CONTRACT TO PURCHASE AND SELL PROPERTY
This Contract to Purchase and Sell Property ("Contract") is made and
entered into as of July 7, 1997 ("Effective Date"), by and between CARDINAL
XXXXX APARTMENTS, LTD., A CALIFORNIA LIMITED PARTNERSHIP, a California limited
partnership ("Seller"), NEW PLAN REALTY TRUST A MASSACHUSETTS BUSINESS TRUST
("Purchaser") and COMMONWEALTH LAND TITLE INSURANCE COMPANY ("Escrow Agent").
Purchaser desires to purchase and Seller desires to sell certain real
property pursuant to the terms of this Contract.
In consideration of the mutual covenants and agreements herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
SALE OF THE PROPERTY
SECTION 1.1 PROPERTY. Subject to the terms of this Contract, Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller,
Seller's respective rights, titles and interests in and to all of the following
described property or any part thereof (collectively, the "Property"):
(A) The land ("Land") located in Cary, North Carolina more
particularly described on Exhibit A hereto commonly known as Cardinal Xxxxx
Apartments, together with all improvements and fixtures located on the Land
("Improvements"), and all rights, titles and interests of Seller
appurtenant to the Land and Improvements, including, without limitation,
all appurtenant easements, adjacent roads, highways and rights-of-way (the
Land and Improvements shall collectively be referred to as the "Real
Property");
(B) All tangible personal property of any kind ("Personalty") owned
by Seller and attached to or located on the Land or Improvements; provided,
however, the Personalty does not include computer software owned or leased
by Seller's property manager;
(C) All leases or other agreements demising space in or providing for
the use or occupancy of the Improvements or Land ("Tenant Leases"), and all
unapplied deposits, whether security or otherwise ("Deposits"), paid by
tenants ("Tenants") under the Tenant Leases, together with all collateral
therefor, all guarantees by third parties of the agreements and obligations
thereunder of Tenants and, except to the extent otherwise set forth in
SECTION 8.6, all rentals, unapplied security deposits, advance rentals,
receivables, reimbursements and other items payable by Tenants;
(D) All service contracts, warranties, guaranties and bonds in effect
at Closing relating to the Land, the Improvements or the Personalty, to the
extent the same are assignable ("Service Contracts");
(E) All certificates, permits, licenses, franchises, authorizations
and approvals relating to the Property or the ownership, use, access,
occupancy, repair, maintenance or operation thereof, running to or in favor
of Seller or the Property and/or the Personalty, and which Purchaser
hereafter elects to accept; and
(F) All drawings, plans and specifications covering the Property or
any part thereof; all rights to the name "Cardinal Xxxxx Apartments" with
respect to the Property, and all trademarks, trade names, service marks,
registrations, logos, good will and other rights associated therewith
(including the right to xxx for past and present infringements thereof);
all other intellectual property used in connection with the ownership and
operation of the Property; all telephone numbers; all tenant files; all
operating and maintenance files; and all books, records and other files
which are used in connection with the ownership and operation of the
Property and the conduct of the business of Seller relating to the
Property;
(g) All other rights, privileges and appurtenances in any way
relating to the above described properties.
ARTICLE II
PURCHASE PRICE
SECTION 2.1 PURCHASE PRICE. The total Purchase Price ("Purchase Price")
to be paid by Purchaser to Seller for the Property shall be Seven Million Two
Hundred Thousand Dollars ($7,200,000). The Purchase Price shall be payable at
the Closing in Current Funds (as defined in SECTION 3.1).
ARTICLE III
XXXXXXX MONEY DEPOSIT
SECTION 3.1 AMOUNT AND TIMING. Within one (1) business day after the
Effective Date, Purchaser shall deliver to Escrow Agent, Seventy-Five Thousand
Dollars ($75,000) ("Xxxxxxx Money Deposit") in cash or Current Funds, to be held
by Escrow Agent in escrow to be applied or disposed of by Escrow Agent as
provided in this Contract. If Purchaser fails to deposit the Xxxxxxx Money
Deposit with Escrow Agent as herein provided, then this Contract shall
automatically terminate and neither Seller nor Purchaser shall have any further
obligations hereunder except that the provisions of SECTIONS 5.1.5 and 11.1 of
this Contract shall survive the termination of this Contract. "Current Funds"
shall mean wire transfers, certified funds or a cashier's check in a form
acceptable to Escrow Agent which would permit Escrow Agent to immediately
disburse such funds.
SECTION 3.2 APPLICATION AND INTEREST. If the purchase and sale
contemplated hereunder is consummated, then the Xxxxxxx Money Deposit shall be
applied to the Purchase Price at Closing. In all other events, the Xxxxxxx Money
Deposit shall be disposed of by Escrow Agent as provided in this Contract. The
Xxxxxxx Money Deposit shall be invested by Escrow Agent in an interest-bearing
account with a financial institution and in a manner reasonably acceptable to
Purchaser and Seller. All interest earned on the Xxxxxxx Money Deposit is part
of the Xxxxxxx Money Deposit, to be applied or disposed of in the same manner as
the Xxxxxxx Money Deposit under this Contract.
ARTICLE IV
TITLE AND SURVEY
SECTION 4.1 TITLE COMMITMENT. Within five (5) business days following
the Effective Date, Seller shall deliver to Purchaser a copy of the existing
title insurance policy in Seller's possession. After the Effective Date,
Purchaser shall obtain at its expense a current ALTA Commitment for Title
Insurance ("Title Commitment") from a title company of Purchaser's choice
("Title Company"). The Title Commitment shall set forth the state of title to
the Property, including a list of conditions or exceptions to title affecting
the Property that would appear in an Owner's Policy of Title Insurance, if one
were issued. The Title Commitment shall contain the express commitment of the
Title Company to issue the Title Policy to Purchaser in the amount of the
Purchase Price, insuring the title to the Real Property. At such time as the
Title Commitment is furnished to Purchaser, the Title Company also shall furnish
to Purchaser copies of instruments or documents ("Exception Documents") that
create or evidence conditions or exceptions to title affecting the Real
Property. Purchaser shall have the right to negotiate with the Title Company
for additional endorsements, and Seller shall reasonably cooperate with
Purchaser in obtaining those endorsements (at no additional cost to Seller).
SECTION 4.2 SURVEY. Within five (5) business days following the
Effective Date, Seller shall deliver to Purchaser a copy of the most complete
survey of the Real Property, if any, in Seller's possession. Purchaser shall
pay for any update or new survey required by Purchaser or the Title Company (any
such Seller provided survey or, if obtained by Purchaser, any such updated or
new survey hereinafter referred to as the "Survey").
SECTION 4.3 REVIEW OF TITLE AND SURVEY. Purchaser shall have until the
end of the Inspection Period (as hereinafter defined) to notify Seller in
writing of any objections Purchaser has to any matters affecting title to the
Property, including any matters shown or referred to in the Title Commitment,
the Exception Documents, or on the Survey. Any title encumbrances, exceptions or
other matters which are either: (a) reported to the Title Company and insured
over without exception on the Title Commitment or (b) set forth in the Title
Commitment, the Exception Documents, or on the Survey; and to which Purchaser
does not object in writing within the Inspection Period, shall be deemed to be
permitted exceptions to the status of Seller's title (such encumbrances,
exceptions or other matters, together with such other matters permitted pursuant
to other provisions of this Contract, shall be referred to as the "Permitted
Exceptions").
SECTION 4.4 OBJECTIONS TO STATUS OF TITLE AND SURVEY. Subject to the
terms hereof, Seller shall be obligated to deliver marketable title to
Purchaser. If Purchaser objects to any matter affecting title to the Property
within the Inspection Period, then Seller shall have fifteen (15) days to notify
Purchaser whether or not Seller will cure, prior to Closing, any such title
objection. If Seller notifies Purchaser that it elects not to cure any such
objection, then Purchaser may, at its option exercisable in writing within five
(5) days following the date of receipt by Purchaser of written notice from
Seller stating that Seller is unable or unwilling to cure such objections,
either (a) accept such title as Seller can deliver, in which case all exceptions
to title which Seller has stated it will not cure shall be deemed to be
Permitted Exceptions, or (b) terminate this Contract by notice in writing to
Seller in which event, subject to the provisions of SECTION 10.1 of this
Contract, Escrow Agent shall Return the Xxxxxxx Money Deposit. If Purchaser
fails to notify Seller, within such five (5) day period, that Purchaser has
elected to proceed under either subpart (a) or (b) of the immediately preceding
sentence, then Purchaser shall be deemed to have elected to proceed under
subpart (a), and this Contract shall remain in full force and effect.
If Seller notifies Purchaser that it elects to cure any such objections but
is unable to cure such objections by Closing or if Seller fails to notify
Purchaser of its intentions with respect to such objections and fails to cure
such objections by Closing, then Purchaser may, at its option, either (x) accept
such title as Seller can deliver in which case the parties shall proceed with
Closing and all exceptions to title which are not removed shall be deemed to be
Permitted Exceptions, or (y) terminate this Contract by notice in writing to
Seller at Closing, in which event Escrow Agent shall Return the Xxxxxxx Money
Deposit.
"Return the Xxxxxxx Money Deposit" shall mean Escrow Agent shall return the
Xxxxxxx Money to Purchaser and neither party shall have any further rights,
duties or obligations hereunder except as otherwise provided in SECTIONS 5.1.5
and 11.1 hereof.
SECTION 4.5 OTHER PERMITTED EXCEPTIONS. The Permitted Exceptions shall
include those matters which become Permitted Exceptions pursuant to SECTIONS 4.3
and 4.4 above and, in addition, the following: (a) the Tenant Leases; (b) taxes
and assessments for the year in which the Closing occurs and subsequent years;
(c) liens and encumbrances arising after the date hereof to which Purchaser
consents in writing; and (d) any liens or encumbrances of a definite or
ascertainable amount, provided that Seller causes such liens or encumbrances to
be cured or discharged from the public record at Closing, so that such liens or
encumbrances do not appear as an exception in the Owner's Policy of Title
Insurance issued to Purchaser pursuant to the Title Commitment (the "Owner's
Policy").
ARTICLE V
INSPECTION BY PURCHASER
SECTION 5.1 INSPECTION PERIOD.
5.1.1 Purchaser shall have a period of time commencing on the
Effective Date and expiring at 5:00 p.m., Cary, North Carolina time on the
thirtieth (30th) day thereafter (the "Inspection Period") within which to
examine the Property and to conduct its feasibility study. During the
Inspection Period, Seller shall allow Purchaser and Purchaser's agents
access to the Property during normal business hours to (i) conduct soil and
engineering, hazardous waste (including asbestos and formaldehyde),
marketing, feasibility, zoning and other studies or tests and to otherwise
determine the feasibility of the Property for Purchasers intended use and
(ii) review and/or photocopy at Property Manager's office during normal
business hours, all Tenant leases, lease amendments, improvement
agreements, and any other currently effective agreements relating to the
use or occupancy ownership, repair, maintenance or operation of the
Property, which documents Property Manager will make available to Purchaser
for this purpose.
Notwithstanding the foregoing, (a) the costs and expenses of
Purchaser's investigation shall be borne solely by Purchaser, (b) prior to
the expiration of the Inspection Period, Purchaser shall restore any damage
to the Property caused by Purchaser or its agents to the condition which
existed prior to Purchaser's entry thereon and investigation thereof, (c)
Purchaser shall not unreasonably interfere with, interrupt or disrupt the
operation of Seller's business on the Property, and such access by
Purchaser and/or its agents shall be subject to the rights of Tenants under
Tenant Leases, (d) Purchaser shall not permit any mechanic's or
materialman's liens or any other liens to attach to the Property by reason
of the performance of any work or the purchase of any materials by
Purchaser or its agents in connection with any studies or tests conducted
pursuant to this SECTION 5.1, (e) Purchaser shall have the right to enter
vacant units and, with the consent of the respective tenants, leased units,
provided that Purchaser shall give notice to Seller forty-eight (48) hours
prior to entry onto the Property and shall permit Seller to have a
representative present during all investigations and inspections conducted
with respect to the Property, and (f) Purchaser shall take all reasonable
actions and implement all reasonable protections necessary to ensure that
all actions taken in connection with the investigations and inspections of
the Property, and all equipment, materials and substances generated, used
or brought onto the Property in the course of such investigations and
inspections pose no material threat to the safety of persons or the
environment and cause no damage to the Property or other property of Seller
or other persons.
5.1.2 If following the end of the Inspection Period (a) any
additional title encumbrances (other than as caused by Purchaser) become
effective against the Property, which Seller does not cause to be cured or
insured around so that such matters do not appear as an exception in the
Owner's Policy or (b) a survey update reveals any new adverse matters which
Seller does not cure by Closing, then Purchaser may terminate this Contract
by delivery of written notice to Seller given in accordance with the
provisions of SECTION 13.1, in which event, subject to the provisions of
SECTION 10.1, Escrow Agent shall Return the Xxxxxxx Money Deposit. Seller
shall cause any such encumbrance of a monetary nature to be satisfied or
discharged from the public record at Closing.
5.1.3 All information made available by Seller to Purchaser in
accordance with this Contract or obtained by Purchaser in the course of its
investigations shall be treated as confidential information by Purchaser
(except to the extent Purchaser is required by law or legal process to
disclose such information, or except as set forth below). Prior to
Closing, Purchaser shall use reasonable efforts to prevent its agents and
employees from divulging such information to any third parties except as
reasonably necessary to third parties engaged by Purchaser for the limited
purpose of analyzing and investigating such information for the purpose of
consummating the transaction contemplated by this Contract, including
Purchaser's attorneys and representatives, prospective lenders, investors
and engineers.
5.1.4 Purchaser shall have the right to accept or reject any
Service Contracts (except the laundry contract shown on SCHEDULE 5.3, which
is hereby deemed accepted by Purchaser) by providing written notice to
Seller thereof during the Inspection Period. Any and all Service Contracts
not so rejected by Purchaser before the end of the Inspection Period shall
be deemed accepted by Purchaser. All Service Contracts so rejected by
Purchaser, including the Management Agreement, shall be terminated by
Seller and Seller shall be solely liable for any termination penalty.
5.1.5 Purchaser shall indemnify, defend and hold harmless Seller
and its general partner and each of their affiliates and their respective
affiliates' officers, directors, employees, agents and representatives from
and against any claims, liabilities, causes of action, damages, liens,
losses, fines, fees and expenses (including, without limitation, attorneys'
fees and expenses) incident to, resulting from or in any way arising out of
any intentional, reckless or negligent infliction of injury or distress to
persons or damage to property caused by Purchaser or its agents on the
Property. The agreements contained in this SECTION 5.1.5 shall survive the
Closing forever (subject to any applicable statutes of limitation) and
shall not be merged therein and shall also survive any termination of this
Contract.
SECTION 5.2 APPROVAL OF INSPECTIONS. If Purchaser determines at any time
prior to the end of the Inspection Period that any aspect of the Property is not
satisfactory to Purchaser, then Purchaser may terminate this Contract by
delivery of written notice to Seller within the Inspection Period given in
accordance with the provisions of SECTION 13.1, in which event Escrow Agent
shall Return the Xxxxxxx Money Deposit. If Purchaser does not timely deliver to
Seller written notice of termination within the Inspection Period, the
conditions of this SECTION 5.2 shall be deemed satisfied, and Purchaser may not
thereafter terminate this Contract pursuant to this SECTION 5.2.
SECTION 5.3 MATTERS TO BE DELIVERED BY SELLER. No later than five (5)
business days from the Effective Date, Seller shall deliver to Purchaser the
following items (collectively, the "Submission Matters"):
(A) A copy of the form used for Tenant Leases with respect to the
Property;
(B) An inventory of all Personalty current to within thirty (30) days
prior to the Effective Date;
(C) Copies of any and all Service Contracts in Seller's possession or
control relating to the ownership and operation of the Property, as
identified on SCHEDULE 5.3(C);
(D) Copies of all warranties and guarantees in Seller's possession or
control relating to the Property, or any part thereof, or to the Personalty
owned by Seller and located on or used in connection with the Property;
(E) Copies of all plans and specifications in Seller's possession or
control with respect to the Property and copies of all licenses and permits
in Seller's possession or control with respect to the ownership and
operation of the Property, including building permits and certificates of
occupancy;
(F) A certificate of fire, hazard, extended coverage, liability and
other insurance policies held by Seller with respect to the Property;
(G) Copies of the most recent real estate and personal property tax
statements in Seller's possession applicable to the Property (including, if
applicable, any rental tax and special assessment statements);
(H) The Rent Roll to be attached hereto as SCHEDULE 6.2(E);
(I) A copy of the Report of Phase 1 Environmental Site Assessment and
Limited Asbestos Survey for Cardinal Xxxxx Apartments dated August 10,
1993, prepared by Law Engineering ("Existing Phase 1"); and
(J) A certified copy of the Limited Partnership Agreement of Seller.
ARTICLE VI
COVENANTS, REPRESENTATIONS AND WARRANTIES; DISCLAIMERS AND WAIVERS
SECTION 6.1 COVENANTS, REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants to Seller as of the date hereof (and Purchaser
shall reassert in writing to Seller as of the Closing Date) as follows, which
representations and warranties shall survive the Closing as provided herein:
(A) Purchaser is a Massachusetts Business Trust, which is duly
authorized and validly existing under the laws of the State of
Massachusetts;
(B) Purchaser has full right and authority to enter into this
Contract and to consummate the transactions contemplated herein;
(C) each of the persons executing this Contract on behalf of
Purchaser is authorized to do so; and
(D) this Contract constitutes a valid and legally binding obligation
of Purchaser, enforceable in accordance with its terms. Provided, each of
the representations and warranties of Purchaser set forth in this Section
6.1 shall survive the Closing for only twelve (12 months except as to any
such representation or warranty as to which Seller has within such twelve
(12 month period asserted with a reasonable basis a claim against
Purchaser.
SECTION 6.2 COVENANTS, REPRESENTATIONS AND WARRANTIES OF SELLER. Seller
represents and warrants to Purchaser as of the date hereof as follows, provided,
Seller shall also certify to Purchaser at Closing that there has been no
material change in any of the following representations and warranties, and each
of the representations and warranties of Seller below shall survive the Closing
for only twelve (12) months except as to any such representation or warranty as
to which Purchaser has within such twelve (12) month period asserted with
reasonable basis a claim against Seller, and except as to those under Sections
6.2(a) and 6.2(b) as provided in Section 6.5:
(A) Seller (i) is a duly organized and validly existing limited
partnership under the laws of the State of California; (ii) is duly bound
by the actions and execution hereof by the general partner of Seller who
executed this Contract; (iii) has the authority and power to enter into
this Contract and to consummate (including the execution of all necessary
documents and contracts) the transaction provided for herein; (iv) is the
owner of the landlord's interest in the Tenant Leases; and (v) to the
extent required to own, operate and sell the Property, is authorized to own
and transfer real estate under the laws of the State of North Carolina and
to otherwise transact and conduct business in the State of North Carolina.
(B) The execution and delivery by Seller of, and the performance and
compliance by Seller with the terms and provisions of this Contract do not
violate any of the terms, conditions or provisions of (i) any judgment,
order, injunction, decree, regulation or ruling of any court or other
governmental authority to which Seller is subject, or (ii) any agreement or
contract to which Seller is a party or to which it or the Property is
subject (other than for the agreements listed on SCHEDULE 6.2(G) to this
Contract, as the terms of such agreements speak for themselves); and
subject only to the qualification in (ii) above, no consent, waiver or
approval by any third party is required in connection with the execution
and delivery by Seller of this Contract or the performance by Seller of
obligations to be performed by Seller under this Contract.
(C) Seller is the sole owner of, and has good and marketable title
to, the Property free and clear of all liens, encumbrances, claims and
demands, other than the Permitted Exceptions. Seller has not entered into
any agreement to sell, mortgage, lease (other than to residential tenants
for personal occupancy) or otherwise encumber or dispose of its interest in
the Property or any part thereof, except for the Permitted Exceptions and
this Contract.
(D) As of the date of this Contract, Seller has not received any
notice of (nor to its knowledge are) any actions, suits, proceedings or
claims (including employee grievance claims) pending or threatened against
or affecting Seller (in respect of the Property) or the Property, at law or
equity or before or by any governmental authority and has not commenced any
actions, suits or proceedings in respect of the Property, except as shown
on SCHEDULE 6.2(D).
(E)
(I) All of the Tenants and occupants of the Property as of the
date of the "Rent Roll" to be attached hereto as SCHEDULE 6.2(E), the
space leased, the Lease expiration dates, the security deposits,
arrearages, the rentals and the concessions, if any, granted to the
tenants are identified on such Rent Roll.
(II) No Tenant has been given free rent, any concession in the
payment of rent or any abatement in the payment of rent, except as set
forth on Schedule 6.2(e).
(III) Seller has paid all costs required to be paid by the
landlord to the Tenants listed in Schedule 6.2(e) in connection with
the preparation of space for occupancy (whether to be performed before
or after occupancy) and has paid all obligations for brokerage
commissions and finders' fees incurred in entering into those Tenant
Leases and, if any additional Tenant Leases are executed after the
date of this Contract and prior to Closing, Seller shall pay or
provide for the payment of all such costs and commissions prior to
Closing. As of the date of the Rent Roll, no payment default exists
under any Tenant Lease except as shown on Schedule 6.2(e) and no
written notice of a default has been received or given by Seller
except as shown on Schedule 6.2(e).
(IV) Since November, 1992, Seller and its General Partner have
had no and continue to have no agreement or other arrangement
involving the Property with any governmental authority for or in
respect of subsidized tenants or housing or rents or similar benefits.
(F) The operating statements provided by Seller to Purchaser were
prepared on a modified cash/accrual basis and are true and correct in all
material respects.
(G) All Service Contracts (written or oral) affecting the Property as
of the date of this Contract are identified on SCHEDULE 6.2(G), which
Schedule will be made available to Purchaser pursuant to SECTION 5.3(C) and
will contain true and complete copies of any such Service Contracts which
are written agreements between Seller and the service provider; Seller is
not in default under any of these Service Contracts; Seller will not enter
into any other contract that cannot be terminated on 30 days notice without
the prior written consent of Purchaser and will give notice at or before
Closing terminating such existing Service Contracts as are designated by
Purchaser during the Inspection Period.
(H) Except for the Management Agreement with Insignia Management
Group, Inc. ("Manager") which will be canceled at Closing, there are no
unrecorded agreements outstanding respecting operations at the Property
after Closing between Seller and any person controlled by, controlling or
under common control with Seller.
(I) The continued maintenance and operation of the Property is not
now, and on the Closing Date will not be, dependent to any extent on
facilities located on any other property (except for public utilities and
public streets) and the continued maintenance and operation of any other
property is not dependent to any extent on facilities located on the
Property.
(J) To the best of Seller's knowledge, there are no condemnation or
eminent domain proceedings affecting the Property now pending or
threatened.
(K) Seller has not received any of the following:
(I) A written notice from a governmental authority that any
building or other structure not a part of the Property relies to any
extent on the Property or any part thereof or any interest therein to
fulfill any legal requirements or that any of the Improvements relies
to any extent on any property (other than the public highways and
public utilities) not included within the Property to fulfill any
legal requirement.
(II) A written notice from any governmental authority or any
public utility that the water supply or sewage disposal systems are
inadequate to distribute the water supply and dispose of the sewage
for the Property or of the need to obtain any permits for access to
the water supply and sewage systems, that there is any impairment
(other than temporary outages) of the electrical, gas or telephone
service, or that there is need for any additional approval of any
governmental authority or public utility or need for construction by
the owner for the use of these utilities.
(III) Any written notice from a governmental authority that
the Improvements and the operation of the Property does not comply in
all material respects with all legal requirements governing or
regulating the use, construction and operation thereof or any written
notice from the beneficiary of any Permitted Exceptions that the
Improvements and the operation of the Property does not comply with
that Permitted Exceptions.
(IV) Any written notice from a governmental authority requiring
Seller to obtain any permit (other than the permits now held by
Seller) for the occupancy of the Property for use as multifamily
apartments and the operation of the Improvements as now being
operated.
(V) Any written notice from any governmental authority of the
disposal of any hazardous or toxic materials on the Property or of a
violation of any environmental legal requirements.
(L) Except for the Existing Phase I and any report prepared for
Purchaser, Seller has not received any environmental site assessment or
written report with respect to the Property, or other written notice of any
disposal of any hazardous or toxic materials on the Property or the
violation of any environmental legal requirements.
(M) Seller has no employees working on site at the Property.
(N) Seller has received no written notice and otherwise has no
knowledge of any increases in the real estate tax assessments for the
Premises subsequent to the 1992 assessment notices received by Seller.
(O) To the actual knowledge of Seller, without independent
investigation or inquiry, and except for such matters as are disclosed in
the Existing Phase I or as may be disclosed by the environmental report to
be performed by Purchaser or its agents during the Inspection Period, (i)
no Hazardous Substances exist on the Property and no leak, spill, release
or discharge of Hazardous Substances has occurred on the Property, and (ii)
neither the Property nor any land adjacent to the Property is in violation
or subject to any existing pending or threatened investigation by any
governmental authority under any applicable federal, state or local law,
regulation or ordinance pertaining to Hazardous Substances or other
environmental matters. "Hazardous Substances" means all chemical
substances, asbestos, oil, petroleum products, formaldehyde, PCB's, toxic,
carcinogenic, radioactive or hazardous waste or materials, existing in such
concentrations or amounts as are regulated or prohibited by applicable
federal, state or local laws, regulations or ordinances, and also shall
include any underground storage tanks. Simultaneously herewith, Seller and
Purchaser shall complete and execute a "Disclosure of Information on Lead-
Based Paint and/or Lead-Based Paint Hazards", the form of which is attached
hereto as Schedule 6.2(g).
(P) To the actual knowledge of Seller, no entity owned or controlled
by ten percent (10%) or more by Insignia Financial Group, Inc. owns any
real property contiguous to the Property.
(Q) Seller has obtained the requisite approval of its limited
partners authorizing Seller to sell the Property to Purchaser pursuant to
the terms of this Contract.
For purposes of this SECTION 6.2, the actual knowledge of Seller shall be deemed
to include the actual knowledge of the Manager's current (as of the date of this
Contract) Property Manager, District Manager and Regional Manager (collectively,
"Manager's Representatives") having authority as to the Property; provided,
Manager and Manager's Representatives shall have no liability whatsoever to
Purchaser or its Related Parties with respect to the Property or this Contract
or any matters arising therefrom.
SECTION 6.3 NO ADDITIONAL REPRESENTATIONS OR WARRANTIES OF SELLER.
Except as expressly specified in this Contract or the special warranty deed or
other documents to be delivered at Closing, Seller has not made, and Seller
hereby specifically disclaims, any warranty, guaranty or representation, oral or
written, past, present or future, of, as to, or concerning, (a) the nature and
condition of the Property, including, without limitation, the water, soil and
geology, and the suitability thereof and of the Property for any and all
activities and uses which Purchaser may elect to conduct thereon; (b) the
existence, nature and extent of any right-of-way, lease, right to possession or
use, lien, encumbrance, license, reservation, condition or other matter
affecting title to the Property; and (c) whether the use or operation of the
Property complies with any and all laws, ordinances or regulations of any
government or other regulatory body. Except as expressly specified in this
Contract or the special warranty deed or other documents to be delivered at
Closing, PURCHASER AGREES TO ACCEPT THE PROPERTY, AND ACKNOWLEDGES THAT THE SALE
OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE BY SELLER, ON AN AS IS, WHERE IS,
AND WITH ALL FAULTS" BASIS. EXCEPT AS EXPRESSLY SPECIFIED IN THIS CONTRACT OR
THE SPECIAL WARRANTY DEED OR OTHER DOCUMENTS TO BE DELIVERED AT CLOSING,
PURCHASER EXPRESSLY ACKNOWLEDGES THAT SELLER MAKES NO REPRESENTATION OR WARRANTY
OF ANY KIND, ORAL OR WRITTEN, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF
LAW, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES
OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, TITLE (OTHER THAN SELLER'S WARRANTY OF TITLE TO BE SET FORTH IN THE
SPECIAL WARRANTY DEED), ZONING, TAX CONSEQUENCES, PHYSICAL OR ENVIRONMENTAL
CONDITION, UTILITIES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL
APPROVALS, THE COMPLIANCE OF THE PREMISES WITH GOVERNMENTAL LAWS, THE TRUTH,
ACCURACY OR COMPLETENESS OF ANY INFORMATION (INCLUDING, WITHOUT LIMITATION, THE
SUBMISSION MATTERS) PROVIDED BY OR ON BEHALF OF SELLER TO PURCHASER, OR ANY
OTHER MATTER OR THING REGARDING THE PROPERTY. PURCHASER ACKNOWLEDGES THAT EXCEPT
AS EXPRESSLY SPECIFIED IN ANY WRITTEN INSTRUMENT DELIVERED BY SELLER TO
PURCHASER INCLUDING, WITHOUT LIMITATION, THIS CONTRACT, SELLER MAKES NO
REPRESENTATION OR WARRANTY OF ANY KIND, ORAL OR WRITTEN, EXPRESS OR IMPLIED, OR
ARISING BY OPERATION OF LAW REGARDING OR WITH RESPECT TO ANY SUCH INFORMATION
(INCLUDING, WITHOUT LIMITATION, THE SUBMISSION MATTERS) PROVIDED OR TO BE
PROVIDED BY SELLER REGARDING THE PROPERTY.
Further, and without in any way limiting any other provision of this
Contract, except as expressly specified in this Contract or the special warranty
deed or other documents to be delivered at Closing, Seller has made and makes no
representation, warranty or guaranty, and hereby specifically disclaims any
warranty, guaranty or representation, oral or written, past, present or future,
with respect to the presence or disposal on or beneath the Property (or any
parcel in proximity thereto) of Hazardous Substances and shall have no liability
to Purchaser therefor (except for a breach of Seller's representations or
warranties set forth in SECTION 6.2(K)(V), (L) or (O). Without limitation of
the preceding sentence, except as expressly specified in this Contract or the
special warranty deed or other documents to be delivered at Closing, Seller
specifically disclaims any representation, warranty or guaranty regarding the
accuracy of any environmental reports which may be included within the
Submission Matters. By acceptance of this Contract and the special warranty deed
to be delivered by Seller at the Closing, Purchaser acknowledges that
Purchaser's opportunity for inspection and investigation of the Property (and
other parcels in proximity thereto) will be adequate to enable Purchaser to make
Purchaser's own determination with respect to the presence or disposal on or
beneath the Property (and other parcels in proximity thereto) of Hazardous
Substances.
SECTION 6.4 NO RELIANCE ON DOCUMENTS. Except as expressly stated
herein, Seller makes no representation or warranty as to the truth, accuracy or
completeness of any materials, data or information (including, without
limitation, the Submission Matters) delivered by Seller, or its general partner
or their respective affiliates or representatives to Purchaser in connection
with the transaction contemplated hereby. Except as expressly stated herein,
Purchaser acknowledges and agrees that all materials, data and information
(including, without limitation, the Submission Matters) delivered by Seller, its
general partner or their respective affiliates or representatives to Purchaser
in connection with the transaction contemplated hereby are provided to Purchaser
as a convenience only and that any reliance on or use of such materials, data or
information by Purchaser shall be at the sole risk of Purchaser.
SECTION 6.5 EFFECT AND SURVIVAL OF DISCLAIMERS. Seller and Purchaser
agree that the provisions of SECTIONS 6.2(A), 6.2(B), 6.3 and 6.4 shall survive
Closing and the termination of this Contract forever.
ARTICLE VII
CONDITIONS PRECEDENT TO PURCHASER'S AND SELLER'S PERFORMANCE
SECTION 7.1 CONDITIONS TO PURCHASER'S OBLIGATIONS. Purchaser's
obligation under this Contract to purchase the Property is subject to the
fulfillment of each of the following conditions (any or all of which may be
waived by Purchaser):
(A) Seller shall be ready, willing and able to deliver title to the
Property in accordance with the terms and conditions of this Contract;
(B) The representations and warranties of Seller contained herein
shall be true, accurate and correct as of the Closing Date; and
(C) Seller shall have delivered all the documents and other items
required pursuant to SECTION 8.2(A), and shall have performed, in all
material respects, all other covenants, undertakings and obligations, and
complied with all conditions required by this Contract to be performed or
complied with by Seller at or prior to the Closing;
If any of the conditions set forth in this SECTION 7.1 are not
satisfied by Closing, then Purchaser may terminate this Contract and Escrow
Agent shall Return the Xxxxxxx Money Deposit to Purchaser and Purchaser may
proceed according to Section 10.2.
SECTION 7.2 CONDITIONS TO SELLER'S OBLIGATIONS. Seller's obligation
under this Contract to sell the Property to Purchaser is subject to the
fulfillment of each of the following conditions (all or any of which may be
waived by Seller):
(A) the representations and warranties of Purchaser contained herein
shall be true, accurate and correct as of the Closing Date; and
(B) Purchaser shall have delivered the funds required hereunder and
all the documents to be executed by Purchaser set forth in SECTION 8.2(B).
If any of the conditions of this SECTION 7.2 are not satisfied by Closing,
then Seller may terminate this Contract and Escrow Agent shall deliver the
Xxxxxxx Money Deposit to Seller and neither party shall have any further rights
or liabilities hereunder, except as provided in Sections 5.1.5 and 11.1 hereof.
ARTICLE VIII
CLOSING
SECTION 8.1 TIME AND PLACE. The consummation of the purchase and sale of
the Property ("Closing") shall take place at the office of Seller's counsel on a
date ("Closing Date") mutually acceptable to both Purchaser and Seller, but
which in no event shall be later than July 31, 1997. Notwithstanding the
above, each party will reasonably cooperate with the other party in
accomplishing the Closing by mail using appropriate escrows, if either party so
requests.
SECTION 8.2 ITEMS TO BE DELIVERED AT THE CLOSING.
(A) SELLER. At the Closing, Seller shall deliver, or cause to be
delivered, to Purchaser each of the following items:
(I) A Special Warranty Deed duly executed and acknowledged by
Seller in the form attached hereto as Exhibit B sufficient to convey
to Purchaser good title to the Property free and clear of all liens
and encumbrances except for the Permitted Exceptions.
(II) An Assignment and Assumption of Leases ("Assignment of
Leases") duly executed and acknowledged by Seller in the form attached
hereto as Exhibit C.
(III) A Blanket Conveyance, Xxxx of Sale and Assignment
("Xxxx of Sale") duly executed by Seller in the form attached hereto
as Exhibit D.
(IV) All keys and master keys to all locks located on the
Property that are in Seller's possession or control.
(V) All original Tenant Leases that are in Seller's possession
or control.
(VI) An executed form letter to the Tenants regarding the sale of
the Property ("Notice Letters") in the form attached hereto as Exhibit
F.
(VII) All original Service Contracts relating to the Property
that are in Seller's possession or control.
(VIII) All amounts owing to Purchaser by Seller under Article
IX hereof.
(IX) A Non-Foreign Affidavit in the form attached hereto as
Exhibit E.
(X) Such resolutions and certificates of Seller or its partners
reasonably required by Title Company, confirming that the requisite
approval of Seller's limited partners has been obtained and confirming
the authority of the persons signing on behalf of Seller to consummate
this Contract.
(XI) A rent roll prepared with respect to the Property in the
form attached hereto as SCHEDULE 6.2(E) which shall be certified, to
Seller's knowledge, as being true and correct as of a date not more
than three (3) days prior to Closing.
(XII) Other items reasonably requested by Title Company for
the sale of the Property in accordance with this Contract or for
administrative requirements for consummating the Closing (provided,
that such items shall not include opinions of Seller's counsel, and
Purchaser shall make every reasonable effort to supply the form of
such items to Seller within the Inspection Period).
(XIII) At the Property, all tenant files and other files which
are used in connection with the ownership and operation of the
Property or any part thereof and the conduct of the business of Seller
relating to the Property or any part thereof.
(XIV) Duly executed closing statement.
(XV) Seller's duly executed certificate of reaffirmation and
remaking dated as of the Closing Date, confirming that the warranties
and representations of Seller as made herein are materially true and
correct as of the Closing Date.
(XVI) An official bank (cashier's) check or attorney's trust
account check payable to Purchaser in the amount of all unapplied
deposits held and all advance rentals received under Tenant Leases,
together with a certified list of each Tenant who has made such a
deposit or advance rental and the amount thereof.
(XVII) A certificate from the Manager to the effect that the
Management Agreement has been terminated and that the Manager has no
claim whatsoever against Purchaser and the Property or any part
thereof under or in connection with the Management Agreement, the
agreements and obligations thereunder or otherwise.
(XVIII) A current termite bond for the Property, paid for by
Seller, that is valid for one year after Closing and assignable to
Purchaser. Provided, however, at Closing Purchaser shall assume the
Xxxxxx Pest Control service program contract relating to the Property.
(B) PURCHASER. At the Closing, Purchaser shall deliver to Seller each
of the following items:
(I) The cash portion of the Purchase Price in Current Funds.
(II) The Assignment of Leases, duly executed and acknowledged by
Purchaser.
(III) Such additional funds in cash or Current Funds, as may
be necessary to cover Purchaser's share of the closing costs and
prorations hereunder .
(IV) Evidence satisfactory to the Title Company that the person
or persons executing this Contract and the closing documents on behalf
of Purchaser have full right, power and authority to do so.
(V) The Notice Letters duly executed by Purchaser.
(VI) Other items reasonably requested by Title Company for the
sale of the Property in accordance with this Contract or for
administrative requirements for consummating the Closing.
SECTION 8.3 COSTS OF CLOSING. The escrow fees of the Title Company (if
any) shall be shared equally by Purchaser and Seller. Seller shall pay for any
deed stamp/transfer taxes. Purchaser shall pay for all recording costs and
costs related to the Title Policy and Survey. All other expenses incurred by
Seller and Purchaser with respect to the Closing, including, but not limited to,
the attorneys' fees and costs and expenses incurred in connection with
negotiating, preparing and closing the transaction contemplated by this
Contract, shall be borne and paid exclusively by the party incurring such
expense.
SECTION 8.4 PRORATIONS.
8.4.1 All normal and customarily proratable items, including,
without limitation, rents, operating expenses and other expenses and fees,
and payments relating to any agreements affecting the Property which
survive the Closing, shall be prorated as of the Closing Date, Seller being
charged and credited for all of same attributable to the period up to, and
including, the day prior to the Closing Date (and credited for any amounts
paid by Seller attributable to the period thereafter) and Purchaser being
responsible for, and credited or charged, as the case may be, for all of
same attributable to the period on and after the Closing Date.
8.4.2 All unapplied Deposits under Tenant Leases in the possession
of Seller, if any, shall be transferred by Seller to Purchaser at the
Closing. There shall be no application of security deposits to unpaid rent
unless the tenant has vacated without paying Rent.
8.4.3 Any real estate ad valorem or similar taxes for the
Property, or any installment of assessments payable in installments which
installment is payable in the year of Closing occurs and those which are
attributable to the calendar year in which Closing occurs (due and payable
in a succeeding calendar year), shall be prorated to the date of Closing,
based upon actual days involved. In connection with the proration of real
property taxes or installments of assessments, such proration shall be
based upon the assessed valuation and tax rate figures for the year in
which the Closing occurs to the extent the same are available; provided, if
actual figures (whether for the assessed value of the Property or for the
tax rate) for the year of Closing are not available at the Closing Date,
then the proration shall be based upon the amounts from the preceding year.
In such event, the parties shall reprorate such amounts within thirty (30)
days after the actual bills are received by Purchaser. The proration shall
be final and unadjustable except as provided in the following paragraph. If
the Property has been assessed for property tax purposes at such rates as
would result in "roll back" taxes upon the changes in land usage or
ownership of the Property, then Seller shall pay all such taxes and hereby
indemnifies, holds harmless and agrees to defend Purchaser from and against
any and all causes of action, costs, expenses, fees liens, fines, damages,
claims, losses, expenses, fines and liabilities for or relating to such
taxes.
8.4.4 Prorations should be governed by the following additional
provisions:
(A) Utilities, if any, payable by Seller, shall be prorated.
Seller shall obtain meter readings on the Closing Date or midnight of
the day immediately preceding the Closing Date ("Proration Date"), and
if such readings are obtained, there shall be no proration of such
items and Seller shall pay the bills therefor for the period through
the Proration Date, and Purchaser shall pay the bills therefor for the
period subsequent to the Proration Date as and when rendered. If
Seller is unable to obtain meter readings as of the Proration Date,
utilities shall be prorated at the Proration Date based upon the most
recent utility bills, adjusted for seasonality (such adjustment being
reasonably acceptable to both parties), and reprorated upon issuance
of the actual bills. In addition, if there are any utility charges
submetered to Tenants and payable by them directly to Seller, Seller
shall use reasonable efforts to obtain readings thereof at the Closing
Date, and such items shall be prorated in mode and manner as with
respect to rents. Provided, however, Seller may have utility service
at the Property terminated in accordance with SECTION 8.5.
(B) Prepaid and unpaid expenses and charges respecting utilities
and all other expenses incurred in the operation of the Property shall
be prorated at and as of the Proration Date. However, fees paid by
Seller with respect to certificates, permits, licenses, franchises,
authorizations and approvals assigned by Seller to Purchaser at the
Closing shall not be prorated, but shall be paid for and assumed
entirely by Seller.
(C) Income from coin telephones, vending and other coin operated
machines, or from the use of other facilities forming a part of, or
located upon, the Property shall be apportioned. If they are to be
received after the Proration Date, they shall be apportioned when the
income is received. In the case of any charges payable by Tenants to
Seller applicable to periods of time ending before the Closing Date
but to become payable thereafter when bills are rendered (such as
service charges, supply charges and utility charges), Seller shall
after settlement prepare and promptly deliver to Purchaser the
information necessary to prepare the bills to the tenants. Seller
warrants and represents that such information will be true, complete
and correct. All such charges shall be paid to Purchaser and adjusted
in the same manner as provided herein.
(D) Except as otherwise provided herein, prorations shall be
made as of the end of business on the day prior to the Closing Date.
Unapplied security deposited in the possession or control of Seller
shall be transferred at the Closing, together with an explanation of
any missing security deposits.
(E) If any of the items subject to proration under the foregoing
provisions of this SECTION 8.4 cannot be prorated at the Closing
because of the unavailability of the information necessary to compute
such proration, or if any errors or omissions in computing prorations
at the Closing are discovered subsequent to the Closing, then such
item shall be reapportioned and such errors and omissions corrected as
soon as practicable after the Closing Date and the proper party
reimbursed, which obligation shall survive the Closing for a period of
one hundred twenty (120) days after the Closing Date as hereinafter
provided. Neither party hereto shall have the right to require a
recomputation of a Closing proration or a correction of an error or
omission in a Closing proration unless within the aforestated one
hundred twenty (120) day period one of the parties hereto (i) has
obtained the previously unavailable information or has discovered the
error or omission, and (ii) has given notice thereof to the other
party together with a copy of its good faith recomputation of the
proration and copies of all substantiating information used in such
recomputation. The failure of a party to obtain any previously
unavailable information or discover an error or omission with respect
to an item subject to proration hereunder and to give notice thereof
as provided above within one hundred twenty (120) days after the
Closing Date shall be deemed a waiver of its right to cause a
recomputation or a correction of an error or omission with respect to
such item after the Closing Date.
The provisions of this SECTION 8.4 shall survive the Closing and the
termination of this Contract forever.
SECTION 8.5 POSSESSION AND CLOSING. Possession of the Property shall be
delivered to Purchaser by Seller at the Closing, subject to the Permitted
Exceptions and the rights of the Tenants. Purchaser shall make its own
arrangements for the provision of public utilities to the Property and Seller
shall terminate its Contracts with such utility companies that provide services
to the Property as of the end of business on the Closing Date.
SECTION 8.6 DELINQUENT RENT.
(A) APPLICATION OF DELINQUENT RENT. If on the Closing Date any
Tenant is in arrears in the payment of any rent under any Tenant Lease (the
"Delinquent Rent") payable by it, any Delinquent Rent received by Purchaser
and Seller from such Tenant after the Closing shall be applied to amounts
due and payable by such Tenant during the following periods in the
following order of priority: (A) first, to the period of time after the
Closing Date, and (B) second, to the period of time before the Closing
Date. Provided, if Seller initiates legal action to collect Delinquent
Rent for the period prior to Closing, Seller shall be entitled to retain
any Delinquent Rent collected as a result of such legal action. The
provisions of this SECTION 8.6(A) shall survive the Closing and the
termination of this Contract forever.
(B) COLLECTION OF DELINQUENT RENT. Purchaser shall have no obligation
to collect past due rentals and other amounts from Tenants after the
Proration Date. Seller retains its rights in and to such past due rentals,
but shall not disturb or otherwise interfere with any Tenant in its
occupancy and use and enjoyment of its demised premises.
ARTICLE IX
CONDEMNATION OR CASUALTY
SECTION 9.1 CONDEMNATION.
(A) If all or any Significant Portion (as defined in SECTION 9.1(B))
of the Property is condemned or taken by eminent domain or conveyed by deed
in lieu thereof, or if any condemnation proceeding is commenced for all or
any Significant Portion of the Property, prior to Closing, then Purchaser
may elect to terminate this Contract by written notice thereof to Seller
within ten (10) days after Seller notifies Purchaser of the condemnation,
taking or deed in lieu or institution of such condemnation proceeding
(which notice Seller shall deliver to Purchaser within ten (10) days of
Seller's receipt thereof). If Purchaser does not terminate this Contract
pursuant to this SECTION 9.1(A), then both parties shall proceed to close
the transaction contemplated herein pursuant to the terms hereof, in which
event Seller shall, except as limited in SECTION 9.1(B) hereof, deliver to
Purchaser at the Closing any proceeds actually received by Seller
attributable to the Property from such condemnation, eminent domain
proceeding or deed in lieu thereof (except for proceeds previously used to
restore or repair the Property ) and assign its interest in and to any such
proceeds, and there shall be no reduction in the Purchase Price.
(B) For purposes of SECTION 9.1(A), "Significant Portion" of the
Property shall be deemed to be any portion of the Property with either a
fair market value or replacement cost in an amount equal to or greater than
$250,000. Notwithstanding anything to the contrary contained in SECTION
9.1(A), if Purchaser has not timely elected to terminate in accordance with
SECTION 9.1(A), and if the proceeds payable with respect to the Property as
a result of condemnation exceed the Purchase Price for the Property, then
the portion of such proceeds in excess of the Purchase Price shall be paid
to Purchaser at the Closing. The foregoing provision shall survive the
Closing and the termination of this Contract forever.
(C) If less than a Significant Portion of the Property is condemned,
taken by eminent domain, conveyed by deed in lieu thereof or is the subject
of a condemnation proceeding, then Purchaser shall not have the right to
terminate this Contract, but Seller shall deliver to Purchaser at Closing
any proceeds actually received by Seller attributable to the Property from
such condemnation or eminent domain proceeding or deed in lieu thereof, and
assign its interest in and to such proceeds to Purchaser, and there shall
be no reduction of the Purchase Price.
SECTION 9.2 CASUALTY.
(A) If all or any Substantial Portion (as defined in SECTION 9.2(B))
of the Property shall be damaged or destroyed by fire or other casualty
prior to Closing, then Purchaser may terminate this Contract by written
notice thereof to Seller within ten (10) days after Seller notifies
Purchaser of the casualty (which notice Seller shall deliver to Purchaser
within ten (10) days of Seller's receipt thereof). If Purchaser does not
terminate this Contract as aforesaid, then both parties shall proceed to
close the transaction contemplated herein pursuant to the terms hereof, in
which event Seller shall, except as limited in SECTION 9.2(B) hereof,
deliver to Purchaser at the Closing any insurance proceeds actually
received by Seller attributable to the Property from such casualty (except
for proceeds previously used to repair the Property) and assign to
Purchaser all of Seller's right, title and interest in and to any claims
which Seller may have under the insurance policies covering the Property,
and Purchaser shall receive a proration credit at Closing in the aggregate
amount of any deductible and there shall be no reduction in the Purchase
Price. If less than a Substantial Portion of the Property shall be damaged
or destroyed by fire or other casualty prior to Closing, then the parties
shall proceed in accordance with the second sentence in this SECTION
9.2(A).
(B) For the purposes of SECTION 9.2(A), a "Substantial Portion@ of
the Property shall be deemed to be any portion of the Property with either
a fair market value or replacement cost in an amount equal to or greater
than $250,000. Notwithstanding anything in SECTION 9.2(A) to the contrary,
if Purchaser has not timely elected to terminate in accordance with SECTION
9.2(A), and if the proceeds payable with respect to the Property as a
result of casualty exceed the Purchase Price for the Property, then the
portion of such proceeds in excess of the Purchase Price shall be paid to
Purchaser at the Closing. The foregoing provision shall survive the Closing
and the termination of this Contract forever.
ARTICLE X
DEFAULTS AND REMEDIES
SECTION 10.1 DEFAULT BY PURCHASER. in SECTION 13.19 to the contrary: if
Seller is not in default hereunder and Purchaser refuses or fails to consummate
the Closing under this Contract for reasons other than as expressly permitted in
this Contract where Purchaser becomes entitled to a Return of the Xxxxxxx Money
Deposit or other than due to a failure of a condition precedent to Purchaser's
obligation to close as set forth in SECTION 7.1, then Seller may terminate this
Contract in which event neither party shall have any further rights, duties, or
obligations hereunder except as provided in SECTIONS 5.1.5 and 11.1 hereof, and,
as its sole and exclusive remedy for Purchaser's failure to close, Seller shall
be entitled to receive or retain the Xxxxxxx Money Deposit as liquidated damages
(Seller and Purchaser hereby acknowledging that the amount of damages in the
event of Purchaser's default is difficult or impossible to ascertain but that
such amount is a fair estimate of such damage). Notwithstanding anything
contained in this SECTION 10.1 to the contrary, in the event of any other
default by Purchaser under this Contract (including, without limitation, breach
of any covenant, representation or indemnity) which survives the Closing or
termination of this Contract, Seller shall have any and all rights and remedies
available at law or in equity by reason of such default.
SECTION 10.2 DEFAULT BY SELLER. If Purchaser shall not be in default
hereunder and if Seller refuses or fails to consummate the Closing under this
Contract other than due to a termination permitted in this Contract or a failure
of a condition precedent to Seller's obligation to close as set forth in SECTION
7.2 hereof, then Purchaser may, at Purchaser's sole option, as its sole and
exclusive remedy, either (a) terminate this Contract and receive from Seller
$37,000 liquidated damages, in which event neither party shall have any further
rights, duties or obligations hereunder except as provided in SECTIONS 5.1.5 and
11.1 hereof, and Purchaser shall be entitled to a refund of the Xxxxxxx Money
Deposit, or (b) enforce specific performance of this Contract against Seller.
In no event shall Seller be liable to Purchaser for any damages, including,
without limitation, any actual, punitive, speculative or consequential damages
or damages for loss of opportunity or lost profit. Notwithstanding anything
contained in this SECTION 10.2 to the contrary, in the event of any other
default by Seller under this Contract (including, without limitation, breach of
any covenant, representation or indemnity) which survives the Closing or
termination of this Contract, Purchaser shall have any and all rights and
remedies available at law or in equity by reason of such default.
SECTION 10.3 COSTS OF ENFORCEMENT. If it shall be necessary for either
Purchaser or Seller to employ an attorney to enforce its rights pursuant to this
Contract, the non-prevailing party shall reimburse the prevailing party for the
prevailing party's reasonable attorneys' fees and other reasonable out-of-pocket
expenses incurred by the prevailing party in pursuit of such enforcement.
ARTICLE XI
BROKERAGE COMMISSIONS
SECTION 11.1 BROKERAGE COMMISSION. Seller and Purchaser each represent to
the other that each has no agreement with any broker, finder or other party
requiring payment of a commission with respect to the sale or purchase of the
Property, except that Seller may pay a fee to Insignia Capital Advisors, Inc.
("AICA"). Seller agrees to indemnify and defend Purchaser and its officers,
directors, trustees, shareholders, representatives and agents and hold each of
them harmless from any loss, liability, damage, cost or expense (including,
without limitation, reasonable attorneys' fees and expenses) arising out of or
paid or incurred by Purchaser by reason of any claim to any broker's, finder's
or other fee in connection with this transaction by any party claiming by,
through or under Seller (including without limitation ICA). Purchaser agrees to
indemnify and defend Seller and its general partner and their respective
affiliates and their and their affiliates' officers, directors, employees,
agents and representatives, and hold each of them harmless from any and all
loss, liability, damage, claim, cause of action, fine, fee, lien, cost or
expense (including, without limitation, reasonable attorneys' fees and expenses
) arising out of or paid or incurred by any of them by reason of any claim to
any broker's, finder's or other fee in connection with this transaction by any
party claiming by, through or under Purchaser or its affiliates (excluding ICA).
Notwithstanding anything to the contrary contained herein, the indemnities set
forth in this ARTICLE XI shall survive the Closing and the termination of this
Contract forever.
ARTICLE XII
OPERATION OF THE PROPERTY PRIOR TO THE CLOSING
SECTION 12.1 OPERATION OF THE PROPERTY PRIOR TO THE CLOSING. During the
term of this Contract, Seller agrees as follows:
(A) Seller shall not sell or convey, nor enter into any other
contract for sale of the Property nor voluntarily create any liens,
encumbrances, defects in title, restrictions or easements affecting the
Property (except for mechanic's and materialmen's liens arising in the
normal course of business, all of which Seller will satisfy at the
Closing).
(B) Seller shall operate and maintain the Property in substantially
the same manner as operated and maintained prior to the Effective Date.
(C) Seller shall lease apartment units in substantially the same
manner as leased prior to the date of this Contract, including, without
limitation leasing for terms not exceeding one (1) year, not granting rent
concessions greater than one month's free rent, and renewing leases only
within the last 60 days of the expiring leases.
(D) Seller shall deliver statements of income and expense promptly
after those reports have been prepared for each month during the term of
this Contract, all written notices of violations of legal requirements,
whenever received, and all written notices of default by Seller in the
performance of any Lease or Contract affecting the operation of the
Property in a material respect.
(E) Without Purchaser's prior written consent, Seller shall not
settle any protest or appeal of the real estate tax assessment for the
Property for the current tax year or for any prior tax year if the
settlement would increase, or compromise Purchaser's ability to challenge,
the assessment for the current tax year or any future tax year.
(F) Seller shall promptly deliver to Purchaser copies of all written
notices of violations of laws, ordinances, orders, regulations or
requirements, including but not limited to zoning, building, health,
safety, pollution control, environmental, fire or similar laws, ordinances,
orders and regulations issued by, filed by or served by, any governmental
agency having jurisdiction over the Property, against or affecting the
Property as of the date hereof (hereinafter referred to as "Violations").
Seller shall comply with all Violations which are of record as of the
Effective Date or of which Seller has received written notice as of the
Effective Date, at Seller's sole cost and expense.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 NOTICES. Any notice provided or permitted to be given under
this Contract must be in writing and may be served by (a) depositing same in the
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, (b) delivering the same
in person to such party via a hand delivery service, Federal Express or any
other nationally recognized courier service that provides a return receipt
showing the date of actual delivery of same to the addressee thereof, or (c)
facsimile transmission. Notice given in accordance herewith shall be effective
upon receipt at the address of the addressee. For purposes of notice, the
addresses of the parties shall be as follows:
If to Seller: c/o Insignia Financial Group, Inc.
One Insignia Financial Plaza
Greenville, South Carolina 29601
Attention: Xxx Xxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
With copies to:Xxxx X. Xxxxxx, Esq.
Parker, Poe, Xxxxx & Xxxxxxxxx L.L.P.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to Purchaser:New Plan Realty Trust
1120 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: President
Facsimile No.: (000) 000-0000
Phone No.: (000) 000-0000
With a copy to:Hofheimer Gartlir & Gross, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Phone No.: (000) 000-0000
If to Escrow Agent:Commonwealth Land Title Insurance Company
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
SECTION 13.2 GOVERNING LAW. THIS CONTRACT IS INTENDED TO BE PERFORMED IN
THE STATE OF NORTH CAROLINA, AND THE LAWS OF SUCH STATE SHALL GOVERN THE
VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THIS CONTRACT.
SECTION 13.3 ENTIRETY AND AMENDMENTS. This Contract embodies the entire
agreement between the parties and supersedes all prior agreements and
understandings, if any, relating to the transaction described herein, and may be
amended or supplemented only by an instrument in writing executed by the party
against whom enforcement is sought.
SECTION 13.4 PARTIES BOUND. Subject to the provisions of SECTION 13.5
hereof, this Contract shall be binding upon and inure to the benefit of Seller
and Purchaser, and their respective heirs, personal representatives, successors
and assigns.
SECTION 13.5 ASSIGNMENT. This Contract may not be assigned in whole or in
part by Purchaser without the prior written consent of Seller. Any assignment of
this Contract by Purchaser without Seller's prior written consent shall, at
Seller's option, be null and void and of no effect. In the event that this
Contract is assigned by Purchaser, then, unless Seller expressly agrees to the
contrary in writing, Purchaser shall not be released from any liability or
obligations hereunder. Notwithstanding anything above to the contrary,
Purchaser shall be entitled to assign the Contract to any affiliates of
Purchaser, provided Purchaser remains under the Contract.
SECTION 13.6 HEADINGS. Headings used in this Contract are used for
reference purposes only and do not constitute substantive matter to be
considered in construing the terms of this Contract.
SECTION 13.7 SURVIVAL. Except as otherwise expressly provided herein, no
representations, warranties, covenants, acknowledgments or agreements contained
in this Contract shall survive the Closing of this Contract and the delivery of
the Special Warranty Deed by Seller to Purchaser.
SECTION 13.8 INTERPRETATION. The parties acknowledge that each party and
its counsel have reviewed this Contract, and the parties hereby agree that the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Contract or any amendments or exhibits hereto. In case any one or more
of the provisions contained in this Contract shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions hereof, and this Contract
shall be construed as if such invalid, illegal or unenforceable provisions had
never been contained herein. When the context in which words are used in this
Contract indicates that such is the intent, words in the singular number shall
include the plural and vice versa, and words in the masculine gender shall
include the feminine and neuter genders and vice versa.
SECTION 13.9 EXHIBITS. All references to "Exhibits" or "Schedules"
contained herein are references to exhibits or schedules attached hereto, all of
which are hereby made a part hereof for all purposes.
SECTION 13.10 TIME OF ESSENCE. It is expressly agreed by the parties
hereto that time is of the essence with respect to this Contract and Closing
hereunder. If any time period set forth herein falls on a weekend or holiday,
it shall be deemed to end on the next business day following such weekend or
holiday.
SECTION 13.11 MULTIPLE COUNTERPARTS. This Contract may be executed in a
number of identical counterparts. If so executed, each of such counterparts is
to be deemed an original for all purposes, and all such counterparts shall,
collectively, constitute one agreement, but, in making proof of this Contract,
it shall not be necessary to produce or account for more than one such
counterpart.
SECTION 13.12 RISK OF LOSS. Risk of loss or damage to the Property, or
any part thereof, by fire or any other casualty following Seller's delivery of
the special warranty deed transferring title to the Property to the Purchaser
will be on the Purchaser; the risk of loss prior to the Closing remains on
Seller.
SECTION 13.13 BUSINESS DAYS. All references to "business days" contained
herein are references to normal working business days, i.e., Monday through
Friday of each calendar week, exclusive of federal and national bank holidays.
SECTION 13.14 NO RECORDATION OF CONTRACT. In no event shall this Contract
or any memorandum hereof be recorded in the public records of the place in which
the Property is situated, and any such recordation or attempted recordation
shall constitute a breach of this Contract by the party responsible for such
recordation or attempted recordation.
SECTION 13.15 GENERAL.
13.15.1 Seller acknowledges that Purchaser shall not be liable to any
employees of Seller for or in respect of salaries, bonuses, vacations,
vacation pay and other leave programs, employee benefit plans or programs,
welfare benefits plans, retirement plans, excess benefit plans, plans
maintained to provide workers' compensation or unemployment benefits and
pay practices which Seller has funded or been obligated to fund for its
past or present employees, independent contractors or either of their
beneficiaries or dependents.
13.15.2 A. Seller shall indemnify, defend and hold harmless
Purchaser and any person or entity affiliated with or owning or
controlling, in whole or in part, directly or indirectly, Purchaser, the
joint venturers, partners, trustees, officers, directors, shareholders,
employees, agents and attorneys at any time and from time to time of any of
the foregoing, and the heirs, legal representatives, successors and assigns
of each and all of the foregoing (collectively "Related Parties") of and
from any and all claims, demands, damages, expenses (including without
limitation reasonable attorneys= fees) losses, injuries, liabilities,
penalties, and costs (except for those claims, demands, damages, expenses
, losses, injuries, liabilities, penalties, and costs referred to in
SECTION 5.1.5), incurred or suffered by Purchaser or its Related Parties
arising out of or in connection with any one or more of the following:
1. any use, occupancy, ownership or operation of any of the
Property or any occurrence in, on or about the Property before the
Closing;
2. any accident, injury (including death) or damage, regardless
of the cause thereof to any person or property occurring in, on or
about the Property before Closing.
Seller's obligation to indemnify and hold Purchaser and its Related Parties
harmless under this SECTION 13.15.2.A shall survive Closing or termination
of this Contract.
B. Provided, Seller shall have no obligation or liability
under this Contract to indemnify, defend or hold harmless Purchaser or
its Related Parties of or from any claims, demands, damages, losses,
injuries, liabilities, penalties, costs, expenses (including without
limitation reasonable attorneys' fees), incurred or suffered by
Purchaser or its Related Parties arising out of or in connection with
the threatened or actual existence of Hazardous Materials or other
environmental conditions relating to the Property except to the extent
that such threatened or actual existence of Hazardous Materials or
other environmental conditions was known by Seller as of the Effective
Date or the Closing Date or is contrary to any representation or
warranty made by Seller herein.
C. Purchaser shall indemnify, defend and hold harmless
Seller and any person or entity affiliated with or owning or
controlling, in whole or in part, directly or indirectly, Seller, the
joint venturers, partners, trustees, officers, directors,
shareholders, employees, agents and attorneys at any time and from
time to time of any of the foregoing, and the heirs, legal
representatives, successors and assigns of each and all of the
foregoing (collectively "Related Parties") of and from any and all
claims, demands, damages, losses, injuries, liabilities, penalties,
costs and expenses (including without limitation reasonable attorneys'
fees), incurred or suffered by Seller or its Related Parties arising
out of or in connection with any one or more of the following:
1. any use, occupancy, ownership or operation of any of the
Property or any occurrence in, on or about the Property on or after
the Closing;
2. any accident, injury (including death) or damage, regardless
of the cause thereof to any person or property occurring in, on or
about the Property on or after Closing;
Purchaser's obligation to indemnify and hold Seller and its Related
Parties harmless under this SECTION 13.15.2.C shall survive Closing or
termination of this Contract.
SECTION 13.16 Purchaser on the one hand and Seller on the other hand shall
use their best efforts to promptly and timely file all filings, reports,
certificates and applications required to carry out the transactions
contemplated by this Contract or to consummate the transactions contemplated
hereby required, if at all, by (i) the federal securities laws, (ii) the United
States or any commission, department, agency, law, rule or regulation thereof,
or (iii) the State of North Carolina or any commission, agency or department
thereof.
SECTION 13.17 Seller shall give to Purchaser and its representatives,
including accountants and counsel, reasonable access during normal business
hours, upon at least forty eight (48) hours prior notice to Purchaser, to the
books, records, files, contracts, commitments, employees and agents of Seller
relating to the Property, and will promptly furnish to Purchaser and its
representatives at the Property and/or at Seller's principal place of business
all such information and documents relating to the Property as Purchaser shall
request, including all interim financial statements and reports as they are
prepared and become available, and Purchaser may make copies thereof.
SECTION 13.18 Without limiting any other rights or remedies of Purchaser,
Purchaser shall have the right after the Closing upon at least forty eight (48)
hours prior notice to audit the books and records of Seller in respect of the
Property for those last two entire fiscal years of Seller ending immediately
preceding the Closing plus any "stub" period thereafter to such Closing.
SECTION 13.19 This Contract and all documents, agreements, understandings
and arrangements relating to this transaction have been negotiated, executed and
delivered on behalf of Purchaser by the trustees or officers thereof in their
representative capacity under the Amended and Restated Declaration of Trust of
New Plan Realty Trust dated as of January 15, 1996, and not individually, and
bind only the trust estate of Purchaser, and no trustee, officer, employee,
agent or shareholder of Purchaser shall be bound or held to any personal
liability or responsibility in connection with the agreements, obligations and
undertakings of Purchaser thereunder, and any person or entity dealing with
Purchaser in connection therewith shall look solely to the trust estate for the
payment of any claim or for the performance of any agreement, obligation or
undertaking thereunder. Seller acknowledges and agrees that each agreement and
other document executed by Purchaser in accordance with or in respect of this
transaction shall be deemed and treated to include in all respects and for all
purposes the foregoing exculpatory provision.
SECTION 13.20 At the Closing, the Escrow Agent shall retain the sum of
$75,000 (the "Comfort Sum") from the Purchase Price as an asset of Seller, and
shall not distribute same. Seller, Purchaser and Escrow Agent shall enter into
the Comfort Sum Escrow Agreement annexed to this Contract as Exhibit G. The
Comfort Sum shall continue to be retained as aforesaid until the date which is
twelve (12) months after the Closing Date, at which time it shall be distributed
to Seller unless any claim is pending against Seller by Purchaser pursuant to
the terms of this Contract (a "Contract Claim"), in which case a portion of the
Comfort Sum equal to the aggregate amount of all Contract Claims shall be
retained pending resolution of each respective Contract Claim, with the balance
distributed by the Escrow Agent. Upon written agreement of Purchaser and Seller
or if Purchaser obtains a final non-appealable judgment against Seller regarding
a Contract Claim, then the Escrow Agent shall pay to Purchaser the amount of
such judgment out of the Comfort Sum. This provision shall survive the Closing.
SECTION 13.21 Angeles Realty Corporation., a California corporation
("General Partner") executes this Contract in its capacity as general partner of
Seller, but Seller and General Partner primarily, jointly and severally make and
assume responsibility for the agreements, representations and warranties
appearing in this Contract.
ARTICLE XIV
ESCROW TERMS
SECTION 14.1 ACCEPTANCE OF ESCROW. Escrow Agent hereby agrees to perform
the obligations of Escrow Agent under the terms of this Contract. Escrow Agent
has executed this Contract to evidence its acceptance of the terms of the escrow
created hereby; provided, however, notwithstanding anything to the contrary
contained herein, Escrow Agent shall not be a required party or signatory to any
modification of the terms of this Contract unless such modification directly
affects the obligations of Escrow Agent hereunder. Escrow Agent shall be given
fully executed copies of all modifications of this Contract to which it is not a
party promptly after execution thereof by Purchaser and Seller.
SECTION 14.2 HOLDING FUNDS. Escrow Agent shall hold all cash portions of
the Xxxxxxx Money in a separate interest bearing account at Escrow Agent's
regular federally insured banking institution and shall otherwise hold, invest
and disburse the Xxxxxxx Money as provided herein.
SECTION 14.3 DISBURSEMENT OF XXXXXXX MONEY. Escrow Agent shall disburse
the Xxxxxxx Money pursuant to the terms hereof.
SECTION 14.4 LIMITED LIABILITY. In performing any of its duties
hereunder, Escrow Agent shall not incur any liability to anyone for any damages
or expenses, except as may arise due to willful misconduct or gross negligence
by the Escrow Agent hereunder. Accordingly, Escrow Agent shall not incur any
such liability with respect to (i) any action taken or omitted in good faith
upon advice of its legal counsel relating to the responsibilities of Escrow
Agent under this Contract, or (ii) any action taken or omitted in reliance on
any instrument, including any written notice or instruction provided for in this
Contract, not only as to the due execution and validity of its provisions but
also as to the truth and accuracy of any information contained therein, which
Escrow Agent shall in good faith believe to be genuine, to have been signed or
presented by a person or persons having authority to sign or present such
instrument and to conform with the provisions of this Contract.
SECTION 14.5 INDEMNITY. Purchaser and Seller hereby indemnify Escrow Agent
against, and hold Escrow Agent harmless from, any and all claims, actions,
demands, loses, damages, expenses (including, without limitation, court costs,
reasonable attorneys' fees, and accountants fees) and liabilities that may be
imposed upon performance of its duties hereunder, including, without limitation,
any litigation arising from this Contract or involving the subject matter
hereof, but excluding any such claims, actions, demands, losses, damages,
expenses and liabilities resulting from or arising out of any willful misconduct
or gross negligence by the Escrow Agent hereunder. In the event of any
litigation arising from this Contract or involving the subject matter hereof,
and in the event Purchaser and Seller are opposing parties in such litigation,
the party prevailing in such litigation shall be reimbursed promptly upon demand
by the other such party in an amount equal to that amount which the prevailing
party shall have paid Escrow Agent with respect to such litigation and the
subject matter thereof pursuant to the indemnification agreement contained in
this SECTION 14.5. The provisions of this SECTION 14.5 shall survive the Closing
or any termination, cancellation rescission or consummation of this Contract.
SECTION 14.6 ESCROW AGENT'S RIGHTS IN THE EVENT OF A DISPUTE. If the
parties hereto shall be in disagreement about the interpretation of the
Contract, or about their rights and obligations thereunder, or the propriety of
any action contemplated by the Escrow Agent hereunder, then Escrow Agent may
institute an interpleader action in and deliver the Xxxxxxx Money to a court of
competent jurisdiction, whereupon Escrow Agent shall thereafter be relieved of
any and all liability under the terms and provisions of the Contract.
IN WITNESS WHEREOF, the parties hereby execute this Contract as of the date
first above written.
SELLER:
CARDINAL XXXXX APARTMENTS, LTD., A CALIFORNIA
LIMITED PARTNERSHIP, a California limited
partnership
By: Angeles Realty Corporation, a California
corporation, its general partner
By: /s/Xxxxxx X. Xxxx, Xx.
Name: Xxxxxx X. Xxxx, Xx.
Its: Vice President
PURCHASER:
NEW PLAN REALTY TRUST, a Massachusetts business
trust
By: /s/Xxxx Xxxxxxxxx (SEAL)
Printed Name: Xxxx Xxxxxxxxx
Title: Vice President
Dated: July 7, 1997
ATTEST:
____________________________
_______________ Secretary
(CORPORATE SEAL)
ESCROW AGENT:
COMMONWEALTH LAND TITLE INSURANCE COMPANY
By: /s/Xxxxx Xxxxx
Printed Name: Xxxxx Xxxxx
Title: Vice President
