EXHIBIT 10.26
AGREEMENT FOR THE PURCHASE AND SALE
OF JOINT VENTURE INTEREST
BETWEEN ▇▇▇▇▇ DEVELOPMENT CORPORATION
AND
THE FUND X-XI JOINT VENTURE
AGREEMENT FOR THE PURCHASE
AND SALE OF JOINT VENTURE INTEREST
THIS AGREEMENT, made and entered into as of the 30th day of July, 1998, by
and between ▇▇▇▇▇ DEVELOPMENT CORPORATION, a Georgia corporation whose address
is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Seller"), ▇▇▇▇▇
MANAGEMENT COMPANY, INC., whose address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Guarantor") and FUND X AND FUND XI ASSOCIATES, a Georgia joint
venture comprised of ▇▇▇▇▇ Real Estate Fund X, L.P., a Georgia limited
partnership, and ▇▇▇▇▇ Real Estate Fund XI, L.P., a Georgia limited partnership,
whose address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(collectively, the "Purchaser").
W I T N E S S E T H:
Whereas, Seller has entered into that certain Purchase and Sale Agreement
and Joint Escrow Instructions (the "Purchase Agreement") with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Valley Holdings, Inc. dated as of June 12, 1998, as amended, relating to certain
improved property situated in Fountain Valley, California and being more
particularly described on Exhibit A hereto (the "Property"); and
WHEREAS, Seller intends to assign its rights under the Purchase Agreement
to ▇▇▇▇▇/ORANGE COUNTY ASSOCIATES, a Georgia joint venture between Seller and
▇▇▇▇▇ Operating Partnership, L.P., a Delaware limited partnership (the "Joint
Venture") and contribute the ▇▇▇▇▇▇▇ Money received by it hereunder in exchange
for an interest in the Joint Venture (the "Joint Venture Interest"); and
Whereas, The Joint Venture will acquire the Property with the funds
contributed by Seller and funds obtained through a loan in the amount of
$4,875,000 (the "Loan") from NationsBank, N.A.; and
WHEREAS, the property is subject to that certain Standard Industrial
Lease-Net with Cort Furniture Rental Corporation (the "Lease") relating to the
Property; and
WHEREAS, Seller desires to sell to Purchaser and Purchaser desires to
acquire from Seller the Joint Venture Interest upon the terms and conditions
hereinafter set forth; and
WHEREAS, Guarantor is an affiliate of Seller and will benefit from this
transaction;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein set forth, the receipt, adequacy and sufficiency
of which are hereby expressly acknowledged by the parties hereto, Seller and
Purchaser do hereby covenant and agree as follows:
1. Agreement to Buy and Sell. Upon the terms and conditions set forth in
this Agreement, and subject to acquisition of the Property by the Joint Venture
pursuant to the Purchase Agreement, Purchaser agrees to buy from Seller and
Seller agrees to sell to Purchaser the Joint Venture Interest.
2. ▇▇▇▇▇▇▇ Money. Within three (3) business days after the effective date
of this Agreement, Purchaser shall deliver to Seller, Purchaser's check, in the
amount of $1,500,000 (said amount being herein referred to as the "▇▇▇▇▇▇▇
Money"), which ▇▇▇▇▇▇▇ Money shall be held and disbursed pursuant to this
Agreement. The ▇▇▇▇▇▇▇ Money, plus any other funds advanced by Purchaser to
Seller, shall be applied as a credit to the Purchase Price (as hereinafter
defined) or otherwise paid to Seller or refunded to Purchaser as provided
herein. The parties hereto acknowledge that some or all of the ▇▇▇▇▇▇▇ Money
shall be utilized by Seller to be contributed as a capital contribution to the
Joint Venture with respect to Seller's Joint Venture Interest. Purchaser may but
shall not be required to pay additional funds to Seller thereby increasing the
▇▇▇▇▇▇▇ Money and Purchase Price by an equivalent amount, in which event Seller
shall contribute such funds to the Joint Venture in exchange for an increased
ownership interest. Guarantor joins in the execution of this Agreement for the
sole purpose of guaranteeing Seller's obligations to Purchaser hereunder
regarding the repayment of the ▇▇▇▇▇▇▇ Money, which guaranty shall be evidenced
by the execution and delivery of that certain Guarantee of Refund of ▇▇▇▇▇▇▇
Money in the form attached as Exhibit B hereto.
3. Purchase Price. Subject to adjustment and credits as otherwise
specified in this Agreement, the purchase price (the "Purchase Price") to be
paid
by Purchaser to Seller for the Joint Venture Interest shall be approximately
$1,500,000, the precise amount to be the amount contributed by Seller to the
Joint Venture. It is the intent of the parties that Seller shall not make any
profit or incur any loss in connection with this transaction and to that end,
Seller agrees to cause the Joint Venture to hold in an interest bearing account
for the benefit of Purchaser any cash distributions payable to Seller prior to
Closing hereunder. The Purchase Price shall be paid by Purchaser to Seller at
the Closing by cashier's check or by wire transfer of immediately available
federal funds, less the amount of ▇▇▇▇▇▇▇ Money and subject to prorations,
adjustments, and credits as otherwise specified in this Agreement.
4. Purchaser's Right of Inspection and Seller's Cooperation. From and
after the date of this Agreement, Purchaser and its agents, engineers, or
representatives, with Seller's reasonable, good faith cooperation, shall have
the privilege of going upon the Property as needed to inspect, examine, test,
and survey the Property at all reasonable times and from time to time. Such
privilege shall include the right to make said tests, borings, and other tests
to obtain information necessary to determine surface and subsurface conditions.
Such privilege shall also include the right to make any other tests deemed
reasonably necessary by Purchaser. Purchaser hereby indemnifies and holds Seller
harmless from any liens, claims, liabilities, and damages incurred through the
exercise of such privilege. The obligations of Purchaser under the preceding
sentence shall survive any termination of this Agreement. Seller shall make
available to Purchaser all work product in the possession of Seller relating to
the Property, including surveys, site plans, environmental audits, soils tests,
market studies, Seller's owner's title policy and all other information provided
to Seller or obtained by Seller with respect to the Property.
5. Special Conditions to Closing. Notwithstanding any other provision to
the contrary contained in this Agreement, Purchaser's obligations hereunder are
expressly conditioned upon the following special conditions:
(a) The Joint Venture shall have paid-off the Loan in full prior to
Closing and the Joint Venture shall own title to the Property debt-free at
Closing;
(b) Purchaser shall have available to it at the date of Closing
sufficient net proceeds available for investment in properties to fully
fund the remainder of the Purchase Price;
(c) All of the representations and warranties set forth in paragraph
7 shall be true and correct in all material respects on the Date of
Closing;
(d) The receipt by Purchaser of an appraisal reflecting the value of
the Property owned by the Joint Venture as being not less than an amount
equal to the quotient of (i) the Purchase Price divided by (ii) the
percentage interest in distributions of the Joint Venture represented by
the Joint Venture Interest.
(e) The receipt by Purchaser of evidence reasonably satisfactory to
Purchaser that the Property is free of any Hazardous Materials;
(f) The receipt of evidence that Cort Furniture Rental Corporation
continues to be occupying the Property as a tenant pursuant to the Lease
paying rent on a current basis and that neither the Landlord nor the
tenant are in default with respect to the Lease; and
(g) The receipt of any necessary consents for the admission of
Purchaser as a Joint Venture partner in the Joint Venture.
In the event any of the conditions set forth above are not met on or prior to
the date of Closing, Purchaser shall be entitled to terminate this Agreement
upon written notice to Seller. If Purchaser elects to so terminate this
Agreement, Seller shall be entitled to receive the sum of Twenty-Five Dollars
($25.00) of the ▇▇▇▇▇▇▇ Money, and the balance of the ▇▇▇▇▇▇▇ Money shall be
refunded to Purchaser, whereupon, except as expressly provided to the contrary
in this Agreement, no party hereto shall have any other or further rights or
obligations under this Agreement. Seller acknowledges that the sum of
Twenty-Five Dollars ($25.00) is good and adequate consideration for the
termination rights granted to Purchaser hereunder.
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6. Closing and Closing Date. The consummation of the sale by Seller and
the purchase by Purchaser of the Property (herein referred to as the "Closing")
shall be held on or before the first anniversary of the date hereof, unless
extended as hereinafter provided, at the offices of ▇'▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other office
as the parties may agree at such specific time and date as shall be designated
by Purchaser in a written notice to Seller not less than three (3) business days
prior to the date of Closing or absent such notice at 10:00 a.m. on the first
anniversary of the date hereof. At Closing, Seller shall execute and deliver to
Purchaser (a) an assignment of its Joint Venture Interest in form and substance
reasonably satisfactory to Purchaser and (b) the consent of ▇▇▇▇▇ Operating
Partnership, L.P. to the transfer of the Joint Venture Interest, (c) an
amendment to the Joint Venture Agreement of the Joint Venture providing for
admission of Purchaser in the place of Seller, and (d) such other documents as
may be reasonably required by Purchaser or Purchaser's counsel in order to
effectuate the transaction contemplated hereunder. At Closing, Purchaser shall
deliver to Seller the Purchase Price and shall execute and deliver to Seller a
Closing Statement and such other documents as may be reasonably required by
Seller or Seller's counsel in order to effectuate the transaction contemplated
hereby. Purchaser shall have the right to extend the closing for two successive
six month periods in the event Purchaser does not have sufficient funds
available to close the transaction.
7. Representations and Warranties of Seller. Seller hereby makes the
following representations and warranties to Purchaser, each of which shall be
deemed material:
(a) Title and Authority. The Joint Venture shall at Closing be the
owner of good and marketable fee simple record title to the Property
subject only to those matters set forth on Exhibit C hereto (the
"Permitted Encumbrances") and, if applicable, to one or more mortgages
which shall be canceled and satisfied at no cost to Purchaser at or before
the Closing, it being the intent of the parties that the Property free and
clear of any liens, claims or encumbrances except the Permitted
Encumbrances, at the time Purchaser acquires the Joint Venture Interest.
Seller has the full right, power and authority to execute and deliver this
Agreement and to consummate the purchase and sale herein contemplated and
to perform the covenants and agreement of Seller hereunder.
(b) No Litigation. There are no actions, suits, or proceedings
pending, or, to the best of Seller's knowledge, threatened by any
organization, person, individual, or governmental agency against Seller
which would impair Seller's ability to convey the Joint Venture Interest
pursuant to this Agreement or against the Property, nor does Seller know
of any basis for such action.
(c) Pre-existing Right to Acquire. No person or entity has any right
or option to acquire the Joint Venture Interest which will have any force
or effect after the execution hereof, other than Purchaser.
(d) Ownership of Joint Venture Interest. Seller owns or shall at the
time of Closing own beneficially and of record the Joint Venture Interest
free and clear of all liens, claims, pledges, options, adverse claims and
charges of any nature whatsoever.
8. Default. In the event Seller fails to comply with or perform any of the
covenants, agreements or obligations to be performed by Seller under the terms
and provisions of this Agreement, or in the event Seller's warranties and
representations set forth in this Agreement are untrue or misleading, at
Purchaser's option: (i) Purchaser shall be entitled to an immediate refund of
all ▇▇▇▇▇▇▇ Money and to thereafter exercise any and all rights and remedies
available to Purchaser at law or in equity; or (ii) Purchaser shall be entitled,
upon giving written notice to Seller as herein provided, to terminate this
Agreement. Upon any such termination, all ▇▇▇▇▇▇▇ Money shall be immediately
returned to Purchaser and this Agreement and all rights and obligations created
hereunder shall be of no further force or effect. In the event Purchaser fails
to comply with or perform any of the covenants, agreements or obligations to be
performed by Purchaser under the terms and provisions of this Agreement,
Seller's sole and exclusive remedy for any such default shall be to terminate
this Agreement and to receive $100 of the ▇▇▇▇▇▇▇ Money as full liquidated
damages for such default, the parties hereto acknowledging that it is impossible
to more precisely estimate the damages to be suffered by Seller upon Purchaser's
default, whereupon all rights and obligations created hereby shall terminate and
be of no further force or effect whatsoever.
9. Assignment. Purchaser's rights and duties under this Agreement shall be
freely transferable and assignable by Purchaser, either in full or in part, and
in the event of any such transfer or assignment, Seller shall look solely to
such transferee or assignee for the performance of all obligations, covenants,
conditions, and agreements imposed upon Purchaser pursuant to the terms of this
Agreement.
10. Broker's Commission. Seller shall and does hereby indemnify and hold
harmless Purchaser from and against any claim for any real estate sales
commission, finder's fees, or like compensation in connection with the sale
contemplated hereby and arising out of any act or agreement of Seller. Likewise,
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Purchaser shall and does hereby indemnify and hold harmless Seller from and
against any claim for any real estate sales commission, finder's fees or like
compensation in connection with the sale contemplated hereby and arising out of
any act or agreement of Purchaser.
11. Notices. Any notices which may be permitted or required hereunder
shall be in writing and sent or hand delivered to the addresses set forth
herein, and shall be deemed to have been duly given as of the date and time the
same are either personally delivered (if delivered by hand or by overnight
courier) or, if mailed, on the third (3rd) business day following the date same
is deposited with the United States Postal Service, postage prepaid, to be
mailed by registered or certified United States mail, return receipt requested.
12. Time Periods. If the time period by which any right, option, or
election provided under this Agreement must be exercised, or by which any act
required hereunder must be performed, or by which the Closing must be held,
expires on a Saturday, Sunday or holiday, then such time period shall be
automatically extended through the close of business on the next regularly
scheduled business day.
13. Survival of Provisions. All covenants, warranties, and agreements set
forth in this Agreement shall survive the execution or delivery of any and all
deeds and other documents at any time executed or delivered under, pursuant to
or by reason of this Agreement, and shall survive the payment of all monies made
under, pursuant to, or by reason of this Agreement.
14. Severability. This Agreement is intended to be performed in accordance
with, and only to the extent permitted by, all applicable laws, ordinances,
rules and regulations. If any provision of this Agreement, or the application
thereof to any person or circumstance, shall for any reason and to any extent be
invalid or unenforceable, the remainder of this Agreement and the application of
such provision to other persons or circumstances shall not be affected thereby
but rather shall be enforced to the greatest extent permitted by law.
15. General Provisions. No failure of either party to exercise any power
given hereunder or to insist upon strict compliance with any obligation
specified herein, and no custom or practice at variance with the terms hereof,
shall constitute a waiver of either party's right to demand exact compliance
with the terms hereof. This Agreement contains the entire agreement of the
parties hereto, and no prior representations, inducements, promises, or
agreements, oral or otherwise, between the parties not embodied herein or in
said Letter Agreement shall be of any force or effect. Any amendment to this
Agreement shall not be binding upon Seller or Purchaser unless such amendment is
in writing and executed by both. The provisions of this Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, legal representatives, successors, and assigns. Time is of the essence in
this Agreement. This Agreement may be executed in multiple counterparts, each of
which shall constitute an original, but all of which taken together shall
constitute one and the same agreement. The headings inserted at the beginning of
each paragraph are for convenience only, and do not add to or subtract from the
meaning of the contents of each paragraph. This Agreement shall be construed and
interpreted under the laws of the State of Georgia. Except as otherwise provided
herein, all rights, powers, and privileges conferred hereunder upon the parties
shall be cumulative but not restrictive to those given by law. All personal
pronouns used in this Agreement, whether used in the masculine, feminine, or
neuter gender shall include all genders, and all references herein to the
singular shall include the plural and vice versa. The parties do not intend and
this Agreement shall not be deemed to create a joint venture, partnership, or
any other relationship between Seller and Purchaser or the Joint Venture and
Purchaser except that of contracting parties.
16. Effective Date. For purposes of the calculations of any time periods
set forth in this Agreement, the effective date of this Agreement shall be
deemed to be the latest of the dates set forth below, or the date this Agreement
is last initialed, whichever is later.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by duly authorized representatives as of the day, month and year
first above written.
"SELLER":
▇▇▇▇▇ DEVELOPMENT CORPORATION, a Georgia corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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Date: July 30, 1998
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"GUARANTOR":
▇▇▇▇▇ MANAGEMENT COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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Date: July 30, 1998
"PURCHASER":
FUND X AND FUND XI ASSOCIATES, a Georgia joint venture
By: ▇▇▇▇▇ REAL ESTATE FUND X, L.P.,
a Georgia limited partnership, as
administrative venturer
By: ▇▇▇▇▇ Partners, L.P., a Georgia limited
partnership, general partner
By: ▇▇▇▇▇ Capital, Inc., a
Georgia corporation
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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Date: July 30, 1998
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