PURCHASE AND SALE AGREEMENT
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Villa Americana Apartments
Houston, Texas
THIS PURCHASE AND SALE AGREEMENT ("Agreement"), is made and entered
into on the Effective Date as provided in Section 18 hereof upon the terms and
conditions hereinafter set forth, by and between VILLA AMERICANA ASSOCIATES,
LTD., a Texas limited partnership ("Seller"), and HOMES FOR AMERICA HOLDINGS,
INC., a Nevada corporation ("Purchaser").
PRELIMINARY STATEMENT
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Subject to the terms and conditions of this Agreement, Seller has
agreed to sell to Purchaser and Purchaser has agreed to purchase from Seller,
certain real property located in Xxxxxx County, Texas, more fully described on
Exhibit "A" attached hereto, together with all and singular, the rights, air
rights, easements, rights-of-way, tenements and hereditaments appertaining
thereto, including any right, title or interest of Seller in and to adjacent
streets, easements, privileges, alleys or rights-of-way now or hereafter
belonging to or inuring to the benefit of the land, and all buildings,
structures and other improvements erected or placed thereon, known as "Villa
Americana Apartments", 5901 Selinsky, Houston, Xxxxxx Xxxxxx, Xxxxx 00000
(collectively, the "Real Property"), together with certain other assets more
fully hereinafter described.
AGREEMENTS
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NOW, THEREFORE, in consideration of the Purchase Price (as hereinafter
defined), the mutual covenants and agreements of the parties set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
1. Assets To Be Purchased. Subject to the terms and conditions of this
Agreement, Seller shall sell, convey, transfer, assign and deliver to Purchaser,
and Purchaser shall purchase, acquire, take and accept from Seller, each of the
following (collectively, the "Conveyed Assets"):
(a) the Real Property;
(b) all furniture, furnishings, fixtures, equipment and other
personal property, tangible or intangible, and all interests in personal
property, owned by Seller, situated on or in or attached to or located at the
Real Property and used in connection with Seller's operation or maintenance of
the Real Property (collectively, the "Personal Property"; the Real Property and
the Personal Property are sometimes, collectively, referred to herein as the
"Premises");
(c) all Seller's interest in all residency agreements, leases,
tenancies and occupancy arrangements relating to the Premises (collectively, the
"Leases"), all prepaid rents (collectively, the "Prepaid Rents") and all
deposits, whether security, damage or otherwise (collectively, the "Deposits"),
paid by residents (collectively, the "Residents") holding under the Leases;
(d) the right to use the name "Villa Americana Apartments" to
the extent Seller has the right to use such name, and all of Seller's interest,
if any, in all other names, logos, designs, slogans and trademarks used in
connection with the Premises and its operations, except Seller's name, the name
of any affiliate of Seller or any derivations of any one, or more or all of them
(collectively, the "Trade Name");
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(e) all books and records, rent rolls, Resident lists,
applications and credit files pertaining to Seller's operation or maintenance of
the Premises (collectively, the "Operating Records");
(f) all of Seller's interest in that certain Housing
Assistance Payments Contract between the U.S. Department of Housing and Urban
Development ("HUD") and Seller relating to an aggregate of 258 units at the Real
Property (the "HAP Contract"), subject to the provisions of Section 4.(d)
hereof; a copy of the HAP Contract, marked Exhibit "B" is attached hereto;
(g) all of Seller's interest in any and all service contracts,
maintenance agreements and other similar contracts affecting the operation or
maintenance of the Premises (collectively, the "Contracts"); and
(h) warranties and guarantees claims (if any) under or with
respect to the Contracts or the Personal Property, or with respect to any
construction of or repairs to the Premises or any part thereof;
provided, however, that in no event shall the Conveyed Assets include (i) any of
Seller's cash in any Seller bank account; (ii) cash or securities in any of
Seller's escrow or impound accounts for or relating to the Real Property,
including, but not limited to, the reserve for replacements for the Premises and
the escrows or impounds for ad valorem real estate taxes, insurance, residual
receipts and interior and/or exterior painting; (iii) xxxxx cash of the
Premises; (iv) accounts receivable; and (v) partnership records.
2. Purchase Price; Escrow Agent.
(a) The total purchase price for the Conveyed Assets shall be
the sum of EIGHT MILLION SIX HUNDRED FIFTEEN THOUSAND AND NO/100 DOLLARS
($8,615,000.) (the "Purchase Price"), subject to the prorations, adjustments and
credits hereinafter provided for in this Agreement, payable as follows:
(i) The sum of TWENTY-FIVE THOUSAND AND NO/100 DOLLARS
($25,000.) (the "Xxxxxxx Money Deposit"), shall be paid to Lawyers Title
Insurance Corporation ("Title Company"), 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxxxx, Xxxxx 00000, Attention: Xxxx Xxxxxxx, Senior Vice President (the Title
Company in such capacity, the "Xxxxxxx Money Escrow Agent"), within two (2)
business days following the due execution of this Agreement by Seller and by
Purchaser and delivery of the fully signed Agreement to Title Company, via
priority overnight carrier service, to be deposited into and held, in escrow, by
the Xxxxxxx Money Escrow Agent, in one or more fully federally insured,
interest-bearing special escrow accounts and applied in accordance with the
terms of this Agreement. Within two (2) business days after the end of the
Inspection Period, unless this Agreement has been terminated pursuant to the
terms hereof, Purchaser shall increase the Xxxxxxx Money Deposit by depositing
with the Xxxxxxx Money Escrow Agent the additional sum of SEVENTY FIVE THOUSAND
AND NO/100 DOLLARS ($75,000); thereafter the phrase "Xxxxxxx Money Deposit"
shall mean and refer to the total ONE HUNDRED THOUSAND AND NO/100 DOLLARS
($100,000) deposited with the Xxxxxxx Money Escrow Agent. If this Agreement has
not been terminated pursuant to the terms hereof and Purchaser fails to timely
increase the Xxxxxxx Money Deposit, as above provided, then Seller shall have
the right to terminate this Agreement by written notice to Seller. If Seller
elects to terminate this Agreement, the Xxxxxxx Money Deposit shall be paid to
Seller as liquidated damages and not as a penalty by Xxxxxxx Money Escrow Agent
and the parties shall have no further rights, duties or obligations hereunder
(except as otherwise expressly provided in this Agreement). For all purposes of
such deposit or deposits, Purchaser's T.I.N. is 00-0000000.
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(ii) The balance of the Purchase Price, namely, EIGHT
MILLION FIVE HUNDRED FIFTEEN THOUSAND AND NO/100 DOLLARS ($8,515,000.), or such
other balance as shall remain after the prorations, adjustments and credits in
accordance with this Agreement, shall be paid to Seller by Purchaser, at
Closing, by federal funds wire transfer or other immediately available wire
ready funds.
(b) At Closing (hereinafter defined), the Xxxxxxx Money
Deposit shall be applied, dollar for dollar, toward the Purchase Price due at
Closing. Purchaser, at its option, may elect for the Xxxxxxx Money Deposit not
to be applied toward the Purchase Price at Closing in which event after receipt
of the full Purchase Price at Closing, paid as aforesaid, the Xxxxxxx Money
Deposit shall be returned to Purchaser by the Xxxxxxx Money Escrow Agent. In the
event that there is no Closing of the transactions contemplated by this
Agreement, the Xxxxxxx Money Escrow Agent shall release and pay over, in
accordance with the provisions of this Agreement, the Xxxxxxx Money Deposit
previously deposited with the Xxxxxxx Money Escrow Agent and held in escrow
hereunder in accordance with the provisions of this Agreement. References herein
to the "Xxxxxxx Money Deposit" shall, for all purposes hereof, also be deemed to
include all interest earned thereon. Upon due compliance with the provisions
hereof relating to the Xxxxxxx Money Deposit, the Xxxxxxx Money Escrow Agent
shall have no further obligations or liability to any party hereto with regard
to the Xxxxxxx Money Deposit.
(c) With the exception of the Permitted Encumbrances (defined
in Subsection 3.(c) hereof) and the HAP Contract (Exhibit "B"), there shall be
no lien indebtedness or other debt, mortgage, encumbrance or obligation
encumbering the Conveyed Assets, or any part thereof, at the consummation of the
Closing herein; provided, however, that should any such lien indebtedness or
other debt, mortgage, encumbrance or obligation exist against the Conveyed
Assets, to and including the Closing Date herein, the same shall be paid by
Seller and discharged or released at the Closing and shall not appear as an
exclusion from the title insurance policy coverage to be provided in the Owner
Policy of Title Insurance pursuant to Subsection 3.(a) hereof.
3. Title Commitment/Policy; Survey.
(a) Within seven (7) days after the Effective Date, Seller
shall, at its sole cost and expense, furnish to Purchaser a title commitment,
issued by Title Company, committing to issue to Purchaser an Owner Policy of
Title Insurance (the "Owner Title Policy") with respect to the Real Property,
dated after the Effective Date hereof (the "Title Commitment"), in the full
amount of the Purchase Price, showing fee simple title to the Real Property to
be vested in Seller and setting forth the state of title of the Real Property
and all exceptions, if any, affecting the Real Property which would appear in
such Owner Title Policy, when issued, accompanied by true and exact, legible
hard copies of all such exceptions noted in the Title Commitment (the "Title
Exception Documents"). The cost of the premium for the Owner Title Policy to be
issued pursuant thereto shall be paid fifty percent (50%) by Seller and fifty
percent (50%) by Purchaser.
(b) Purchaser shall, forthwith, cause an accurate survey of
the Real Property to be made, at Purchaser's expense, by a Texas Registered
Public Surveyor, containing a surveyor's certificate reasonably satisfactory to
the Title Company, describing the Real Property by metes and bounds and
depicting the dimensions and locations of all improvements, parking areas,
easements (if any), adjoining streets, means of access to public ways,
encroachments, protrusions or any other types of visible encumbrances or
impediments and other matters as may be reasonably required by Purchaser (the
"Survey"). The Survey shall be certified to Purchaser, to Seller and to the
Title Company. At Closing, and only if the Closing is consummated, Seller will
reimburse Purchaser for the cost of the Survey, up to an aggregate amount not to
exceed Two Thousand Five Hundred and No/100 Dollars ($2,500.).
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(c) If the Title Commitment, the Title Exception Documents or
the Survey contain any exceptions or other matters that are not acceptable to
Purchaser, then Purchaser shall notify Seller, in writing, of such unacceptable
exceptions or matters within the first to occur in point of time of twenty-one
(21) days after the Effective Date or seven (7) days after Purchaser's receipt
of the Title Commitment, the Title Exception Documents and the Survey
("Purchaser's Exception Period" and any such exceptions or matters of which
Purchaser gives Seller written notice within such Purchaser's Exception Period
are herein referred to as the "Unauthorized Exceptions"). Any exceptions to
which Purchaser does not object within such Purchaser's Exception Period shall
constitute "Permitted Encumbrances" hereunder, and Purchaser shall be deemed to
have waived its right to object thereto.
(d) Seller shall have five (5) days after its receipt of
Purchaser's written notice of Unauthorized Exceptions to notify Purchaser of any
Unauthorized Exceptions that Seller will agree to cure at or prior to the
Closing. Commencing upon the earlier of (x) Purchaser's receipt of such notice
from Seller, or (y) the expiration of said five (5) day period, Purchaser shall
have ten (10) days to elect either to: (i) terminate this Agreement by written
notice to Seller, without any liability on its part, in which event, the parties
hereto shall have no further rights duties or obligations hereunder (except as
otherwise expressly provided in this Agreement), and all Xxxxxxx Money Deposit
previously delivered by Purchaser to Xxxxxxx Money Escrow Agent shall be
promptly returned by the Xxxxxxx Money Escrow Agent to Purchaser; or (ii) accept
title to the Real Property subject only to the Permitted Encumbrances and such
Unauthorized Exceptions as Seller has not agreed to cure, without reduction in
the amount of the Purchase Price, in which event, such Unauthorized Exceptions
shall be deemed to be Permitted Encumbrances hereunder. In the event that
Purchaser fails to elect to take title to the Real Property in accordance with
clause (ii) above by giving written notice to Seller within the five (5) day
period aforesaid, Purchaser shall be deemed to have elected to terminate this
Agreement in accordance with the terms of clause (i) above. At or prior to the
Closing, Seller shall cure the Unauthorized Exceptions that Seller has notified
Purchaser in writing that Seller will cure.
4. Furnishing of Information; Conditions to Closing.
(a) As soon as possible, but in any event within seven (7)
days after the Effective Date, Seller shall make available to Purchaser, for
Purchaser's examination, the following information and materials relating to the
Real Property (collectively, the "Due Diligence Materials"):
(i) Plans, drawings, specifications and engineering and
architectural studies and work (including "as built" plans and drawings, if any)
with regard to the Real Property to the extent reasonably available and under
Seller's control;
(ii) Copies of inspection reports of the physical
condition of the Premises for calendar years 1997, 1998 and 1999, year-to-date,
from HUD, from the present mortgagee, if any, or from any one or more
governmental agencies or authorities, federal, state, county, city or otherwise,
having or asserting jurisdiction over all or any part of the Premises, including
fire or safety of the Premises and/or the Residents, to the extent the foregoing
are reasonably available and under Seller's control;
(iii) The annual operating statements for the Premises
for the calendar years 1997, 1998 and 1999, year-to-date, each showing income,
expenses and capital expenditures relating to the Premises (itemized in the form
of the HUD chart of accounts) and a copy of the current payroll for employees;
(iv)All existing Leases and any amendments thereto;
(v) A current rent roll for the Premises setting forth,
for each Lease and Resident, (a) the portion of the Premises occupied by such
Resident, (b) the rent payable under such Lease, and (c) information regarding
the amount and status of Deposits and Prepaid Rents, if any;
(vi) Contracts and any amendments or proposed amendments
thereto;
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(vii) Copies of all real estate and personal property
tax bills for 1996, 1997 and 1998; and copies of all notices of assessments, if
any;
(viii) Copies of all licenses, permits, authorizations
or approvals for the Premises and for its present use and occupancy, to the
extent reasonably available and under Seller's control;
(ix) Copies of Seller's existing title insurance policy
and survey of the Real Property;
(x) Copies of Seller's current sales and marketing
brochures for the Premises, if any, in Seller's possession; and
(xi) Copies of any and all environmental reports,
studies, and notices related to the Premises, in Seller's possession.
In the event that the transactions contemplated by this Agreement shall fail to
close for any reason, or in the event that this Agreement is terminated for any
reason, then all Due Diligence Materials and all copies thereof, in Purchaser's
possession or under Purchaser's control, shall be promptly returned to Seller,
and Purchaser at all times shall keep the same and all other written information
that Seller shall have provided to Purchaser relating to the Property in strict
confidence. References in this Agreement to "strict confidence" shall be read to
allow the Purchaser to deliver the Due Diligence Materials, or excerpts or
summaries thereof, to its counsel, surveyor, environmental consultant, and other
professional advisers, as well as its prospective lenders and equity
participants.
(b) From and after the Effective Date, and upon at least
forty-eight (48) hours notice, Seller agrees to allow Purchaser and its agents
access to the Premises at reasonable times and places to make such inspections,
tests and studies as Purchaser, in its sole discretion, may deem necessary or
advisable, including, without limitation, soil borings, engineering and
environmental studies and other physical examinations and testings of the Real
Property; provided, however, that (i) Purchaser and its agents shall neither
disrupt the operation of the Premises nor unreasonably disturb any of the
Residents of the Premises, and (ii) after performing any such tests and
inspections, the Real Property shall, at Purchaser's expense, be returned to the
same condition as it was in prior to the performance of such tests and
inspections. In addition to the Due Diligence Materials, Seller further agrees
to provide Purchaser with access to other of Seller's non-proprietary books,
files and records relative to the Premises, to the extent reasonably available
and under Seller's control, during regular business hours from and after the
Effective Date hereof, upon reasonable prior written notice from Purchaser,
which such notice shall also contain an enumeration of the documents and
information being so requested, and may permit Purchaser to make copies thereof;
provided, however, that Purchaser shall promptly return the same to Seller if
the transactions contemplated by this Agreement fail to close for any reason
whatsoever, and Purchaser at all times shall keep the same in strict confidence.
Purchaser agrees to indemnify and hold Seller harmless from and against any and
all loss, liability and damage of any kind arising out of Purchaser's (or
Purchaser's agents') activities on or about the Premises in connection with any
examinations, inspections or tests performed, unless caused by Seller's gross
negligence or willful misconduct. This indemnity shall survive the Closing
and/or any termination of this Agreement.
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(c) Purchaser's obligations under this Agreement are expressly
conditioned upon Purchaser's inspection and approval of the Premises and of the
Due Diligence Materials (collectively, "Purchaser Due Diligence Approval").
Purchaser shall have forty-five (45) days after the Effective Date (the
"Inspection Period") within which to examine same and to make its tests, studies
and inspections of the Premises. If Purchaser, in Purchaser's sole discretion,
finds the Premises or any of the Due Diligence Materials to be unacceptable,
then Purchaser may terminate this Agreement by so notifying Seller on or before
5:00 p.m., Houston, Texas time, on or before the last day of the Inspection
Period, in which event the parties hereto shall have no further duties, rights
or obligations hereunder (except as otherwise expressly provided in this
Agreement), and Xxxxxxx Money Escrow Agent shall promptly return the Xxxxxxx
Money Deposit to Purchaser. If Purchaser fails to notify Seller in writing of
Purchaser's disapproval of the Premises or of the Due Diligence Materials within
the Inspection Period, Purchaser will be deemed to have given its Purchaser Due
Diligence Approval.
(d) Purchaser's and Seller's obligations under this Agreement
are each expressly conditioned upon Purchaser and Seller having obtained, within
ninety (90) days after the Effective Date, all required HUD prior written
consents and approvals for the transactions contemplated by the Agreement,
including, but not limited to (i) the sale, assignment, conveyance or transfer
of the HAP Contract; (ii) the sale, assignment, conveyance or transfer of the
Real Property; (iii) if applicable, the assignment of the HAP Contract by
Purchaser (at Closing) as security for the purpose of obtaining financing of the
Real Property; and (iv) any other required HUD consents and approvals, for
example, the management of the Real Property (collectively, the "HUD Required
Prior Consents").
Purchaser shall proceed diligently to prepare and complete all
documents, information and exhibits as shall be necessary to obtain the HUD
Required Prior Consents and deliver the same to Seller within ten (10) business
days after the Effective Date for Seller submission to HUD, as required by the
HAP Contract, within ten (10) business days after Seller's timely receipt from
Purchaser of all such documents, information and exhibits required by HUD for
such purpose. After the submission to HUD, Purchaser and Seller shall, with
reasonable diligence, cooperate with each other and expeditiously prepare or
obtain all such additional documents, information and exhibits as HUD may
reasonably require during its review and processing of the request for the HUD
Required Prior Consents for delivery to Seller and the submission thereof to
HUD, by Seller.
If the HUD Required Prior Consents is not obtained with ninety
(90) days after the Effective Date, the time provided for the obtaining of such
HUD Required Prior Consents may be extended by either Seller or Purchaser, upon
written notice to the other, in each instance, for up to three (3) additional
consecutive fifteen (15)-day periods if HUD has not yet issued the requisite HUD
Required Prior Consents and HUD is still processing the same (collectively, the
"HUD Approval Time Extensions" and, singularly, a "15-Day HUD Approval Time
Extension"). The HUD Approval Time Extensions shall not extend the Inspection
Period.
If the HUD Required Prior Consents, are not timely obtained,
as aforesaid, within ninety (90) days after the Effective Date and of any 15-Day
HUD Approval Time Extension or of the HUD Approval Time Extensions that either
or both of the parties hereto may elect to assert, either Purchaser or Seller
may terminate this Agreement, upon written notice to the other, in which event,
the parties hereto shall have no further duties, rights or obligations hereunder
(except as otherwise expressly provided in this Agreement), and Xxxxxxx Money
Escrow Agent shall promptly return the Xxxxxxx Money Deposit to Purchaser. For
all purposes of this Agreement, the condition precedent relating to the HUD
Required Prior Consents cannot be waived.
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(e) Purchaser's obligation to close under this Agreement are
also expressly conditioned upon (i) the representations and warranties of Seller
set forth in Section 6 hereof shall be true on the Effective Date and on the
Closing Date as if made at such date; (ii) there shall be no change in the
zoning classification in place for the Premises as of the last day of the
Inspection Period; (iii) there shall be no change in the condition of the title
of the Premises from that shown in the Title Commitment and in the Survey, each
as approved by Purchaser pursuant to Section 3 hereof; and (iv) there shall be
no outstanding violations as determined by the appropriate governmental agencies
or authorities, federal, state, county, city or otherwise, having or asserting
jurisdiction over the Premises relating to the Premises or its present
operations or fire or safety of the Premises and/or the Residents materially
affecting the continuing present operations of the Premises that, in each case,
first arose after the expiration of the Inspection Period and Purchaser had
received no written notice thereof prior to the expiration of the Inspection
Period; provided, however, Seller shall have the right, but not the obligation,
to attempt to cure any such violation of which it receives notice for up to
thirty (30) days, and so long as Seller is proceeding in good faith to cure such
violation, Purchaser shall not be permitted to terminate this Agreement during
this thirty (30) day period; and (v) Purchaser shall receive from Seller written
confirmation duly executed by Seller's managing agent for the Premises that the
management agreement between Seller and Seller's management agent has, at
Purchaser's option and written direction to Seller so to do, been terminated
effective as of the Closing Date.
If one or more of the conditions precedent to Purchaser's
obligation to close hereunder, as set forth in Subsections (i) through (v),
inclusive, of this Subsection 4.(e) hereof, has not been satisfied on or before
the Closing Date hereunder, Purchaser shall have the option of: (i) waiving its
condition precedent and closing in accordance with the terms of this Agreement;
(ii) canceling this Agreement, by written notice to Seller, given on or before
the Closing Date ("Purchaser's Cancellation Right"); or (iii) delaying the
Closing Date from time to time for a period not to exceed thirty (30)
consecutive days to give Seller an additional opportunity to satisfy such
conditions. In the event Purchaser exercises its Purchaser's Cancellation Right
in accordance with the foregoing, Xxxxxxx Money Escrow Agent shall deliver to
Purchaser the Xxxxxxx Money Deposit and this Agreement shall thereupon terminate
and Seller and Purchaser shall be released from any further duties, rights or
obligations hereunder (except as otherwise expressly provided in this
Agreement). If Purchaser does not timely exercise Purchaser's Cancellation
Right, Purchaser shall be deemed to have waived its aforesaid conditions
precedent.
(f) Assuming Purchaser has approved the condition of the
Premises and of the Due Diligence Materials, Seller's obligations under this
Agreement are also expressly conditioned upon (i) the representations and
warranties of Purchaser set forth in Section 7 hereof shall be true on the
Closing Date as if made at such date; (ii) timely issuance by HUD and the
receipt by Seller of the HUD Required Prior Consents; (iii) HUD's prior written
confirmation and the receipt thereof by Seller of compliance with all applicable
provisions of Public Law 105-276 enacted by the Congress of the United States
and signed into law by President Clinton on October 21, 1998, and the HUD rules
and regulations, if any, applicable thereto, clarifying the owner's right to
prepay its mortgage, including, but not limited to, the requirement of not less
than one hundred fifty (150) days but not more than two hundred seventy (270)
days prepayment notice to HUD and to others, as therein specified, and the
statutory mandate that prepayment can be made only if the owner of the project
involved agrees not to increase the rent charges for any dwelling unit in the
project during the sixty (60)-day period beginning upon such prepayment
(collectively, "Compliance With Public Law"); and (iv) Purchaser's written
agreement to accept and be bound by the Compliance With Public Law ("Purchaser's
Acceptance of Public Law Compliance"). If Seller, after reasonable effort, has
not timely received from HUD, the HUD Required Prior Written Consents and the
HUD written confirmation of Compliance With Public Law and from Purchaser, the
timely delivery of the Purchaser's Acceptance of Public Law Compliance, Seller
may terminate this Agreement upon written notice to Purchaser. Upon such
termination by Seller, Xxxxxxx Money Escrow Agent shall deliver to Purchaser,
within five (5) days thereafter, the Xxxxxxx Money Deposit and this Agreement
shall thereupon terminate and Seller and Purchaser shall be released from any
further duties, rights or obligations hereunder (except as otherwise expressly
provided in this Agreement). Seller shall have the right to waive receipt of HUD
written confirmation of Compliance with Public Law and Purchaser's Acceptance of
Public Law Compliance.
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5. Control of Premises; Condemnation; Casualty Loss.
(a) Until Closing, Seller shall have the full responsibility
and the entire liability for any and all damage or injury of any kind whatsoever
to the Premises and any and all persons (whether Residents, employees or
otherwise) injured at or from activities on the Premises, except for Purchaser's
obligation to indemnify Seller pursuant to Subsection 4.(b) hereof. Prior to
Closing, Seller agrees to (i) manage, operate and maintain the Premises in a
manner substantially consistent with its prior operation and management thereof
and otherwise in accordance with the terms hereof, (ii) maintain in full force
and effect all insurance policies relating to the Premises which are in force on
the Effective Date and (iii) except as may be necessary to cure Unauthorized
Exceptions, from the Effective Date hereof to the Closing Date Seller shall not
voluntarily cause or permit any negative change in the status of title to the
Property.
(b) If, at any time prior to Closing, Seller has actual
knowledge that the Premises (or any part thereof) are threatened with
condemnation, or legal proceedings are commenced under the power of eminent
domain, Seller shall promptly notify Purchaser of such fact, in writing, and
furnish to Purchaser full copies of all pleadings, correspondence and other
documents and data pertaining thereto. Purchaser shall have the option,
exercisable within ten (10) days after its receipt of written notice from Seller
of the threat or pendency of any such proceedings and the aforesaid copies of
documents and information, to terminate this Agreement or to proceed with the
Closing. If Purchaser fails to give Seller written notice of its election to
proceed with the Closing within said ten (10) day period, Purchaser shall be
deemed to have elected to terminate this Agreement. If Purchaser elects to
terminate this Agreement, the Xxxxxxx Money Deposit shall be returned to
Purchaser by Xxxxxxx Money Escrow Agent and the parties shall have no further
rights, duties or obligations hereunder (except as otherwise expressly provided
in this Agreement). If Purchaser elects to proceed with the Closing, it shall be
obligated to do so without a reduction in the amount of the Purchase Price, but
Purchaser shall be entitled to any and all awards payable to Seller as a result
of such condemnation or eminent domain proceedings, and Seller shall assign to
Purchaser all of Seller's rights to all such awards at Closing.
(c) If, prior to Closing, the Premises (or any part thereof)
are destroyed or substantially damaged, Seller shall promptly give Purchaser
written notice of such destruction or damage and Purchaser shall have the
option, exercisable, in writing, within ten (10) days after its receipt of such
notice, to terminate this Agreement or to proceed with the Closing. If Purchaser
fails to give Seller written notice of its election to proceed with the Closing
within said ten (10) day period, Purchaser shall be deemed to have elected to
terminate this Agreement. If Purchaser elects to terminate this Agreement, the
Xxxxxxx Money Deposit shall be returned to Purchaser by Xxxxxxx Money Escrow
Agent and the parties shall have no further rights, duties or obligations
hereunder (except as otherwise expressly provided in this Agreement). If
Purchaser elects to proceed with the Closing or if the damage to the Premises is
not substantial (as defined below), Purchaser shall be obligated to proceed with
the Closing without a reduction in the amount of the Purchase Price (except as
otherwise expressly provided herein). But Purchaser shall be entitled to any
insurance proceeds payable by insurance companies to Seller as a result of such
damage (whether or not substantial) and Seller shall assign to Purchaser all of
Seller's rights to such proceeds at Closing. The Purchaser shall, at Closing,
receive a credit on the Purchase Price for the amount of any "deductible" under
such insurance policy. Seller agrees to assist and cooperate with Purchaser in
collecting the insurance proceeds.
(d) For the purposes of this Section 5, destruction or damage
to the Premises shall be deemed "substantial" only if the loss in question
exceeds five percent (5%) of the Purchase Price pursuant to written estimate of
the actual cost for repair and restoration obtained by Seller from a reputable
contractor or from a public insurance adjusting firm, and reasonably
satisfactory to Purchaser.
6. Representations and Warranties of Seller.
(a) Seller hereby represents and warrants to Purchaser the
following:
Page - 8
(i) Seller is a Texas limited partnership, duly
organized, validly existing and in good standing under the laws of the State of
Texas; is duly authorized and qualified under the laws of the State of Texas to
own, to operate and to sell the Real Property and to transact the business it
transacts; has full power and authority to execute and deliver this Agreement
for the transaction contemplated hereby; and upon such execution by its General
Partner, this Agreement shall be valid, binding and, upon issuance of the
consents described in Subsections 4.(d) and 4.(f) above, enforceable against
Seller in accordance with its terms.
(ii) To Seller's knowledge, there is no condemnation
or similar proceeding or action presently pending or threatened with respect to
the Premises.
(iii) To Seller's knowledge, there are no actions, suits
proceedings or regulatory investigations instituted or threatened, in writing,
by any person or entity either against or the Seller, or both, affecting the
Premises or Seller's title thereto before any federal, state, municipal or other
governmental authority nor does Seller have reasonable grounds to know of any
basis for such actions, suits, proceedings or investigations.
(iv) Upon issuance of the consents described in
Subsections 4.(d) and 4.(f) above, Seller will have the legal right and all
requisite power and authority to complete the transactions contemplated herein
and this Agreement shall thereupon be valid, binding and enforceable against
Seller, in accordance with its terms.
(v) Seller has received no written notice within the
past twenty-four (24) months from any governmental authority of non-compliance
by the Premises or its operations, with any statute, rule or regulation of Texas
or any other governmental authority, federal, county, city or otherwise, having
or asserting jurisdiction (which non-compliance, if any, has not been cured).
(vi) Items (iii), (iv), (v) and (vi) of the Due
Diligence Materials are true and correct, in all material respects, as of the
dates set forth thereon, in writing.
(vii) The consummation of the transaction contemplated
by this Agreement and the performance of the obligations of Seller under this
Agreement, upon issuance of the consents described in Subsection 4.(d) and 4.(f)
above, will not be in conflict with, result in any breach of or constitute a
default under, any mortgage, security deed or agreement, deed of trust, lease,
bank loan or credit agreement, license, franchise, or any other instrument or
agreement to which Seller is a party or by which Seller may be bound or
affected.
(viii) Except as otherwise disclosed in writing to
Purchaser by those documents related to the environmental condition of the
Premises produced with the Due Diligence Materials which represent all of the
environmental reports and documents applicable to the Property and known to
Seller, and incorporated herein by reference, to Seller's knowledge there are in
existence at the Property no "hazardous wastes" as that term is defined in the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Resources, the Compensation and Liability Act, or any other applicable law or
code, or the regulations issued pursuant thereto by either the Federal
Environmental Protection Agency or any state or local agency or authority
exercising jurisdiction over the Property. Seller is not a generator of any such
hazardous wastes, and is in full compliance with all hazardous waste emissions,
reporting, and removal requirements imposed by applicable law.
(ix) The person executing this Agreement on behalf of
Seller represents and warrant that he or she is an officer, representative, or
partner of Seller, has been duly authorized by Seller to execute this Agreement,
and has full power and authority to execute the same on behalf of Seller.
(x) On the Closing Date, there will be no management,
service, maintenance, employment, or other similar contracts affecting the
Property which are not terminable at will without penalty, other than the
Contracts.
Page - 9
(b) Except for the express representations and warranties of
Seller set forth in Subsection 6.(a) above, the Conveyed Assets are being sold
on an "AS IS - WHERE IS" condition and with "ALL FAULTS". Except as specifically
and expressly set forth in this Agreement, no representations or warranties have
been made or are made and no responsibility is assumed by Seller or by any
officer, director, general partner or limited partner, officer or director of
any corporate general or limited partner, beneficiary, affiliate, person, firm,
agent or representative acting or purporting to act on behalf of Seller as to
(i) the condition or state of repair or utility of the Conveyed Assets, (ii) the
value or income potential thereof, or (iii) any other fact or condition which
has or could affect the Conveyed Assets or the condition, repair, value or
income potential of the Conveyed Assets or any portion thereof, including,
without limitation, with respect to any environmental matters which could affect
the Conveyed Assets. Purchaser waives any rights to contribution for
environmental matters it may now or hereafter have, whether under the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
Section 9601, et seq.), or otherwise, but such waiver shall not apply to
environmental matters materially caused by Seller or to any such matters of
which Seller has knowledge. Except as specifically and expressly set forth in
Section 6.(a)(vi) of this Agreement, Seller shall have no liability for the
accuracy of any matters, facts or data reflected in the Due Diligence Items. The
parties acknowledge and agree that all understandings and agreements heretofore
made between them or their respective agents or representatives regarding the
purchase and sale of the Conveyed Assets are merged into this Agreement, which,
alone, fully and completely expresses their agreement and that neither party is
relying upon any statement, promise or representation by the other unless such
statement, promise or representation is specifically and expressly set forth in
this Agreement.
(c) The knowledge which Seller's on-site management agent and
on-site employees shall not be imputed to Seller.
7. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller, the following:
(a) Purchaser is a Nevada corporation, duly organized, validly
existing and in good standing under the laws of the State of Nevada; shall be
authorized prior to the Closing hereunder, to transact business in Texas; has
full power and authority to make, execute and deliver this Agreement and to
consummate the transaction contemplated hereby; and upon such execution by one
of its corporate officers, duly authorized, this Agreement shall be valid,
binding and, upon issuance of the consents described in Subsections 4.(d) and
4.(f) above, enforceable against Purchaser in accordance with its terms.
Purchaser's duly authorized officer has executed this Agreement as the act of
Purchaser with all required consents and approvals to the sales transaction
which is the subject matter of this Agreement.
(b) To Purchaser's knowledge, there are no actions, suits,
threatened, in writing, by any person or entity, either against or affecting
Purchaser or its members, or both, before any federal, state, municipal or other
governmental authority, affecting Purchaser's right, power, or ability to enter
into and perform and observe its obligations and the terms and conditions of
this Agreement.
(c) The consummation of the transaction contemplated by this
Agreement and the performance of the obligations of Purchaser under this
Agreement, upon issuance of the consents described in Subsections 4.(d) and
4.(f) above, will not be in conflict with, result in any breach of or constitute
a default under, any mortgage, security deed or agreement, deed of trust, lease,
bank loan or credit agreement, license, franchise, or any other instrument or
agreement to which Purchaser is a party or by which Purchaser may be bound or
affected.
Page - 10
8. Closing.
(a) Subject to all terms and conditions of this Agreement, and
unless this Agreement has been sooner terminated pursuant to the provisions
hereof, the Closing hereof shall take place on or before the tenth (10th) day
after the last to occur of (i) the issuance by HUD of all necessary HUD Required
Prior Consents to the transactions contemplated hereby, as described in
Subsection 4.(d) hereof, in which event, the date upon which HUD issues such
consent and approval as described in Subsection 4.(d) shall be utilized herein
for the purpose of this Subsection 8.(a); (ii) Seller having obtained HUD's
prior written confirmation of Compliance With Public Law as described in
Subsection 4.(f)(iii) hereof, in which event, the date upon which HUD issues
such HUD confirmation of compliance as described in Subsection 4.(f) shall be
utilized herein for the purpose of this Subsection 8.(a)(ii); and (iii)
Purchaser, having executed its Purchaser's Acceptance of Public Law Compliance
as described in Subsection 4.(f)(iv) hereof, in which event, the date upon which
Purchaser delivers to Seller such Purchaser Acceptance of Public Law Compliance
shall be utilized herein for the purpose of this Subsection 8.(a)(iii), on a
date acceptable to Seller and Purchaser (the "Closing" or the "Closing Date"),
but in no event, shall the Closing occur later than one hundred sixty (160) days
after the Effective Date. Notwithstanding the foregoing, Seller shall have the
right to waive HUD's prior written confirmation of Compliance with Public Law
and Purchaser's written Acceptance of Public Law Compliance.
It is further agreed that should HUD not timely issue the HUD
Required Prior Consents, or decline so to do, and all reasonable appeals to HUD
for reconsideration and consent or confirmation have been exhausted by Seller,
then in such event, either party hereto shall have the right to cancel this
Agreement by written notice to the other party and upon such happening, the
Xxxxxxx Money Escrow Agent shall deliver to Purchaser the Xxxxxxx Money Deposit
and this Agreement shall thereupon terminate and Seller and Purchaser shall be
released from any further duties, rights or obligations hereunder (except as
otherwise expressly provided in this Agreement). By execution of this Agreement,
Purchaser hereby agrees that if the Closing occurs Purchaser shall not increase
the rent charges for any dwelling unit in the Real Property during the sixty day
period beginning with the prepayment of the existing indebtedness secured by
liens on the Real Property.
(b) The Closing shall take place at the offices of the Title
Company, or at such other location upon which the parties shall mutually agree.
At the Closing, Seller agrees to convey fee simple title to the Real Property to
Purchaser, subject only to the Permitted Encumbrances, by a Special Warranty
Deed (the "Deed"). The legal description of the Premises to be contained in the
Deed shall be identical to the legal description depicted on the Survey.
9. Seller's Obligations at Closing. At or prior to the Closing, Seller
shall:
(a) Execute, acknowledge and deliver the Deed to Purchaser.
(b) Cause the Title Company to delete from the Title
Commitment all exceptions to title disclosed thereby (including the "standard
exceptions" listed thereon, to the extent permitted by the Texas Insurance
Commission, without additional premium, but excluding, however, the Permitted
Encumbrances, matters shown by the Survey, acceptable to Purchaser pursuant to
Subsection 3.(c) hereof, and Residents in possession under the Leases); dated on
the Closing Date, with "gap" coverage; to agree to issue and deliver to
Purchaser the Owner Title Policy conforming to the "down-dated" Title Commitment
as soon as is practicable following the Closing; and a UCC search of the
Personal Property dated as close to the Closing Date as is reasonably
obtainable.
Page - 11
(c) Execute and deliver to Purchaser a Limited Warranty Xxxx
of Sale; an Assignment and Assumption of Leases; and an Assignment and
Assumption of Contracts, each of the foregoing in form and content to be
reasonably agreed upon by counsel for Seller and counsel for Purchaser pursuant
to which, among other things, the Personal Property shall be sold to Purchaser;
the Leases, the HAP Contract and the Contracts shall be assigned and transferred
to Purchaser; and Purchaser shall assume all of Seller's obligations arising
under the Leases, under the HAP Contract and under the Contracts, after the
Closing, in accordance with the terms and provisions of the sale, assignment and
assumption documents.
(d) Deliver to Purchaser originals (or if not available, true
copies) of the Leases, of the HAP Contract and of the Contracts and, to the
extent available and under Seller's control, all plans and specifications
relating to the Premises and the Operating Records for the Premises.
(e) Deliver to Title Company copies of resolutions or other
proceedings of Seller and/or the general partner thereof, as the Title Company
may reasonably require, authorizing the execution and delivery of this
Agreement, the Deed, the Limited Warranty Xxxx of Sale and the other documents
required to be executed and delivered by Seller hereunder, copies of limited
partnership documents reasonably requested by Title Company to verify the power
and authority of Seller to engage in the transactions contemplated hereby and
the authority of the person signing the aforementioned Closing documents on
behalf of Seller.
(f) Deliver to Purchaser keys to all locks and security and
access codes to the Premises, to the extent available and under Seller's
control.
(g) Deliver to Purchaser the affidavit required pursuant to
Section 1445 of the Internal Revenue Code, as amended, and/or the regulations
thereunder stating, under the penalties of perjury, (i) that Seller is not a
foreign entity, (ii) the U.S. taxpayer identification number of Seller, and
(iii) such other information as may be required by the Internal Revenue Code, as
amended, and/or the regulations thereunder.
(h) Deliver to Purchaser a current (dated within five (5) days
of the Closing Date), certified rent roll in the form required by this
Agreement.
(i) Execute and deliver to Purchaser a letter addressed to the
Residents advising them of the sale of the Premises to Purchaser; that all
deposits and Prepaid Rents, if any, were transferred to Purchaser; and directing
the Residents to make all future rent payments to Purchaser.
(j) Quit-Claim Assignment of the Trade Name.
(k) If so required by Purchaser, deliver to Purchaser a
duplicate original of the termination letter of Seller's management agent for
the Premises, effective on the Closing Date.
(l) Execute and deliver to Purchaser, Seller's Certificate
that the representations and warranties of Seller contained in Subsection
6.(a)(i) through (vii), inclusive, are true and correct in all material
respects, as of the Closing Date.
(m) Execute and deliver to Title Company, Seller's Closing
Statement.
(n) Execute and deliver such other documents as may be
reasonably required by the Title Company or by Purchaser's counsel.
10. Purchaser's Obligations at Closing. At Closing, and subject to the
terms, conditions and provisions hereof and the performance by Seller of its
obligations as set forth above, Purchaser shall:
(a) Pay to Seller the balance of the Purchase Price (or all
thereof) due and payable at Closing pursuant to Subsection 2.(a)(ii) hereof.
Page - 12
(b) Execute and deliver to Seller a counterpart of the Limited
Warranty Xxxx of Sale; of the Assignment and Assumption of Leases; of the
Assignment and Assumption of Contracts; of documents required from Purchaser
with respect to the HUD Required Prior Consents and of the Purchaser Acceptance
of Public Law Compliance.
(c) Execute and deliver to Seller, Purchaser's Certificate
that the representations and warranties contained in Subsection 7.(a) through
(c), inclusive, are true and correct in all material respects, as of the Closing
Date.
(d) Execute and deliver to Title Company, Purchaser's Closing
Statement.
(e) Execute and deliver such other documents as may be
reasonably required by the Title Company or by Seller's counsel.
11. Closing Costs. The following costs and expenses in connection with
the Closing shall be paid by the parties as follows:
(a) Seller shall pay fifty percent (50%) of the premium for
the Owner Title Policy; reimbursement to Purchaser for the cost of the Survey,
as provided for in Subsection 3.(b) hereof, not to exceed Two Thousand Five
Hundred and No/100 Dollars ($2,500.); and for any prorations chargeable to
Seller hereunder.
(b) Purchaser shall pay fifty percent (50%) of the premium for
the Owner Title Policy; the recording fees required to be paid to record the
Deed and any other documents required by the Title Company in connection with
the transactions covered by this Agreement; and any prorations chargeable to
Purchaser hereunder.
(c) Each party shall pay the fees and expenses of its own
counsel.
12. Prorations. The following items relating to the Premises are to be
prorated as of the Closing Date, with Seller given credit for and charged for
the Closing Date:
(a) All real estate and personal property taxes due and
payable for the tax year in which the Closing occurs shall be prorated between
Seller and Purchaser as of the Closing Date, and Seller shall pay all back real
estate and personal property taxes to and including the Closing Date.
(b) All collected rents (not including Prepaid Rents), income
and revenues of the Premises; all operating expenses of the Premises; all
utility charges; and all assessments or liens for governmental assessments shall
be prorated between Seller and Purchaser as of the Closing Date.
Page - 13
All uncollected Rents prior to the Closing Date (the
"Delinquent Rents") shall remain Seller's property and shall not be prorated.
All Prepaid Rents shall be delivered to Purchaser at Closing without proration.
Purchaser agrees to make a good faith effort and attempt, for a period of three
(3) months after Closing, to collect Delinquent Rents and to pay such Delinquent
Rents to Seller promptly after collection by Purchaser; provided, however, that
nothing contained herein shall operate to require Purchaser to institute a
lawsuit to recover any such Delinquent Rents or to terminate any Lease. In the
event Purchaser is successful in collecting sums from any Residents under the
Leases and such sums consist of both Delinquent Rents and current rents, the
amount so received by Purchaser shall: (i) first be applied to rents and other
charges under the Leases attributable to any period after the Closing Date which
are due on the date of receipt; and (ii) then to Delinquent Rents, which
amounts, if any, shall be paid to Seller. If the Purchaser incurs collection
costs not recovered from a Resident any other sums recovered from the Resident
including sums for Delinquent Rents shall be allocated to reimburse such costs
on a pro-rata basis. No portion of Delinquent Rents attributable to a particular
Resident shall be applied against the rents or Delinquent Rents attributable to
another Resident, or to the expenses incurred by Purchaser in collecting such
rents or Delinquent Rents from such other Resident. Seller shall be entitled to
continue to prosecute any and all legal actions commenced by Seller prior to the
Closing Date against any Resident or Residents owing Delinquent Rents. Purchaser
agrees that its obligations hereunder with respect to uncollected Rents shall
survive Closing of the transactions contemplated under this Agreement for a
period of six (6) months after Closing.
With respect to operating expenses for salaries and wages of
employees, employees' vacation pay, sick leave, employees' bonuses, if any,
welfare fund and union dues, if any, federal income tax on employees' wages
withheld at the source, federal and/or state payroll taxes, social security
taxes and all state, municipal county or other employee based or related taxes,
the proration as of the Closing Date shall be solely with respect to those
employees, if any, whom Purchaser, in its sole discretion, elects to continue in
such employment from and after the Closing Date; provided, however, that in no
event shall such employee compensation prorations chargeable to Seller pursuant
to this Subsection exceed the amounts for which Seller would have been liable
had such employee been terminated as of the Closing Date and not re-hired by
Purchaser; and there shall be no proration with respect to any employee not so
continued by Purchaser, such obligation being an operating expense prior to the
Closing Date and payable by Seller.
(c) All of the above-listed items that are required to be
prorated as of the Closing Date and that are not subject to an exact
determination at the time of Closing shall be estimated by the parties. When any
item so estimated is capable of exact determination after the Closing, the party
in possession of the facts necessary to make the determination shall send the
other party a detailed statement of the exact determination so made, and the
parties shall adjust the prior estimate within ten (10) days after both parties
have received said statement. The cash payment due to Seller at Closing shall be
increased or decreased by proration of the foregoing items, as appropriate.
(d) All Deposits, and any interest thereon that would be owed
to any Residents by law or contract if the residency expired without default on
the Closing Date, as shown on the updated rent roll to be delivered by Seller to
Purchaser at the Closing, shall be transferred or credited to Purchaser, in
full, without proration, on the Closing Date, and Purchaser shall indemnify and
hold Seller harmless from any liability with reference thereto accruing from and
after the Closing Date. Purchaser agrees to hold the security deposits in
accordance with the provisions of the Leases and of applicable law. All Prepaid
Rents relating to occupancy after the Closing Date shall be delivered to
Purchaser at Closing, without proration.
(e) To the extent the same are not the direct responsibility
of Residents under Leases, all other income and expenses of the Premises shall
be prorated as of the Closing Date.
13. Brokerage. Seller and Purchaser each represent and warrant to the
other that there are no real estate brokers, salesman or finders presently
involved in this transaction other than Mr. Xxxxx XxXxxxxx, Marcus & Millichap,
0000 Xxxx Xxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 (the "Broker"), which
company presently serves in such capacity herein, pursuant to a separate written
agreement with Seller, whose total commission or finder's fee shall be paid by
Seller at Closing in accordance with said agreement. If a claim for a brokerage
commission or finder's fee in connection with this transaction is made by any
broker, salesman or finder other than the Broker claiming to have dealt through
or on behalf of one of the parties hereto or by any one or more predecessor
brokers, salesmen or finders other than the Broker claiming to have dealt
through or on behalf of the Seller (the "Indemnitor"), said Indemnitor shall
indemnify, defend and hold the other party hereunder, and such party's,
partners, officers, directors agents and representatives (collectively, the
"Indemnitees") harmless from any liabilities, damages, claims, costs, fees and
expenses whatsoever (including reasonable attorneys' fees and court costs) with
respect to such claim for brokerage or finder's fees. This Section shall survive
the Closing or termination of this Agreement.
Page - 14
14. Merger/Survival. All prior understandings and agreements of the
parties with respect to the subject matter of this Agreement are merged in this
Agreement, which, alone, fully and completely expresses their agreement. All
representations, covenants and agreements contained herein shall survive the
Closing; provided, however, that the warranties and representations of the
Seller and of the Purchaser shall, with respect to each of them, survive only
for a period of six (6) months following the Closing.
15. Default. In the event that:
(a) Seller fails to consummate the transactions contemplated
herein for any reason, except for Purchaser's default hereunder, the
nonoccurrence of any condition to Seller's obligations or the rightful
termination by Seller or Purchaser of this Agreement pursuant to its terms, then
Purchaser, as its sole remedies hereunder, may either (a) enforce this Agreement
through an action for a decree of specific performance; or (b) cancel and
terminate this Agreement, in which event, Purchaser shall be immediately
entitled to the return of the Xxxxxxx Money Deposit and upon Purchaser's receipt
of the Xxxxxxx Money Deposit from the Xxxxxxx Money Escrow Agent, the parties
shall have no further rights, duties or obligations hereunder (except as
otherwise expressly provided in this Agreement).
(b) Purchaser fails to consummate the transactions
contemplated herein for any reason, except for Seller's default hereunder, the
nonoccurrence of any condition to Purchaser's obligations or the rightful
termination by Seller or Purchaser of this Agreement pursuant to its terms, then
Seller's sole remedy hereunder shall be to cancel and terminate this Agreement
and to receive and retain the Xxxxxxx Money Deposit as liquidated damages and
not as a penalty, and the parties shall have no further rights, duties or
obligations hereunder (except as otherwise expressly provided in this
Agreement). The parties acknowledge and agree that Seller's right hereunder to
receive and retain the Xxxxxxx Money Deposit as liquidated damages upon a
default by Purchaser reflects the parties' mutual agreement that such amount
represents a fair and reasonable measure of the damages that would be suffered
by Seller for removing the Premises from the market and carrying the Premises
during the pendency of this Agreement, it being further agreed that the exact
amount of such damages are incapable of ascertainment with mathematical
precision and that the parties hereto are attempting and intending by such
provision to establish a measure of damages that is fair and reasonable under
the circumstances.
16. Miscellaneous. The following general provisions shall govern this
Agreement:
(a) Time of Essence. Time is of the essence of this Agreement
and each provision hereof.
(b) Governing Law. This Agreement is made and executed under
and is, in all respects, to be governed and construed by the laws of the State
of Texas.
(c) Notices. All notices, demands and requests provided for in
this Agreement (collectively, "Notice" or "Notices") shall be in writing. All
such Notices shall be personally delivered or sent by Fax or telecopier (with a
hard copy sent by overnight courier), by overnight courier service (such as
Federal Express), or by United States Certified mail, return receipt requested,
postage prepaid, addressed as set forth as follows:
Page - 15
If to Seller: Villa Americana Associates., Ltd.
c/o J&B Management Corp.
Xxx Xxxxxxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxxx
FAX: (000) 000-0000
Phone: (000) 000-0000
With a copy to: Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxxxxxx & Price, L.L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
FAX: (000) 000-0000
Phone: (000) 000-0000
If to Buyer: Homes For American Holdings, Inc.
Xxx X'Xxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Mr. Xxxxxx XxxXxxxxxx, CEO
FAX: (000) 000-0000
Phone: (000) 000-0000
With a copy to: Xxxxxx X. Xxxxx, Esq.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
FAX: (000) 000-0000
Phone: (000) 000-0000
Notices which are served in the manner aforesaid shall be deemed served,
received or given for all purposes hereunder (i) upon delivery, if
hand-delivered, (ii) on the next business day if deposited with an overnight
courier, if sent by overnight courier, (iii) if mailed, four (4) business days
after such notice shall be so deposited with the United States Post Office, or
upon actual receipt, whichever first occurs, or (iv) on the same day as sent via
Fax or via telecopier, if sent on a business day, or on the next business day if
sent on a non-business day; provided that in either case, a "hard copy" of such
notice is deposited with an overnight courier service on the same day the Fax or
telecopy is sent, or on the next business day if the Fax or telecopy is sent on
a non-business day.
(d) Waivers. The parties to this Agreement may waive any of
the conditions contained herein or any of the obligations of the other party
hereunder, but any such waiver shall be effective only if in writing and signed
by the party waiving such condition or obligation. Any past waiver as to any of
the terms, covenants, conditions or provisions of this Agreement shall not
operate as a future waiver of the same terms, covenants, conditions or
provisions or prevent the future enforcement thereof.
(e) Entire Agreement and Amendment. This Agreement sets forth
the entire agreement between the parties relating to the subject matter hereof
and supersedes all prior or contemporaneous agreements and understandings of the
parties hereto and of their respective principals in connection therewith. No
promise, representation, warranty, covenant, agreement or condition not included
or expressed in this Agreement has been or is relied upon by either party hereto
nor shall the same be binding upon the parties hereto or shall affect or be
effective to interpret, change or restrict the provisions of this Agreement
unless in writing, signed by the parties and dated contemporaneously or
subsequent to the date hereof. Furthermore, neither party hereto has made any
representations, warranties or covenants to the other party concerning any tax
benefits or tax treatment which may be given to the other party in connection
with the transaction contemplated hereunder. Each party has relied upon its own
examination of this Agreement and the provisions hereof, and the counsel of its
own advisors, and the warranties, representations and covenants expressly
contained in this Agreement itself. No modification or amendment of this
Agreement shall be of any force or effect unless made, in writing, and executed
by both Purchaser and Seller.
Page - 16
(f) Construction. The captions and headings of the various
sections and paragraphs of this Agreement are for convenience only and are not
to be construed as defining or as limiting in any way the scope or intent of the
provisions hereof. Wherever the context requires or permits, the singular shall
include the plural, the plural shall include the singular and the masculine,
feminine and neuter shall be freely interchangeable. This Agreement shall not be
construed more strictly against one party than against the other by virtue of
the fact that it may have been drafted or 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. The phrase
"the date hereof" or words of similar import shall refer to the Effective Date.
(g) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto, their respective successors
and assigns and successors in interest. Purchaser may not assign this Agreement
without the consent of Seller; provided, however, this Agreement may be assigned
by Purchaser prior to the Closing without the consent of Seller, if (i) made to
a partnership in which Purchaser shall serve as one of the partners thereof or
to an entity that is an affiliate of Purchaser; (ii) Seller is given written
notice thereof; and (iii) the assignee assumes all of Purchaser's obligations
hereunder. Purchaser shall not be relieved, discharged or released from any of
its obligations and liabilities hereunder, either in whole or in part, by virtue
of any assignment hereof, whether one or more.
(h) Severability. If for any reason any provision of this
Agreement, or the application thereof to a particular person or circumstance,
shall be declared void or unenforceable by any court of competent jurisdiction,
such invalidity shall only affect such provision or application and the balance
of this Agreement and/or the application of such provision to other persons or
circumstances shall remain in full force and effect and shall be binding upon
the parties hereto.
(i) Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original and one and the same
agreement, binding on the parties hereto, notwithstanding that both parties are
not signatory to the same counterpart.
(j) Business Days. When used herein, "business day" refers to
any day other than a day on which commercial banks in Houston, Texas are
required or permitted to close.
(k) Time for Performance. Time is of the essence of this
Agreement. Whenever under the terms of this Agreement the time for performance
falls on a Saturday, Sunday or legal holiday, such time for performance shall be
on the next day that is not a Saturday, Sunday or legal holiday.
(l) Attorneys' Fees. In any litigation arising out of this
Agreement, the prevailing party in such litigation shall be entitled to recover
reasonable attorneys' fees and costs.
(m) Possession. Possession of the Property shall be delivered
to Purchaser at Closing, subject only to the Permitted Encumbrances and the
rights of Residents in possession as residents pursuant to Leases.
Page - 17
17. Intermediary. Seller has the option to qualify this transaction as
part of a tax-deferred exchange under Section 1031 of the Internal Revenue Code,
provided, however, that the Seller shall not be released from its obligations
hereunder if Seller does not qualify this transaction as part of a tax-deferred
exchange. Buyer agrees to cooperate in the exchange provided Buyer incurs no
liability or additional cost or expense and the exchange does not delay Closing.
Buyer and Seller agree that Seller may substitute, prior to the Closing
hereunder, an intermediary ("Intermediary") to act in only the capacity of
Seller's agent and in place of Seller as the seller of the Property, subject to
the prior written approval of Seller's Lender, to be obtained by Seller, if
required. Intermediary shall be designated in writing by Seller. Upon
identification of Intermediary and receipt of Lender's prior written approval,
to be obtained by Seller, if required, and upon assignment of Seller's rights
hereunder to Intermediary, Intermediary shall be substituted for Seller
hereunder as the seller of the Property. Buyer agrees to accept from
Intermediary, the Property and all other required performance under this
Agreement and under any Closing escrow instructions and to render its
performance of all of its obligations hereunder, to Intermediary. Buyer agrees
that performance by Intermediary will be treated as performance by Seller, and
Seller agrees that Buyer's performance to Intermediary will be treated as
performance to Seller. In the event that Seller designates Intermediary, Seller,
in consideration of the premises and for other good and valuable independent
considerations, the receipt and sufficiency of which are hereby acknowledged,
shall and hereby does, jointly and severally, unconditionally guarantee the full
and timely performance by Intermediary of each and every one of the
representations, warranties, indemnities, obligations and undertakings of
Intermediary pursuant to this Agreement and to and Closing escrow instructions
(or amendments). As such guarantor, Seller shall be treated as a primary obligor
with respect to these representations, warranties, indemnities, obligations and
undertakings, and, in the event of breach, Buyer may proceed directly against
Seller, jointly or severally, on this guarantee without the need to join
Intermediary as a party to the action against Seller. Seller, jointly and
severally, unconditionally waives any defense that it might have as guarantor
that it would not have if it had made or undertaken these representations,
warranties, indemnities, obligations and undertakings directly to Buyer.
18. Effective Date. Unless both parties hereto have signed this
Agreement on or before August 12, 1999, and Xxxxxxx Money Escrow Agent has
received the Xxxxxxx Money Deposit within three (3) business days thereafter,
this Agreement shall be automatically terminated and shall be of no further
force and effect. The "Effective Date" of this Agreement shall be the date of
signing by Title Company of the Joinder By Xxxxxxx Money Escrow Agent (attached
hereto as the last page hereof).
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement effective on the respective dates set forth below, to be effective as
of the Effective Date determined in accordance with Section 18 hereof.
SELLER:
VILLA AMERICANA ASSOCIATES, LTD.,
a Texas limited partnership
By:/s/
------------------------------------
Xxxxxxx X. Xxxxx, General Partner
Date: September 22, 1999
Page - 18
PURCHASER:
HOMES FOR AMERICA HOLDINGS, INC.,
a Nevada corporation
By:/s/
------------------------------------
Xxxxxx X. XxxXxxxxxx, CEO
Date: September 23, 1999
Exhibits
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Exhibit A - Property Description (Preliminary Statement)
Exhibit B - HAP Contract (Section 2(c))
Page - 19
