EXHIBIT 99.1
PURCHASE AND SALE AGREEMENT
by and between
PORTLAND LOFTS ASSOCIATES LP
("Seller")
and
SP/XXXXXXXX LLC
("Purchaser")
for
certain property located in
Portland, Oregon
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made and entered
into as of the 14th day of April, 2006 (being the "Effective Date" as defined in
Section 16.4 below), by and between PORTLAND LOFTS ASSOCIATES LP, a Delaware
limited partnership ("Portland" or "Seller"), with an address of 00 Xxxxxx Xxxxx
Xxxxxx, Xxxxxx, XX 00000 and SP/XXXXXXXX LLC, a Delaware limited liability
company with an address of 00 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 ("Purchaser").
R E C I T A L S:
A. Seller shall sell to Purchaser, and Purchaser shall purchase from
Seller, at the price and upon the terms and conditions set forth in this
Agreement the following:
(a) that certain tract or parcel of land located at 000 XX
Xxxx, Xxxxxxxx, Xxxxxxxxx Xxxxxx, Xxxxxx, more particularly described
in Exhibit A attached hereto (the "Land");
(b) the 89 unit apartment complex commonly known as The
Xxxxxxxx Hardware Lofts, which contains related improvements,
facilities, amenities, structures, driveways and walkways, all of which
have been constructed on the Land (collectively, the "Improvements");
(c) all right, title and interest of Seller in and to any
alleys, strips or gores adjoining the Land, and any easements,
rights-of-way or other interests in, on, under or to, any land,
highway, street, road, right-of-way or avenue, open or proposed, in,
on, under, across, in front of, abutting or adjoining the Land, and all
right, title and interest of Seller in and to any awards for damage
thereto by reason of a change of grade thereof;
(d) the accessions, appurtenant rights, privileges,
appurtenances and all the estate and rights of Seller in and to the
Land and the Improvements, as applicable, or otherwise appertaining to
any of the property described in the immediately preceding clauses (a),
(b) and/or (c);
(e) all right, title and interest of Seller in the personal
property listed in Exhibit B attached hereto and all other fixtures,
machinery, supplies, equipment and other personal property owned by
Seller and located on or in or used or usable solely in connection with
the Land and Improvements (collectively, the "Personal Property"); and
(f) all of Seller's right, title and interest in and to the
Leases (as hereinafter defined), and to the extent assignable, the
Contracts (as
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hereinafter defined), any intangible property now or hereafter owned by
Seller and used solely in connection with the Land, Improvements and
Personal Property, including, without limitation, the name of the
Property and any trademarks, trade names, trade styles, service marks,
software, domain names and web sites related to the Property, all
rights under any certificates of occupancy, licenses, permits and
approvals relating to the Property, data files in Seller's possession
containing the information set forth in the Rent Roll (as hereinafter
defined), all contract rights, escrow or security deposits, utility
agreements or other rights related to the ownership of or use and
operation of the Property, as hereinafter defined (collectively, the
"Intangible Property").
All of the items described in subparagraphs (a), (b), (c), (d), (e) and
(f) above are collectively the "Property".
B. Purchaser desires to purchase the Property from Seller and the
Seller desires to sell, transfer and assign the same to Purchaser.
C. Seller, Historic Preservation Properties 1989 Limited Partnership
("HPP '89"), Boston Historic Partners Limited Partnership ("BHP"), Purchaser,
and Equity Resource Investments, LLC ("ERI"), represent, warrant, and agree that
this is the only agreement between the parties. Except with respect to any
claims arising from this Agreement, or in connection with the transaction
contemplated herein, Seller, HPP '89, BHP, Purchaser and ERI individually and on
behalf of their respective partners, members, managers, officers, directors,
shareholders, heirs, agents, representatives, affiliates, lawyers, servants,
employees, principals, successors and assigns hereby fully release, remise,
waive, and forever discharge each other and their respective partners, members,
managers, officers, directors, shareholders, heirs, agents, representatives,
affiliates, lawyers, servants, employees, principals, successors and assigns,
from and of any and all claims, debts, demands, actions, causes of action,
suits, obligations, covenants, judgments, rights of offset, breach of contract,
breaches of duty of any relationship, contribution, damages, agreements,
malfeasance, non-feasance, promises of any and all types whatsoever, dues, sums
and sums of money, accounts, reckonings, bonds, specialties, indemnities,
executions and liabilities of any nature whatsoever, both at law and in equity,
whether known or unknown, suspected or unsuspected, absolute or contingent, and
whether previously asserted or otherwise, which arose at any time prior to the
date hereof, or which hereafter could arise based on any fact, transaction,
cause, matter or thing which occurred prior to the date hereof, that any of the
foregoing parties had or may have against each other. Seller, HPP '89, BHP,
Purchaser and ERI understand they are waiving legal rights and/or claims under
this paragraph; that they voluntarily, expressly, and knowingly do so. Seller,
HPP '89, BHP, Purchaser and ERI represent and warrant that they were represented
by an attorney employed to represent them with respect to this paragraph and all
matters covered by it; and that they have been fully advised by their attorneys
concerning their rights with respect to this paragraph. The provisions of this
Recital C shall survive the delivery of the Deed (as herein defined) from Seller
to Purchaser.
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NOW, THEREFORE, for and in consideration of the recitals, the mutual
promises hereinafter set forth, the payment by Purchaser to the Seller of Ten
and 00/100 Dollars ($10.00), the receipt of which is hereby acknowledged, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
INCORPORATION OF RECITALS
1.1. Incorporation of Recitals. The foregoing recitals are incorporated
into this Agreement as if fully set forth herein.
ARTICLE II.
PURCHASE AND SALE
2.1. Purchase and Sale. Subject to the terms and conditions set forth
in this Agreement, Seller hereby agrees to sell, assign, transfer and deliver to
Purchaser, and Purchaser hereby agrees to purchase, acquire and accept from the
Seller the Property upon the terms and conditions set forth in this Agreement.
ARTICLE III.
PURCHASE PRICE
3.1. Purchase Price. (a) The aggregate purchase price for the Property
shall be Eleven Million and No/100 Dollars ($11,000,000.00) (the "Purchase
Price"), as may be adjusted pursuant to the terms of this Agreement. The
Purchase Price shall be delivered to the Escrow Agent (as defined in Section 4.1
below) by federal wire transfer in immediately available federal funds on the
day of Closing (as defined in Section 12.1 below), subject to customary escrow
arrangements, and shall be paid to Seller in accordance with instructions to be
provided by Seller and Purchaser to Escrow Agent prior to closing.
ARTICLE IV.
DEPOSIT
4.1. Deposit. Purchaser shall deliver to Lawyers Title Insurance
Corporation, c/o LandAmerica Financial Group, Inc., 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 Attn: Xxxxxx Xxxxx, Esq. ("Escrow Agent") no later than two
business days after execution of this Agreement an xxxxxxx money deposit of Two
Hundred Thousand and No/100 Dollars ($200,000.00) in cash or in the form of an
irrevocable, clean standby letter of credit (upon such terms, and issued by such
bank, as approved by Seller) (the "Initial Deposit"). On the Due Diligence Date
(as herein defined), unless Purchaser has
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otherwise terminated this Agreement, Purchaser shall deliver to the Escrow Agent
an additional Three Hundred Thousand and No/100 Dollars ($300,000.00) in cash or
in the form of an irrevocable, clean standby letter of credit (upon such terms,
and issued by such bank, as approved by Seller) (the "Additional Deposit"). The
entire Deposit consisting of the Initial Deposit and the Additional Deposit
(collectively the "Deposit") shall thereupon and thereafter be non-refundable
except as expressly provided in this Agreement. All interest accruing on the
Deposit, if any, shall for all purposes be considered part of the Deposit. In
the event Purchaser does not deliver the Deposit to Escrow Agent within the time
period provided in this Section 4.1, Seller shall have the right to immediately
terminate this Agreement upon notice to Purchaser.
4.2. Application Upon Default. The Deposit, if paid in cash, shall be
held by Escrow Agent in an interest-bearing escrow account in one or more
federally-insured institutions as directed by Purchaser and reasonably
acceptable to Seller. To allow the interest bearing account(s) to be opened,
Purchaser's and Seller's tax identification or social security numbers are set
forth below their signatures. The Deposit shall be held by the Escrow Agent
until (i) Closing occurs under this Agreement, in which event the Deposit
(including all interest earned thereon), shall be paid to Seller as a credit to
the Purchase Price, or (ii) this Agreement has been terminated, in which event
the Deposit will be promptly delivered to Seller or to Purchaser as provided in
this Agreement.
4.3. Escrow Agent. Escrow Agent is executing this Agreement to
acknowledge Escrow Agent's responsibilities hereunder, which may be modified
only by a written amendment signed by all of the parties. Any amendment to this
Agreement that is not signed by Escrow Agent shall be effective as to the
parties thereto, but shall not be binding on Escrow Agent. Escrow Agent shall
accept the Deposit with the understanding of the parties that Escrow Agent is
not a party to this Agreement except to the extent of its specific
responsibilities hereunder, and does not assume or have any liability for the
performance or non-performance of Purchaser or Sellers hereunder to either of
them. Additional provisions with respect to the Escrow Agent are set forth in
Section 16.14 of this Agreement.
ARTICLE V.
PRORATIONS AND CLOSING COSTS
5.1. Prorations. All matters involving prorations or adjustments to be
made in connection with Closing, if not addressed herein, shall be adjusted in
the manner customarily applied in large commercial real estate transactions in
Multnomah County, Oregon. Except as otherwise set forth herein, all items to be
prorated pursuant to this Article V shall be prorated as of midnight of the day
immediately preceding the Closing Date, with Purchaser to be treated as the
owner of the Property, for purposes of prorations of income and expenses, on and
after the Closing Date.
5.1.1. Taxes. Real estate and personal property taxes and
assessments for the year in which Closing is held shall be prorated on the basis
of a three hundred
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sixty-five (365) day year. If the amount of said taxes is not known at the time
of the delivery of the deed, they shall be apportioned on the basis of the taxes
assessed for the preceding year, with a reapportionment as soon as the new tax
rate and valuation can be ascertained; and, if the taxes which are to be
apportioned shall thereafter be reduced by abatement, the amount of such
abatement, less the reasonable cost of obtaining the same, shall be apportioned
between the parties, provided that neither party shall be obligated to institute
or prosecute proceedings for an abatement unless herein otherwise agreed. The
provisions of this Section 5.1.1 shall survive the Closing.
5.1.2. Rents. Purchaser shall receive from Seller a credit for
any rent and other income under Leases collected by Seller before Closing that
applies to any period after Closing. Uncollected rent and other uncollected
income shall not be prorated at Closing. After Closing, Purchaser shall apply
all rent and income collected by Purchaser from a tenant, first to the month in
which Closing occurred, then to such tenant's current monthly rental and then to
arrearages in the reverse order in which they were due, remitting promptly to
Seller, any balance properly allocable to Seller's period of ownership.
Purchaser shall xxxx and use commercially reasonable efforts to collect such
rent arrearages in the ordinary course of business, but shall not be obligated
to engage a collection agency or take legal action to collect any rent
arrearages. Any rent or other income received by Seller after Closing which are
owed to Purchaser shall be remitted to Purchaser promptly after receipt for
allocation and disbursement as provided herein. Seller shall have the right to
attempt to collect directly from any tenants any rents or other amounts payable
to Seller by tenants under the Leases, provided that Seller shall not institute
legal proceedings with respect to any such amounts. A current rent roll for the
Property, is attached hereto as Exhibit C, listing for each of the apartment
units in the Improvements: apartment number, unit type, unit status, tenant
name, commencement and termination dates, market rent, lease rent, security
deposits and details of any concessions and schedule of rental delinquencies in
such form as is prepared by Seller in the ordinary course of business (the "Rent
Roll").
5.1.3. Insurance. There shall be no proration of Seller's
insurance premiums or assignment of Seller's insurance policies, and Seller
shall, at its option, be entitled to cancel all of its existing policies as of
consummation of the Closing. Purchaser shall be obligated (at its own election)
to obtain any replacement policies.
5.1.4. Utilities. Prior to Closing, Seller shall notify all
public and private utilities providing services to the Property of the
prospective change in ownership and will request that all future xxxxxxxx be
made to Purchaser or its designee, at a specified address, with no interruption
of service.
5.1.5. Operating Costs. Purchaser and Seller hereby
acknowledge and agree that the amounts of all telephone, electric, sewer, water
and other utility bills, trash removal bills, janitorial and maintenance service
bills and all other operating expenses relating to the Property and allocable to
the period prior to the Closing Date shall be determined and paid by Seller
before Closing, if possible. Seller shall attempt to have all utility meters
read as of the Closing Date. To the extent not paid prior to Closing, such
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amounts shall be prorated as of the Closing Date, with Seller being charged for
all amounts that accrue through the day immediately preceding the Closing Date
and Purchaser being charged for all amounts that accrue thereafter. If final
meter readings are not available, such prorations shall be made based on the
parties' good faith reasonable estimate with a readjustment based on the actual
charges within forty-five (45) days of Closing if necessary. Seller shall
further attempt to obtain from the provider of same all other service statements
and bills of account. The provisions of this Section 5.1.5 shall survive the
Closing.
5.1.6. Security Deposits. Purchaser shall receive a credit for
all security deposits plus any interest thereon required to be paid under
applicable state law or under the terms of Leases; it is the intent of the
parties that all security deposits shown on the Rent Roll shall be transferred
by Seller to Purchaser at Closing; on the Closing, Purchaser will assume all
obligations with respect to the security deposits transferred to Purchaser and
be directly accountable to the residents of the Property with respect thereto;
provided however, Seller shall indemnify and hold Purchaser harmless from any
liabilities, resulting solely from the negligence or improper handling of the
security deposits by Seller, for the period prior to the Closing, and this
indemnification obligation shall survive the Closing.
5.1.7. Contracts. Prepayments paid by or paid to Seller under
assigned Contracts shall be prorated between Seller and Purchaser.
5.2. Closing Costs.
(a) The Seller and Purchaser shall each pay the following costs in
connection with the transaction contemplated by this Agreement:
(i) fifty percent (50%) of all escrow fees, if any;
(ii) each party's share of prorations pursuant to Section
5.1 above;
(iii) each party's own expenses incurred in connection with
the transaction and this Agreement including, without
limitation, all of its own accounting, legal,
appraisal and other professional fees, and all other
costs and expenses set forth in this Agreement to be
borne by that party.
(b) Seller shall pay one hundred percent (100%) of the cost of
Purchaser's base title insurance premium (for Purchaser's owner's policy) and
all title examination costs incurred in connection with the Title Commitment
obtained pursuant to Section 7.2 below. Purchaser shall pay one hundred percent
(100%) of the cost of (i) Purchaser's title insurance premiums for Purchaser's
lender's title policy and for any extended coverage (for owner's and lender's
policies), (ii) environmental inspection or review, (iii) any financing, (iv)
survey costs; and (v) all other property inspections and due diligence
investigations, and all reports prepared in connection therewith.
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ARTICLE VI.
PURCHASER'S DUE DILIGENCE, RIGHT OF ACCESS AND INSPECTION
6.1. Purchaser's Due Diligence, Right of Access and Inspection.
(a) At all times after the date of this Agreement, and subject to the
confidentiality provisions set forth in Section 6.3 below and payment of the
Initial Deposit pursuant to Section 4.1 above, Purchaser may examine (a) all
leases, contracts, books, records and accounting reports of Seller or Seller's
property manager relating to the Property, (b) title and survey, (c) compliance
with all zoning, building and other laws and regulations, (d) an engineering and
physical inspection, (e) an environmental study, and (f) an inspection of such
other matters as Purchaser determines. Purchaser, its agents and
representatives, shall be entitled to enter upon the Property (as coordinated
through Seller's property manager), including all leased areas and apartment
units, upon reasonable prior notice to Seller, to perform inspections and tests
of the Property, including surveys, environmental studies, examinations, tests
of all structural and mechanical systems within the Improvements. Seller shall
make an on-site representative available to assist in all on-site inspections at
reasonable times and on reasonable notice to Seller. Notwithstanding the
foregoing, Purchaser shall not be permitted to materially and unreasonably
interfere with Seller's operations at the Property or materially interfere with
any tenant's occupancy at the Property, and the scheduling of any inspections
shall take into account the timing and availability of access to tenants'
premises, pursuant to tenants' rights under the Leases or otherwise. The term
"Inspection Period," as used herein, shall mean the period commencing on the
Effective Date (as defined below) and ending at 5:00 p.m. Boston time on May 15,
2006 (herein the "Due Diligence Date"). Purchaser shall have the right to
terminate this Agreement, in its sole discretion, for any reason or no reason,
by giving written notice of such election to Seller on any day prior to and
including the final day of the Inspection Period, in which event the Deposit
shall be returned forthwith to Purchaser and, except as expressly set forth
herein, neither party shall have any further liability or obligation to the
other hereunder. In the absence of such written notice, the contingency provided
for in this Section 6.1 shall no longer be applicable, Purchaser shall be deemed
to have waived its right to terminate under this Section 6.1 and this Agreement
shall continue in full force and effect.
(b) Subject to the confidentiality provisions set forth in Section 6.3
below and payment of the deposit pursuant to Section 4.1 above, Purchaser shall
have the right, upon reasonable notice to Seller, to cause a Phase I
Environmental Study and, if warranted or desirable in Purchaser's reasonable
discretion, a Phase II Environmental Study of the Property (collectively,
"Environmental Studies") to be performed. Purchaser shall not make any physical
alterations to the Improvements, shall use reasonable efforts to prevent
interference with the tenants or management of the Property, and shall restore
any damage to the Property caused by Purchaser or its designees. In addition,
Purchaser shall further have complete access to all documentation, agreements
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and other information in the possession of, or under the control of, the Seller,
related to the ownership, use and operation of the Property, and shall have the
right to make copies of such documentation. Purchaser agrees to maintain, and to
cause each of its designees performing any of the foregoing inspections or
investigations of any kind to maintain, commercial general liability insurance
with limits of not less than Two Million and No/100 Dollars ($2,000,000.00) for
personal injury, including bodily injury and death, and premises damage, naming
the Seller as an additional insured. Upon Seller's request, Purchaser shall
deliver to the Seller a copy or copies of the certificate or certificates of
insurance evidencing the insurance required hereunder, which certificate shall
provide that such insurance shall not be terminated or modified without at least
ten (10) days' prior written notice to Seller. Purchaser shall indemnify and
hold Seller harmless for all costs and expenses (including reasonable attorneys'
fees actually incurred) incurred by Seller in connection with any property
damage to the Property (or to a tenant's property) or physical injury to any
person, resulting from Purchaser's (or its employees', contractors',
consultants' or agents') entry onto, or inspections and examinations of, the
Property, provided however that the Purchaser shall not be liable for loss due
to any condition discovered by Purchaser as part of its due diligence (which
condition was not caused by Purchaser or Purchaser's employees, contractors,
consultants or agents) or for any damage or injury which is the result of the
acts or omissions of Seller, its agents, employees, contractors or tenants. The
foregoing indemnification shall survive the Closing or the termination of this
Agreement.
6.2. Due Diligence Materials. Seller has delivered, or caused to be
delivered, to Purchaser copies of all those materials identified in the
Memorandum sent to Xxxxxxx Xxxxxx/The Valuations Group Inc. from Xxxxx
XxXxxxxxxx, dated March 20, 2006, attached hereto as Exhibit D (the "Due
Diligence Materials"), without any representation or warranty except as
expressly set forth in this Agreement. Seller shall give Purchaser and its
agents, representatives, contractors or designees access to the Property and
shall arrange meetings with Seller's representatives as reasonably requested by
Purchaser, subject to the confidentiality provisions of Section 6.3 below.
6.3 Confidentiality. Purchaser shall not disclose the information
contained in this Agreement, or other instrument or agreement which may be
entered into in connection with the transaction contemplated hereby, or the
contents of the Due Diligence Materials (collectively, the "Transaction
Documents") to any person other than any employees, officers, agents, attorneys,
advisors and contractors of Purchaser involved in the inspection or
investigation of the Property conducted by Purchaser in accordance with the
provisions of this Agreement, or to any potential lenders or investors with whom
Purchaser may be dealing with in connection with the acquisition or financing of
the Property (collectively, "Permitted Parties"). Purchaser shall not divulge
the contents of the Due Diligence Materials and other information except in
strict accordance with the confidentiality standards set forth herein. In
permitting Purchaser to review the Due Diligence Materials, or any other
information, Seller has not waived any privilege or claim of confidentiality
with respect thereto, and no third party benefits or relationships of any kind,
either express or implied, have been offered, intended or created. Purchaser
shall make no public announcement or disclosure of the terms of this Agreement
to third
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parties, before the Closing, without the prior written specific consent of
Seller, provided, however, that Purchaser may, subject to the provisions set
forth above, make disclosure of this Agreement to its Permitted Parties, and as
may be required under laws or regulations applicable to Purchaser. Additionally,
the foregoing restrictions do not apply to information in the public domain as a
result of lawful disclosure, or if disclosure is required under applicable laws,
including, without limitation, governmental regulatory, disclosure, tax and
reporting requirements.
In the event that this Agreement is terminated, Purchaser shall
promptly deliver to Seller all information, materials, and other documents that
were provided to Purchaser by Seller with respect to the Property or otherwise
in connection with the Agreement, but not including any internally generated
information, any privileged information or any reports obtained from third
parties in connection with the Property.
6.4. As-Is, Where Is. PURCHASER ACKNOWLEDGES THAT IT HAS HAD OR WILL
HAVE PURSUANT TO THE PROVISIONS OF THIS AGREEMENT THE OPPORTUNITY TO MAKE SUCH
INSPECTIONS AS IT DESIRES OF THE PROPERTY AND ALL FACTS RELEVANT TO ITS USE.
PURCHASER ACKNOWLEDGES THAT IT IS RELYING UPON ITS OWN INVESTIGATIONS OF THE
PROPERTY AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER
(INCLUDING, WITHOUT LIMITATION, THE DUE DILIGENCE MATERIALS) EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT OR IN THE DOCUMENTS DELIVERED BY SELLER TO
PURCHASER. THE PROPERTY SHALL BE CONVEYED AND TRANSFERRED TO PURCHASER "AS IS,
WHERE IS AND WITH ALL FAULTS." EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE VIII,
SELLER DOES NOT WARRANT OR MAKE ANY REPRESENTATION, EXPRESS OR IMPLIED, AS TO
THE PROPERTY'S FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, DESIGN,
QUANTITY, QUALITY, LAYOUT, FOOTAGE, PHYSICAL CONDITION, OPERATION, COMPLIANCE
WITH LAWS AND REGULATIONS (INCLUDING, WITHOUT LIMITATION, THOSE LAWS AND
REGULATIONS RELATING TO HEALTH, SAFETY AND THE ENVIRONMENT) OR ANY OTHER MATTER
AFFECTING THE PROPERTY, AND SELLER SHALL BE UNDER NO OBLIGATION WHATSOEVER TO
UNDERTAKE ANY REPAIRS, ALTERATIONS OR OTHER WORK OF ANY KIND WITH RESPECT TO ANY
PORTION OF THE PROPERTY. INFORMATION PREVIOUSLY PROVIDED OR TO BE PROVIDED BY
SELLER AND/OR OTHER PARTIES IN RESPECT OF THE PROPERTY (INCLUDING, WITHOUT
LIMITATION, THE DUE DILIGENCE MATERIALS) WAS OBTAINED FROM A VARIETY OF SOURCES.
EXCEPT AS SET FORTH IN ARTICLE VIII, SELLER HAS NOT MADE AN INDEPENDENT
INVESTIGATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE
ACCURACY OR COMPLETENESS THEREOF. THE PROVISIONS OF THIS SECTION 6.4 SHALL
SURVIVE THE CLOSING OR THE TERMINATION OF THIS AGREEMENT. NOTHING CONTAINED IN
THIS SECTION SHALL AFFECT THE OBLIGATION OF SELLERS TO DELIVER THE PROPERTY AT
THE CLOSING IN THE CONDITION REQUIRED BY THIS AGREEMENT.
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6.5. Property Inspections and Condition. Purchaser is solely
responsible for inspecting the Property and the condition thereof (or causing
such inspection to be undertaken) including, without limitation, (i) the
structural, mechanical, electrical and other physical characteristics and
systems of the Property, (ii) the existence or non-existence on, under or about
the Property of any asbestos or other hazardous substances or hazardous
materials, (iii) whether the Property is located within a flood or earthquake
zone, and (iv) compliance with all applicable laws, ordinances and governmental
regulations. Except as expressly set forth in Article VIII, Purchaser further
acknowledges and agrees that the conveyance of the Property to Purchaser shall
be "AS IS, WHERE IS AND WITH ALL FAULTS."
ARTICLE VII.
TITLE
7.1. Title. The Property is to be conveyed by a special warranty deed
(with covenants against grantor's acts), in accordance with Oregon Revised
Statutes 93.855, running to Purchaser (or its nominee), and said deed shall
convey title thereto, without Title Objections (as defined in Section 7.3)
insurable at standard rates, free from encumbrances, except:
(a) zoning laws, bylaws, regulations and other applicable
governmental regulations and requirements;
(b) rights of public and adjoining owners in highways, streets,
roads and lanes bounding the Land;
(c) liens for taxes, assessments, water charges and sewer charges
not yet due and payable on the Closing Date (such taxes, etc.,
to be subject to adjustment as set forth in this Agreement);
and
(d) the Permitted Title Exceptions (as defined in Section 7.3).
7.2. Commitment. Purchaser will obtain a title insurance commitment for
the Property ("Title Commitment") issued by Lawyers Title Insurance Corporation
("Title Company").
7.3. Title and Survey Defects. Seller shall provide to Purchaser any
and all surveys currently in its possession regarding the Property. Purchaser
may obtain, at its own expense, any additional surveys it may require. On or
before the Due Diligence Date, Purchaser shall notify Seller in writing of any
Title Objections (as defined herein below) that Purchaser has to any matters
shown or referred to in any survey or the Title Commitment. In the absence of
such written notice, Purchaser shall be deemed to have waived its right to
terminate under this Section 7.3, and this Agreement shall continue in
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full force and effect. If Purchaser objects to the so called "standard
exceptions" in the Title Commitment, and is unable to receive assurances from
the Title Company that the exceptions will be removed, Purchaser may terminate
this Agreement on or before the Due Diligence Date. Purchaser acknowledges that
the cost of any extended coverage shall be borne by Purchaser in accordance with
Section 5.2(b) of this Agreement. Any exception of Title Commitment to which
Purchaser does not object shall be considered a Permitted Title Exception. The
term "Title Objection" as used herein shall mean an objection to any matter
regarding the Title Commitment or Survey, in Purchaser's discretion. If
Purchaser notifies Seller of any Title Objection, Seller shall have ten (10)
business days thereafter to notify Purchaser in writing whether Seller will
eliminate or modify such Title Objection to Purchaser's satisfaction (in which
case Seller shall have thirty days to eliminate or modify the same), provided
however that notwithstanding anything herein to the contrary, Seller shall be
required to pay off and discharge on or before the Closing Date, all mortgages,
mechanics liens, taxes and monetary encumbrances (collectively "Monetary Liens")
affecting the Property. If Seller fails to notify Purchaser in writing within
the ten (10) business day period, Seller will be deemed to have elected not to
eliminate or modify such Title Objection(s), other than Monetary Liens, on or
before the Closing. In the event Seller notifies Purchaser within such ten (10)
business day period that it is unable or unwilling to eliminate or modify such
Title Objection(s) to the satisfaction of Purchaser and Title Company, or if
Seller is deemed to have made such election pursuant to the immediately
preceding sentence, then, in that event, Purchaser shall have the right to
either (i) terminate this Agreement by delivering notice to Seller within five
(5) business days after receipt of Seller's response notice described above or
(ii) elect to purchase the Property subject to said uncured Title Objection, and
such Title Objection shall thereafter be deemed a Permitted Title Exception.
Additionally, any uncured Title Objection which is expressly waived by Purchaser
in writing shall also be considered a Permitted Title Exception. If this
Agreement is terminated as provided above, the Deposit with all interest
accruing thereon shall be returned to Purchaser and neither party shall have
further liability to the other under this Agreement except for those provisions
hereof which by their terms survive the termination hereof. Except for Monetary
Liens, and except for Title Objections that Seller agrees to cure, as provided
above, Seller shall have no obligation to cure any title or survey objections.
ARTICLE VIII.
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller hereby represents and covenants to Purchaser that each of
the following representations and warranties is, with respect to the Seller,
true and correct as of the date of execution of this Agreement and shall be true
and correct as of the Closing Date. As used herein, "Seller's Knowledge" shall
mean the actual knowledge of Xxxxxxxx X. Xxxxxxxx or Xxxxx XxXxxxxxxx, as Agent
of Seller.
8.1. Authority. The Seller is duly formed and validly existing under
the laws of the State of Delaware. Seller has all requisite authority to enter
into this Agreement
12
and to perform its obligations hereunder. The execution and delivery of this
Agreement and the performance by Seller of its obligations hereunder have been
duly authorized by all requisite action, and no further action or approval is
required in order to constitute this Agreement as a binding and enforceable
obligation of the Seller. The undersigned individual(s) is authorized to sign on
behalf of the Seller, and no additional signatures are required to bind Seller.
8.2. Bankruptcy or Debt of Seller. The Seller is not the subject of a
pending bankruptcy or insolvency action. There are no due but unpaid income,
property or franchise taxes of Seller which constitute a lien against the
Property, except for the current year. Seller shall not be liable for any taxes
resulting from any disqualification of the Property for special assessment as
historic property.
8.3. Foreign Person. The Seller is not a foreign person within the
meaning of Section 1445(f) of the Internal Revenue Code, and the Seller agrees
to execute any and all documents necessary or required by the Internal Revenue
Service or Purchaser in connection with such declaration(s).
8.4. Threatened Litigation. To Seller's Knowledge, there is no pending
or threatened litigation or claims, including without limitation condemnation
claims, pertaining to the Property or the Seller.
8.5 Contracts. There are no contracts affecting the construction, use,
ownership, maintenance and/or operation of the Property (including without
limitation any agreements pertaining to the historic nature of the building),
other than those existing and executed in the normal course of business and
identified in Exhibit E, attached hereto (collectively, the "Contracts").
8.6 Violations. To Seller's Knowledge, Seller has received no written
notices, claims or demands concerning any violation of any governmental rule,
regulation or law affecting the Property that remain outstanding as of the date
hereof, or, except as disclosed to Purchaser, any written notice of any
environmental condition at, in, on, under or from the Property, or concerning
the escape of any Hazardous Substance at, in, on, under or from the Property.
8.7. Due Diligence Materials. To Seller's Knowledge, the Due Diligence
Materials are true, accurate and complete copies of all such documents and
materials, except as provided in Section 6.2 hereof.
8.8. Prohibited Persons and Transactions. Neither the Seller nor any of
its respective affiliates, nor any of its respective partners, members,
shareholders or other equity owners, and none of its respective employees,
officers, directors, representatives or agents is, nor will they become, a
person or entity with whom United States persons or entities are restricted from
doing business under regulations of the Office of Foreign Asset Control ("OFAC")
of the Department of the Treasury (including those named on OFAC's Specially
Designated and Blocked Persons List) or under any statute, executive
13
order (including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism), or other governmental action and is not and will not engage in any
dealings or transactions or be otherwise associated with such persons or
entities.
8.9. Leases. To the best of Seller's knowledge, as of the date of the
Agreement there are no leases, subleases, licenses or other rental agreements or
occupancy agreements (written or verbal) which grant any possessory interest in
and to any space situated on or in the Improvements or that otherwise give
rights with regard to use of the Improvements other than those identified on
Exhibit C, and in the case of the commercial leases, identified on Exhibit C-1
(collectively, the "Leases"). To the best of Seller's knowledge, the Rent Roll
is true, accurate and complete as of the date hereof. To the best of Seller's
knowledge, except as otherwise specifically set forth in the Rent Roll or
elsewhere in this Agreement:
(a) the Leases are in full force and effect and none of them has
been modified, amended or extended, except as stated thereon
or as evidenced by modifications, amendments or extensions
thereto;
(b) no tenant, or any other person, entity or association has an
option to purchase, right of first refusal, right of first
offer or other similar right in respect of all or any unit in
the Property;
(c) no leasing commission shall be due for any period subsequent
to the time of Closing other than for tenants who have
executed a lease prior to Closing but do not move in until
after the time of Closing, which commissions shall be paid by
Purchaser;
(d) no tenant is entitled to rental concessions or abatements for
any period subsequent to the time of Closing;
(e) Seller has neither sent written notice to any tenant of the
Property, nor received any notice from any such tenant,
claiming that such tenant, or Seller, as the case may be, is
in default, which default remains uncured other than as shown
on the Rent Roll;
(f) no action or proceeding instituted against Seller by any
tenant of any unit in the Property is presently pending;
(g) there are no security deposits or other deposits other than
those set forth in the Rent Roll;
(h) no rent has been paid more than thirty (30) days in advance
under any lease of any unit in the Property other than as
shown on the Rent Roll;
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(i) no uncompleted work with respect to any part of the Property
demised under any of the Leases to be performed by Seller will
remain incomplete after the time of Closing; and
(j) all brokerage commissions with respect to the Leases shall
have been paid in full by the time of Closing.
8.10. The representations and warranties made by Seller in this Article
VIII shall survive Closing for a period of nine (9) months.
ARTICLE IX.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser warrants and represents to Seller as follows:
9.1. Authority. Purchaser is a limited liability company duly formed
and validly existing under the laws of the Commonwealth of Massachusetts.
Purchaser has all requisite authority to enter into this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
and the performance by Purchaser of its obligations hereunder have been or will
be duly authorized by all requisite action and no further action or approval is
required in order to constitute this Agreement as a binding and enforceable
obligation of Purchaser.
9.2. Legal Action Against Purchaser. There are no judgments, orders, or
decrees of any kind against Purchaser unpaid or unsatisfied of record which
would adversely affect the Closing hereunder, nor any legal action, suit or
other legal or administrative proceeding pending before any court or
administrative agency, which would adversely affect the Closing hereunder.
9.3. Bankruptcy or Debt of Purchaser. Purchaser is not the subject of a
pending bankruptcy or insolvency action.
9.4. Binding on Purchaser. The execution and delivery of this Agreement
by Purchaser and the consummation of the transaction contemplated hereby will be
binding upon Purchaser. The undersigned individual(s) is authorized to sign on
behalf of Purchaser and no additional signatures are required to bind Purchaser.
9.5 Prohibited Persons and Transactions. Neither Purchaser nor any of
its affiliates, nor any of their respective partners, members, shareholders or
other equity owners, and none of their respective employees, officers,
directors, representatives or agents is, nor will they become, a person or
entity with whom United States persons or entities are restricted from doing
business under regulations of the Office of Foreign Asset Control ("OFAC") of
the Department of the Treasury (including those named on OFAC's Specially
Designated and Blocked Persons List) or under any statute, executive
15
order (including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism), or other governmental action and is not and will not engage in any
dealings or transactions or be otherwise associated with such persons or
entities.
ARTICLE X.
COVENANTS OF SELLER
Seller hereby covenants and agrees that during the period between the
Effective Date and the earlier to occur of Closing or the termination of this
Agreement, Seller shall perform and observe the following covenants and
obligations:
10.1. Operation and Maintenance of the Property. Seller agrees to
operate, maintain and repair the Property in substantially the same manner as
Seller has been prior to the Effective Date, normal wear and tear accepted.
Seller shall not remove from the Improvements any item or article defined as
Personal Property hereunder except as may be necessary for repair or discarding
worn out or useless items.
10.2. Bills and Claims. All bills and claims for labor performed and
materials furnished to Seller for the benefit of the Property during the period
preceding the Closing Date shall be paid in full at or prior to Closing.
10.3. Contracts. As of the Closing Date, any Contracts by Seller with
respect to the Property shall be terminated without cost or liability to
Purchaser, except with respect to those Contracts which Purchaser elects to
assume in writing, and except with respect to those identified in Section 8.5
above.
10.4. Creation of Encumbrances. Seller shall not hereafter create or
consent to the imposition of any lien, lease, easement, restriction, covenant,
condition or other encumbrance upon the Property which would be binding upon
Purchaser or the Property following the Closing, other than as expressly set
forth herein, without, in each instance, the prior written consent of Purchaser,
and shall discharge the same on or before the Closing.
10.5. Alterations. Except for repairs or replacements made in the
ordinary course of business or those required by applicable law or ordinance,
Seller shall not make any alterations, improvements or additions to the Property
without the prior written consent of Purchaser.
10.6. Notice to Purchaser. Seller shall notify Purchaser promptly of
the occurrence of any (i) fire or other casualty causing damage to the Property,
or any portion thereof; (ii) receipt of written notice of eminent domain
proceedings or condemnation of or affecting the Property, or any portion
thereof; (iii) receipt of written notice from any governmental or
quasi-governmental agency relating to any violations regarding the Property, or
(iv) notice of any release of any "hazardous substances" as
16
defined in the Comprehensive Environmental Response and Compensation Liability
Act of 1980, as amended at, on, under or from the Property.
10.7 Insurance. Seller shall maintain Property and Casualty Insurance
in the same amounts as currently insured.
10.8. Leasing. Seller shall not, without Purchaser's prior written
consent (a) enter into any new lease for an apartment unit with a first-time
tenant unless the lease is on the Seller's standard form, is for a period of no
more than one (1) year and the rent shall be not less than the amount of rent
for the applicable type of unit shown on Exhibit C attached hereto; or (b) enter
into, and, renew or extend any Lease for an apartment unit with an existing
tenant unless the lease is on Seller's standard form, is for a period of not
more than one (1) year and not less than seven (7) months and that the rent for
the amended, renewal or extension term shall not be less than the amount of rent
noted of rent for the applicable type of unit shown on Exhibit C attached
hereto; (c) terminate any Lease except by reason of a default by the tenant
thereunder; or (d) grant any concessions to a tenant. On or prior to the
Closing, as a condition to the Closing for the benefit of Purchaser, Seller
shall have performed all work necessary (including, without limitation,
supplying operable kitchen appliances, installing new carpeting or cleaning
existing carpeting, and repainting) to make all apartment units within the
Property that have been vacated for more than five (5) days prior to the Closing
ready for occupancy by incoming tenants, consistent with Seller's past practices
(the "Ready Work"). In the event that all Ready Work has not been completed
prior to the Closing, Purchaser may elect to either (a) terminate this Agreement
and the Deposit shall be returned to Purchaser, and neither party shall have
further rights or obligations pursuant to this Agreement, or (b) waive the
completion of the Ready Work, proceed to close the transaction, and receive a
credit on account of the incomplete Ready Work in an amount to be reasonably
determined by Seller and Purchaser at Closing. Notwithstanding the foregoing,
all such Ready Work shall be to the extent and consistent with Seller's previous
practices.
10.9. Estoppel Certificates. Seller shall (a) send a tenant estoppel,
in the form provided by Purchaser, to each commercial tenant listed on Exhibit
C-1 by April 19, 2006; and (b) use all commercially reasonable efforts to obtain
the executed original tenant estoppel form back from each commercial tenant
listed on Exhibit C-1 prior to the Due Diligence Date. Seller shall deliver to
Purchaser all executed tenant estoppels and any correspondence received from
such commercial tenants with respect to the requested tenant estoppels within
one (1) business day of receipt thereof by Seller. Receipt of such executed
tenant estoppels shall not be a condition precedent to Closing.
ARTICLE XI.
CONDITIONS PRECEDENT
The obligation of Purchaser to purchase the Property and to perform the
other covenants and obligations to be performed by it on the Closing Date shall
be subject to the following conditions:
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11.1. Covenants. Seller shall have performed all of its covenants,
agreements and obligations under this Agreement.
11.2. Representations and Warranties. All of Seller's representations
and warranties set forth in this Agreement shall be true and correct in all
material respects.
11.3 Escrow Deposit and Documents. Purchaser shall have complied with
the deposit provisions of Section 4.1, and delivered all documents required by
the escrow agent.
11.4. Title. There shall be no exceptions to title to the Property
other than the Permitted Title Exceptions and the encumbrances identified in
Section 7.1 of this Agreement.
11.5. Condition of the Property. There shall be no material adverse
change in the condition of the Property from the Effective Date to the Closing
Date.
ARTICLE XII.
CLOSING
12.1. Closing and Closing Date. Subject to the conditions set forth in
this Agreement, the closing of the purchase and sale of the Property (the
"Closing") shall occur not more than 30 days after the later to occur of (i)
expiration of the Due Diligence Period; and (ii) receipt of all necessary
approvals authorizing the appropriate signatories' right to sell the Property,
but not later than June 30, 2006 in any event, or on such earlier date as the
parties may agree in writing, at Lawyers Title Insurance Corporation, c/o
LandAmerica Financial Group, Inc., 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000 ("Closing Date"). Purchaser may elect, by the Due Diligence Date, by
notice in writing to Seller, to extend the closing date to June 30, 2006. Such
extension shall in no way affect any of the obligations of the Purchaser and
Seller, as set forth in this Agreement, and the Agreement shall continue in full
force and effect. The Closing shall be conducted through an escrow administered
by Escrow Agent. Purchaser and Seller shall execute supplemental escrow
instructions as may be appropriate to enable Escrow Agent to comply with the
terms of this Agreement, so long as such instructions are not in conflict with
this Agreement. The transactions described herein shall be closed by means of
concurrent delivery of the documents of title, transfer of interest, delivery of
Title Policy (as hereinafter defined) and the Purchase Price, in keeping with
the manner customarily applied in large commercial real estate transactions in
Multnomah County, Oregon
12.2. Seller's Closing Deliveries. With respect to the Property, except
as otherwise noted below, Seller agrees to provide the following to Purchaser at
Closing and the delivery of such shall be a condition precedent to Purchaser's
obligation to perform under this Agreement:
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12.2.1. Deed. A statutory special warranty deed in recordable form
properly executed by the Seller conveying to Purchaser the
Land and the Improvements in fee simple subject only to the
matters set forth in Section 7.1 (the "Deed").
12.2.2. Xxxx of Sale. A limited warranty xxxx of sale, in form
reasonably satisfactory to Purchaser's and Seller's counsel,
which conveys all of Seller's right, title and interest in and
to the tangible and intangible personal property.
12.2.3. Assignment of Leases and Security Deposits. An assignment and
assumption of the Leases and Security Deposits, including
material indemnities, in form reasonably satisfactory to
Purchaser's and Seller's counsel.
12.2.4. Assignment of Contracts. An assignment and assumption of all
assumed Contracts, to the extent assignable or assumable in
form reasonably satisfactory to Purchaser's and Seller's
counsel.
12.2.5. Assignment of Intangible Property. An assignment and
assumption of all Intangible Property, to the extent
assignable or assumable, in form reasonably satisfactory to
Purchaser's and Seller's counsel.
12.2.6. Title Affidavits. Such affidavits as the Title Company may
reasonably require in order to omit from its title insurance
policy all exceptions for (i) parties in possession other than
under the rights to possession granted under the Leases; and
(ii) mechanics' liens, as well as a Gap Indemnity Agreement.
12.2.7. Notices of Sales. Sufficient letters, executed by Seller, as
of the date of the Closing, advising the tenants under the
Leases of the sale of the Property to Purchaser and directing
that all rents and other payments thereafter becoming due
under the Leases be sent to Purchaser or as Purchaser may
direct.
12.2.8. Real Property Transfer Tax Declaration. Any transfer tax
declaration required to be filed in connection with the
recording of the Deed.
12.2.9. Authority. In addition to the foregoing, Seller shall provide
Purchaser with the following: (i) copies of good standing
certificates documenting the valid existence and the
authorization to transact business in the state of formation
of such party, and it's constituent managing or general
partner entities, (ii) only if required by the Title Company,
copies of the relevant provisions
19
of the partnership agreement, articles of incorporation,
limited liability company agreement or other organizational
documentation for such party, and its managing or general
partner constituent entities, as necessary to demonstrate all
entities and persons whose consent is a prerequisite to
Closing, and (iii) full authorizing resolutions evidencing
authority to assume and perform obligations hereunder by such
party, and its managing/general partner constituent entities.
12.2.10. Books and Records. All original (or true copies of) books,
records, tenant files, operating reports, files, plans and
specifications and other materials in Seller's possession
necessary to the continuity of operation of the Property.
Seller shall retain the right to access all documents if
needed for reasonable purposes, which right shall survive
delivery of the deed hereunder.
12.2.11. Certificates of Occupancy. All original certificates of
occupancy (or copies if no originals are available) relating
to the Property to the extent in Seller's possession.
12.2.12. Plans and Specifications. All original as-built plans and
specifications relating to the Property to the extent in
Seller's possession;
12.2.13. Keys. All keys to the Improvements which delivery shall
comprise at least one full set of keys;
12.2.14. Reaffirmation of Representations and Warranties. A certificate
properly executed by Seller reaffirming all representations
and warranties of Seller set forth in this Agreement;
12.2.15. FIRPTA Certificate. An affidavit properly executed by Seller
certifying that Seller is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Internal Revenue Code;
12.2.16. Rights Under Permitted Title Exceptions. If requested by
Purchaser, a properly executed assignment of Seller's rights
under any of the Permitted Title Exceptions, to the extent
such rights are assignable; and
12.2.17. Other Consents, Approvals, Etc. Such other consents,
approvals, affidavits, estoppel certificates and other
instruments and documents as may be reasonably required by
Purchaser or the Title Company prior to Closing, but limited
to warranties and representations as set forth in this
Agreement.
20
12.3. Purchaser's Closing Deliveries. With respect to the Property,
except as otherwise noted below, Purchaser agrees to provide the following to
Seller at Closing:
12.3.1. Purchase Price. The Purchase Price for the Property,
as adjusted pursuant to the terms hereof.
12.4. Further Assurances. Purchaser and Seller each agree that they
will, upon reasonable notice and from time to time after the Closing Date, upon
request of the other, do, execute, acknowledge and deliver, or will cause to be
done, executed, acknowledged and delivered, all such further acts, deeds,
assignments, transfers, conveyances and assurances as may be required for the
better assignment, transfer and granting of the Property to Purchaser, its
successors or assigns, but nothing herein shall obligate either party to incur
any liability beyond that set forth elsewhere in this Agreement.
ARTICLE XIII.
RISK OF LOSS AND CONDEMNATION
13.1 Risk of Loss. Until Closing, the risk of loss or damage to the
Property or any portion thereof shall be assumed by Seller who will promptly
notify Purchaser in writing as to the occurrence, extent and estimated cost of
repair of the damage. In the event of damage to the Property by fire or other
casualty, act of God or any other event, and the cost to repair such damage
exceeds Two Hundred Thousand Dollars ($200,000.00) in the reasonable
determination of a third party consultant selected by Seller and Purchaser, then
Purchaser, at its sole option exercised within the earlier to occur of
twenty-one (21) days of Purchaser receiving notice of such event or within three
(3) Business Days after the outside date for the Closing, if sooner, shall have
the right to (i) terminate this Agreement and obtain a refund of its Deposit; or
(ii) close, in which event, if restoration has not been completed, the insurance
proceeds (including business interruption and rental loss insurance proceeds to
the extent related to any period after the Closing Date), as well as any unpaid
claims or rights in connection with such casualty shall be assigned to
Purchaser, and the amount of any deductible shall be credited to Purchaser, at
the Closing or, if paid to Seller prior to Closing, shall be credited at the
Closing against the Purchase Price. In the event of damage to the Property by
fire or other casualty, act of God or other event, the cost of which to repair
is not greater than Two Hundred Thousand Dollars ($200,000.00), as reasonably
determined by of a third party consultant selected by Seller and Purchaser, the
parties shall proceed to Closing, in which event if restoration has not been
completed, the insurance proceeds (including business interruption and rental
loss insurance proceeds to the extent related to any period after the Closing
Date) as well as unpaid claims or rights in connection with such casualty shall
be assigned to Purchaser, and the amount of any deductible shall be credited to
Purchaser, at the Closing, or if paid to Seller prior to Closing, shall be
credited at the Closing against the Purchase Price.
21
13.2 Condemnation. Seller agrees to give Purchaser prompt written
notice of any action or proceeding instituted or pending, in eminent domain or
for condemnation affecting any part of the Property, promptly after Seller's
receipt thereof. If, prior to the Closing Date, all or any material part of the
Property is taken by condemnation or eminent domain proceeding or other transfer
in lieu thereof, this Agreement may be terminated at the option of Purchaser by
written notice to Seller given within five (5) business days after Seller gives
Purchaser the notice of such condemnation or conveyance in lieu thereof. If
Purchaser elects not to terminate this Agreement, then this Agreement shall
remain in full force and effect, and Seller shall at Closing assign to Purchaser
all rights of Seller to the condemnation award, but there shall be no reduction
in the Purchase Price, which shall apply whether or not the condemnation
involves all or any material portion of the Property.
ARTICLE XIV.
DEFAULT
14.1. Seller's Default. If Seller fails to comply with or otherwise
defaults in any of the terms, provisions, covenants or agreements set forth in
this Agreement to be complied with or performed by Seller and Purchaser is not
in default hereunder, Purchaser shall have the right to (i) terminate this
Agreement by written notice to Seller and receive, as full liquidated damages,
the Deposit (including all interest earned thereon, if any) which shall be
Purchaser's sole remedy at law or in equity, or (ii) to bring an action for
specific performance, and in the event Purchaser maintains an action for
specific performance of the terms of this Agreement, then Seller shall (and does
hereby) waive, in any such action for specific performance, the defense of
adequacy of remedy at law. If Purchaser shall terminate this Agreement due to
Seller's default as provided in this Section 14.1, upon payment of the Deposit
and the interest earned thereon to Purchaser, all rights and obligations of the
parties hereto under or with respect to this Agreement (except those obligations
and liabilities which, by their express terms, specifically survive termination)
shall be deemed terminated.
14.2 Purchaser's Default. The parties acknowledge that in the event of
Purchaser's failure to fulfill its closing obligations hereunder it is
impossible to compute exactly the damages which would accrue to Seller in such
event. The parties have taken these facts into account in setting the amount of
the Deposit required pursuant to this Agreement, and hereby agree that: (a) such
amount together with the interest earned thereon is the pre-estimate of such
damages which would accrue to Seller; (b) such amount represents damages and not
any penalty against Purchaser; and (c) if this Agreement shall be terminated by
Seller by reason of Purchaser's failure to fulfill Purchaser's closing
obligations hereunder, the Deposit together with the interest thereon shall be
Seller's full and liquidated damages in lieu of all other rights and remedies
which Seller may have against Purchaser at law or in equity.
22
ARTICLE XV.
BROKER
The parties hereto agree and represent to each other that no broker,
agent or finder has been engaged on their behalf or otherwise involved in this
transaction and each party shall indemnify, defend and hold the other harmless
from and against the claims of any broker, agent, consultant of finder claiming
to have acted on behalf of such party in connection with this transaction or
this Agreement. The provisions of this Article and the indemnities herein shall
survive after the conveyance of title and payment of the Purchase Price and
shall not be merged therein.
ARTICLE XVI.
MISCELLANEOUS
16.1. Notices. All notices, requests, demands or other communications
hereunder shall be in writing and deemed given (i) when delivered personally or
by telecopier, or (ii) on the third day following the day deposited in the U.S.
Mail, postage prepaid, or (iii) on the day deposited with a recognized overnight
courier service (such as Federal Express), in all events addressed as follows
(or to such other address which a party may from time to time hereafter
designate by notice given in accordance with this Section 16.1):
To Seller: Historic Preservation Properties 1989 LP
00 Xxxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxxxx
Telecopier: (000)000-0000
With a copy to: Xxxxx Xxxx
Xxxxx Xxxxxx LLP
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Telecopier: (000) 000-0000
To Purchaser: SP/Xxxxxxxx LLC
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Dagbjartsson
Telecopier: (000) 000-0000
23
With a copy to: Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopier: (000) 000-0000
The refusal to accept delivery by any party or the inability to deliver any
communication because of a changed address of which no notice has been given in
accordance with this Section 16.1 shall constitute delivery. Notices may be
given by a party's attorney or other authorized representative.
16.2. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws the State of Oregon.
16.3. Headings. The captions and headings herein are for convenience
and reference only and in no way define or limit the scope or content of this
Agreement or in any way affect its provisions.
16.4. Effective Date. This Agreement shall be effective upon delivery
of this Agreement fully executed by Seller and Purchaser, which date shall be
deemed the Effective Date hereof (the "Effective Date"). Either party may
request that the other party promptly execute a written confirmation specifying
the Effective Date hereof.
16.5. Business Days. If any date herein set forth for the performance
of any obligations of Seller or Purchaser or for the delivery of any instrument
or notice as herein provided should be on a Saturday, Sunday or legal holiday,
the compliance with such obligations or delivery shall be deemed acceptable on
the next business day following such Saturday, Sunday or legal holiday. As used
herein, the term "legal holiday" means any state or federal holiday for which
financial institutions or post offices are generally closed in the State of
Oregon or the Commonwealth of Massachusetts.
16.6. Counterpart Copies. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument, as if all parties hereto had executed a
single original of this Agreement. Such executed counterparts when transmitted
via facsimile or electronic mail will be valid and binding as if transmitted in
original form.
16.7. Binding Effect. This Agreement shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors and
assigns.
16.8. Interpretation. This Agreement shall not be construed more
strictly against one party than against the other merely by virtue of the fact
that it may have been prepared by counsel for one of the parties, it being
recognized that both Seller and Purchaser have contributed substantially and
materially to the preparation of this Agreement.
24
16.9. Entire Agreement. This Agreement and the Exhibits attached hereto
contain the final and entire agreement between the parties hereto with respect
to the sale and purchase of the Property and are intended to be an integration
of all prior negotiations and understandings. Purchaser, Seller and their agents
shall not be bound by any terms, conditions statements, warranties or
representations, oral or written, not contained herein. No change or
modifications to this Agreement shall be valid unless the same is in writing and
signed by the parties hereto. Purchaser reserves the right to waive any of the
terms or conditions of this Agreement which are for the benefit of Purchaser and
to purchase the Property in accordance with the terms and conditions of this
Agreement which have not been so waived. Any such waiver must be in writing
signed by Purchaser.
16.10. Severability. If any one or more of the provisions hereof 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
provision hereof, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
16.11. Survival. The provisions of this Agreement and the
representations and warranties herein shall survive after the conveyance of
title and payment of the Purchase Price and shall not be merged therein, except
as expressly set forth and required in this Agreement.
16.12. Limitation of Liability. In no event shall any officer,
director, partner, shareholder, agent or employee of Purchaser or its partners
be personally liable for any of the obligations of Purchaser under this
Agreement or otherwise. In no event shall any officer, director, partner,
shareholder, agent or employee of Seller or its partners be personally liable
for any of the obligations of Seller under this Agreement or otherwise.
16.13. Prevailing Party. Should either party employ an attorney to
enforce any of the provisions hereof, (whether before or after Closing, and
including any claims or actions involving amounts held in escrow or relating to
any action pursuant to Article XIV) or to recover damages for the breach of this
Agreement, the non-prevailing party in any final judgment agrees to pay the
other party's reasonable expenses, including attorneys' fees and expenses in or
out of litigation and, if in litigation, trial, appellate, bankruptcy or other
proceedings, expended or incurred in connection therewith, as determined by a
court of competent jurisdiction. The provisions of this Section shall survive
Closing or the termination of this Agreement.
16.14. Liability of Escrow Agent. The parties acknowledge that the
Escrow Agent shall be conclusively entitled to rely, except as hereinafter set
forth, upon a certificate from Purchaser or Seller as to how the Deposit (which,
for purposes of this Section 16.14 shall be deemed to also include any other
escrowed funds held by the Escrow Agent pursuant to this Agreement) should be
disbursed. Any notice sent by Seller or Purchaser (the "Notifying Party") to the
Escrow Agent shall be sent
25
simultaneously to the other noticed parties pursuant to Section 16.1 herein (the
"Notice Party" or "Notice Parties"). If the Notice Parties do not object to the
Notifying Party's notice to the Escrow Agent within ten (10) days after the
Notice Party's receipt of the Notifying Party's certificate to the Escrow Agent,
the Escrow Agent shall be able to rely on the same. If the Notice Parties send,
within such ten days, written notice to the Escrow Agent disputing the Notifying
Party's certificate, a dispute shall exist and the Escrow Agent shall hold the
Deposit as hereinafter provided. The parties hereto hereby acknowledge that
Escrow Agent shall have no liability to any party on account of Escrow Agent's
failure to disburse the Deposit if a dispute shall have arisen with respect to
the propriety of such disbursement and, in the event of any dispute as to who is
entitled to receive the Deposit, disburse them in accordance with the final
order of a court of competent jurisdiction, or to deposit or interplead such
funds into a court of competent jurisdiction pending a final decision of such
controversy. The parties hereto further agree that Escrow Agent shall not be
liable for failure of any depository and shall not be otherwise liable except in
the event of Escrow Agent's negligence or willful misconduct. The Escrow Agent
shall be reimbursed on an equal basis by Purchaser and Seller for any reasonable
expenses incurred by the Escrow Agent arising from a dispute with respect to the
Deposit.
16.15. No Agreement Until Execution and Delivery. The delivery by
either party of unexecuted copies of this Agreement is solely for the purpose of
review by the party to whom delivered and is in no way to be construed as an
offer or an acceptance by either party or an agreement to sell or purchase the
Property, as applicable, and neither party shall be bound by the terms hereof
until a definitive agreement satisfactory to both Purchaser and Seller has been
executed and delivered by both parties.
16.16. Merger. The acceptance of the Deed by Purchaser shall be deemed
to be full performance by Seller of, and shall discharge Seller from all
obligations hereunder, subject, however, to the provisions of Section 16.11 and
the other provisions of this agreement that survive the Closing. Seller shall
have no liability hereunder thereafter to Purchaser, or to any other person,
firm, corporation or public body with respect to the Property except pursuant to
section 16.11 and to those provisions specifically stated herein to have
survived the Closing.
16.17. Recording. Neither this Agreement nor any notice or memorandum
shall be recorded in any public record. A violation of the prohibition set forth
in this Section 16.17 shall be a material breach of this Agreement by Purchaser,
entitling Seller to terminate this Agreement.
16.18. Time of the Essence. Time is of the essence of this Agreement.
16.19. Use of Proceeds to Clear Title. To enable Seller to make
conveyance as herein provided, Seller may, at the time of Closing, use the
purchase price or any portion thereof to clear the title of any or all
encumbrances or interests, provided that provision reasonably satisfactory to
Purchaser's attorney and Purchaser's title insurer is
26
made for prompt recording of all instruments so procured in accordance with
conveyance practice in the jurisdiction in which the Property is located.
16.20. Local Improvement District Disclosure. Purchaser hereby
acknowledges that the Property may be located in a so-called "Local Improvement
District," ("LID") as identified by the City of Portland Office of
Transportation. Seller and Purchaser agree that, regarding the LID, any
payments, expenses, or other costs assessed against the Property will be
prorated at Closing, with Seller paying only those payments, expenses, or other
costs assessed against the Property prior to Closing. Seller shall bear no
responsibility for compliance with any and all laws and regulations relating to
the LID, including but not limited to any related payments, expenses, or other
costs assessed against the property subsequent to the Closing, and any and all
such compliance, including payment of installments shall be the sole
responsibility of Purchaser.
16.21. Oregon Revised Statute 93.040.
(a) THE PROPERTY DESCRIBED IN THIS INSTRUMENT MAY NOT BE WITHIN A FIRE
PROTECTION DISTRICT PROTECTING STRUCTURES. THE PROPERTY IS SUBJECT TO LAND USE
LAWS AND REGULATIONS THAT, IN FARM OR FOREST ZONES, MAY NOT AUTHORIZE
CONSTRUCTION OR SITING OF A RESIDENCE AND THAT LIMIT LAWSUITS AGAINST FARMING OR
FOREST PRACTICES AS DEFINED IN ORS 30.930 IN ALL ZONES. BEFORE SIGNING OR
ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE TITLE SHOULD INQUIRE
ABOUT THE PERSON'S RIGHTS, IF ANY, UNDER ORS 197.352. BEFORE SIGNING OR
ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD
CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED
USES, THE EXISTENCE OF FIRE PROTECTION FOR STRUCTURES AND THE RIGHTS OF
NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS 197.352.
(b) THE PROPERTY DESCRIBED IN THIS INSTRUMENT IS SUBJECT TO SPECIAL
ASSESSMENT UNDER ORS 358.505. ORS 358.515 REQUIRES NOTIFICATION TO THE STATE
HISTORIC PRESERVATION OFFICER OF SALE OR TRANSFER OF THIS PROPERTY.
[SIGNATURES COMMENCE ON FOLLOWING PAGE]
27
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the Effective Date first set forth above.
WITNESS PORTLAND LOFTS ASSOCIATES LP
By: HISTORIC PRESERVATION PROPERTIES
----------------------- 1989 LIMITED PARTNERSHIP, as General
Partner
By: Boston Historic Partners Limited
Partnership, its General Partner
By: Portfolio Advisory Services, Inc.
its General Partner
By: /s/ Xxxxxxxx X. Xxxxxxxx
---------------------------
Xxxxxxxx X. Xxxxxxxx, President
and
By:
---------------------------------
Xxxxxxxx X. Xxxxxxxx
its General Partner
Seller's Tax I.D. Number for Escrow
00-0000000
WITNESS By: PORTLAND LOFTS APARTMENTS, LLC, a
Delaware limited liability company
By: HISTORIC PRESERVATION PROPERTIES
----------------------- 1989 LIMITED PARTNERSHIP, Member
By: Boston Historic Partners Limited
Partnership, General Partner
By: Portfolio Advisory Services, Inc.
By: /s/ Xxxxxxxx X. Xxxxxxxx
----------------------------
Xxxxxxxx X. Xxxxxxxx
President
and
By: /s/ Xxxxxxxx X. Xxxxxxxx
---------------------------------------
Xxxxxxxx X. Xxxxxxxx, General Partner
28
WITNESS HISTORIC PRESERVATION PROPERTIES
1989 LIMITED PARTNERSHIP
By: Boston Historic Partners Limited Partnership,
----------------------- its General Partner
By: Portfolio Advisory Services, Inc.
its General Partner
By:
---------------------------------
Xxxxxxxx X. Xxxxxxxx, President
and
By: -------------------------------------
Xxxxxxxx X. Xxxxxxxx
its General Partner
WITNESS BOSTON HISTORIC PARTNERS LIMITED
PARTNERSHIP
By: Portfolio Advisory Services, Inc.
----------------------- its General Partner
By:
-------------------------------------
Xxxxxxxx X. Xxxxxxxx, President
and
By:
--------------------------------------
Xxxxxxxx X. Xxxxxxxx
its General Partner
29
WITNESS SP/XXXXXXXX LLC
By:
--------------------------- --------------------------------
Its:
--------------------------------
Purchaser's Tax I.D. Number for Escrow
--------------------------------------
WITNESS EQUITY RESOURCE INVESTMENTS LLC
By:
--------------------------- --------------------------------
Its:
--------------------------------
30
The Escrow Agent hereby executes this Agreement for the sole purpose of
acknowledging receipt of the Deposit and its responsibilities hereunder and to
evidence its consent to serve as Escrow Agent in accordance with the terms of
this Agreement.
ESCROW AGENT:
LAWYERS TITLE INSURANCE CORPORATION
By:
------------------------------------
Its:
-----------------------------------
Date: April 14, 2006
31
EXHIBIT A
LEGAL DESCRIPTION
Parcel I
Xxxx 0, 0, 0 xxx 0, Xxxxx 73, COUCH'S ADDITION TO THE CITY OF PORTLAND, in the
City of Portland, County of Multnomah and State of Oregon.
Parcel II
Xxxx 0, 0, 0 xxx 0, Xxxxx 73, COUCH'S ADDITION TO THE CITY OF PORTLAND, in the
City of Portland, County of Multnomah and State of Oregon.
32
EXHIBIT B
PERSONAL PROPERTY LIST
33
EXHIBIT C
RENT ROLL
34
EXHIBIT C-1
COMMERCIAL LEASES, INCLUDING DATES AND AMENDMENTS THERETO
[LIST TO BE PROVIDED BY SELLER ON OR BEFORE APRIL 21, 2006]
35
EXHIBIT D
DUE DILIGENCE MEMO
36
EXHIBIT E
CONTRACTS
37
