PURCHASE AND SALE AGREEMENT
(Oak Forest Apartments)
This PURCHASE AND SALE AGREEMENT ("Agreement") is entered into
as of the ________ day of August, 1996.
1. Parties. The parties to this Agreement are as follows:
Xxxxxx Residential Properties, Inc., a Maryland corporation,
maintaining its principal office at One Lincoln Center, 0000 XXX
Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000.
Xxxx Xxxxxx and Xxxxxx Xxxxxx, maintaining offices at 0000
Xxxxxx Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000.
2. Definitions. As used in this Agreement, the following
terms shall have the meanings hereinafter set forth in this
Paragraph:
(a) Agencies: All governmental agencies having
jurisdiction over the construction, zoning and operation of the
Property.
(b) Applicable Environmental Laws: Any and all
applicable laws pertaining to health or the environment, including,
without limitation, the Superfund Reauthorization and Amendments
Act of 1986 ("XXXX"), the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA"), the Resource
Conservation and Recovery Act of 1976 ("RCRA"), the Texas Water
Code, the Texas Solid Waste Disposal Act, and the Texas Toxic
Substances Control Act ("TSCA"), as well as any and all other laws,
ordinances, rules and/or regulations created or imposed by any
governmental authority having jurisdiction with respect to the
Property, whether local, state or federal, pertaining to
environmental regulation, contamination, clean-up or disclosure, as
now existing and/or as hereafter amended.
(c) Appurtenant Interests: All Seller's interest in and
to the appurtenances to the Land and in and to all streets, alley
and other public ways adjacent thereto.
(d) Closing: The consummation of the transfer of title
to the Property as contemplated hereunder and payment of the
consideration thereof in the manner provided at Paragraph 8 hereof.
(e) Current Rent Roll: The current schedule attached
hereto as Exhibit G, dated not more than thirty (30) days prior to
the Effective Date, setting forth, as of the date hereof, the
Tenant Leases.
(f) Xxxxxxx Money Deposit: An amount equal to $50,000
in cash, to be delivered by Purchaser to Title Company on or before
two (2) days following the execution by both Purchaser and Seller
of this Agreement, together with all earnings (if any) thereon.
(g) Effective Date: The date upon which this Agreement,
executed by both Purchaser and Seller, shall have been delivered to
Title Insurer together with the Xxxxxxx Money Deposit.
(h) Excluded Personal Property: The tangible personal
property listed at Exhibit F hereto.
(i) Existing Indebtedness: All indebtedness currently
outstanding and secured by, or related to, the Property, all as
more particularly described on Schedule IV attached hereto and
incorporated herein by reference for all purposes.
(j) Existing Lender(s): Whether one or more, the
holder(s) of the Existing Indebtedness.
(k) Existing Lender Estoppel Letter(s): Whether one or
more, the executed letter obtained from the Existing Lender(s)
confirming that Existing Lender(s) will accept payment in full of
the Existing Indebtedness and deliver a corresponding release of
any liens held by Existing Lender securing the Existing
Indebtedness on or before the Closing Date or, at Purchaser's
option, consent to Purchaser's assumption of the Existing
Indebtedness.
(l) Feasibility Period: The period commencing with the
delivery to Purchaser of the documents and other items listed in
Schedule I attached hereto and incorporated herein by reference,
and ending on the thirtieth (30th) day thereafter.
(m) Hazardous Materials: Any toxic materials, hazardous
waste or hazardous substance as these terms are defined in the
Applicable Environmental Laws.
(n) Improvements: All of the buildings, fixtures and
improvements located on the Land, together with all mechanical
systems, fixtures and equipment, electrical systems, fixtures and
equipment, plumbing fixtures, systems and equipment, heating
fixtures, systems and equipment and air conditioning fixtures,
systems and equipment installed in, belonging to or constructed as
components of the Improvements.
(o) Included Personal Property: All tangible personal
property listed at Exhibit E hereto, together with, for each
apartment unit comprising the Improvements, whether or not thus
listed, if installed by Seller or Seller's predecessors in title,
all carpeting, window coverings, ranges, ovens, dishwashers,
ceiling fan(s), bookshelves, range hoods, refrigerators, heating
units, air conditioning units, sinks and garbage disposals, and
washers and dryers, the same to be in the same condition at Closing
as existed at the expiration of the Feasibility Period, normal wear
and tear excepted, and all other furniture, fixtures, equipment,
machinery, supplies and other tangible personal property and all
leases of tangible personal property located on the Land and
Improvements and belonging to the Property and/or used in the
normal operation and maintenance of the Land and Improvements.
(p) Land: The land more particularly described at
Exhibit A.
(q) Material Damage: Damage to the Property of a nature
such that the cost of restoring the Improvements located on such
Property to its condition prior to the fire or other casualty, as
mutually agreed by the Seller and Purchaser or as otherwise
determined in accordance with this Agreement, (but in full
compliance with all then applicable building, health, zoning, and
similar laws, ordinances, and regulations) will exceed an amount
equal to ten percent (10%) of the Purchase Price, whether or not
such damage is covered by insurance.
(r) Owner Policy: An Owner Policy of Title Insurance
issued by the Title Insurer in the standard form promulgated by the
Texas State Board of Insurance, as modified pursuant to Paragraph
6(d) hereof.
(s) Permitted Title Exceptions: Any items to which
Purchaser does not object within the time period provided in
Paragraph 6(c) hereof.
(t) Plans and Specifications: The plans and
specifications, if any in the possession or control of Seller,
described in Exhibit D attached hereto.
(u) Property: The parcel of real property to be
purchased and sold pursuant to this Agreement and comprised of the
Land, Improvements, Included Personal Property, Appurtenant
Interests, Tenant Leases and all other property described in
Paragraph 4 hereof.
(v) Proration Date: 12:01 a.m., Central Daylight Time,
on the date immediately preceding the date of Closing or such other
date as shall be specified in Paragraph 9 hereof.
(w) Purchase Price: The total consideration to be paid
by Purchaser for the Property as set forth in Paragraph 5 hereof.
(x) Purchaser: Xxxxxx Residential Properties, Inc., a
Maryland corporation, together with any assignee thereof described
in Paragraph 21 hereof.
(y) Rent Roll: Collectively, the Current Rent Roll and
the Revised Rent Roll, or either of them as of the context may
required.
(z) Revised Rent Roll: A revision of the Current Rent
Roll dated not earlier than five (5) days prior to Closing.
(aa) Seller: Xxxx Xxxxxx and Xxxxxx Xxxxxx
(bb) Service Contracts: All service or maintenance
contracts relating to the Property as described at Exhibit K
hereto.
(cc) Street Rents: The rents for space in the Property
being offered to the public as of the date of this Agreement.
(dd) Survey: An on-the-ground survey of the Land and
Improvements prepared by a qualified, registered public surveyor
selected by Seller and reasonably acceptable to Purchaser and the
Title Insurer (I) containing a field note description of the Land
which (A) establishes a beginning point by reference to a permanent
monument, (B) states the distances, bearing and angles of all sides
or boundaries of the Land, if appropriate, states the length of
arc, central angle and radius of circle for arc, central angle and
radius of circle for arc and chord distance and bearing of all
curving sides or boundaries of the Land, (D) establishes a single
perimeter description, and (E) references all abutting or
encroaching streets, roadways and fence lines, including a
statement of width, (ii) noting, by plat, the size and location of
all Improvements and other physical conditions affecting the
Property, (iii) noting, by plat, the size and location of all
abutting or encroaching streets, roadways and fence lines, (iv)
noting, by plat, the size and location of all encroachments or
protrusions, (v) noting, by plat, the size, location and recording
data of all easements, ditches, rights-of-way, setback lines, curb
cuts and similar matters, (vi) locating any portion of the Land or
Improvements determined to be flood prone or within the 100-year
flood plain under the Flood Disaster Protection Act of 1973 or
otherwise determined to be flood prone or within the flood plain by
the Federal Emergency Management Agency, the United States Army
Corps of Engineers, a xxxx xx xxxxxxxxxx xx xxx Xxxxxx Xxxxxx, the
engineer preparing the Survey, or any other state or federal
agency, (vii) certifying the number of acres of land in the Land,
both as to total acreage and as to net acreage, (viii) certified by
the surveyor as conforming to the current Texas Surveyor's
Association Standards and Specifications for a Category 1A
Condition II Survey, (ix) being dated or recertified as of a date
not earlier than the Effective Date, (x) containing a certificate
substantially in the form attached hereto as Exhibit C, and (xi)
otherwise containing such items and revisions as Purchaser's lender
may require.
(ee) Tenant Leases: The lease agreements relating to
the Land and Improvements and existing at Closing.
(ff) Title Commitment: A Commitment for Title Insurance
issued by the Title Insurer in the standard form promulgated by the
Texas State Board of Insurance.
(gg) Title Insurer: Chicago Title Insurance Company, or
other title insurance company acceptable to Purchaser in its sole
discretion, acting through its agent, American Title Company, 000
X. Xxxxxxx Xx., 0000 Xxxxx Xxxxxx Xxxxx, Xxxxxx, Xxxxx 00000,
Attention: Mr. Xxx Xxxxxx.
3. Agreement of Purchase and Sale. Subject to the terms and
conditions thereof and for the consideration of One Hundred and
No/100 Dollars ($100.00) paid to Seller by Purchaser on the
Effective Date, the receipt and sufficiency of which hereby is
acknowledged and which sum is non-refundable to Purchaser and in no
event shall be applied against the Purchase Price and for the
Purchase Price set forth at Xxxxxxxxx 0, Xxxxxxxxx hereby agrees to
purchase, and Seller hereby agrees to sell, the Property, as more
particularly described at Schedule III attached hereto and
incorporated herein by reference.
4. Property to be Sold. The Property to be purchased
hereunder by Purchaser shall be comprised of (I) the Land, (ii) the
Improvements, (iii) all Included Personal Property, but not the
Excluded Personal Property, (iv) the Appurtenant Interests, (v) the
Tenant Leases, and (vi) all of Seller's right, title and interest,
if any, in and to (A) warranties covering the Included Personal
Property and the Improvements, (B) the trademarks or tradenames set
forth on Schedule III attached hereto and incorporated herein by
reference for all purposes and any other trademark or tradename
used by Seller in connection with the Property; (C) the Service
Contracts and (D) all licenses, permits, approvals and other
intangible property rights relating to the Property.
5. Purchase Price. Subject to the adjustments provided
in subparagraphs (b) and (c) below and elsewhere in this Agreement,
the Purchase Price for the Property shall be FOUR MILLION SEVEN
HUNDRED SIXTY-FIVE THOUSAND AND NO/100 DOLLARS ($4,765,000),
payable as follows:
(a) Xxxxxxx Money Deposit. $50,000, payable by
delivery of the Xxxxxxx Money Deposit to the Title Insurer in
accordance with this Agreement.
(b) Cash at Closing. $4,765,000, payable in cash at
Closing, less any sum paid Seller at Closing from the Xxxxxxx Money
Deposit.
Notwithstanding the foregoing, at Purchaser's option prior to
Closing, Purchaser may seek from Lender the consent of Lender to an
assumption of the Existing Indebtedness by Purchaser on such terms
and conditions as may be acceptable to Purchaser and Existing
Lender. In the event that Purchaser elects to assume the Existing
Indebtedness, the cash portion of the Purchase Price shall be
reduced by an amount equal to the amount of the Existing
Indebtedness so assumed.
6. Evidence of Title.
(a) Title Commitment. Within five (5) days from and
after the Effective Date, Purchaser shall order and deliver, or
cause to be delivered, to Purchaser or Purchaser's attorney, a
current Title Commitment from the Title Insurer covering the
Property, in the amount of the Purchase Price covering the Land and
Improvements located on the Property. The Title Commitment shall
be issued as of or subsequent to the Effective Date and shall
include good, legible copies of all documents constituting
exceptions to Seller's title as reflected in the Title Commitment.
The Title Commitment shall reflect good and indefeasible fee simple
title vested in Seller.
(b) Survey. Within ten (10) days from the Effective
Date, Purchaser, at Seller's sole expense, shall order and deliver,
or shall cause to be delivered, to Purchaser or Purchaser's
attorney, the Survey of the Land and Improvements. The Survey
shall be sufficient to permit the Title Insurer to modify the
standard printed exception in the Owner Policy pertaining to
discrepancies, conflicts, shortages in area or boundary lines,
encroachments, overlapping of improvements or similar matters.
(c) Review. Purchaser shall have through and including
the expiration of the Feasibility Period in which to review such
items and to deliver to Seller in writing such objections as
Purchaser may have to anything contained or set forth therein. Any
items to which Purchaser does not object to prior to the expiration
of the Feasibility Period shall be Permitted Title Exceptions.
(d) Owner Policy. At Closing, the special warranty deed
to the Land and Improvements referred to in Subparagraph 8(b)(I)
hereof shall be recorded, and Seller shall furnish or cause to be
furnished to Purchaser, at Purchaser's sole expense, the Owner
Policy covering the Property, insuring good and indefeasible fee
simple title to be vested in Purchaser and insuring Purchaser's
title to the Property in an amount equal to the Purchase Price,
subject only to the Permitted Title Exceptions and the standard
printed exceptions, except that:
(i) the exception relating to restrictions against
the Property shall be endorsed by Title Insurer to read "None of
record" except for such restrictions as may be included in the
Permitted Title Exceptions;
(ii) the exception relating to discrepancies,
conflicts, shortages in area, boundaries, encroachments, or
overlaps shall be modified, at Purchaser's sole cost and expense,
by deleting such exception, save any shortages in area; and
(iii) the exception relating to ad valorem taxes
shall except only to taxes owing for the current year of Closing
and subsequent years and subsequent assessments for prior years due
to change in land usage or ownership, not yet due and payable.
(e) Intentionally Deleted.
(f) Remedies of Purchaser. If Seller is unable to
furnish Purchaser the Title Commitment pursuant to Subparagraph
6(a) or the Owner Policy in the manner provided at Subparagraph
6(d), then, at Purchaser's sole discretion, Purchaser may cancel
this Agreement and shall have the right to the return of the
Xxxxxxx Money Deposit, and the parties shall have no further
obligation to each other, except as is expressly provided in
Subparagraph 16(c). Except as expressly set forth in this
Subparagraph 6(f), Seller shall have no liability for its inability
to deliver the Title Commitment or Owner Policy.
(g) Uniform Commercial Code Search. Seller also shall
deliver at Closing, at Seller's cost and expense, Uniform Commercial
Code financing statement searches covering Seller and any general
partner of Seller for the state constituting the situs of the
Property and the county in which the Property is located showing
that all of the Included Personal Property is free and clear of all
liens and encumbrances other than the Permitted Title Exceptions
and also shall deliver copies of receipts showing payment of all
taxes levied and payable on the Property.
7. Representations and Warranties of Seller. Seller
represents and warrants to, and covenants with, Purchaser, as of
the date of this Agreement and thereafter in accordance with
Paragraph 7(w), as follows:
(a) Legal and Beneficial Title. Seller is, and at
Closing will be, the sole person holding good and indefeasible fee
simple title to the Property, free and clear of all liens and
encumbrances except the Permitted Title Exceptions.
(b) Due Authorization and Execution and Validity,
Binding Effect and Enforceability. This Agreement has been duly
authorized and executed by Seller and is a valid and binding
obligation of, and is enforceable, in accordance with its terms,
against Seller. The documents delivered to Purchaser at Closing
will be duly authorized and executed by Seller and will be a valid
and binding obligation of, and will be enforceable in accordance
with their terms against, Seller.
(c) The Rent Roll. Attached hereto as Exhibit G is the
Current Rent Roll. Not earlier than five (5) days prior to
Closing, Seller shall deliver a Revised Rent Roll to Purchaser,
certified by Seller in writing as true and correct. The Revised
Rent Roll shall set forth the following:
(i) the name of each tenant;
(ii) the lease commencement and expiration dates and
the nature of any renewal options;
(iii) the amount of any security deposits;
(iv) a list of vacant space;
(v) the size and type of each vacant area; and
(vi) the amount and description of any concessions
and any rights of first refusal.
(d) Representations as to Rent Roll. Except as
expressly set forth in a Rent Roll:
(i) All of the information contained on the Rent
Roll is, and will be, true, correct and complete as of its date.
(ii) No rent under any Tenant Lease has been, or
prior to Closing will be, prepaid for a period in excess of thirty
(30) days.
(iii) No tenant has any right of first refusal
or option with respect to the leasing of any portion of the
Property, other than renewal options contained in tenant leases.
(iv) No one, including any tenant, has any option or
right of first refusal to purchase the Property or any part
thereof.
(v) To the best of Seller's knowledge, there are no
oral agreements with anyone, including tenants, with respect to the
Property or any portion thereof, except as set forth in a Rent Roll
or at Exhibit K.
(vi) All of the present Tenant Leases for rental
space in the Improvements are in writing, on a standard form (which
form is attached hereto as Exhibit N) and duly executed by all
parties thereto, and, to the best of Seller's knowledge, are (A) in
full force and effect and (B) valid and binding agreements of, and
fully enforceable in accordance with their terms against, the
tenants.
(vii) The Tenant Leases will not be amended in
any way after the date hereof, other than in the ordinary course of
business, without the prior, written consent of Purchaser, which
consent shall not be unreasonably withheld. Purchaser, unless it
otherwise shall advise Seller in writing within ten (10) days
following Seller's request for such consent, shall be deemed to
have consented to any such amendment.
(viii) Except as stated in a Rent Roll, there are
no uncured defaults on the part of any party to any of the Tenant
Leases, and Seller is in full compliance with all of lessor's
obligations thereunder.
(ix) None of the rentals due or to become due under
such leases will be assigned, encumbered, or subject to any liens
at the Closing other than the Permitted Title Exceptions.
(x) Except as set forth at Exhibit G, at the time
of Closing, all tenants will be paying charges for electricity
consumed in their space, including heating and air conditioning, on
an individually metered basis.
(e) Street Rents. Set forth below is a current schedule
of the Street Rents. Seller represents, to the best of its
knowledge after due investigation and inquiry, that the Street
Rents, under leases averaging six (6) months in duration,
constitute the fair rental value of apartment units in the
Improvements as of such date in light of current rental market
conditions in the relevant market area and that the same is
evidenced by the pace at which such space is being leased by the
public at the Street Rents. The Street Rents are as follows:
Unit Type Number Square Feet Monthly Rent
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
Total __________ ___________ $___________
(f) Operating Statements. Attached at Exhibit I is
the most recent monthly statement of income and expense in
connection with the operation and maintenance of the Property. The
balance of such statements for the preceding months shall be made
available to Purchaser promptly upon request. Such statements are
unaudited, were assembled by Seller and were prepared on the cash
basis of accounting by an employee or bookkeeper of Seller who is
not an accountant. There have been no material adverse changes to
the Effective Date in the gross income from the Property from that
set forth in the most recent operating statement at Exhibit I.
Seller agrees to make available to Purchaser or its
representatives, at Seller's office (or to provide Purchaser with
photocopies thereof upon request), all supporting documentation for
such statements, such documentation to be in a condition that is
adequate to enable the Property's financial records to be audited
by Purchaser's financial representatives.
(g) Intentionally Deleted.
(h) Intentionally Deleted.
(i) Liens on Property. No action has been or will be,
prior to Closing, taken by Seller with respect to work performed or
delivery of material which would give rise to a lien on the
Property.
(j) Insurance. The insurance policies listed and
described at Exhibit J are presently in force, and all such
policies or their equivalent will be maintained in force until
Closing. Seller will not renew, amend, or reduce the coverage
under, or cancel, any existing policy or procure any new policy
without Purchaser's prior, written consent, which shall not be
unreasonably withheld. Purchaser, at Closing, shall obtain its own
insurance coverage. Seller has received no notices from any
insurer of the Property or any part thereof requesting any
improvements, alterations, additions, correction or other work in,
on or about the Improvements, whether related to the Property or to
the operation of any occupant thereof, which have not been cured or
satisfied.
(k) Pending or Threatened Litigation. There are no
lawsuits or proceedings pending or, to the best of Seller's
knowledge, threatened, or any present state of facts which
reasonably could give rise to any lawsuits or proceedings,
regarding ownership, construction, use or possession of the
Property or any portion thereof.
(l) Mechanical Systems and Structural Components. To
the best of Seller's knowledge, the Improvements and Personal
Property are in good working order and there are no material
defects therein except inconsequential items requiring repair due
to normal wear and tear, and no condition exists which could
adversely affect in a material way the operation of the Property
with respect to the following:
(i) Water, sewer, plumbing, heating, air
conditioning, and other mechanical and electrical systems in the
Improvements; and
(ii) Roofs and other structural portions of the
Improvements, including walls and foundations.
(m) Inspection of Plans and Specifications, Reports and
Books and Records. The Property and the Plans and Specifications,
all reports (including but not limited to soil tests and
construction inspection reports), the books and records and all
Tenant Leases and other documents related thereto regarding the
construction, ownership, management and operation of the Property
shall be open to inspection by Purchaser or Purchaser's agents
during regular business hours from and after the Effective Date,
and Seller shall cooperate with Purchaser or its agents with
respect to the inspection of the Plans and Specifications, all
reports, the books and records, the Tenant Leases, the Property or
the construction, management and operation thereof.
(n) Maintenance of Property Until Closing.
(i) Seller, at its expense, will maintain the
Property in a first class condition until Closing excepting only
ordinary wear and tear and damage or loss thereto covered by
insurance. In the event of any breakdown, malfunction or other
similar event (other than of a type covered, and to the extent
covered, by insurance) occurring prior to the Closing, whether or
not the same is covered by any service warranty or contract, the
parties hereto will determine the cost of repairing or restoring
the same, and Seller will cause the same to be repaired and
restored at no cost to Purchaser within a reasonable time after
Closing. The amount of the estimated cost thus determined and
agreed to by the parties shall be withheld by the Title Insurer
from the cash proceeds of sale and shall be paid over to Seller,
together with any accrued interest thereon, upon completion by
Seller of such items.
(ii) Until Closing, Seller shall continue the
operation of the Property in the normal and usual manner, will not
remove any fixtures, furnishings, equipment or personalty subject
to this Agreement, except for repair or replacement, and the
Property will be managed, operated, maintained, repaired and
redecorated in the ordinary course of business and in such manner
as to maintain the Property completed in all material respects as
of the date hereof in no less satisfactory condition than the same
exists as of such date.
(iii) All rental units shall be in "market
ready" rentable condition as of the date of Closing; provided,
however, Seller and Purchaser acknowledge that rental units that
are vacated within five (5) business days prior to the date of
Closing will be in varying conditions of make-ready for leasing, as
is ordinary in Seller's course of business. As to any units that
are not in "market-ready" rentable condition as of the date of the
Closing, Purchaser and Seller understand and agree that Purchaser
shall be entitled to credit against the Purchase Price at Closing
an amount equal to the amount agreed upon at Closing by Purchaser
and Seller as being required to put in "market-ready" rentable
condition any units that are not in such condition as of the date
of the Closing. Purchaser shall have the right to re-inspect the
Property during the period commencing not earlier than five (5)
days prior to the Closing and ending on the Closing solely for
purposes of verifying the maintenance of the Property in accordance
with Subparagraphs 7(p)(I) and (ii). Purchaser hereby acknolwedges
that one (1) "down" unit located on the Property is currently being
used for maintenance and storage and shall constitute an exception
to this paragraph.
(o) Service Contracts.
(i) At Closing, no contract of any kind, including
contracts for servicing, operating or managing the Property, will
be effective and binding upon the Property or Purchaser, except as
may be approved in writing by Seller during the Feasibility Period.
Seller will not enter into any other service, operating or
management contracts relative to the Property that cannot be
canceled on thirty (30) days' notice without cost to Purchaser, nor
will Seller make, or agree to, prior to Closing, any change or
modification to the contracts set forth in Exhibit K without the
prior, written consent of Purchaser. If an agreement concerning
the management of the Property currently is in effect and is not
set forth at Exhibit K, it shall be terminated effective on the
date of Closing.
(ii) Seller agrees that benefits or compensation
accrued prior to Closing, and due or claimed to be due either
before or after Closing, to employees or former employees of Seller
shall constitute obligations of Seller only, and Seller agrees to
indemnify and hold Purchaser harmless from all such obligations and
claims.
(p) Restrictions on Additional Indebtedness. Seller
will not borrow any money or do, or fail to do, any other act or
thing which would cause the Land, the Improvements or any Included
Personal Property to become pledged or otherwise utilized as
collateral or in any way stand as security for any indebtedness or
obligation.
(q) Closing Not Constituting Breach. The consummation
of the transaction contemplated herein will not result in the
breach of any provision in any lease or other agreement affecting
the Property.
(r) Access to Property. Seller has received no notices
of the existence of any fact or condition which would result in the
termination or restriction of the current access from the Property
to any presently existing highways and roadways adjoining, situated
on or otherwise serving the Property or to any sewer or other
utility adjoining, situated or otherwise serving the Property.
(s) Improvements and Amenities. A description of the
improvements and amenities of the Property is more particularly set
forth at Schedule V attached hereto and incorporated herein by
reference for all purposes.
(t) Seller's Non-foreign Status. Seller is not a
"foreign person" within the meaning of Sections 1445 and 7701 of
the Internal Revenue Code of 1954, as amended; that is, Seller is
not a non-resident alien, foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the
Internal Revenue Code of 1986, as now existing or hereafter
amended).
(u) Taxes and Assessments. All ad valorem taxes and
personal property taxes, together with all assessments or other
charges for utilities, roads or the widening of such roads, or any
other fees imposed by any governmental authority with respect to
the Property, have been paid in full. The ad valorem taxes,
personal property taxes and special assessments pertaining to the
Property for calendar year 1995 were in the aggregate amount of
$[to be determined].
(v) Exhibits. All exhibits attached hereto are true and
correct in all material respects.
(w) Seller's Affidavit at Closing. The representations,
warranties and covenants of the Seller contained in this Agreement
or in any document delivered to Purchaser pursuant to the terms of
this Agreement (whether in this Paragraph 7 or elsewhere) (I) shall
be true and correct in all material respects and not in default at
the time of Closing, just as though they were made at such time,
and Seller shall deliver to Purchaser, at Closing, an Affidavit to
that effect, and (ii) in the event of a breach of such
representations, warranties or covenants prior to or at Closing,
Purchaser shall have the right to make a claim hereunder against
Seller for a period of one (1) year after the date as of which such
Affidavit was delivered to Purchaser.
(x) Disclaimers. Purchaser acknowledges that, except
as otherwise set forth herein or in the Deed, neither Seller nor
his representatives have made any representations or warranties as
to the property or its environmental or physical condition upon
which Purchaser has relied. This includes not only the condition
of the land itself, but all improvements constructed thereon,
including without limitation, any and all equipment and fixtures
which are included in this conveyance. Purchaser further
acknowledges and agrees that, except as otherwise set forth herein
or in the Deed, SELLER HAS NOT MADE, DOES NOT MAKE, AND EXPRESSLY
DISCLAIMS ANY WARRANTIES, REPRESENTATIONS, COVENANTS OR GUARANTEES,
EXPRESS OR IMPLIED, ARISING BY OPERATION OF LAW AS TO THE
MERCHANTABILITY, HABITABILITY, QUANTITY, QUALITY OR ENVIRONMENTAL
CONDITION OF THE PROPERTY OR ITS SUITABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OR USE. Purchaser affirms that it (1) will
thoroughly investigate and inspect the Property and will become
familiar and satisfied with the physical condition of the Property,
and (2) will make its own determination as to (a) the
merchantability, quantity, quality and condition of the Property,
including without limitation, the possible presence of toxic or
hazardous substances or waste, or other environmental
contamination, and (b) the Property's suitability or fitness for any
particular purpose or use. The Purchaser hereby accepts the
Property in its present condition on and "AS IS," "WHERE IS," and
"WITHOUT FAULTS" and acknowledges that without this acceptance this
Sale would not be made and that Seller shall be under no obligation
whatsoever to undertake any repair, alteration, remediation or
other work of any kind with respect to any portion of the Property.
8. Closing and Conditions to Closing.
(a) The Closing Generally. The Closing shall occur at
10:00 a.m. on or before ten (10) days following the expiration of
the Feasibility Period. The Closing will be held at the offices of
the Title Insurer, or at such other time and place as to which the
parties hereafter may agree upon in writing. At Closing, the
Purchase Price shall be delivered to Seller in the manner provided
at Paragraph 5, and possession of, and title to, the Property shall
be delivered and conveyed to Purchaser in the manner provided
herein, together with all other documents to be delivered by Seller
to Purchaser hereunder.
(b) Documents Delivered By Seller at Closing. At the
Closing, Seller, at its sole cost and expense, shall deliver, or
shall cause to be delivered, to Purchaser the conveyance,
assignment and other documents described below (Purchaser and
Seller agreeing to negotiate and agree upon the form of such
documents, including, but not limited to, the documents to be
attached to this Agreement as Exhibit M, as soon as possible after
the Effective Date and no later than the expiration of the
Feasibility Period):
(i) Special Warranty Deed. A special warranty
deed, duly executed and acknowledged, conveying to Purchaser good
and indefeasible fee simple title to the Land and Improvements free
and clear of all liens and encumbrances, except the Permitted Title
Exceptions, in the form attached at Exhibit M.
(ii) Xxxx of Sale and Assignment. A xxxx of sale,
duly executed and acknowledged, with general warranties of title,
subject only to the Permitted Title Exceptions, conveying to
Purchaser (A) the Included Personal Property, (B) Seller's interest
in and to all assignable Service Contracts as have been approved by
Purchaser, together with copies of the originals of each of said
contracts, (C) all existing warranties on the Improvements,
including, but not limited to, roofs, foundations, plumbing,
heating, air conditioning, and electrical, if any, (D) Seller's
right, title and interest, if any, in and to the names of the
apartment complexes set forth on Schedule III attached hereto and
other applicable trade names or trademarks used by Seller in
connection with the Property, and (E) Seller's right, title and
interest in any and all licenses, permits, approvals and other
intangible property or rights relating to the Property, together
with appropriate endorsements or such other instruments as may be
necessary to transfer title to Seller's interest in the Included
Personal Property in the form attached at Exhibit M.
(iii) Assignment of Tenant Leases. A transfer
and assignment of the Tenant Leases, together with all rents, other
income and deposits paid or payable thereunder, subject to the
Permitted Title Exceptions in the form attached as Exhibit M,
together with delivery of all Tenant Leases and information
pertinent thereto.
(iv) Affidavit of Seller. An affidavit of Seller in
the form attached as Exhibit M, pursuant to Subparagraph 7(w) to
the effect that the representations and warranties of Seller
pursuant to Paragraph 7 and as limited by Subparagraph 7(x)
continue to be true and correct in all material respects and that
all of Seller's covenants (not otherwise waived by Purchaser) have
been performed as of the date of Closing.
(v) Owner Policy. Seller, at Purchaser's sole cost
and expense, also shall deliver or cause to be delivered the Owner
Policy.
(vi) Intentionally Deleted.
(vii) Audit Letter. Seller shall deliver or
cause to be delivered the letter ("Audit Letter") in the form
attached hereto as Schedule II.
(c) Conditions Precedent to Purchaser's Obligations.
Purchaser shall not be obligated to consummate the transfer of
title to the Property hereunder unless and until:
(i) Closing Documents. Seller has delivered (A) to
the Title Insurer the closing documents attached at Exhibit M and
any other documents required by the Title Insurer in order to
insure Purchaser's good and indefeasible fee simple title to the
Property free and clear of all liens and encumbrances, except the
Permitted Title Exceptions, and (B) to Purchaser all other
instruments required to the terms of this Agreement.
(ii) No Uncured Breach. There has been no uncured
breach by Seller of any of the agreements, representations,
warranties or covenants contained in Paragraph 7.
(iii) Title Vested in Seller. Good and
indefeasible title to the Property has been shown to be vested in
Seller in accordance with and subject to the matters stated in
Paragraph 6(a).
(iv) Appraisal. On or before the expiration of the
Feasibility Period, Purchaser shall have obtained, at its sole cost
and expense, from a member of the American Institute of Real Estate
Appraisers, an independent appraisal of the fair market value of
the Property acceptable to Purchaser. Seller shall fully cooperate
with the appraiser and shall furnish such documents or materials
reasonably requested in connection with such appraisal.
(v) Termite Inspection. Purchaser shall have
obtained, at Seller's sole cost and expense, a termite inspection
report indicating no live infestation by termites or other pests in
or damage to the Improvements. If such inspection reveals live
infestation or damage, then Seller shall take such action as may be
necessary to exterminate the termites and repair the damage in a
workmanlike manner; provided, however, that Seller shall not be
required to spend more than $10,000.00 with respect to such
extermination and repair.
(vi) Delivery of Plans and Specifications, Reports
and Books and Records. To the extent in Seller's possession and
control, Seller shall have delivered to Purchaser the Plans and
Specifications and all reports and books and records concerning the
construction, ownership, management and operation of the Property
through the date of Closing.
(vii) Existing Lender Estoppel Letter. Prior to
the expiration of the Feasibility Period, Seller, at
its sole cost and expense, shall deliver or shall cause to be
delivered, the Existing Lender Estoppel Letter in form and content
acceptable to Purchaser in Purchaser's sole discretion.
9. Prorations and Adjustments. All prorations and
adjustments shall be made and determined as of the Proration Date
as follows:
(a) Rents. Collected rents shall be prorated. Seller
shall not receive any proration credit for rents accrued and
delinquent for months prior to the Proration Date, and all rentals
received after such date shall be applied, first, to current and,
then, delinquent obligations, the latter of which shall be paid to
Seller; provided, however, nothing herein shall operate to require
Purchaser to institute a lawsuit to recover such amounts. Seller
shall not be charged for uncollected rent for the month within
which the Proration Date shall occur, it being the intent of the
parties to prorate only the rents that have been collected at such
date. Any delinquent rents for periods prior to the Proration Date
and a prorated portion of rents for the month uncollected as of the
Proration Date which are collected by Purchaser and which are not
necessary to bring a tenant current as described above shall be
forwarded to Seller.
(b) Prepaid Rents and Security and Other Deposits.
Prepaid rents and security and other tenant deposits (including but
not limited to pet deposits and key deposits), if any, under
assigned leases shall be paid to Purchaser by Seller at Closing.
Purchaser shall assume full liability therefor and hold Seller
harmless with respect to all such deposits.
(c) Service Contracts. Prepaid or unpaid amounts under
those Service Contracts listed in Exhibit K which shall be assigned
to and assumed by Purchaser at Closing shall be prorated,
including, but not limited to, all amounts prepaid to Seller under
long-term Service Contracts (e.g., laundry contracts), which shall
be prorated over the entire term of such long-term contracts.
(d) Property Taxes. Taxes assessed upon the Property
for calendar year 1996 shall be prorated based on the assumption
that the actual taxes for the entire calendar year 1996 will be the
same as calendar year 1995 with an increase of five percent (5%),
which amount Seller and Purchaser agree is a reasonable estimate of
1996 taxes. Taxes prorated at Closing shall be re-prorated between
the parties promptly upon the receipt of the 1996 real estate tax
xxxx.
(e) Intentionally Deleted.
(f) Utilities. Utility charges shall not be prorated
but, rather, instructions shall be given to the utility companies
by Seller (with a duplicate copy of such instruction being provided
concurrently to Purchaser) to read the meters on the date of
Closing and to issue separate statements thereafter. Utility
deposits will be credited to Seller and assigned to Purchaser at
Closing. In the event that any provider of utilities shall refuse
to issue separate statements in the manner aforesaid, applicable
utility charges shall be adjusted in the manner of rents.
(g) Other Adjustments. Such other items as are adjusted
pursuant to custom in the state constituting the situs of the
Property and on similar real estate transactions.
(h) Delivery by Seller of Documents and Supplies.
Seller, at Closing, shall assign and deliver to Purchaser all
original leases, deposits, supplies, contracts, and other items as
to which proration is to be made. Seller also shall deliver to
Purchaser all Plans and Specifications (including cost breakdowns)
relating to the Property and all such other documents, books,
records, and keys which relate to the operation, maintenance or
management of the Property. Seller also shall deliver to Purchaser
its current supply of printed leasing brochures, floor plans and
other advertising literature with respect to the Property.
10. Material Damage.
(a) Procedure. If, prior to Closing, the Property shall
be destroyed or sustain Material Damage as a result of fire or
other casualty, then, at Purchaser's option exercised in the manner
provided hereunder, the following shall occur with respect to the
Property:
(i) This Agreement shall become null and void and
the Xxxxxxx Money Deposit shall be returned to Purchaser, provided
that Purchaser gives notice of such election at or prior to
Closing, but in any event within ten (10) days following receipt by
Purchaser of notice of the occurrence of any such event; or
(ii) If all other conditions precedent to
Purchaser's obligation to close have been satisfied, the purchase
and sale transaction shall close with a reduction in the cash
portion of the Purchase Price equal to the amount of the applicable
insurance deductible, and concurrently with the Closing, Seller,
Existing Lender and any other named insured shall assign to
Purchaser, in form satisfactory to Purchaser, all claims arising
under any policy of insurance covering such casualty, and Seller
shall have no further liability to Purchaser with respect to such
damage.
If the parties shall fail to agree on the amount of the cost
of such restoration, either party may terminate this Agreement by
giving written notice to the other prior to Closing and, in such
event, the Purchaser shall have the right to the return of the
Xxxxxxx Money Deposit, and neither party shall have any further
obligations to the other.
(b) Damage Other Than Material Damage. In the event of
any damage to the Property other than Material Damage, the purchase
and sale transaction shall close in accordance with and subject to
the conditions of Subparagraph 10(a)(ii). If the cost to restore
the Property to its condition before the casualty, as mutually
agreed by Seller and Purchaser is not more than $50,000 and is
uninsured, the cash portion of the Purchase Price shall be reduced
by the cost to restore thus determined.
11. Condemnation. If, prior to Closing, any governmental or
similar authority shall institute eminent domain or similar
proceeding or take any steps preliminary thereto (including the
giving of any direct or indirect notice of intent to institute any
such proceeding), Purchaser shall be entitled to terminate this
Agreement upon written notice to Seller prior to Closing and to a
return of the Xxxxxxx Money Deposit.
12. Brokerage and Consultants.
(a) Representation of Seller. Seller represents and
warrants that it has neither employed, retained nor consulted any
broker, consultant, agent or finder in carrying on the negotiations
relative to this Agreement or the purchase and sale referred to
herein, and Seller shall indemnify and hold Purchaser harmless from
and against any and all claims, demands, causes of action, debts,
liabilities, judgments and damages (including costs and reasonable
attorney's fees) which may be asserted or recovered against it on
account of any brokerage fee, consulting fee, commission or other
compensation arising by reason of the breach of this representation
and warranty. Seller further represents and warrants that no
amount shall be paid by Seller to any party as a fee or a
commission, or any amount of a similar nature, whatever designated,
as a result of the purchase and sale referred to herein.
(b) Representation of Purchaser. Purchaser represents
and warrants that it has neither employed, retained, nor consulted
any broker, consultant, agent or finder in carrying on the
negotiations relative to this Agreement or the purchase and sale
referred to herein, and Purchaser shall indemnify and hold Seller
harmless from and against any and all claims, demands, actions,
causes of action, debts, liabilities, judgments and damages
(including costs and reasonable attorney's fees) which may be
asserted or recovered against it on account of any brokerage fee,
consulting fee, commission or other compensation arising by reason
of the breach of this representation and warranty. Purchaser
further represents and warrants that no amount shall be paid by
Purchaser to any party as a fee or a commission, or any amount of
a similar nature, whatever designated, as a result of the purchase
and sale referred to herein.
(c) Advice as to Title. Purchaser acknowledges that, at
the time of execution of this Agreement, Seller has advised
Purchaser by this writing that Purchaser should have the abstract
covering the Property examined by an attorney of Purchaser's own
selection or that Purchaser should be furnished with or should
obtain a policy of title insurance.
13. Indemnification.
(a) Indemnification of Purchaser. Seller hereby agrees
to indemnify, defend and hold harmless the Purchaser and any other
holder of record title to the Property pursuant to Paragraph 21,
their officers, directors, general partners, agents and employees
and their respective heirs, executors, administrators, successors
and assigns, from and against any and all indebtedness or other
liability arising out of ownership or operation of the Property
prior to Closing, including, but not limited to, any and all
claims, liabilities, damages, penalties and losses, costs or
expenses (including court costs and reasonable attorney's fees)
incurred, resulting from or in any way arising out of any act or
omission of Seller, its agents and employees, in respect of the
construction or operation of the Property prior to Closing, any
injury to persons or damage to property happening or occurring in,
on or about the Property. Seller further agrees, upon notice and
request from Purchaser, to contest any such demand, claim, suit or
action against which Seller has hereinabove agreed to indemnify and
hold Purchaser harmless, and to defend any action that may be
brought in connection with any such demand, claim, suit or action
or with respect to which Seller has hereinabove agreed to indemnify
and hold Purchaser harmless and to bear all costs and expenses of
such contest and defense, provided, however, that Seller shall have
no obligation hereunder to indemnify or hold Purchaser harmless
from and against any claim, liability, damage, penalty or loss,
cost or expense incurred by Purchaser incident to, resulting from
or in any way arising out of any act or omission of Purchaser, its
agent or employees, it being understood and agreed, however, that
the employees of Seller engaged in the operation of the Property
prior to Closing are and shall be construed to be, for purposes of
this provision, the employees of Seller and the acts and omissions
of said employees shall in no way be attributable to Purchaser for
the purposes of this provision.
(b) Indemnification of Seller. Subject to Subparagraph
13(a), Purchaser agrees to indemnify, defend and hold Seller
harmless from and against any claim, liability, damage, penalty,
loss, cost or expense (including court costs and reasonable
attorney's fees) incurred by Seller incident to, resulting from or
in any way arising out of any act or omission of Purchaser, its
agents or employees, or arising out of, or in any way connected
with, the operation of the Property from and after Closing; and
Purchaser further agrees, upon notice, and request from Seller, to
contest any such demand, claim, suit, or action against which
Purchaser has hereinabove agreed to indemnify and hold Seller
harmless, and to defend any action that may be brought in
connection with any such demand, claim, suit or action or with
respect to which Purchaser has hereinabove agreed to indemnify and
hold Seller harmless and to bear all costs and expenses of such
contest and defense.
(c) Indemnification Procedure. To the extent of any
claims against Seller or Purchaser predicated upon facts which
could reasonably be interpreted as giving rise to potential
liability of Seller or Purchaser under this Paragraph 13, the party
against whom such claim is asserted shall promptly give notice
thereof to the other party hereto. Thereupon, such other party
shall have the option of retaining counsel of its choice to defend
both it and the remaining party in respect of such claim and to
control, in a manner reasonable in light of applicable
circumstances, the course and ultimate disposition of such claim.
In the event that a party to this Agreement shall elect to exercise
the option provided in the preceding sentence, the party electing
such option, by reason thereof, shall be deemed to have agreed to
pay all reasonable costs and expenses of defending against such
claim and any liability of the party against whom such claim was
asserted on account thereof. Without regard to whether any party
hereto shall exercise such option, Seller and Purchaser and their
counsel shall consult with one another concerning such claim and
with due regard to both the mutual and the independent interests of
Seller and Purchaser therein.
14. Notice to Tenants. On the date of Closing or at any time
thereafter, upon request by Purchaser, Seller agrees to give
notice, said notice to be in compliance with local law and inform
approved by Purchaser, to each of the tenants of space located on
the Property that Seller has sold and conveyed the Property to
Purchaser and that all future rental payments due under the terms
of the Tenant Leases are to be paid as directed by Purchaser. Upon
request of Seller, Purchaser agrees to give notice to all tenants
that their security deposit (if any) has been paid over to the
Purchaser, and Purchaser shall assume the liability therefor.
15. Payments.
(a) General. All payments to be made under this
Agreement shall be made by the wire transfer of immediately
available funds. Notwithstanding any provision to the contrary,
whether express or implied, the payment required under Paragraph 5
hereof shall be deemed made to Seller by payment thereof to the
Title Insurer, as escrow agent for Seller and Purchaser, to be held
by the Title Insurer in escrow until the earlier of (I) the Closing
(or such later date in respect to which explicit provision is
herein made), (ii) such time as Purchaser shall be entitled to a
refund thereof or (iii) such time as Seller shall be entitled to
demand the same as liquidated damages in accordance with
subparagraph 16(a). At whichever of such times first occurs, the
Title Insurer shall pay such amounts to the party then entitled
thereto. Except in connection with a Closing, the Title Insurer
shall not pay such funds to either party unless both (A) the party
claiming to be entitled thereto gives notice of such entitlement to
the Title Insurer and to the other party, including an affidavit
containing the facts on which such claim is based, and (B) the
other party does not, within fifteen (15) days of such notice, give
notice to the Title Insurer that the claim of the first party is
disputed. If the Title Insurer receives notice within such fifteen
(15) day period that the claim of entitlement is disputed, the
Title Insurer shall continue to hold such amounts in escrow and
shall not pay such amounts to either party until such dispute is
finally resolved by written agreement signed by both parties or by
final unappealable judgment of a court of law, and when such
dispute is finally resolved, the Title Insurer then shall pay such
amounts to the party or parties entitled thereto pursuant to such
final resolution.
(b) Deposits to Account of Title Insurer. Unless and
until the Title Insurer shall advise Purchaser and Seller to the
contrary in writing, it is represented and acknowledged that
deposits to the account of Title Insurer made hereunder by Seller
and/or Purchaser shall be made as follows:
Account Owner: [to be provided]
Account Name:
Account Number:
Depository:
ABA Routing No.:
Telephone Advice:
(c) Deposits to Account of Purchaser. Unless and until
the Title Insurer shall advise Purchaser and Seller to the
contrary, it is represented and acknowledged that deposits to the
account of Purchaser hereunder, at or after Closing or otherwise,
shall be made by federal wire transfer of immediately available
funds as follows:
Account Owner: [to be provided]
Account Name:
Account Number:
Depository:
ABA Routing No.:
Telephone Advice:
(d) Deposits to Account of Seller. Unless and until
Seller shall advise Purchaser and the Title Insurer to the
contrary, it is represented and acknowledged that deposits to the
account of Seller hereunder, at or after Closing or otherwise,
shall be made by federal wire transfer of immediately available
funds as follows:
Account Owner: [to be provided]
Account Name:
Account Number:
Depository:
ABA Routing No.:
Telephone Advice:
16. Default and Remedies.
(a) Remedies of Seller. In the event that all
conditions to Purchaser's obligation to close have been satisfied
and Purchaser fails to close its purchase of the Property
hereunder, the Xxxxxxx Money Deposit shall be paid to Seller and
retained by them as liquidated damages as Seller's sole and
exclusive remedy hereunder. The parties acknowledge that Seller's
damages occasioned by Purchaser's default hereunder would be
difficult to ascertain, but agree that the amount of the Xxxxxxx
Money Deposit represents a reasonable estimate of Seller's damages.
(b) Remedies of Purchaser. In the event that all
conditions to Seller's (whether one or more of them) obligation to
close have been satisfied and Seller fail to close the sale of the
Property hereunder, Purchaser, at its sole discretion, either may
(I) specifically enforce this Agreement and the sale and purchase
provided for herein according to its terms by suit filed within
ninety (90) days, or (ii) terminate this Agreement, whereupon the
Xxxxxxx Money Deposit shall be returned in full to Purchaser.
(c) Rightful Termination by Purchaser. In the event
that the conditions precedent to Purchaser's obligation to close
are not satisfied and Purchaser terminates this Agreement pursuant
to the terms hereof, the Xxxxxxx Money Deposit shall be returned in
full to Purchaser as its sole remedy, and the parties shall have no
further liability to one another.
(d) Expense of Default. In the event either party
hereto is required to employ an attorney because of the default of
the other party, then the defaulting party shall pay to the
nondefaulting party court costs and a reasonable attorney's fee
incurred in the enforcement of this Agreement.
(e) Arbitration. The Purchaser and Seller hereby agree
that any controversy or claim or matters in question between the
parties including, but not limited to, any matter arising out of or
relating to (a) this Contract, and any amendments thereto, (b) any
breach thereof, (c) the sales transaction reflected in the
Contract, (d) any alleged misrepresentations or breach of
warranties, express or implied, (e) violations of the Texas
Deceptive Trade Practices-Consumer Protection Act, and/or (f) any
other cause of action relating to or arising out of the
construction and/or sale of the Improvements by Seller to Buyer,
(herein referred to collectively as a "Dispute"), shall be submitted
to mediation with the American Arbitration Association (the"AAA")
where the parties will endeavor to resolve the Dispute in an
amicable manner. In the event any Dispute cannot be resolved by
mediation, the Dispute shall be submitted to binding arbitration
pursuant to Title 9 of the United States Code, which the parties
hereto acknowledge and agree applies to the transaction involved
herein, and in accordance with the Rules of the AAA. If Title 9 of
the United States Code is inapplicable to any such claim, dispute
or controversy for any reason, such arbitration shall be conducted
by the AAA pursuant to the Texas General Arbitration Act and in
accordance with the Rules of the AAA. In any such arbitration
proceeding (i) all statues of limitations which would otherwise be
applicable shall apply, and (ii) the proceeding shall be conducted
by a single arbitrator. The arbitrator shall be selected by the
process of appointment from a panel pursuant to the applicable
procedures of the AAA. Any award rendered in any such arbitration
proceeding shall be final and binding, and judgment upon any such
award may be entered in any court having jurisdiction.
17. Notices. All notices and other communications hereunder
shall be effective as to any party only if, concurrent with notice
to such party, notice shall be given to such party's counsel. All
notices shall be in writing and shall be deemed to have been duly
given the date deposited with a commercial air courier service or
the United States Postal Service, the latter being registered or
certified mail, return receipt requested, first class, postage
prepaid, as follows:
Notice as to Seller:
Xxxx Xxxxxx and Xxxxxx Xxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Ph.: (000) 000-0000
Fax: (000) 000-0000
Notice to Seller's Counsel:
Xxxxxx X. Xxxx, Esq.
0000 Xxxxxxxx Xxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
Ph.: 817/000-0000
Fax: 817/000-0000
Notice as to Purchaser:
Xxxxxx Residential Properties, Inc.
One Lincoln Center
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxxxx X. Xxxxxxx
Notice to Purchaser's Counsel:
Xxxxxx Xxxxx Xxxx Xxxx & Xxxxx
0000 Xxxxxxxx Xxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
18. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED,
ENFORCED AND GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF
TEXAS. THE INITIAL DRAFT OF THIS AGREEMENT WAS PREPARED BY
PURCHASER ONLY AS A MATTER OF CONVENIENCE AND SHALL NOT BE
CONSTRUED FOR OR AGAINST EITHER PARTY ON THAT ACCOUNT.
19. Binding Effect. This Agreement and the exhibits attached
hereto shall be binding upon, and shall inure to the benefit of,
the parties hereto, their successors and assigns.
20. Entire Agreement. This Agreement and the exhibits
attached hereto shall constitute the entire contract between the
parties and supersedes all prior and contemporaneous agreements,
representations and undertakings of the parties regarding the
subject matter of this Agreement. This Agreement may not be
modified except by a writing, one or more counterparts of which is
signed by all parties to this Agreement.
21. Vesting of Title To Property. Seller and Purchaser agree
that title to the Property will be vested at Closing in such other
entity as Purchaser may direct by written notice to Seller. For
purposes of this Agreement, "Purchaser" shall mean Purchaser and
its successors and assigns.
22. Waiver. No inspection by Purchaser of the Property or of
any item delivered by Seller to Purchaser as provided in this
Agreement shall constitute a waiver of any representation, warranty
or covenant made by Seller hereunder. The waiver by a party hereto
of any term, covenant, agreement or condition herein contained
shall not be deemed to be a waiver of any subsequent breach or
failure of condition as to the same or any other term, covenant,
agreement or condition herein contained, nor shall any custom or
practice which may arise between the parties in the administration
of the terms hereof be construed as a waiver of or in such a manner
as to lessen the rights of any party to insist upon the performance
by the other parties in strict accordance with such terms.
23. Time of the Essence. The time for performance of the
obligations of the parties hereunder is of the essence in this
Agreement.
24. Survival of Agreement. The obligation of any parties to
this Agreement, including any performance specified or anticipated
to occur following the Closing, to that extent shall survive the
Closing.
25. Headings. The subject headings of paragraphs and
subparagraphs of this Agreement are included for purposes of
convenience only and shall not affect the construction or
interpretation of any of its provisions.
26. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.
27. General.
(a) Waiver by Purchaser. Purchaser, at any time at or
prior to Closing, may waive any one or more of the requirements or
conditions of this Agreement by written notice to Seller to that
effect.
(b) Time for Performance of Certain Obligations. At
Purchaser's option, this Agreement shall be null and void unless
one copy hereof, executed by Purchaser and Seller, together with
the Xxxxxxx Money Deposit, shall have been delivered to Title
Insurer within three (3) business days following the date of
execution hereof by Purchaser.
(c) Limited Liability of Officers. This Agreement
and all documents, agreements, understandings, and arrangements
relating to this transaction have been executed by the undersigned
in his/her capacity as an officer or director of Purchaser which
has been formed as a Maryland corporation pursuant to the Articles
of Incorporation of Purchaser, and not individually, and neither
the directors, officers or stockholders of Purchaser shall be bound
or have any personal liability hereunder or thereunder. Seller
shall look solely to the assets of Purchaser for satisfaction of
any liability of the Purchaser in respect of this Agreement and all
documents, agreements, understandings and arrangements relating to
the transaction contemplated by this Agreement and will not seek
recourse or commence any action against any of the directors,
officers or stockholders of Purchaser or any of their personal
assets for the performance or payment of any obligation hereunder
or thereunder. The foregoing shall also apply to any future
documents, agreements, understandings, arrangements and
transactions between the parties hereto.
(d) No Further Agreements. From and after the date
hereof, Seller shall not enter into any agreement or Letter of
Intent to sell the Property other than this Agreement.
(e) Confidentiality. The parties hereto hereby agree
that they will maintain the confidentiality of all information and
materials provided to each other in connection herewith and the
terms of the transaction contemplated hereby, the contents of this
Agreement and related documents, if any, except that Purchaser may
disclose material terms which are required to be disclosed by
applicable securities laws or as required by any national
securities exchange on which Purchaser's common stock may be listed
and Purchaser may include a copy of this Agreement and in its
filings with the Securities and Exchange Commission.
28. 1031 Exchange. Purchaser and Seller agree that Seller may
substitute an intermediary ("Intermediary") to act in place of
Seller as the seller of the Property. Intermediary shall be
designated in writing by Seller. Upon identification of
Intermediary, Intermediary shall be substituted for Seller as the
seller of the property. Buyer agrees to accept the property and
all other required performance from Intermediary to render its
performance of all of its obligations to Intermediary. Buyer
agrees that performance by Intermediary will be treated as
performance by Seller, and Seller agrees that Buyer's performance
to Seller. Seller shall unconditionally guarantee the full and
timely performance by Intermediary of each and every one of the
representations, warranties, indemnities, obligations and
undertakings of Intermediary. As guarantor, Seller shall be
treated as a primary obligor with respect to these representations,
warranties, indemnities, obligations and undertakings, and, in the
event of breach, Buyer may proceed directly against Seller on this
guarantee without the need to join Intermediary as a party to any
action against Seller. Seller unconditionally waives any defense
that it might have as guarantor that it would not have if it had
made or undertaken these representations, warranties, indemnities,
obligations and undertakings directly. In the event of the breach
of any representation, warranties, obligations and undertakings by
Seller of Intermediary or in the event of any claim upon any
indemnity by Seller or Intermediary (whether the representation,
warranty, indemnity, obligation or undertaking is express or
implied). Buyer's exclusive recourse shall be against the Seller,
Buyer shall have no recourse of any type against the Intermediary
arising from this transaction.
29. Inspections. Prior to the expiration of the Feasibility
Period, Purchaser shall have received various reports, satisfactory
to Purchaser in its sole discretion, of inspections of the Property
(including without limitation structural, mechanical,
environmental, cathodic and financial). On the Effective Date,
Purchaser shall have received the items listed in Schedule I
attached hereto. Seller shall make the Property and all reports,
books and records and agreements relating to the construction,
ownership, management and operation of the Property available to
the Purchaser and its agents as provided in Paragraph 7(o) hereof
throughout the Feasibility Period. If the results of the
inspections are unsatisfactory to Purchaser, or for any reason
whatsoever, in its sole and absolute discretion, Purchaser, at its
election, may terminate this Agreement by giving written notice to
Seller at any time prior to 5:00 P.M., C.D.T., on or before the
last day of the Feasibility Period, whereupon the Title Insurer
immediately shall return the Xxxxxxx Money Deposit to Purchaser,
this Agreement automatically shall terminate, and neither party
shall have any further obligation to the other. In the absence of
such notice by such date, the inspections shall be deemed to have
been approved by Purchaser.
30. Closing Costs. The recording costs for the special
warranty deed described in Subparagraph 8(b)(I) hereof and the
recording costs for any other of the Closing documents necessary to
convey good and indefeasible fee simple title to the Property to
Purchaser in accordance with this Agreement, except as otherwise
provided herein, any and all prepayment penalties or premiums with
respect to existing debts secured by the Property which will not
constitute Permitted Exceptions and the costs of obtaining any
Estoppel Letter shall be borne by Seller. The premiums for the
Owner Policy shall be paid by Purchaser. The escrow fees, if any,
charged by the Title Company shall be borne equally by Purchaser
and Seller. Purchaser and Seller each shall pay their respective
attorneys' fees and expenses. All other costs and expenses in
connection with the transaction contemplated by this Agreement,
unless otherwise expressly set forth herein to the contrary, shall
be borne by Seller and Purchaser in the manner in which such costs
and expenses customarily are allocated between the parties at
closings of real property similar to the situs of the Property.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed on the day and in the year entered below, effective as
above written.
PURCHASER:
XXXXXX RESIDENTIAL PROPERTIES, INC.,
a Maryland corporation
By:______________________________
Xxxxxxxx X. Xxxxxxx
President
Date Executed by Purchaser:_________
SELLER:
__________________________________
XXXX XXXXXX
__________________________________
XXXXXX XXXXXX
Date Executed by Seller:__________
The undersigned, constituting the Title Insurer, hereby agrees
to accept in escrow the moneys provided for in the above Agreement
to be paid into escrow and to hold and apply the same as provided
in said Agreement.
AMERICAN TITLE COMPANY,
in its separate capacity and
as agent for Chicago Title Insurance
Company
By:_____________________________
Authorized Agent
Date executed by Title
Insurer:____________
SCHEDULE I
ITEMS TO BE DELIVERED
In accordance with the Agreement, to the extent in Seller's
possession or control, Seller shall deliver to Purchaser the
following items:
1. Seller's most current owner's title insurance policy and a
copy of all title reports and documents in Seller's possession.
2. A list and a copy of all Service Contracts, all documents
pertaining to any leased Personalty, and all warranties, guaranties
and bonds, including termite inspections and treatments, relating
to the Property, or any part thereof.
3. A complete, itemized and detailed inventory of the Personalty
to be conveyed by Seller to Purchaser at the Closing.
4. A copy of (I) all income and expense statements for the
Property, for the year to date and for the most recently completed
prior year (prepared on a monthly basis), and annual operating
statements for the two (2) most recent fiscal years, certified by
Seller or audited (when available) as having been prepared in
accordance with generally accepted accounting principles (except to
the extent prepared on a cash basis), (ii) operating budgets for
the Property for the current calendar year and the upcoming
calendar year, (iii) a capital expenditure budget for the Property
for the current calendar year and the upcoming calendar year, and
(iv) such other information as may be required by Purchaser's
accountants to perform a complete audit of the Property for the
twelve (12) month period ended December 31, 1995, and year-to-date
1996.
5. A copy of all ad valorem and other property tax statements
(including personal property tax statements) relating to the
Property for the current tax year and the immediately preceding two
(2) tax years, including copies of any assessments or statements
for the current or forthcoming year, including a summary of any
contested tax assessments relating to the Property for the
preceding two (2) years, and the results thereof.
6. A copy of (i) a resident rent roll for the Improvements,
showing actual occupancies, rentals, delinquencies, defaults,
security deposits, assigned parking spaces (if any), free rent,
rent concessions, resident incentives, lease terms, unit numbers,
unit types, and unit amenities, (ii) a current schedule of rental
rates for each type of unit within the Improvements, and (iii) such
other pertinent information regarding the resident leases and
rental units as is reasonably available to Seller, including,
without limitation a schedule of the appliances and amenities
included in each type of rental unit.
7. A copy of all site plans, surveys, soil and substrata reports
and studies, engineering plans and studies, environmental reports
or studies, architectural renderings, plans and specifications,
construction contracts (with all applicable change orders), floor
plans, landscape plans, utility schemes and other similar plans,
diagrams of studies, if any, relating to the Property.
8. If available, a copy of the architect's certificate rendered
at or after the completion of construction of the Improvements
stating that the Improvements were constructed substantially in
accordance with the plans and specifications delivered to Purchaser
hereunder.
9. A copy of all reports made by engineers, architects or others,
if any, relating to any structural problems or other defects with
respect to any part of the Property.
10. A copy of all certificates of occupancy for the Improvements,
and a letter from the cities in which the Property are located
dated no earlier than the Effective Date stating that the Property
complies fully with all applicable zoning ordinances and the
operation of the Improvements as an apartment complex is a
permitted use under such ordinances, together with a copy of such
ordinances.
11. A copy of all swimming pool permits, boiler permits and other
licenses and permits for the Property required by law and issued by
any governmental authority having jurisdiction over the Property or
Seller.
12. A list of all employees currently employed in the operation of
the Property, setting forth his/her name, address, telephone
number, position, salary, benefits, bonuses, leasing commissions,
other incentives, apartment allowance (if applicable) and tenure
with the Property.
13. A schedule outlining, and invoices, contracts and/or work
orders pertaining to, any (i) carpet replacement, window
replacement, and appliance replacement over the past two (2) years
relating to the Improvements, (ii) any other capital expenditures
over the past two (2) years at the Property, showing the nature of
the work, expense, date and unit or common area where the work was
done, and (iii) regular maintenance and repair at the Property over
the past twelve (12) months.
14. A copy of the standard form of tenant lease, leasing
application, security and pet deposit documents, rules and
regulations, leasing brochures, occupancy checklist, current
marketing/leasing plans and business plans for the Property, other
standard forms and documents currently used in connection with the
leasing and marketing of the Property, and, to the extent such
information is available to Seller, a profile of existing tenant
base, including data on age, income, sex, household structure,
occupation, etc..
15. A list of all utility deposits or bonds for the Property and
a copy of all utility bills for the Property for the previous
twelve (12) months, excluding individually metered tenant utility
bills; and a letter from each of the utility providers stating that
the utilities are available to the Property.
16. A summary of any approvals, requirements or prerequisites (if
any) imposed by any current lender having a security interest in
the Property (or any portion thereof) as a condition to the
execution of this Agreement by Seller or as a condition to the
Closing as contemplated by this Agreement.
17. Copies of any documents related to any loans affecting the
Property, including, promissory notes, deeds of trust, guarantee
agreements, appraisals and other such documents pertaining to any
such loans.
18. Copies of and/or access throughout the Feasibility Period to
all resident files.
19. Copies of any pertinent litigation of safety related issues
with respect to the Property.
20. Such other books, records, leasing files, contracts,
agreements and information relating to the Property that are in
Seller's possession or are readily available to Seller and as may
be required by Purchaser's accountants to perform a complete audit
of the Property for the twelve (12) month period ended December 31,
1995, and year-to-date 1996.
21. Copies of any and all existing contractor bids and proposals
for anticipated future repair work and/or proposed capital
improvements indicating bidder and estimated scope, specifications
and costs for same.
22. Copies of contractor agreements (contracts for repairs or
capital improvement projects) in progress and/or recently
completed/performed work at the Property, including, but not
limited to, any guaranteed work still within any warranty period
(i.e., roofing, painting, paving pools, etc.) Said contracts will
indicate contractor and performed scope, specification, warranty
periods and contract cost.
23. Copies of all documents evidencing, representing or securing
the Existing Indebtedness.
SCH EDULE II
AUDIT LETTER
Date
Deloitte & Touche LLP
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Dear Sirs:
In connection with your audit of the combined statement of revenues
and certain expenses of __________________ Apartments (the
"Property") for the year ended December 31, 1995, (the "Statement")
for the purpose of expressing an opinion as to whether the combined
statement presents fairly, in all material respects, the revenues
and certain expenses of the Property in conformity with generally
accepted accounting principles, we acknowledge that such statement
is prepared, in part, using the financial data made available to
Xxxxxx Residential Properties, Inc., the purchaser of the Property.
The responsibility for the fair presentation of the statement in
conformity with generally accepted accounting principles rests with
Xxxxxx Residential Properties, Inc. We are responsible for the
fair presentation of the financial information provided to them in
the limited capacity as management company for the Property. In
connection thereto, we confirm, to the best of our current, actual
knowledge the following:
1. The financial information provided to you was prepared on an
accrual basis.
2. We have made available to you all relevant financial records
and data relating to the financial information requested by
you.
3. There have been no matters discussed or actions taken as
documented in the minutes of the meeting of stockholders,
directors, and committees of directors that have not been
appropriately reflected in the financial data provided to you.
4. There have been no irregularities involving management or
employees who have significant roles in the internal control
structure of the entities which own the Property and relating
to such Property.
5. There have been no irregularities involving employees (other
than management or those who have significant roles in the
internal control structure) that could have a material adverse
effect on the financial data provided to you.
6. There are no related party transactions relating to revenues
or expenses except for management fees relating to the
Property.
7. There are no violations or possible violations of laws or
regulations relating to the Property which has resulted in a
material adverse effect on the financial data provided to you.
8. There are no transactions relating to revenues and certain
expenses that have not been properly recorded in the
accounting records of the Property.
9. The Property has complied with all aspects of contractual
agreements that would have a material, adverse effect on the
financial data in the event of material noncompliance.
10. No material events have occurred subsequent to December 31,
1995, that require consideration or adjustments to, or
disclosures in, the financial data provided to you.
11. There are no unasserted claims or assessments that legal
counsel has advised us are probable of assertion and that
would pass to the purchaser of the Property.
, President
, Vice President
, Controller
SCHEDULE III
PROPERTY
Oak Forest Apartments
170 Units/134,800 NRSF/8.73 Acres
0000 Xxxxxx Xxxx Xxxxxx, Xxxxxxx, Xxxxx
SCHEDULE IV
EXISTING INDEBTEDNESS
[TO BE PROVIDED]
SCHEDULE V
DESCRIPTION OF IMPROVEMENTS AND AMENITIES
(A) ____ acres of land, more or less,
(B) ____ dwelling units located in ________ buildings,
consisting of _______ one-bedroom, _________ two-bedroom and
________ three-bedroom units,
(C) __________ square feet of rentable space,
(D) uncovered parking on the premises for _______
vehicles, and
(E) a clubhouse, laundry facilities, ________ swimming
pool(s), ___________ tennis court(s) and
____________________________________.
EXHIBIT A
LEGAL DESCRIPTIONS OF LAND
[TO BE PROVIDED]
EXHIBIT B
SURVEY
[TO BE PROVIDED]
EXHIBIT C
SURVEYOR'S CERTIFICATE
[TO BE PROVIDED]
EXHIBIT D
PLANS AND SPECIFICATIONS
[TO BE PROVIDED]
EXHIBIT E
INCLUDED PERSONAL PROPERTY
[TO BE PROVIDED]
EXHIBIT F
EXCLUDED PERSONAL PROPERTY
[TO BE PROVIDED]
EXHIBIT G
RENT ROLL
[TO BE PROVIDED]
EXHIBIT H
ESTOPPEL LETTERS
[TO BE PROVIDED]
EXHIBIT I
STATEMENTS OF INCOME AND EXPENSE
[TO BE PROVIDED]
EXHIBIT J
SCHEDULE OF INSURANCE
[TO BE PROVIDED]
EXHIBIT K
SCHEDULE OF SERVICE CONTRACTS
[TO BE PROVIDED]
EXHIBIT L
Intentionally Omitted
EXHIBIT M
CLOSING DOCUMENTS
[TO BE PROVIDED]
EXHIBIT N
STANDARD TENANT LEASE
[TO BE PROVIDED]
