to Buyer
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15. ASSIGNMENT OF LEASES, CONTRACTS, WARRANTIES, PERMITS, PLANS REPORTS,
CLAIMS AND UTILITY DEPOSITS.
Effective concurrently with the Close of Escrow, Seller shall assign
to Buyer all of Seller's and/or RVA's right, title and interest in and to all
(a) Leases, (b) Contracts, (c) Warranties, (d) Permits, (e) Plans and
Reports, (f) all utility deposits held by any utility or other service provider
with respect to the Property, and (g) all claims, suits, and causes of action,
other than San Diego Superior Court Case No. 689813 entitled Renaissance Villas
Associates v. Truck Insurance Exchange filed on June 22, 1995, arising from,
under or in connection with the Property and its operation, including, but not
limited to, all of Seller's and/or RVA's rights, claims, demands and causes of
action against all Tenants in the Property and all suppliers of labor,
materials or services to or with respect to the Property (collectively, the
"CLAIMS"). Buyer and Seller intend that the Assignment and Assumption of
Contracts shall vest in Buyer full ownership of the assets or rights described
above, and that no other document of transfer or assignment shall be required
by the parties hereto or any other person to achieve or evidence the same.
However, in the event that any additional document or action reasonably is
required of Seller to vest in Buyer or its successors, nominees and assigns
title to the assets or rights described above, or to evidence Buyer's or its
successors', nominees' and assigns' ownership of any of such assets or rights,
Seller agrees that it will, upon written request therefor, execute and deliver
to Buyer or its successors, nominees and assigns any such document and take
such further action.
16. INDEMNIFICATION.
(a) Except for Losses and Liabilities (as hereinafter defined)
arising directly or indirectly from a breach of any of Buyer's representation
or warranties, Seller shall hold harmless, indemnify and defend Buyer, its
successors and assigns and their respective agents, employees, officers and
directors, and the Property from and against any and all obligations,
liabilities, claims, liens, encumbrances, demands, losses, damages, causes of
action, judgments, costs and expenses (including, without limitation,
attorneys' fees and expenses) whether direct, contingent or consequential and
no matter how arising ("LOSSES AND LIABILITIES") in any way (i) related to the
Property and attributable to the period prior to the Close of Escrow (except to
the extent arising as a result of the acts of Buyer and/or any of Buyer's
employees, agents or representatives) or (ii) resulting from any
misrepresentation of Seller or any inaccuracy in or breach of any
representations and warranties by Seller.
(b) Except for Losses and Liabilities arising directly or
indirectly from a breach of any of Seller's representations,
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warranties or covenants, Buyer shall hold harmless, indemnify and defend
Seller, its successors and assigns and their respective agents, employees,
officers and partners, from and against any and all Losses and Liabilities in
any way (i) related to the Property and arising or accruing with respect to the
period from and after the Close of Escrow and during Buyer's period of
ownership of the Property (except to the extent arising as a result of the acts
of Seller and/or any of Seller's employees, agents or representatives) or (ii)
resulting from any misrepresentation of Buyer or inaccuracy in or breach of any
representation, warranty or covenant of Buyer.
17. BROKER'S COMMISSION.
Buyer and Seller each represent to the other that, with the exception
of any agreement Buyer may have with Xxx Xxxxxx (for which, as between Buyer
and Seller, Buyer is solely responsible), they have not entered into any
agreement or incurred any obligation which might result in the obligation to
pay a sales or brokerage commission or finder's fee with respect to this
transaction. Buyer and Seller each agree to indemnify, defend and hold the
other harmless from and against any and all losses, claims, damages, costs or
expenses (including attorneys' fees) which the other may incur as a result of
any claim made by any person to a right to a sales or brokerage commission or
finder's fee in connection with this transaction to the extent such claim is
based, or purportedly based, on the acts or omissions of Seller or Buyer, as
the case may be. The obligations of Buyer and Seller under this Section 17
shall survive the Close of Escrow.
18. NOTICES.
All notices, requests and demands to be made hereunder to the parties
hereto shall be made in writing to the addresses set forth below and shall be
given by any of the following means: (a) personal service; (b) electronic
communication, whether by telex, telegram, telecopying or facsimile
transmission (provided, however, that notice is also given by one of the other
means set forth in Subsection 18(a), (c) or (d)); (c) certified or registered
mail, postage prepaid, return receipt requested; or (d) nationally recognized
courier or delivery service. Such addresses may be changed by notice to the
other parties given in the same manner as provided above. Any notice, demand
or request sent pursuant to either Subsection 18(a), (b) or (d) hereof shall be
deemed received upon the actual delivery thereof, and, if sent pursuant to
Subsection 18(c) shall be deemed received five (5) days following deposit in
the mail. Refusal to accept delivery of any notice, request or demand shall be
deemed to be delivery thereof. If any party hereto is not an individual,
notice may be made on any officer, general partner or principal thereof.
Notice to any one co-party shall be deemed notice to all co-parties.
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To Buyer: Irvine Apartment Communities, L.P.
000 Xxxxxxx Xxxxxxx, Xxxxx 0000
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxxx
Facsimile No. (000) 000-0000
With a O'Melveny & Xxxxx LLP
copy to: 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx, Esq.
Facsimile No. (000) 000-0000
To Seller: Aoki Construction (CA) Co., Ltd.
0000 Xxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxx
Facsimile No. (000) 000-0000
With a Xxxxxxxx, Kahan & Xxxxx
copy to: Seventeenth Floor
First National Bank Center
000 Xxxx "X" Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxx, Esq.
Facsimile No. (000) 000-0000
To Escrow Chicago Title Company
Holder: 000 X Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxx
Escrow No. 7338099-48
Facsimile No. (000) 000-0000
19. MISCELLANEOUS PROVISIONS.
(a) INCORPORATION OF PRIOR AGREEMENTS. This Agreement contains
the entire understanding of Buyer and Seller with respect to
the subject matter hereof, and no prior or contemporaneous
written or oral agreement or understanding pertaining to any
such matter shall be effective for any purpose. This
Agreement specifically supersedes the Letter of Intent. No
provision of this Agreement may be amended or added to except
by an agreement in writing, expressly stating that such
agreement is an amendment of this Agreement, signed by the
parties to this Agreement or their respective successors in
interest.
(b) BUYER'S RIGHT TO ASSIGN. Buyer shall have no right to assign
its rights under this Agreement to any other person or entity
without the prior written consent of Seller, which may be
withheld in Seller's sole and
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absolute discretion. Furthermore, Buyer hereby covenants and
agrees that it will not sell, or enter into any agreement or
contract to sell, the Property prior to the date which is six
(6) months following the Close of Escrow. In the event Buyer
breaches the foregoing covenant, Seller shall be entitled to
receive from Buyer a cash payment equal to fifty percent (50%)
of the excess of the consideration received by Buyer in
connection with such sale over the Purchase Price. The
obligations of Buyer under this Section 19(b) shall survive
the Close of Escrow.
(c) ATTORNEYS' FEES. If either party commences an action against
the other to interpret or enforce any of the terms of this
Agreement or because of the breach by the other party of any
of the terms hereof, the losing party shall pay to the
prevailing party reasonable attorneys' fees, costs and
expenses incurred in connection with the prosecution or
defense of such action, whether or not the action is
prosecuted to a final judgment. For the purpose of this
Agreement, the terms "attorneys' fees" or "attorneys' fees and
costs" shall mean the fees and expenses of counsel to the
parties hereto, which may include printing, photostating,
duplicating and other expenses, air freight charges, and fees
billed for law clerks, paralegals, librarians and others not
admitted to the bar but performing services under the
supervision of an attorney. The terms "attorneys' fees" or
"attorneys' fees and costs" shall also include, without
limitation, all such fees and expenses incurred with respect
to appeals, arbitrations and bankruptcy proceedings, and
whether or not any action or proceeding is brought with
respect to the matter for which said fees and expenses were
incurred. The term "attorney" shall have the same meaning as
the term "counsel."
(d) TIME IS OF THE ESSENCE. Time is of the essence of this
Agreement.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and enure to the benefit of each of the parties hereto and to
their respective permitted transferees, successors, and
assigns.
(f) CALIFORNIA LAW; CHOICE OF FORUM; WAIVER OF JURY TRIAL. This
Agreement shall be construed in accordance with and governed
by the internal laws of the State of California without giving
effect to any "conflict of law" rules of such state. Buyer
and Seller each acknowledge and agree that the Superior Court
of the State of California in and for the County of San Diego
and the associated federal and appellate courts shall have
exclusive jurisdiction to
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hear and decide any dispute, controversy or litigation
regarding the enforceability or validity of this Agreement or
any portion thereof. Seller and Buyer each hereby waives any
right such party may have to a trial by jury in any action,
proceeding or counterclaim brought by either such party in
connection with this Agreement and the transaction
contemplated hereby.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but
all of which, when taken together, shall constitute one and
the same instrument.
(h) INTERPRETATION. Wherever possible, each provision of this
Agreement shall be interpreted in such a manner as to be valid
under applicable law, but, if any provision of this Agreement
shall be invalid or prohibited thereunder, such invalidity or
prohibition shall be construed as if such invalid or
prohibited provision had not been inserted herein and shall
not affect the remainder of such provision or the remaining
provisions of this Agreement.
(i) CONSTRUCTION. The language in all parts of this Agreement
shall be in all cases construed simply according to its fair
meaning and not strictly against the party who drafted such
language.
(j) HEADINGS. Section and Section headings of this Agreement are
solely for convenience of reference and shall not govern the
interpretation of any of the provisions of this Agreement.
(k) EXHIBITS. All Exhibits attached hereto are incorporated
herein by reference.
(l) WAIVER BY A PARTY. The waiver of any contingency,
representation, warranty, covenant, or other matter or
provision hereof may only be made by the party benefitted by
same, and the waiver must be in writing, must be signed by the
benefitted party and must specifically state which matter is
being waived.
(m) RECITALS VERIFIED. The Recitals to this Agreement are hereby
stated to be true and correct and are incorporated herein by
this reference.
(n) BUSINESS DAYS. As used in this Agreement, a "business day"
shall mean a day other than Saturday, Sunday or any day on
which banking institutions in the City of Los Angeles are
authorized by law or other governmental
38
41
action to close. All other references to "days" or "calendar
days" in this Agreement shall refer to calendar days. If the
last day for the performance of any act or the giving of any
notice permitted or required under this Agreement is a day
other than a business day, then the time period for performing
such act or giving such notice shall be extended until the
next business day.
(o) SURVIVAL. Any indemnity set forth in this Agreement,
including without limitation those set forth in Sections 11,
12 and 17 above, shall survive the Close of Escrow or any
termination of this Agreement.
(p) CONFIDENTIALITY. Seller and Buyer each agree that the terms
of the transaction contemplated by this Agreement, the
existence of this Agreement and all information made available
by one party to the other shall be maintained in strict
confidence and no disclosure of such information will be made
by Seller or Buyer, whether or not the transaction
contemplated by this Agreement shall close, except to such
attorneys, accountants and other professional consultants as
are reasonably required to evaluate and consummate the
transaction; provided, however, nothing in this Section (p)
shall prevent Buyer or Seller from disclosing or accessing any
information otherwise deemed confidential under this
Subsection (p): (i) in connection with that party's
enforcement of its rights hereunder, (ii) pursuant to any
legal requirement, any statutory reporting requirement or any
accounting or auditing disclosure requirement, or (iii) in
connection with the performance of its obligation hereunder,
including, but not limited to, the delivery and recordation of
instruments, notices, or other documents required hereunder.
[SIGNATURES ON NEXT PAGE]
39
42
IN WITNESS WHEREOF, Buyer and Seller have executed this Agreement as
of the day and year first above written.
"SELLER"
AOKI CONSTRUCTION (CA) CO., LTD.,
a California corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
"BUYER"
IRVINE APARTMENT COMMUNITIES, L.P.,
a Delaware limited partnership
By: IRVINE APARTMENT COMMUNITIES, INC.,
a Maryland corporation,
General Partner
By:
-----------------------------
Xxxxxxx X. Xxxxxxxx,
Senior Vice President
By:
-----------------------------
Xxxxx X. Xxxx,
Senior Vice President &
Chief Financial Officer
40
43
LIST OF EXHIBITS
Exhibit A Legal Description
Exhibit B Personal Property Inventory
Exhibit C Form of Rent Schedule
Exhibit D Printed Escrow Instructions
Exhibit E Grant Deed
Exhibit F Xxxx of Sale
Exhibit G Assignment and Assumption of Leases
Exhibit H Assignment and Assumption of Contracts
Exhibit I Seller's Non-Foreign Affidavit
41
44
EXHIBIT A
LEGAL DESCRIPTION
LOTS 1 THROUGH 27, INCLUSIVE, OF THE VILLAS OF RENAISSANCE, IN THE
CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING
TO MAP THEREOF NO. 13051, FILED IN THE OFFICE OF THE COUNTY RECORDER
OF SAN DIEGO COUNTY ON SEPTEMBER 2, 1993.
A-1
45
EXHIBIT B
PERSONAL PROPERTY INVENTORY
[To be attached by Seller prior to the Opening of Escrow]
B-1
46
EXHIBIT C
FORM OF RENT SCHEDULE
[To be attached by Seller prior to the Opening of Escrow]
C-1
47
EXHIBIT D
PRINTED ESCROW INSTRUCTIONS
[attached]
D-1
48
EXHIBIT E
FORM OF GRANT DEED
WHEN RECORDED MAIL TO:
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx, Esq.
MAIL TAX STATEMENTS TO:
Irvine Apartment Communities, L.P.
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Controller
-----------------------------------------------------------------------------
(Space above for Recorder's Use Only)
DOCUMENTARY TRANSFER TAX TO BE PAID BY SEPARATE DECLARATION.
GRANT DEED
FOR VALUE RECEIVED, the receipt and sufficiency of which are hereby
acknowledged, Aoki Construction (CA) Co., Ltd., a California corporation,
hereby grants to Irvine Apartment Communities, L.P., a Delaware limited
partnership, all of that certain real property more particularly described in
Schedule 1 attached hereto and incorporated herein by this reference, subject
to (a) all non-delinquent real property taxes, (b) all non-delinquent special
assessments, if any, and (c) all other liens, leases, easements, encumbrances,
covenants, conditions, restrictions and other matters of record.
DATED: ___________, 1997
AOKI CONSTRUCTION (CA) CO., LTD.,
a California corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
By:
-----------------------------
E-1
49
Name:
---------------------------
Title:
--------------------------
X-0
00
XXXXXXXXXXXXXXX
XXXXX OF CALIFORNIA )
) ss.
COUNTY OF _________________ )
On ____________________, 1997, before me, personally appeared
________________________ and _________________________ personally known to me
or proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signatures(s) on the instrument the persons(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
_________________________________
Signature of Notary
E-3
51
SCHEDULE 1
GRANT DEED LEGAL DESCRIPTION
LOTS 1 THROUGH 27, INCLUSIVE, OF THE VILLAS OF RENAISSANCE, IN THE
CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING
TO MAP THEREOF NO. 13051, FILED IN THE OFFICE OF THE COUNTY RECORDER
OF SAN DIEGO COUNTY ON SEPTEMBER 2, 1993.
E-4
52
EXHIBIT F
XXXX OF SALE
THIS XXXX OF SALE is dated as of ______________________, 1997, by Aoki
Construction (CA) Co., Ltd., a California corporation ("TRANSFEROR"), in favor
of Irvine Apartment Communities, L.P., a Delaware limited partnership
("TRANSFEREE").
FOR VALUE RECEIVED, receipt of which is hereby acknowledged,
Transferor does hereby grant, bargain, sell, convey, assign, transfer and set
over unto Transferee, absolutely and not as security, all of Transferor's
interest in and to the following property and equipment located at the property
known as Villas of Renaissance, California, as more particularly described in
Schedule 1 attached hereto.
IN WITNESS WHEREOF, Transferor has executed this Xxxx of Sale as of
the day and year first above written.
TRANSFEROR: AOKI CONSTRUCTION (CA) CO., LTD.,
a California corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
F-1
53
SCHEDULE 1
XXXX OF SALE LEGAL DESCRIPTION
LOTS 1 THROUGH 27, INCLUSIVE, OF THE VILLAS OF RENAISSANCE, IN THE
CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING
TO MAP THEREOF NO. 13051, FILED IN THE OFFICE OF THE COUNTY RECORDER
OF SAN DIEGO COUNTY ON SEPTEMBER 2, 1993.
F-2
54
EXHIBIT G
ASSIGNMENT AND ASSUMPTION OF LEASES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES ("Assignment") is made as of the ____
day of _______________, 1997 by AOKI CONSTRUCTION (CA) CO., LTD., a California
corporation ("Assignor"), whose address is 0000 Xxxxx Xxxxxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000, to IRVINE APARTMENT COMMUNITIES, L.P., a Delaware limited
partnership ("Assignee"), whose address is 3rd Floor, 000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000.
RECITALS
A. Assignor as "Seller" and Assignee as "Purchaser" have entered into
that certain Purchase and Sale Agreement and Joint Escrow Instructions
(the "Purchase Agreement") dated April ___, 1997, pursuant to the
terms of which Assignor has agreed to sell to Assignee and Assignee
has agreed to purchase from Assignor certain property, including the
apartment project known as The Villas of Renaissance, located at
_________________________________________, as more particularly
described in the Purchase Agreement (the "Property"). All capitalized
terms used herein but not defined herein shall have the meanings set
forth in the Purchase Agreement.
B. Pursuant to the terms of the Purchase Agreement, Assignor desires to
assign to Assignee, and Assignee desires to accept such assignment
from Assignor, all the right, title and interest of Assignor in and to
any and all Leases in connection with the Property (the "Leases"), all
as more completely described on Schedule 1 attached hereto and by this
reference incorporated herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby
agree as follows:
1. ASSIGNMENT. Effective as of the date hereof (the "Effective Date"),
Assignor hereby grants, assigns, transfers and conveys to Assignee,
and Assignee hereby accepts from Assignor such grant, assignment,
transfer and conveyance, all right, title and interest of Assignor in
and to the Leases. Assignee hereby assumes and agrees to perform and
to be bound by all of the terms, covenants, conditions and obligations
of Assignor under the Leases which arise on or after the Effective
Date (the "Post Effective Date Obligations").
G-1
55
2. ASSIGNEE INDEMNITY. Without in any way limiting any indemnity
contained in the Purchase Agreement, Assignee hereby agrees to
protect, defend, indemnify and save and hold harmless Assignor from
and against the Post Effective Date Obligations and any and all
liability, loss, costs, damage or expense (including attorneys' fees,
charges and expenses) which Assignor may incur under the Leases, and
from any and all claims and demands whatsoever which may be asserted
against Assignor by reason of any alleged obligation or undertaking on
Assignor's part to perform or discharge any of the terms, covenants or
agreements contained in any of the Leases, which claims or demands
arise from events occurring on or after the Effective Date.
3. ASSIGNOR INDEMNITY. Without in any way limiting any indemnity
contained in the Purchase Agreement, Assignor hereby agrees to
protect, defend, indemnify and save and hold harmless Assignee from
and against any and all liability, loss, cost, damage or expense
(including attorneys' fees, charges and expenses) which Assignee may
incur under the Leases, by reason of any failure of Assignor to
perform or discharge any of the terms, covenants or agreements
contained in the Leases which arose prior to the Effective Date.
4. FURTHER ASSURANCES. Each party agrees to execute such other and
further instructions as may be necessary or proper in order to
consummate the transaction contemplated by this Assignment.
5. SUCCESSORS AND ASSIGNS. This Assignment shall be binding upon and
inure to the benefit of the respective successors and assigns of
Assignor and Assignee.
6. ATTORNEYS' FEES AND COSTS. If either party to this Assignment brings
any action or suit against the other party to this Assignment by
reason of any breach of any covenant, condition, agreement or
provision on the part of the other party set forth in this Assignment,
the prevailing party shall be entitled to recover from the other party
all costs and expenses of the action or suit, including reasonable
attorneys' fees, in addition to any other relief to which it may be
entitled. For purposes hereof, the term "attorneys' fees" shall have
the meaning set forth in the Purchase Agreement.
7. GOVERNING LAW. This Assignment shall be governed by and construed in
accordance with the laws of the State of California.
G-2
56
8. CONFLICT WITH PURCHASE AGREEMENT. This Assignment is intended to
implement the terms and conditions of the Purchase Agreement. If any
of the provisions hereof are in direct conflict with the provisions of
the Purchase Agreement, the Purchase Agreement shall control.
9. COUNTERPARTS. This Assignment may be executed in several counterparts
and all such executed counterparts shall constitute one Assignment,
binding on all of the parties hereto, notwithstanding that all of the
parties hereto are not signatories to the original or to the same
counterpart.
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment as of the day and year first above written.
ASSIGNOR
AOKI CONSTRUCTION (CA) CO., LTD.,
a California corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
ASSIGNEE
IRVINE APARTMENT COMMUNITIES, L.P.
a Delaware limited partnership
By: IRVINE APARTMENT COMMUNITIES, INC.,
a Maryland corporation,
General Partner
By:
-----------------------------
Xxxxxxx X. Xxxxxxxx,
Senior Vice President
G-3
57
By:
-----------------------------
Xxxxx X. Xxxx,
Senior Vice President and
Chief Financial Officer
G-4
58
SCHEDULE 1
DESCRIPTION OF LEASES
[attached]
G-5
59
EXHIBIT H
ASSIGNMENT AND ASSUMPTION OF CONTRACTS
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS ("Assignment") is made as of the
____ day of _______________, 1997 by AOKI CONSTRUCTION (CA) CO., LTD., a
California corporation ("Assignor"), whose address is 0000 Xxxxx Xxxxxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000, to IRVINE APARTMENT COMMUNITIES, L.P., a Delaware
limited partnership ("Assignee"), whose address is 3rd Floor, 000 Xxxxxxx
Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000.
RECITALS
A. Assignor as "Seller" and Assignee as "Purchaser" have entered into
that certain Purchase and Sale Agreement and Joint Escrow Instructions
(the "Purchase Agreement") dated April ___, 1997, pursuant to the
terms of which Assignor has agreed to sell to Assignee and Assignee
has agreed to purchase from Assignor certain property, including an
apartment project known as The Villas of Renaissance, located at
______________________________________, as more particularly described
in the Purchase Agreement (the "Property"). All capitalized terms
used herein but not defined herein shall have the meanings set forth
in the Purchase Agreement.
B. Pursuant to the terms of the Purchase Agreement, Assignor desires to
assign to Assignee, and Assignee desires to accept such assignment
from Assignor, all the right, title and interest of Assignor in and to
any and all Contracts, Warranties, Permits, Plans and Reports, all
utility deposits held by any utility or other service provider with
respect to the Property, and all Claims (collectively, the "Assignment
Contracts"). A partial list of the Assignment Contracts is attached
to this Agreement as Schedule 1.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby
agree as follows:
1. ASSIGNMENT. Effective as of the date hereof (the "Effective Date"),
Assignor hereby grants, assigns, transfers and conveys to Assignee,
and Assignee hereby accepts from Assignor such grant, assignment,
transfer and conveyance, all right, title and interest of Assignor in
and to the Assignment Contracts. Assignee hereby assumes and agrees
to perform and to be bound by all of the terms, covenants, conditions,
and obligations of
H-1
60
Assignor under the Assignment Contracts which arise on or after the
Effective Date (the "Post Effective Date Obligations").
2. ASSIGNEE INDEMNITY. Without in any way limiting any indemnity
contained in the Purchase Agreement, Assignee hereby agrees to
protect, defend, indemnify and save and hold harmless Assignor from
and against the Post Effective Date Obligations and any and all
liability, loss, costs, damage or expense (including attorneys' fees,
charges and expenses) which Assignor may incur under the Assignment
Contracts, and from any and all claims and demands whatsoever which
may be asserted against Assignor by reason of any alleged obligation
or undertaking on Assignor's part to perform or discharge any of the
terms, covenants or agreements contained in any of the Assignment
Contracts, which claims or demands arise from events occurring on or
after the Effective Date.
3. ASSIGNOR INDEMNITY. Without in any way limiting any indemnity
contained in the Purchase Agreement, Assignor hereby agrees to
protect, defend, indemnify and save and hold harmless Assignee from
and against any and all liability, loss, cost, damage or expense
(including attorneys' fees, charges and expenses) which Assignee may
incur under the Assignment Contracts, by reason of any failure of
Assignor to perform or discharge any of the terms, covenants or
agreements contained in the Assignment Contracts which arose prior to
the Effective Date.
4. FURTHER ASSURANCES. Each party agrees to execute such other and
further instructions as may be necessary or proper in order to
consummate the transaction contemplated by this Assignment.
5. SUCCESSORS AND ASSIGNS. This Assignment shall be binding upon and
inure to the benefit of the respective successors and assigns of
Assignor and Assignee.
6. ATTORNEYS' FEES AND COSTS. If either party to this Assignment brings
any action or suit against the other party to this Assignment by
reason of any breach of any covenant, condition, agreement or
provision on the part of the other party set forth in this Assignment,
the prevailing party shall be entitled to recover from the other party
all costs and expenses of the action or suit, including reasonable
attorneys' fees, charges and expenses, in addition to any other relief
to which it may be entitled. For purposes hereof, the term
"attorneys' fees" shall have the meaning set forth in the Purchase
Agreement.
H-2
61
7. GOVERNING LAW. This Assignment shall be governed by and construed in
accordance with the laws of the State of California.
8. CONFLICT WITH PURCHASE AGREEMENT. This Assignment is intended to
implement the terms and conditions of the Purchase Agreement. If any
of the provisions hereof are in direct conflict with the provisions of
the Purchase Agreement, the Purchase Agreement shall control.
9. COUNTERPARTS. This Assignment may be executed in several counterparts
and all such executed counterparts shall constitute one Assignment,
binding on all of the parties hereto, notwithstanding that all of the
parties hereto are not signatories to the original or to the same
counterpart.
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment as of the day and year first above written.
ASSIGNOR
AOKI CONSTRUCTION (CA) CO., LTD.,
a California corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
ASSIGNEE
IRVINE APARTMENT COMMUNITIES, L.P.
a Delaware limited partnership
By: IRVINE APARTMENT COMMUNITIES, INC.,
a Maryland corporation,
General Partner
H-3
62
By:
-----------------------------
Xxxxxxx X. Xxxxxxxx,
Senior Vice President
By:
-----------------------------
Xxxxx X. Xxxx,
Senior Vice President and
Chief Financial Officer
H-4
63
SCHEDULE 1
ASSIGNMENT CONTRACTS
[attached]
H-5
64
EXHIBIT I
SELLER'S NON-FOREIGN AFFIDAVIT
Under Section 1445 of the Internal Revenue Code of 1986, as amended
(the "US CODE"), and Sections 18805 and 26131 of the California Revenue and
Taxation Code, a transferee of a California real property interest must
withhold tax if the transferor is a foreign person or a non-resident of
California. To inform IRVINE APARTMENT COMMUNITIES, L.P., a Delaware limited
partnership (the "TRANSFEREE"), that withholding of tax will not be required
upon the transfer to Transferee by AOKI CONSTRUCTION (CA) CO., LTD., a
California corporation (the "TRANSFEROR") of that certain real property located
in the State of California and more particularly described in Schedule 1
attached hereto (the "PROPERTY"), the undersigned hereby certifies the
following on behalf of Transferor:
1. Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate, as those terms are defined in the US Code and
the Income Tax Regulations promulgated thereunder;
2. Transferor's U.S. employer identification number is
_________________; and
3. Transferor has a permanent place of business in California.
The office address of Transferor's permanent place of business in California is
______________________________________.
Transferor understands that this Certification may be disclosed to the
Internal Revenue Service and/or the California Franchise Tax Board and that any
false statement contained herein could be punished by fine, imprisonment, or
both.
Transferor understands that Transferee is relying on this Certificate
in determining whether withholding is or will be required in connection with
the transfer of the Property by Transferor to Transferee, and that Transferee
may face liabilities if any statement contained in this certificate is false.
Transferor hereby indemnifies Transferee, and agrees to hold
Transferee harmless, from any liability or cost which such Transferee may incur
as a result of: (i) the Transferor's failure to pay any U.S. Federal Income tax
which Transferor is required to pay under applicable federal law; (ii) the
Transferor's failure to pay California State Income Tax which Transferor is
required to pay under applicable California law, or (iii) any false or
misleading statement contained herein.
I-1
65
Under penalties of perjury, I declare that I have examined this
Certification and to the best of my knowledge declare that I have authority to
sign this document on behalf of Transferor.
Dated: _________________, 1997
TRANSFEROR: AOKI CONSTRUCTION (CA) CO., LTD.,
a California corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
I-2
66
SCHEDULE 1
LEGAL DESCRIPTION
LOTS 1 THROUGH 27, INCLUSIVE, OF THE VILLAS OF RENAISSANCE, IN THE
CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING
TO MAP THEREOF NO. 13051, FILED IN THE OFFICE OF THE COUNTY RECORDER
OF SAN DIEGO COUNTY ON SEPTEMBER 2, 1993.
I-3
