EXHIBIT 99.3
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(Form S-3)
AGREEMENT REGARDING ACQUISITION OF
PARTNERSHIP INTERESTS
among
AMLI RESIDENTIAL PROPERTIES, L.P.,
VERANDAH HOLDINGS PHASE I INC.,
JSDP, INC.,
M&B HOLDINGS GENERAL PARTNERSHIP,
FAIRGROWTH INTERNATIONAL, INC.
AND
TVA SP PARTNERSHIP
Dated as of December __, 1996
TABLE OF CONTENTS
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PAGE
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DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE I
PURCHASE AND SALE OF PARTNERSHIP INTERESTS . . . . . . . . . 4
1.1 Purchase and Sale. . . . . . . . . . . . . . . . . . . . . . 4
1.2 Payments at Closing. . . . . . . . . . . . . . . . . . . . . 4
1.3 Prorations and Adjustments . . . . . . . . . . . . . . . . . 5
ARTICLE II
GUARANTY OPTION AND REVIEW PERIOD. . . . . . . . . . . . . . 6
2.1 OP Units Sellers' Guaranty Option. . . . . . . . . . . . . . 6
2.2 Review Period. . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Title and Survey Review. . . . . . . . . . . . . . . . . . . 8
ARTICLE III
REPRESENTATIONS AND WARRANTIESOF THE SELLERS . . . . . . . . 9
3.1 Ownership of Acquired Interests. . . . . . . . . . . . . . . 9
3.2 Due Formation. . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 Due Authorization. . . . . . . . . . . . . . . . . . . . . . 11
3.4 No Other Agreement . . . . . . . . . . . . . . . . . . . . . 12
3.5 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.6 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.7 Assets, Liabilities and Activities of the Partnership. . . . 14
3.8 Zoning . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.9 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.10 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.11 Compliance with Law. . . . . . . . . . . . . . . . . . . . . 15
3.12 Access/Utilities . . . . . . . . . . . . . . . . . . . . . . 16
3.13 Absence of Bankruptcy Proceedings. . . . . . . . . . . . . . 16
3.14 No Defaults or Violations. . . . . . . . . . . . . . . . . . 16
3.15 Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.16 Environmental Laws . . . . . . . . . . . . . . . . . . . . . 16
3.17 Absence of Liens or Assessments. . . . . . . . . . . . . . . 16
3.18 No Unpaid Bills or Claims. . . . . . . . . . . . . . . . . . 17
3.19 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . 17
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER. . . . . . . . . 17
4.1 Due Organization.. . . . . . . . . . . . . . . . . . . . . . 17
4.2 Due Authorization. . . . . . . . . . . . . . . . . . . . . . 18
4.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.4 Registration of Shares . . . . . . . . . . . . . . . . . . . 18
ARTICLE V
COVENANTS OF SELLERS . . . . . . . . . . . . . . . . . . . . 18
5.1 Implementing Agreement . . . . . . . . . . . . . . . . . . . 18
5.2 Additional Actions . . . . . . . . . . . . . . . . . . . . . 18
5.3 Preservation of Partnership Interests. . . . . . . . . . . . 19
5.4 Preservation of Ownership of Phase I Property. . . . . . . . 19
5.5 No Default . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.6 Compliance with Laws . . . . . . . . . . . . . . . . . . . . 19
5.7 Operation of the Partnership and the Phase I Property. . . . 19
5.8 Accuracy of Representations and Warranties . . . . . . . . . 22
5.9 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.10 Code Violations. . . . . . . . . . . . . . . . . . . . . . . 22
5.11 Conduct of Verandah Condominiums . . . . . . . . . . . . . . 22
ARTICLE VI
COVENANTS OF PURCHASER . . . . . . . . . . . . . . . . . . . 23
6.1 Implementing Agreement . . . . . . . . . . . . . . . . . . . 23
6.2 Disposition of Phase I Property. . . . . . . . . . . . . . . 23
6.3 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER . . . . . . 23
7.1 Ownership of Phase I Property and the Remainder. . . . . . . 23
7.2 Representations and Warranties True. . . . . . . . . . . . . 24
7.3 Compliance with Agreements and Covenants . . . . . . . . . . 24
7.4 Condition of Property. . . . . . . . . . . . . . . . . . . . 24
7.5 Verandah Apartments Agreement. . . . . . . . . . . . . . . . 24
7.6 Other Closing Documents. . . . . . . . . . . . . . . . . . . 24
7.7 Failure to Close . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS . . . . . 25
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8.1 Ownership of Phase I Property. . . . . . . . . . . . . . . . 25
8.2 Representations and Warranties True. . . . . . . . . . . . . 25
8.3 Compliance with Agreements and Covenants . . . . . . . . . . 25
8.4 Other Agreements . . . . . . . . . . . . . . . . . . . . . . 25
8.5 Verandah Apartments Agreement. . . . . . . . . . . . . . . . 25
8.6 Failure to Close . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE IX
CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Deliveries by the Sellers. . . . . . . . . . . . . . . . . . 26
9.3 Deliveries by Purchaser. . . . . . . . . . . . . . . . . . . 27
ARTICLE X
TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . 27
10.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . 27
10.2 Effect of Termination. . . . . . . . . . . . . . . . . . . . 28
ARTICLE XI
SURVIVAL; INDEMNIFICATION. . . . . . . . . . . 28
11.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.2 Indemnification by the Cash Sellers. . . . . . . . . . . . . 28
11.3 Indemnification by the OP Units Sellers. . . . . . . . . . . 28
11.4 Limitation on Liability. . . . . . . . . . . . . . . . . . . 29
11.5 Indemnification by Purchaser . . . . . . . . . . . . . . . . 29
ARTICLE XII
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 29
12.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.2 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.3 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.4 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
12.5 Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 31
12.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.8 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 32
12.9 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . 32
12.10 Other Instruments. . . . . . . . . . . . . . . . . . . . . . 32
12.11 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 32
12.12 Verandah Apartments Agreement. . . . . . . . . . . . . . . . 32
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12.13 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . 32
SCHEDULES
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Schedule 3.1 Partnership Interests Owned by Sellers
EXHIBITS
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Exhibit A Description of Land
Exhibit B OP Units Letter
Exhibit C Partnership Interests Assignment
Exhibit D FIRPTA Affidavit and Certificate
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AGREEMENT REGARDING ACQUISITION OF PARTNERSHIP INTERESTS
THIS AGREEMENT REGARDING ACQUISITION OF PARTNERSHIP INTERESTS, dated
as of the ______ day of December, 1996, by and among AMLI RESIDENTIAL
PROPERTIES, L.P., a Delaware limited partnership ("PURCHASER"); VERANDAH
HOLDINGS PHASE I INC., a Canadian corporation ("PHASE I"), JSDP, INC., a
Texas corporation ("JSDP"), M&B HOLDINGS GENERAL PARTNERSHIP, a Texas
general partnership ("M&B"), FAIRGROWTH INTERNATIONAL, Inc. an Ontario
corporation ("FAIRGROWTH"), and TVA SP PARTNERSHIP, a Texas general
partnership ("TVA SP") (collectively, the "SELLERS").
R E C I T A L S
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WHEREAS, the Verandah Partners Ltd., a Texas Limited Partnership (the
"PARTNERSHIP") is the owner of the Remainder (hereinafter defined), and
either is the owner of, or will acquire ownership of not less than one day
prior to the expiration of the Review Period, the Phase I Property
(hereinafter defined).
WHEREAS, the Partnership is governed by and in accordance with that
certain Amended and Restated Agreement of Limited Partnership dated as of
June 1, 1990, by and among Phase I, JSDP, M&B, Fairgrowth, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as amended by the First Amendment to Amended
and Restated Agreement of Limited Partnership dated July 31, 1991 by and
among Phase I, JSDP, M&B and TVA SP (as so amended, the "PARTNERSHIP
AGREEMENT").
WHEREAS, Phase I and JSDP are the sole general partners of the
Partnership, and M&B, Fairgrowth and TVA SP are the sole limited partners
of the Partnership.
WHEREAS, subsequent to the acquisition by the Partnership of the
Phase I Property, Purchaser or an Affiliate of Purchaser desires to
purchase from Sellers and Sellers desire to sell to Purchaser or an
Affiliate of Purchaser all of their Partnership Interests in the
Partnership, so that Purchaser or an Affiliate of Purchaser will own 100%
of the Partnership.
In consideration of the mutual covenants, agreements and warranties
herein contained, it is agreed that Purchaser or an Affiliate of Purchaser
shall acquire from the Sellers all of the Partnership Interests (as defined
herein) upon the terms and conditions hereinafter set forth.
DEFINITIONS
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The following terms shall have the meanings set forth herein for the
purposes of the transactions described in this Agreement:
"ACQUIRED INTERESTS" shall mean the Partnership Interests held by
Sellers and to be transferred to the Purchaser at Closing, which, as of the
date hereof, constitute, and at Closing will constitute, 100% of the
Partnership Interests of the Partnership.
"AFFILIATE" of any person shall mean any corporation, proprietorship,
partnership or business entity which, directly or indirectly, owns or
controls, is under common ownership or control with, or is owned or
controlled by, such person. For purposes of this Agreement, any
corporation, proprietorship, partnership or business entity in which
Purchaser has or owns a ten percent or greater interest shall be deemed to
be an affiliate of Purchaser.
"AGREEMENT" shall mean this Agreement Regarding Acquisition of
Partnership Interests, including all Exhibits and Schedules hereto, as it
may be amended from time to time in accordance with its terms.
"CASH SELLERS" shall have the meaning assigned to it in Section 1.2.1
hereof.
"CLOSING" shall have the meaning assigned to it in Section 1.2 hereof.
"CLOSING DATE" shall have the meaning assigned to it in Section 9.1
hereof.
"COMMITMENT" shall have the meaning assigned to it in Section 2.3
hereof.
"ENCUMBRANCE" shall mean any option, pledge, security interest, lien,
charge, encumbrance, mortgage, trust deed, easement, lease, sublease,
claim, right of way, covenant, condition or restriction (whether on sale,
transfer or disposition or otherwise) whether imposed by agreement, law or
otherwise, whether of record or otherwise.
"ENVIRONMENTAL LAW" shall mean any law, statute, ordinance, rule,
regulation, order or determination of any governmental authority or agency
affecting the Phase I Property or the Remainder and pertaining to health or
the environment including, but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
and the Resource Conservation and Recovery Act of 1986.
"LOSSES" shall mean all actual liabilities, losses, costs, damages,
penalties or expenses (including, without limitation, attorneys' fees and
expenses and costs of investigation and litigation).
"OP UNITS SELLERS" shall have the meaning assigned to it in
Section 1.2.2 hereof.
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"PARTNERSHIP ASSETS" shall mean all of the assets of the Partnership,
which shall be the Remainder, the Phase I Property and may include an
amount of cash as provided for herein.
"PARTNERSHIP INTERESTS" shall mean the general and limited partnership
interests in the Partnership.
"PARTNERSHIP LIABILITIES" - none.
"PHASE I PROPERTY" shall mean the following:
(a) The term "PHASE I LAND" shall mean that certain
parcel of real property located in the City of Arlington, County of
Tarrant, State of Texas, and being more particularly described in EXHIBIT A
attached hereto and incorporated herein by reference for all purposes,
together with all rights and appurtenances pertaining to such real estate,
including, without limitation, any and all rights of in and to all roads,
alleys, easements, streets and ways adjacent to the same and, strips and
gores and rights of ingress and egress thereto.
(b) All improvements, structures and fixtures placed,
constructed or installed on the Phase I Land shall be referred to herein as
the "PHASE I IMPROVEMENTS."
(c) All equipment, furnishings, materials, inventory,
supplies and other tangible personal property owned by the Partnership,
placed or installed on or about the Phase I Land or Phase I Improvements
and used as part of or in connection therewith, including, without
limitation, all leases or other occupancy agreements, keys, leasing
materials and forms, records relating to tenants, security deposits,
prepaid rentals, service contracts, maintenance agreements, bonds, and
unexpired warranties, guarantees, bonds and the like relating to the Phase
I Property shall be referred to herein as the "PHASE I PERSONAL PROPERTY".
(d) All right, title and interest of the Partnership in
and to (i) the right to the use of the trade name of Verandah Apartments,
and goodwill relating thereto, (ii) all telephone exchange numbers related
to the Phase I Improvements and (iii) all licenses and permits of any kind
related to the use or operation of the Phase I Improvements and any all
right, title and interest of the Partnership in and to and all other
intangible property related to the Phase I Improvements are hereinafter
collectively referred to as the "PHASE I INTANGIBLE PROPERTY."
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(e) The Phase I Land, Phase I Improvements, Phase I
Personal Property, the Phase I Intangible Property and other matters
covered hereby and relating to Phase I shall be referred to collectively
herein as the "PHASE I PROPERTY."
"PHASE II PROPERTY" shall mean the "Property" as defined in Section
1.1 of the Verandah Apartments Agreement.
"PLANNED DONATION" shall mean the planned dedication of the Release
Parcel to the City of Arlington, Texas.
"PURCHASE PRICE" shall mean the cash to be paid and the securities to
be delivered pursuant to Sections 1.2.1 and 1.2.2 hereof.
"REMAINDER" shall mean a portion of a tract of land (the "ADJACENT
LAND") which is shown on Sheet 1 of 3 of that certain survey dated
September 23, 196, prepared by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and titled "A Land Title
Survey of 27.360 Acres of Land." A portion of the Adjacent Land is
referred to on such survey as the "RELEASE PARCEL" and will be dedicated to
the City of Arlington, Texas as park land, and the remainder thereof is
referred herein to as the "Remainder" and will be retained by the
Partnership. If the Release Parcel has not been so dedicated as of the
Closing Date, then the term "Remainder" shall include the Release Parcel
and Purchaser shall, following the Closing, cause the Partnership to so
dedicate the Release Parcel.
"VERANDAH APARTMENTS AGREEMENT" shall mean the agreement dated as of
even date herewith between Verandah Phase II Limited Partnership, a Texas
limited partnership (the "Phase II Partnership") and Purchaser.
All other capitalized terms used herein without definition shall have
the respective meanings given such terms in the Verandah Apartments
Agreement.
ARTICLE I
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PURCHASE AND SALE OF PARTNERSHIP INTERESTS
1.1 PURCHASE AND SALE. Subject to the terms and conditions hereof,
on the Closing Date the Sellers shall sell, transfer and deliver to
Purchaser or an Affiliate of Purchaser, and Purchaser or an Affiliate of
Purchaser shall purchase, acquire and accept delivery of, all of the
Acquired Interests owned by such Sellers, so that Purchaser or an Affiliate
of Purchaser shall thereby acquire 100% of the outstanding Partnership
Interests.
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1.2 PAYMENTS AT CLOSING. Subject to the terms and conditions
hereof, at the closing of the transactions contemplated hereby (the
"CLOSING"):
1.2.1 Purchaser or an Affiliate of Purchaser shall deliver
to Phase I and M&B (together with Fairgrowth, the "CASH SELLERS"), by
cashier's or certified check, or by wire transfer of immediately available
funds to the account designated by such Sellers, an aggregate of
$17,337,000, subject to adjustment as herein provided, which amount shall
be allocated among them as they shall determine. Phase I and M&B shall be
responsible for allocating to Fairgrowth its allocable shares of the such
amount.
1.2.2 Purchaser or an Affiliate of Purchaser shall issue to
JSDP and TVA SP (together, the "OP UNITS SELLERS"), or to such parties as
may be designated by such Sellers, an aggregate number of partnership
interests in Purchaser ("OP UNITS") obtained by dividing (i) $1,053,000 by
(ii) the Average Closing Price. The Average Closing Price shall be equal
to average per share price of a share of beneficial interest (a "Share") of
Amli Residential Properties Trust, a Maryland real estate investment trust
(the "REIT"), at the close of trading on the New York Stock Exchange for
the ten trading days preceding the fifth business day prior to Closing.
Each OP Units Seller's (or OP Units Seller's designee's) acquisition and
ownership of the OP Units shall be subject to the execution of a letter
(the "OP UNITS LETTER") in the form attached hereto as EXHIBIT B.
Purchaser shall also pay to the OP Units Sellers $25,000 in cash, which
shall be remitted at Closing dirctly to the OP Unit Sellers' legal expenses
in payment of legal expenses incurred in connection with this Agreement.
1.3 PRORATIONS AND ADJUSTMENTS. Collected rents, operating
expenses, ad valorem taxes on the Phase I Property and the Remainder for
the current year, charges under the Phase I Approved Service Contracts (as
hereinafter defined) and utility charges and all other income and expense
related to the Phase I Property or the Remainder shall be prorated at the
Closing, effective as of the Closing Date, utilizing the best available
computations of such items. Sellers retain all rights to a refund of any
existing utility deposits. If current ad valorem tax assessments are
unavailable at Closing, said ad valorem taxes shall be adjusted based upon
a ten percent (10%) increase over the prior year's taxes; provided,
however, if for the prior year the Phase I Property was not taxed as a
completed and operating apartment project, then the ad valorem tax
assessment shall be prorated based upon a written estimate of such taxes,
prepared by an independent, local real estate tax consultant, such estimate
to be reasonably acceptable to Purchaser and Sellers; provided further, all
special tax assessments made by any taxing authority with respect to the
Phase I Property prior to Closing shall be the sole responsibility of
Sellers and shall be paid by Sellers at Closing. Such prorations shall be
subject to reprorations at such time as actual numbers are available or in
the event that is determined that any prorated item may not have been
mathematically calculated correctly. Sellers shall be entitled to any and
all cash and cash equivalents owned by the Partnership as of the Closing,
and Purchaser shall cooperate with Sellers after the Closing to distribute
to Sellers any such cash or cash equivalents. Delinquent rents collected
by the Partnership after
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the Closing shall be remitted by Purchaser to the Cash Sellers upon receipt
thereof by the Partnership; provided, however, that the Partnership shall
be under no obligation to collect such rents and all rentals received shall
be applied first to current rents and then to delinquent rents. Purchaser
shall receive a credit against the Purchase Price for tenant security
deposits that are not yet forfeited and the security deposits of all
tenants who have moved out within five (5) business days prior to the
Closing. Purchaser shall assume responsibility for such deposits and shall
determine the amount of such deposits to refund, and any balance not
refunded shall be retained by Purchaser. All adjustments shall be
cumulated for a period of six months after the Closing Date, at which time
a final adjustment shall be made to the Purchase Price, and no adjustments
thereafter shall be made. The prorations shall be made by adjustment to
the cash portion of the Purchase Price.
ARTICLE II
GUARANTY OPTION AND REVIEW PERIOD
2.1 OP UNITS SELLERS' GUARANTY OPTION. Each OP Units Seller, at
such OP Units Seller's option, or one or more of such OP Units Seller's
partners or shareholders, as the case may be, shall have the right, but not
the obligation, to guaranty its pro rata portion (based upon its percentage
interest in the Partnership) of up to an aggregate of Four Million, Eight
Hundred Thousand and No/100 Dollars ($4,800,000) of the indebtedness to be
secured by the Phase I Property, on terms and conditions reasonably
acceptable to Purchaser, each such OP Units Seller and Purchaser's lender.
Each OP Units Seller, or such partners or shareholders, as the case may be,
shall have a period of up to ten (10) days after the date hereof to
negotiate the form of such guaranty. Each OP Units Seller hereby agrees
to, and to cause its respective partners or shareholders to, as the case
may be, use its reasonable best efforts to negotiate such a guaranty. If
any OP Units Seller, or such partners or shareholders, as the case may be,
shall not have negotiated a form of guaranty reasonably acceptable to the
Purchaser within such ten-day period, such OP Units Seller shall have the
right to terminate this Agreement as to itself and all other Sellers by
written notice to the Purchaser on or before the expiration of such ten-day
period, and the parties hereto shall have no further liabilities one to the
other, except obligations which expressly survive any termination hereof.
If no OP Units Seller shall have so terminated this Agreement within such
period, this Section 2.1 shall be deemed deleted from this Agreement. If
any OP Units Seller, or such OP Units Seller's partners or shareholders, as
the case may be, shall negotiate an acceptable form of guaranty, such OP
Units Seller shall so notify Purchaser and provide Purchaser with a copy
thereof and with copies of any amendments thereof or notices related
thereto. Any such guaranty shall confer no rights upon the guarantor,
particularly no right of reimbursement and contribution. The guarantor's
consent shall not be required in connection with any prepayment, sale and
assumption, modification, amendment, extension, refinancing or any other
matter related to such financing; provided, however, any such action
undertaken by Purchaser shall not increase any liability under such
guaranty or amend the terms of the guaranty. Purchaser makes no
representation or warranty of any kind or nature as to such
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guaranty, including no representation or warranty as to tax consequences
and whether Purchaser's lender will permit the same. Purchaser undertakes
no obligations or covenants in connection with the same. During the seven-
year period beginning on the Closing Date, Purchaser may not voluntarily
prepay the debt secured by the Phase I Property (the "PHASE I DEBT") unless
it gives each guarantor the opportunity to guaranty other debt of
Purchaser, if any, of the same character for tax purposes as the Phase I
Debt which guaranty would enable such guarantor to preserve its tax
position; provided, that if Purchaser involuntarily prepays or is required
to prepay the Phase I Debt so that the outstanding balance thereof is less
than $4,800,000, Purchaser will cooperate with each guarantor in enabling
such guarantor to guaranty other debt of Purchaser, if any, of the same
character for tax purposes as the Phase I Debt which guaranty would enable
such guarantor to preserve its tax position.
2.2 REVIEW PERIOD. For a period (the "REVIEW PERIOD") beginning on
the earlier to occur of (i) the date the OP Units Sellers notify Purchaser
that they, or their respective partners or shareholders, as the case may
be, have all negotiated an acceptable form of guaranty pursuant to Section
2.1 above and (ii) the expiration of the ten-day period set forth in
Section 2.1 above (such earlier date is hereby referred to as the "DUE
DILIGENCE PERIOD COMMENCEMENT DATE") and expiring on the later to occur of
(x) forty-five days after the Due Diligence Period Commencement Date and
(y) one business day after the Partnership acquires ownership of the Phase
I Property, Purchaser shall have the right to have performed any and all
inspections or studies of the Phase I Property and the Remainder which
Purchaser may desire, including but not limited to the status of the
ownership thereof any Encumbrances thereon, a physical and mechanical
inspection (including all building and construction plans and
specifications related to the Phase I Improvements as well as those
maintained by municipal building departments or any other governmental
agencies), subject to the rights of tenants, an environmental inspection, a
feasibility study, an inspection of all leasing and maintenance files and
all books and records and financial information pertaining thereto. In
connection therewith, Sellers agree to cause to be made available to
Purchaser for its review, as soon as possible after the date hereof,
similar items as made available pursuant to Section 5.1.3 of the Verandah
Apartments Agreement, pertaining to the Phase I Property and (to the extent
applicable thereto) the Remainder. Purchaser shall coordinate all of
Purchaser's inspections and investigations with Sellers in advance, and at
Sellers' option, shall be accompanied by Sellers or a representative of
Sellers. Purchaser shall have the right to make and retain copies of any
document or item reviewed by Purchaser during its inspection (if Purchaser
terminates this Agreement for any reason, Purchaser shall return all of
such copies to Sellers). On or before the expiration of the Review Period,
Purchaser shall send to Sellers a notice setting forth the service
contracts pertaining to the Phase I Property (the "PHASE I APPROVED SERVICE
CONTRACTS") which Purchaser agrees may remain binding on the Partnership.
If Purchaser shall not notify Sellers of any Phase I Approved Service
Contracts, then it shall be assumed that the Purchaser does not desire any
service contracts to remain binding on the Partnership. Sellers shall be
responsible, at their cost and expense, to cause the Partnership to
terminate all contracts which Purchaser does not desire to remain binding
on the Partnership, with such termination to be effective thirty (30) days
after the Closing. Sellers shall, or shall cause the Partnership to,
terminate, at their cost and expense, effective
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as of the Closing Date, the existing APS security monitoring contract;
provided, however, that if any lease requires that security monitoring be
provided, Purchaser shall be solely responsible for ensuring that such
requirements are satisfied following the Closing. If Purchaser shall find
such inspections or studies to be unsatisfactory, for any reason, or if
Purchaser otherwise determines that the Phase I Property is not suitable to
it, for any reason whatsoever, in Purchaser's sole discretion, Purchaser
shall have the right, at its option, to terminate this Agreement by written
notice delivered to Sellers prior to the expiration of said Review Period
and, upon such termination, the parties hereto shall have no further
liabilities one to the other, except obligations which expressly survive
any termination hereof.
Purchaser shall indemnify and hold Sellers harmless from any
injuries, accidents or damage to or on the Property caused by Purchaser or
Purchaser's inspecting agents during Purchaser's inspections, such
indemnity to survive the termination of this Agreement. Notwithstanding
the foregoing, Purchaser's indemnity shall not cover any loss, claim or
damage to the Property or to any person directly related to environmental
issues or the existence of any hazardous waste or materials on the Phase I
Property or the Remainder, including but not limited to Purchaser's
inspection causing existing hazardous materials to be released or for
causing any existing environmental concern or problem to become
exacerbated, except to the extent any such loss, claim or damage is solely
caused by the negligence of any one or more of Purchaser or its agents or
contractors. With respect to inspecting individual apartment units,
Purchaser shall give Sellers notice (which may be oral or written) of
Purchaser's desire to inspect such units at least one (1) day in advance of
the inspection. Purchaser shall not interfere with any occupants of the
Phase I Property in conducting its inspections. If Purchaser shall not
have terminated this Agreement on or before the expiration of the Review
Period, then Purchaser shall be deemed to have waived its rights to
terminate pursuant to this Section 2.2. Purchaser shall maintain in
confidence all information obtained by Purchaser in connection with the
Phase I Property or the Remainder (provided that Purchaser may share such
information with Purchaser's attorneys, consultants, advisors, prospective
partners, lenders and the like, and as required by requirements of the
Securities and Exchange Commission) and shall not use such information or
permit such information to be used for any purpose other than Purchaser's
decision whether to purchase the Property. Purchaser's obligations under
this Section 2.2 shall survive the termination of this Agreement.
2.3 TITLE AND SURVEY REVIEW. Sellers, at Sellers' sole cost and
expense, shall, within five (5) days after the date hereof, deliver to
Purchaser a commitment for Title Insurance or a Commitment to Insure (the
"COMMITMENT") dated no earlier than the date hereof, issued by Chicago
Title Insurance Company (the "TITLE COMPANY") through its agent American
Title Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (phone: 817-335-
5741, fax: ▇▇▇-▇▇▇-▇▇▇▇) (Attn: Ms. ▇▇▇▇▇▇ Cloud) (the "ESCROW AGENT"),
showing (i) title to the Phase I Property to be good and indefeasible and
vested in Verandah Condominiums (hereafter defined) and (ii) title to the
Remainder to be good and indefeasible and vested in the Partnership, both
together with true, correct and legible copies of all items and documents
referred to on Schedule B therein. Seller has delivered to Purchaser a
Survey (the "SURVEY") of the Phase I Property and the Remainder, prepared
by ▇▇▇▇▇▇ & Associates, Inc., and dated
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October 15, 1996. Purchaser shall have ten (10) business days after
receipt of the Commitment and copies of the exception documents to examine
the condition of title and the Survey and approve or disapprove the same.
Those items listed in the Commitment or shown on the Survey and not
disapproved of by Purchaser or waived by Purchaser's failure to timely
terminate this Agreement as hereinafter provided shall be referred to as
the "PERMITTED EXCEPTIONS". In the event that Purchaser disapproves of all
or any item referred to in the Commitment or shown on the Survey, Sellers
shall have a period of ten (10) business days after receipt of Purchaser's
written notice of title and/or survey objections within which they may, but
without obligation, cure or remove such exceptions provided, however,
Sellers shall, as of the Closing (or at Sellers' expense cause the
Partnership to do the same), pay, discharge, bond around or otherwise cause
to be released any liens which are Cure Items (hereinafter defined). In
the event Sellers fail or refuse to, or at Sellers' expense cause the
Partnership to, cure all of such items within such ten (10) business day
cure period, or in the event that Sellers notify Purchaser (the "CURE
NOTICE") of which items they will cure (the "CURE ITEMS") and which items
they will not cure, Purchaser shall have the right, exercisable within five
(5) days after the earlier of (i) the expiration of said ten (10) business
day cure period or (ii) receipt of Sellers' Cure Notice indicating that
Sellers will not cure all of Purchaser's objections, to terminate this
Agreement, whereupon the parties hereto shall be released from all
obligations hereunder except obligations which expressly survive the
termination hereof. If Purchaser shall not so terminate, Sellers shall
cure, or cause the Partnership to cure, all Cure Items and shall deliver
the Partnership Interests with the Partnership owning title in its existing
condition with the Cure Items having been cured and Purchaser shall, by
failing to timely terminate this Agreement within the time period set forth
above, shall be deemed to have waived any objections to such title which
have not been cured except as to any uncured Cure Item and warranties
contained in the documents of conveyance, and all such waived objections
shall constitute Permitted Exceptions for purposes hereof. In connection
with addressing any of Purchaser's objections as provided for in this
Section 2.3 above, Sellers agree to have the Survey updated to a date not
earlier than the date of Purchaser's comment letter and to correct the
certification so the same is certified in favor of the Partnership,
Purchaser, or any assignee and/or lender of Purchaser identified to Sellers
prior to such time (the Survey currently being certified in favor of
Purchaser's general partner).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SELLERS
3.1 OWNERSHIP OF ACQUIRED INTERESTS.
3.1.1 Phase I represents and warrants that it owns and has
1% of the Partnership Interests, and at the Closing shall transfer to
Purchaser, good and valid title to the Acquired Interests to be transferred
by it to Purchaser at the Closing, free and clear of all Encumbrances.
None of the Acquired Interests being sold by Phase I is
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subject to any restriction on transfer, except as set forth in the
Partnership Agreement and/or Encumbrances which will be released at
Closing, and no other person or entity has any right, title or interest in
or to such Partnership Interests. Neither Phase I nor any of its
Affiliates has any contract, agreement, arrangement or understanding with
respect to the sale or other disposition of the Partnership Interests to be
transferred by it to Purchaser at the Closing.
3.1.2 M&B represents and warrants that its owns and has an
aggregate of 80.4% of the Partnership Interests, and at the Closing shall
transfer to Purchaser, good and valid title to the Acquired Interests to be
transferred by it to Purchaser at the Closing, free and clear of all
Encumbrances. None of the Acquired Interests being sold by M&B is subject
to any restriction on transfer, except as set forth in the Partnership
Agreement and/or Encumbrances which will be released at Closing, and no
other person or entity has any right, title or interest in or to such
Partnership Interests. Neither M&B nor any of their respective Affiliates
has any contract, agreement, arrangement or understanding with respect to
the sale or other disposition of the Partnership Interests to be
transferred by it to Purchaser at the Closing.
3.1.3. JSDP represents and warrants that it owns and has 1%
of the Partnership Interests, and at the Closing shall transfer to
Purchaser, good and valid title to the Acquired Interests to be transferred
by it to Purchaser at the Closing, free and clear of all Encumbrances.
None of the Acquired Interests being sold by JSDP is subject to any
restriction on transfer, except as set forth in the Partnership Agreement
and/or Encumbrances which will be released at Closing, and no other person
or entity has any right, title or interest in or to such Partnership
Interests. Neither JSDP nor any of its Affiliates has any contract,
agreement, arrangement or understanding with respect to the sale or other
disposition of the Partnership Interests to be transferred by it to
Purchaser at the Closing.
3.1.4 TVA SP represents and warrants that it owns and has
14% of the Partnership Interests, and at the Closing shall transfer to
Purchaser, good and valid title to the Acquired Interests to be transferred
by it to Purchaser at the Closing, free and clear of all Encumbrances.
None of the Acquired Interests being sold by TVA SP is subject to any
restriction on transfer, except as set forth in the Partnership Agreement
and/or Encumbrances which will be released at Closing, and no other person
or entity has any right, title or interest in or to such Partnership
Interests. Neither TVA SP nor any of its Affiliates has any contract,
agreement, arrangement or understanding with respect to the sale or other
disposition of the Partnership Interests to be transferred by it to
Purchaser at the Closing. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ are the
sole partners of TVA SP.
3.1.5 Fairgrowth represents and warrants that its owns and
has an aggregate of 3.6% of the Partnership Interests, and at the
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Closing shall transfer to Purchaser, good and valid title to the
Acquired Interests to be transferred by it to Purchaser at the Closing,
free and clear of all Encumbrances. None of the Acquired Interests being
sold by Fairgrowth is subject to any restriction on transfer, except as set
forth in the Partnership Agreement and/or Encumbrances which will be
released at Closing, and no other person or entity has any right, title or
interest in or to such Partnership Interests. Neither M&B nor any of their
respective Affiliates has any contract, agreement, arrangement or
understanding with respect to the sale or other disposition of the
Partnership Interests to be transferred by it to Purchaser at the Closing.
3.2 DUE FORMATION. The OP Unit Sellers represent and warrant as
follows: The Partnership is a limited partnership duly formed and validly
existing under the laws of the State of Texas with all requisite power and
authority to own, lease and operate its properties and to carry on its
business as now being conducted. The Partnership does not conduct business
or own any property in any jurisdiction other than Texas, the conduct or
ownership of which would require qualification. The Partnership does not
hold any interest in any other security issued by a corporation or other
entity.
3.3 DUE AUTHORIZATION.
3.3.1 Each of the Cash Sellers represents and warrants that
(i) it is a partnership or corporation duly formed or incorporated, validly
existing and in good standing under the laws of the State of its formation
or incorporation and (ii) the execution, delivery and performance of this
Agreement by the Cash Sellers has been duly authorized by all necessary
action on the part of the Cash Sellers, and the Cash Sellers have full
power and authority to execute and deliver this Agreement, to perform their
respective obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by the Cash Sellers, and constitutes the legal, valid and binding
obligation of the Cash Sellers, enforceable in accordance with its terms,
except as such enforceability may be limited by (a) applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws now or hereafter in
effect relating to creditors' rights generally and (b) general principles
of equity. The execution, delivery and performance of this Agreement and
all other instruments, agreements, certificates and documents contemplated
hereby by the Cash Sellers do not and will not on the Closing Date: (i)
violate or conflict with (A) any term or provision of the partnership
agreement or the certificate of incorporation or bylaws of any Cash Seller;
(B) any decree or judgment of any court or Governmental Authority which may
be applicable to or binding on any Cash Seller or the Partnership Interests
of any Cash Seller, except where any such violation or conflict would not
have a material adverse effect on the Cash Sellers' ability to consummate
the transactions contemplated hereby; (C) any law, statute, rule or
regulation to which any Cash Seller is subject; (ii) violate or conflict
with, or result in a breach of, or constitute a default (or an event of
default) under, or result in the creation of any Encumbrance upon, any of
the Partnership Interests owned by any Cash Seller except for Encumbrances
to be released as of the Closing; or (iii) permit the acceleration of the
maturity of any indebtedness secured by any Partnership
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Interests owned by any Cash Seller, except for Encumbrances which
will be released as of the Closing.
3.3.2 Each of the OP Units Sellers represents and warrants
that (i) it is a partnership or corporation duly formed or incorporated,
validly existing and in good standing under the laws of the State of its
formation or incorporation and (ii) the execution, delivery and performance
of this Agreement by the OP Units Sellers has been duly authorized by all
necessary action on the part of the OP Units Sellers, and the OP Units
Sellers have full power and authority to execute and deliver this
Agreement, to perform their respective obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by the OP Units Sellers, and the OP
Units Sellers have not taken any action which would cause this Agreement
not to constitute the legal, valid and binding obligation of the OP Units
Sellers, enforceable in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws now or hereafter in effect
relating to creditors' rights generally and (b) general principles of
equity. The execution, delivery and performance of this Agreement and all
other instruments, agreements, certificates and documents contemplated
hereby by the OP Units Sellers do not and will not on the Closing Date,
except for Encumbrances which will be released at the Closing: (i) violate
or conflict with (A) any term or provision of the Partnership Agreement of
the Partnership; (B) any term or provision of the partnership agreement or
the certificate of incorporation or bylaws of any OP Units Seller; (C) any
decree or judgment of any court or Governmental Authority which may be
applicable to or binding on any OP Units Seller, the Partnership, the
Partnership Assets or the Partnership Interests, except where any such
violation or conflict would not have a material adverse effect on the OP
Unit Sellers' ability to consummate the transactions contemplated hereby;
(D) any law, statute, rule or regulation to which any OP Units Seller or
the Partnership is subject; (ii) violate or conflict with, or result in a
breach of, or constitute a default (or an event of default) under, or
result in the creation of any Encumbrance upon, any of the Partnership
Assets or the Partnership Interests, except where any such violation or
conflict would not have a material adverse effect on the OP Unit Sellers'
ability to consummate the transactions contemplated hereby; or (iii) permit
the acceleration of the maturity of any indebtedness of the Partnership, or
any indebtedness secured by any of the Partnership Assets or the
Partnership Interests, except for Encumbrances which will be released as of
the Closing.
3.4 NO OTHER AGREEMENT.
3.4.1 The Cash Sellers represent and warrant that neither
the Cash Sellers nor the Partnership nor any of their respective Affiliates
has any contract, agreement, arrangement or understanding, with respect to
the sale or other disposition of the Partnership Interests owned by the
Cash Sellers except as set forth in this Agreement.
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3.4.2 The OP Units Sellers represent and warrant that
neither the OP Units Sellers nor the Partnership nor any of their
respective Affiliates has any contract, agreement, arrangement or
understanding, other than the Verandah Apartments Agreement, with respect
to the sale or other disposition of the Partnership Assets or the
Partnership Interests owned by the OP Units Sellers except as set forth in
this Agreement. No person, firm or corporation or other entity has any
right or option to acquire the Phase I Property, or any part thereof, or
any other Partnership Assets from the Partnership.
3.5 CONSENTS.
3.5.1. The Cash Sellers represent and warrant that as of the
Closing Date, the Cash Sellers shall have obtained all necessary consents
and permissions related to the transfer of the Acquired Interests to be
conveyed by them as herein contemplated and required under any covenant,
agreement, Encumbrance, law or regulation which is applicable to any Cash
Seller, other than consents which would not prevent the transactions from
closing on a timely basis or result in a material liability.
3.5.2 The OP Units Sellers represent and warrant that as of
the Closing Date, the OP Units Sellers shall have obtained all necessary
consents and permissions related to the transfer of the Acquired Interests
to be conveyed by them as herein contemplated and required under any
covenant, agreement, Encumbrance, law or regulation which is applicable to
any OP Units Seller, other than consents which would not prevent the
transactions from closing on a timely basis or result in a material
liability.
3.6 TAXES. As used in this Section 3.6 or in Article XI, "TAX" or
"TAXES" are defined to include all taxes, however denominated, imposed by
any federal, state, local or foreign government or any agency or political
subdivision of any such government, which taxes shall include, without
limiting the generality of the foregoing, all income or profits taxes
(including any interest, penalties or additions attributable to or imposed
on or with respect to any such taxes), real property gain taxes, payroll
and employee withholding taxes, unemployment insurance taxes, social
security taxes, sales and use taxes, ad valorem taxes, excise taxes,
franchise taxes, gross receipts taxes, business license taxes, occupation
taxes, real and personal property taxes, stamp taxes, environmental taxes,
transfer taxes, workers' compensation, Pension Benefit Guaranty Corporation
premiums and other governmental charges, and other obligations of the same
or of a similar nature to any of the foregoing, which the Partnership or
the Sellers are required to pay, withhold or collect, imposed with respect
to the assets or operations of the Partnership. As used in this Section
3.6, "TAX RETURN" is defined as any return, report, information return
schedule or other document (including, without limitation, any related or
supporting information or schedule, such as self-employment schedules and
returns, federal tax Form 1099's for all applicable transactions, property
tax filings, sales and use tax returns, federal and state payroll reports
and federal tax Form 5500's) filed or required to be filed with any
federal, state, local or foreign
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governmental entity or other authority in connection with the
determination, assessment or collection of any Tax or the administration of
any laws, regulations or administrative requirements relating to any Tax.
The OP Units Sellers represent and warrant that:
3.6.1 The Partnership has timely filed (or has had timely
filed on its behalf) or will timely file or cause to be timely filed, all
Tax Returns required by applicable law to be filed by it prior to or as of
the Closing Date. All such Tax Returns and amendments thereto are or will
be true, complete and correct in all respects.
3.6.2 No audit by a Tax authority is pending or threatened
with respect to any Tax Returns filed by, or Taxes due from, the
Partnership. No issue has been raised by any Tax authority in any audit of
the Partnership that if raised with respect to any other period not so
audited could be expected to result in a material proposed deficiency for
any period not so audited. No deficiency or adjustment for any Taxes has
been threatened, proposed, asserted or assessed against the Partnership.
There are no liens for Taxes upon the assets of the Partnership, except
liens for current Taxes not yet due.
3.6.3 The Partnership has not given or been requested to
give any waiver of statutes of limitations relating to the payment of Taxes
or has executed powers of attorney with respect to Tax matters, which will
be outstanding as of the Closing Date.
3.6.4 There are no changes in the tax accounting methods
subject to Section 481(a) of the Internal Revenue Code of 1986, as amended
(the "CODE") which have an ongoing effect on the Partnership.
3.6.5 Each Seller other than Phase I and Fairgrowth is not a
foreign person, foreign corporation, foreign partnership, foreign trust or
foreign estate within the meaning of Section 1445 of the Code.
3.6.6 The Partnership is, and has been since its formation,
classified as a partnership and not as an association taxable as a
corporation for Federal income tax purposes for any and all periods up to
and including the Closing. The IRS has not challenged or threatened to
challenge the status of the Partnership as a partnership and not an
association taxable as a corporation for Federal income tax purposes. All
Tax Returns and other filings have been filed on a basis consistent with
such position for Federal income tax purposes.
3.7 ASSETS, LIABILITIES AND ACTIVITIES OF THE PARTNERSHIP. The OP
Unit Sellers represent and warrant that the Partnership has no liabilities,
contingent or otherwise, other than liabilities which are either (i)
prorated pursuant to Section 1.3 hereof, (ii) otherwise referred to or
dealt with hereunder or under the Verandah Apartments Agreement, (iii) paid
in
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full at the Closing or (iv) which Purchaser would have had or incurred had
it purchased the Phase I Property and the Remainder rather than the
Acquired Interests.
As to Sections 3.8 through 3.19, each of Phase I and the OP Units
Sellers (for purposes of Section Sections 3.8 through 3.19, the term
"Sellers" shall mean only Phase I and the OP Units Sellers"), severally and
not jointly, represents and warrants that:
3.8 ZONING. No Seller has received any written notice or has any
knowledge of any pending or proposed changes or modifications to the
current zoning of the Phase I Property or the Remainder.
3.9 LITIGATION. To each Seller's knowledge, except for the Planned
Donation and except as reflected in the Commitment, there are no existing
or pending litigation, claims, condemnations or sales in lieu thereof, with
respect to any aspect of the Phase I Property or the Remainder or other
Partnership Assets nor, to the knowledge of such Seller, have any such
actions, suits, proceedings or claims been threatened or asserted.
3.10 LEASES. The executed copies of the leases to be made available
for Purchaser's inspection (and to be a Partnership Asset at the Closing)
shall be, to each Seller's knowledge, true and correct, and shall
constitute all leases or occupancy agreements affecting the Phase I
Property. Seller has not received any written notice from any tenant that
the Partnership is in default under any such lease. There are no leases or
occupancy agreements affecting the Remainder. To such Seller's knowledge,
except as set forth on a rent roll for the Phase I Property (the "RENT
ROLL") to be delivered pursuant to Section 2.2, there is not in existence
any condition or fact which with notice or passage of time or both, shall
constitute a material default by either the landlord or by the tenant under
such leases. To each Seller's knowledge: other than as shown on the Rent
Roll, no such tenants shall be entitled to any rebates, rent concessions or
free rent; other than as shown on the Rent Roll, no written commitments
have been made to any tenant for repairs or improvements other than a
general landlord requirement for normal maintenance in the future; no rents
due under any such tenant leases have been assigned, hypothecated or
encumbered other than to the holders of indebtedness to be released at
Closing; and other than as shown on the Rent Roll there are no leasing
fees, leasing commissions, locator fees or similar charges payable to any
person or entity in regard to the Phase I Property.
3.11 COMPLIANCE WITH LAW. No Seller has any knowledge, and has not
received any written notice, of any lack of compliance with applicable
setback requirements and other applicable laws, statutes, ordinances,
codes, covenants, conditions or restrictions of any kind or nature
affecting the Phase I Property or the Remainder, including zoning,
building, health, fire, safety or similar laws and ordinances, orders or
regulations, or the certificate or certificates of occupancy issued or to
be issued for the Phase I Property. Notwithstanding the foregoing, (i) as
to the retaining walls on the Phase I Property, each Seller discloses that
it understands that the same would not be in compliance with applicable
building codes if constructed as of the date hereof in their current
manner; (ii) the Remainder has not, as of this
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date, been platted as a separate lot; and (iii) Sellers make no
representation or warranty as to whether the Phase I Improvements are in
compliance with applicable building codes if constructed as of the date
hereof in their current manner.
3.12 ACCESS/UTILITIES. No Seller has any knowledge of any proposed
termination or reduction of the current access from the Phase I Property to
existing thoroughfares, or of any reduction in or to sewer or other utility
services presently serving the Phase I Property, other than those matters
shown on the Commitment
3.13 ABSENCE OF BANKRUPTCY PROCEEDINGS. There are no attachments,
executions, assignments for the benefit of creditors or voluntary or, to
such Seller's knowledge, involuntary proceedings in bankruptcy pending
against or contemplated by Sellers or the Partnership, and to the knowledge
of each Seller, no such actions have been threatened against it or the
Partnership.
3.14 NO DEFAULTS OR VIOLATIONS. Neither the execution and delivery
of this Agreement by Sellers nor Sellers' performance of their obligations
hereunder will result in a violation or breach of any term or provision or
constitute a default or accelerate the performance required under any other
agreement or document to which any of the Sellers is a party or is
otherwise bound (subject to satisfaction of requirements of any loan
documents evidencing or securing debt which is secured by the Phase I
Property) and to Sellers' knowledge will not constitute a violation of any
law, ruling, regulation or order to which any Seller is subject.
3.15 UTILITIES. No Seller has any knowledge nor has it received any
notice of any proposed reductions or changes to the utilities (including
but not limited to, water, storm and sanitary sewers, gas, electricity and
telephone facilities) currently serving the Phase I Property. Each Seller
has no knowledge of any contingent liabilities, costs, expenses, or
outstanding assessments, including, without limitation, "tap-in fees",
which may be incurred by the Partnership as a condition to the use or
enjoyment of such utilities except for normal fees and expenses, including
deposits, which may become payable in connection with the transfer of
utility services to the Partnership and thereafter to Purchaser.
3.16 ENVIRONMENTAL LAWS. To Seller's knowledge, neither the Phase I
Property, the Remainder, the Partnership nor any Seller are in violation of
any existing, applicable Environmental Law and are not subject to any
existing, pending or threatened investigation or inquiry by any
governmental authority and are not subject to any remedial action or
obligations under any Environmental Law. To Seller's knowledge, no
underground storage tanks are now and were not previously located on the
Phase I Property or the Remainder. To Seller's knowledge, no hazardous
substances or toxic wastes have been disposed of on the Phase I Property or
the Remainder in violation of Environmental Laws. To the knowledge of each
Seller, during the Partnership's ownership of the Phase I Property and
Verandah Condominiums' ownership of the Phase I Property, neither the
Partnership nor Verandah Condominiums have violated any Environmental Law.
-16-
3.17 ABSENCE OF LIENS OR ASSESSMENTS. No Seller has received any
written notice or has any knowledge of any pending improvements, liens or
special assessments to be made against the Phase I Property or the
Remainder by any governmental authority except for any matter set forth in
the Commitment. Neither Sellers, nor to the best of each Seller's
knowledge, any prior owner, have applied for or been granted an
agricultural tax exemption so that the Phase I Property or the Remainder
would be subject to any "roll back" taxes.
3.18 NO UNPAID BILLS OR CLAIMS. As of the Closing Date there will
be no unpaid bills or claims in connection with the construction of or any
repairs to the Phase I Property or the Remainder by or on behalf of the
Partnership.
3.19 CONTRACTS. As of the Closing Date, neither the Partnership nor
the Phase I Property or the Remainder will be obligated under any
employment, maintenance, management or service contract pertaining to the
Phase I Property or the Remainder which cannot be canceled or terminated
upon written notice of thirty (30) days or less, except for the Phase I
Approved Service Contracts and matters reflected in the Commitment.
As used in Sections 3.8 through 3.19, references to a Seller's
knowledge, when used in any context, or in any combination, including where
reference is made to "best" knowledge, shall be limited to the current,
actual knowledge, without investigation or inquiry (except as set forth
below), of ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇▇▇. Prior to Sellers' execution
hereof, Sellers have provided copies of these representations and
warranties to ▇▇. ▇▇▇▇▇▇▇▇▇, who through his involvement in the original
construction of the Phase I Property and his current involvement as liaison
between Sellers and the current property manager, would be in a position to
have some knowledge regarding the subject of these representations and
warranties. Further, Sellers have provided copies of these representations
and warranties to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the direct property supervisor of the
Phase I Property, and ▇▇. ▇▇▇▇▇▇▇▇ has indicated to Sellers that she
believes these representations and warranties to be true and correct in all
material respects. Neither Mr. Bratty, ▇▇. ▇▇▇▇▇▇▇▇▇ nor ▇▇. ▇▇▇▇▇▇▇▇
shall be deemed to have made any of these representations and warranties in
any personal capacity.
PURCHASER AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, THE SELLERS DO NOT AND HAVE NOT MADE ANY REPRESENTATIONS OR
WARRANTIES TO PURCHASER REGARDING THE PHASE I PROPERTY.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Sellers and the Partnership
as follows:
4.1 DUE ORGANIZATION. Purchaser is a limited partnership duly
formed, validly existing and in good standing under the laws of the State
of Delaware, with all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted.
4.2 DUE AUTHORIZATION. Purchaser represents and warrants that the
execution, delivery and performance of this Agreement by Purchaser has been
duly authorized by all necessary action on the part of Purchaser, and
Purchaser has full power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Purchaser and constitutes the legal, valid and
binding obligation of Purchaser, enforceable in accordance with its terms,
except as such enforceability may be limited by (a) applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws now or hereafter in
effect relating to creditors' rights generally and (b) general principles
of equity. The execution, delivery and performance of this Agreement and
all other instruments, agreements, certificates and documents contemplated
hereby by Purchaser do not and will not on the Closing Date: (i) violate or
conflict with (A) any term or provision of the partnership agreement of
Purchaser; (B) any decree or judgment of any court or Governmental
Authority which may be applicable to or binding on Purchaser, the
partnership assets of Purchaser or the partnership interests in Purchaser;
(C) any law, statute, rule or regulation to which Purchaser is subject;
(ii) violate or conflict with, or result in a breach of, or constitute a
default (or an event of default) under, or result in the creation of any
Encumbrance upon, any of the partnership assets of Purchaser or the
partnership interests in Purchaser; or (iii) permit the acceleration of the
maturity of any indebtedness of Purchaser or any indebtedness secured by
any of the partnership assets of Purchaser or the partnership interests in
Purchaser.
4.3 CONSENTS. No notice to, filing with, authorization of,
exemption by, or consent of any person, entity, or public or Governmental
Authority is required in order for Purchaser to consummate the transactions
contemplated hereby.
4.4 REGISTRATION OF SHARES. The Shares which may be issued upon
exchange of OP Units issued pursuant hereto will be issued pursuant to an
effective registration statement under the Securities Act.
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ARTICLE V
COVENANTS OF SELLERS
Each of the Sellers agrees, as to itself only, that from the date
hereof to the Closing Date:
5.1 IMPLEMENTING AGREEMENT. Each of the Sellers will, and shall
cause the Partnership to, take all actions and do all things necessary,
proper, or advisable to fulfill their obligations under this Agreement and
to consummate the transactions contemplated hereby.
5.2 ADDITIONAL ACTIONS. Each of the Sellers will take all
additional steps as may be required to put Purchasers in exclusive
possession and operating control of the assets, properties and business of
the Partnership, including the following actions: if requested by
Purchaser, each Seller will execute and deliver an amendment to, or a
restatement of, the Partnership Agreement, and also amendments, if any, to
the Partnership's fictitious name filings, all as prepared by Purchaser's
legal counsel and in form and substance acceptable to Purchaser and to
Sellers, acting reasonably (it being understood that none of the foregoing
documents will increase Sellers' liabilities beyond the level they would
have been without the execution of such documents).
5.3 PRESERVATION OF PARTNERSHIP INTERESTS. Each Seller agrees that
such Seller will not sell, assign, transfer, pledge or otherwise dispose of
any interest in such Seller's Partnership Interests, except as expressly
contemplated by this Agreement.
5.4 PRESERVATION OF OWNERSHIP OF PHASE I PROPERTY. No Seller
shall, and shall not cause the Partnership to, sell, assign or create any
right, title or interest whatsoever in or to the Phase I Property or the
Remainder or create any lien, Encumbrance or charge thereon, other than
liens or Encumbrances either noted in the Commitment or those which shall
be released at Closing. The foregoing shall not limit or impair the
Partnership's right or ability to enter into leases and service contracts
in the ordinary course of operating the Phase I Property.
5.5 NO DEFAULT. Neither Phase I nor any OP Units Seller shall, and
each of Phase I and the OP Units Sellers shall cause the Partnership not
to, do any act or omit to do any act, or permit any act or omission to act,
which will cause a material breach of any contract, agreement or
understanding to which the Partnership, the Partnership Assets or the
Partnership Interests are subject, the breach of which would have an
adverse effect on the financial condition, operation or prospects of the
Partnership or on any of the Partnership Assets or the Partnership
Interests. M&B shall not take any affitmative action permitting the
Partnership to do any act or omit to do any act, or permit any act or
omission to act, which will cause a material breach of any contract,
agreement or understanding to which the Partnership, the Partnership Assets
or the Partnership Interests are subject, the breach of which would have an
adverse effect on the financial condition, operation or prospects of the
Partnership or on any of the Partnership Assets or the Partnership
Interests.
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5.6 COMPLIANCE WITH LAWS. Phase I and the OP Units Sellers shall
cause the Partnership to, and M&B will not take any affirmative action
which would permit the Partnership to fail to, duly comply with all laws,
statutes, regulations, rules and orders applicable to the business or
operation of the Partnership or as may be required for the valid and
effective transfer and assignment of the Partnership Interests. Each
Seller agrees to promptly notify Purchaser of any fact of which such Seller
becomes aware which would cause the representation set forth in Section
3.16 to become false and of any notice that such Seller receives regarding
the matters set forth in Section 3.16.
5.7 OPERATION OF THE PARTNERSHIP AND THE PHASE I PROPERTY. From
and after the date hereof with respect to the Remainder, and from and after
the time the Partnership acquires ownership of the Phase I Property with
respect to the Phase I Property:
5.7.1 Phase I and the OP Units Sellers shall cause the
Partnership to, and M&B will not take any affirmative action which would
permit the Partnership to fail to, operate and maintain the Phase I
Property through Closing in substantially the same manner as heretofore
operated and maintained, reasonable and ordinary wear and tear and damage
by fire or casualty excepted. Phase I and the OP Units Sellers shall cause
the Partnership to, and M&B will not take any affirmative action which
would permit the Partnership to fail to, make-ready all rental units of the
Phase I Property vacated at least ten (10) days prior to the Closing Date
to a condition consistent with current practices with respect to the Phase
I Property, and as of the Closing all such vacated units shall be ready for
occupancy by a new tenant. In the event any unit vacated at least ten (10)
days prior to the Closing Date has not been made ready for occupancy to a
condition consistent with current practices with respect to the Phase I
Property as of the Closing Date, Purchaser and Sellers shall agree upon an
appropriate amount which shall be credited to the Purchase Price; in the
event Purchaser and Sellers are unable to agree on an appropriate amount,
the Broker (as defined herein) shall determine a fair and reasonable amount
which shall be credited to the Purchase Price. During the term of this
Agreement, Purchaser, or its authorized agents, shall be given reasonable
access to the Phase I Property in order to prepare for an orderly
transition of management thereof.
5.7.2 All permits, licenses and occupancy certificates,
including, but not limited to, all building and use permits and a
certificate of occupancy, which have been obtained on all operations to
date and are currently in effect shall be maintained through Closing, to
the extent required by applicable legal requirements.
5.7.3 Phase I and the OP Unit Sellers shall, and shall cause
the Partnership to, and M&B will not take any affirmative action which
would permit the Partnership to fail to, conduct the Partnership's leasing
activities in the normal course of business and shall execute no new tenant
leases other than on the form of lease currently used with respect to the
Phase I Property or such other form as may be approved by Purchaser, with
such new tenant leases being for a term (including renewals) no longer than
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twelve (12) months past the Closing Date without Purchaser's prior
written approval. Further, none of Phase or the OP Unit Sellers shall, and
shall not permit the Partnership to, nor shall M&B take any affirmative
action which would permit the Partnership to, grant any leasing concessions
which are not currently being offered at the Phase I Property without
Purchaser's prior written consent. Phase I and the OP Units Sellers shall
cause the Partnership to, and M&B will not take any affirmative action
which would permit the Partnership to fail to, quote all rents and leases
without monitored alarms unless the resident contracts individually with
the monitoring service.
5.7.4 Neither Phase I nor any OP Units Seller shall allow
the Partnership to, nor shall M&B take any affirmative action which would
permit the Partnership to, transfer or remove any Phase I Personal
Property or fixtures from the Phase I Property subsequent to the date
hereof, except for purposes of replacement thereof, in which case such
replacements shall be promptly installed prior to Closing and shall be
comparable in quantity and quality to the item(s) being replaced. All
Phase I Personal Property and fixtures, including all HVAC equipment, are
and will be on the Closing Date on the Phase I Property and in
substantially the same condition as currently existing, reasonable and
ordinary wear and tear and damage by fire or casualty excepted.
5.7.5 Phase I and the OP Units Sellers shall satisfy, or
shall cause the Partnership to, and M&B will not take any affirmative
action which would permit the Partnership to fail to, satisfy prior to
Closing, any and all claims for mechanics' or materialmen's liens or other
claims or charges against the Phase I Property or the Remainder or any part
thereof on or prior to Closing; provided, however, Sellers shall have the
right to contest, or cause the Partnership to contest, any such claims so
long as a bond is posted by Sellers and/or other procedures reasonably
acceptable to Purchaser are followed in order to protect the Phase I
Property or the Remainder and so long as no exception therefor appears in
the Phase I Owner's Title Policy described in Section 7.1 herein.
5.7.6 Phase I and the OP Units Sellers shall cause the
Partnership not to, and M&B will not take any affirmative action which
would permit the Partnership to: amend the Partnership Agreement or admit
new partners (except as contemplated herein); incur or assume any long-term
or short-term debt other than long-term or short-term debt discharged at or
prior to Closing; assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the
obligations of any other person other than obligations discharged at or
prior to Closing; make any loans or advances to any person; mortgage or
pledge any of its assets, tangible or intangible, or create any Encumbrance
thereupon other than Encumbrances; adopt a plan of complete or partial
liquidation, dissolution, consolidation, restructuring, recapitalization or
other reorganization; conduct any business other than as provided in
Section 5.7.1 hereof; sell, lease, encumber, transfer or dispose of any
assets outside the ordinary course of business consistent with past
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practices; admit liability, guilt or culpability in connection with
the settlement or compromise of any action, suit or proceeding against or
involving the Partnership or the Phase I Property or the Remainder; or take
any action likely to materially decrease or diminish the value of the Phase
I Property. Nothing herein contained shall limit the ability of the
Partnership to operate the Phase I Property in the ordinary course of
business consistent with past practices.
5.7.7 No Seller shall, Phase I and the OP Units Sellers
shall not permit the Partnership to, and M&B will not take any affirmative
action which would permit the Partnership to, enter into any leases or
agreements with respect to or improve or otherwise physically alter the
Remainder.
5.8 ACCURACY OF REPRESENTATIONS AND WARRANTIES. No Seller shall
intentionally take any action, or intentionally omit to take any action,
which action or omission would have the effect of violating any of the
representations and warranties of such Seller contained in this Agreement.
5.9 NOTICE. Sellers shall provide to Purchaser copies of any
notices of violations referred to in Section 3.16 that the Partnership may
receive following the date hereof.
5.10 CODE VIOLATIONS. Prior to Closing, Phase I and the OP Units
Sellers shall at such Sellers' expense cause the Partnership to make, cure
or correct all violations referred to in Section 3.11 ("CODE VIOLATIONS")
if any such Code Violations were caused by the Partnership or Verandah
Condominiums' actions (the "REQUIREMENTS"). If the cost of the
Requirements (together with similar "Requirements" under the Verandah
Apartments Agreement) exceeds $25,000 (the "MAXIMUM AMOUNT"), then if such
Sellers do not at such Sellers' expense cause the Partnership to cure,
correct or comply with same prior to the Closing Date, Purchaser may either
terminate this Agreement or close this transaction and receive a credit
against the Purchase Price in an amount equal to the difference between the
Maximum Amount and the amount spent by such Sellers or the Partnership (and
the Phase II Partnership) in curing, correcting or complying with the
Requirements. If the cost of correcting, curing or complying with the
Requirements (together with similar "Requirements" under the Verandah
Apartments Agreement) is less than or equal to the Maximum Amount and if
such Sellers or the Partnership (and the Phase II Partnership) shall not at
such Sellers' expense have corrected same prior to Closing, Purchaser shall
be entitled to a credit against of the Purchase Price in an amount equal to
the cost of correcting, curing or complying with the Requirements. The
terms "Code Violations" and "Requirements" as used herein shall not include
or apply to matters referred to in the second sentence of Section 3.11. In
addition, the Maximum Amount shall be the aggregate amount required to be
incurred or otherwise permitted to be charged against such Sellers under
this Agreement and Phase II Partnership under Section 6.2.10 of the
Verandah Apartments Agreement.
5.11 CONDUCT OF VERANDAH CONDOMINIUMS. From the date hereof through
the date the Partnership become the record owner of the Phase I Property,
Phase I and the OP ▇▇▇▇▇
-▇▇-
▇▇▇▇▇ ▇ and the OP Units Sellers shall cause Verandah Condominiums to
comply with the covenants contained in Section 5.7 hereof.
ARTICLE VI
COVENANTS OF PURCHASER
Purchaser agrees that from the date hereof to the Closing Date:
6.1 IMPLEMENTING AGREEMENT. Purchaser will take all actions and do
all things necessary, proper and advisable to fulfill its obligations under
this Agreement and to consummate the transactions contemplated hereby.
6.2 DISPOSITION OF PHASE I PROPERTY. For a period of five years
from the Closing Date, Purchaser will not, without the written consent of
each of the OP Units Sellers, sell, assign or transfer, other than to an
Affiliate of Purchaser, the Partnership or the Phase I Property. Purchaser
may cause the Partnership to be dissolved and liquidated at Closing, with
the Phase I Property and the Remainder being transferred to Purchaser or an
Affiliate of Purchaser.
6.3 CONFIDENTIALITY. Except as required by any Governmental
Authority, all information supplied to Purchaser pursuant to Section 2.2
shall be maintained in strict confidence by Purchaser, and in the event
that this Agreement is terminated, Purchaser shall make no further use of
such information whatsoever.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS
OF PURCHASER
The obligations of Purchaser under this Agreement are, at the option
of Purchaser, subject to satisfaction of the following conditions on or
before the Closing Date (or such earlier date as may be specified):
7.1 OWNERSHIP OF PHASE I PROPERTY AND THE REMAINDER. The
Partnership shall own the Phase I Property and the Remainder free and clear
of all liens and Encumbrances, other than existing Encumbrances, not less
than one day prior to the expiration of the Review Period. Before the
expiration of the Review Period, Sellers shall provide to Purchaser copies
of all documents evidencing such acquisition. Purchaser shall be
satisfied, in its sole discretion, that the Partnership owns all right,
title and interest to the Phase I Property and the Remainder, subject to
the Permitted Exceptions, and Purchaser shall have received a Commitment,
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updated to the expiration of the Review Period, showing title to the Phase
I Property as vested in the Partnership. Additionally, Sellers shall
deliver to Purchaser a Texas Standard Owner's Policy of Title Insurance
(the "PHASE I OWNER'S TITLE POLICY") at Closing, or the Title Company's
irrevocable commitment to issue the same, in the full amount of the
Purchase Price, subject only to the Permitted Exceptions, insuring the
Partnership as the owner of the Phase I Property and the Remainder.
Purchaser intends to dissolve the Partnership at Closing and transfer the
Phase I Property to Purchaser or an Affiliate of Purchaser. Under the
Verandah Apartments Agreement, Verandah Phase II Partnership, a Texas
limited partnership has committed to furnish Purchaser or its permitted
assignee a policy of title insurance (the "PHASE II OWNER'S TITLE POLICY").
The Phase I Owner's Title Policy and the Phase II Owner's Title Policy
shall be issued as a single policy, insuring that fee simple title to all
of the Phase I Property, the Remainder and the Phase II Property is vested
in Purchaser or its permitted assignee. Sellers shall pay the cost of the
Phase I Owner's Title Policy. In the event that the title company is not
willing to issue the Phase I Owners Title Policy and the Phase II Owners
Title Policy as a single policy, then the Phase I Owners Policy shall be
issued a separate policy at Sellers' expense. If Purchaser elects not to
dissolve the Partnership at Closing, thereby requiring separate issuance of
the Phase I Owners Title Policy and the Phase II Owners Title Policy, then
Purchaser shall be responsible for any incremental premium cause thereby.
Sellers shall, at their sole cost and expense, cause all existing
indebtedness secured by the Phase I Property or the Remainder, to be
released, including the payment of any prepayment premium.
7.2 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of the Sellers contained herein shall be true and correct in all
material respects on and as of the date hereof and (except for such changes
as are contemplated herein) on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date.
7.3 COMPLIANCE WITH AGREEMENTS AND COVENANTS. Each of the Sellers
shall, in all material respects, have performed and complied with all of
their respective obligations, agreements and covenants hereunder prior to
the Closing Date.
7.4 CONDITION OF PROPERTY. The environmental, financial and
physical condition of the Phase I Property and the Remainder shall not
change adversely and materially after the date hereof.
7.5 VERANDAH APARTMENTS AGREEMENT. All conditions precedent to
Purchaser's obligations under the Verandah Apartments Agreement shall have
been satisfied or waived.
7.6 OTHER CLOSING DOCUMENTS. All of the other agreements,
certificates and instruments to be delivered to Purchaser at the Closing
pursuant to Article IX hereof shall have been delivered to Purchaser.
7.7 FAILURE TO CLOSE. In the event that any of the conditions to
Purchaser's obligation to close shall not have been satisfied on or before
the Closing Date (and all of Sellers'
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obligations to close shall have been satisfied on or before the Closing
Date) or in the event that any Seller shall default under this Agreement,
Purchaser may, at its option, and as its sole and exclusive remedy,
terminate this Agreement pursuant to Section 10.1 hereof or seek to enforce
specific performance of this Agreement against any defaulting Seller;
provided however that in the event that as a result of a Seller's voluntary
and intentional actions specific performance is not available as a remedy,
such as if a Seller sells the Acquired Interest to be transferred by it at
the Closing, or any portion thereof, to a third party, Purchaser may seek
damages for breach of this Agreement from such defaulting Seller. If
Purchaser elects to terminate this Agreement as provided above, it is
entitled to a full and immediate refund of all ▇▇▇▇▇▇▇ Money previously
deposited pursuant to the Verandah Apartments Agreement.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS
The obligations of the Sellers under this Agreement are, at the option
of the Sellers, subject to the satisfaction of the following conditions on
or before the Closing Date:
8.1 OWNERSHIP OF PHASE I PROPERTY. The Partnership shall actually
acquire the Phase I Property free and clear of all liens and Encumbrances,
other than the Permitted Exceptions.
8.2 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of Purchaser contained herein shall be true and correct in all
material respects on and as of the date hereof and (except for such changes
as are contemplated herein) on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date.
8.3 COMPLIANCE WITH AGREEMENTS AND COVENANTS. Purchaser shall have
performed and complied with all of its obligations, agreements and
covenants hereunder in all material respects prior to the Closing Date.
8.4 OTHER AGREEMENTS. All of the other agreements, certificates
and instruments to be delivered to the Sellers at the Closing pursuant to
Article IX hereof shall have been delivered to the Sellers.
8.5 VERANDAH APARTMENTS AGREEMENT. Purchaser shall not be in
default under the Verandah Apartments Agreement.
8.6 FAILURE TO CLOSE. In the event that any of the conditions to
Sellers' obligation to close shall not have been satisfied on or before the
Closing Date (and all of Purchaser's obligations to close shall have been
satisfied on or before the Closing Date), Sellers' sole remedy (subject to
Section 10.2) shall be to terminate this Agreement and Purchaser's
liability shall be limited to the loss of the ▇▇▇▇▇▇▇ Money deposited
pursuant to the Verandah Apartments Agreement, and it shall be the
responsibility of Sellers to enter into such
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agreement with the Phase II Partnership regarding an equitable sharing
thereof. In any event, Purchaser shall pay to Sellers the sum of One
Hundred Dollars ($100.00) as independent consideration for Sellers'
agreement to sell the Partnership Interests to Purchaser. Purchaser and
Sellers acknowledge that such amount shall be liquidated damages with
respect to Purchaser's breach, that Seller's actual damages would be
difficult to ascertain and that such amount is a fair and reasonable
estimate of Seller's damages and is not intended as a penalty.
ARTICLE IX
CLOSING
9.1 CLOSING. The Closing shall be held no later than forty-five
(45) days after the expiration of the Review Period, the actual date being
designated by Purchaser upon at least five (5) business days prior written
notice to Sellers (the "CLOSING DATE"), provided that in any event the
Closing shall be held simultaneously with closing under the Verandah
Apartments Agreement. The Closing shall be held at the Dallas offices of
the Title Company or at such other location as the parties hereto shall
agree.
9.2 DELIVERIES BY THE SELLERS. At the Closing, the Sellers will
deliver to Purchaser the following:
9.2.1 Each Seller will deliver and transfer to Purchaser all
of such Seller's Partnership Interests set forth next to Seller's name on
SCHEDULE 3.1, free and clear of any Encumbrances, adverse claims or
security interests. Each Seller will execute an assignment (the
"PARTNERSHIP INTEREST ASSIGNMENT") in the form of EXHIBIT C attached
hereto, assigning their respective Partnership Interests to Purchaser.
9.2.2 A copy of the Partnership Agreement of the Partnership
certified as of a recent date by the general partners in the Partnership;
9.2.3 The Phase I Owner's Title Policy as described in
Section 7.1 hereof;
9.2.4 An amendment (the "AMENDMENT") to the Certificate of
Limited Partnership of Purchaser evidencing the succession of Purchaser to
the Partnership Interests of Phase I and JSDP;
9.2.5 If a Seller is a partnership, a copy of the
Partnership Agreement of such Seller certified as of a recent date by each
of the parties thereto;
9.2.6 If a Seller is a corporation, (i) a copy of such
Seller's certificate of incorporation certified as of a recent date by the
Secretary of State of the State of such Seller's incorporation, (ii) a copy
of such Seller's bylaws and (iii) a certificate of the
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Secretary of State of the State of such Seller's incorporation as to
the good standing of the corporation; and
9.2.7 Each of the Sellers shall deliver to the Purchaser a
certificate in such form as may be required by the Internal Revenue Service
pursuant to Section 1445 of the Code or the regulations issued pursuant
thereto, certifying as to the nonforeign status of a transferor, with such
certificate to be substantially in the form of EXHIBIT D attached hereto
and made a part hereof for all purposes, or such variation thereof as may
be required by the Internal Revenue Service. In the event that any Seller
fails or refuses to deliver such certificate to Purchaser at the Closing,
such Seller authorizes Purchaser to withhold, and remit to the Internal
Revenue Service, from such Seller's portion of the Purchase Price an amount
equal to ten percent (10%) of such Seller's portion of the Purchase Price.
Notwithstanding the foregoing, if a Seller otherwise delivers a certificate
from the Internal Revenue Service indicating the amount to be withheld and
remitted, Purchaser shall withhold and remit such amount.
9.3 DELIVERIES BY PURCHASER. At the Closing, Purchaser will
deliver to the Sellers the following:
9.3.1 The Purchase Price in the form of cash and OP Units as
described in Section 1.2, as it may be adjusted pursuant to Section 1.3;
9.3.2 The Amendment, duly executed by Purchaser; and
9.3.3 A copy of the Partnership Agreement of Purchaser
certified as of a recent date by the general partners in Purchaser.
ARTICLE X
TERMINATION
10.1 TERMINATION. This Agreement may be terminated at any time on
or prior to the Closing Date:
(1) With the mutual consent of the Sellers and Purchaser;
(2) By Purchaser, if any Seller has materially breached
this Agreement and Purchaser has not materially breached this Agreement or
if a condition precedent to Purchaser's obligations has failed to be
satisfied; and
(3) By the Sellers, if Purchaser has materially breached
this Agreement and none of the Sellers have materially breached this
Agreement or if a condition precedent to Sellers' obligations has failed to
be satisfied.
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In the event of any termination pursuant to this Section 10.1 (other
than pursuant to Section 10.1(1)), written notice setting forth the reasons
thereof shall forthwith be given by Purchaser, if Purchaser is the
terminating party, to the Sellers, or by the Sellers, if the Sellers are
the terminating party, to Purchaser.
10.2 EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 10.1 hereof, all obligations of the parties hereunder
shall terminate, except for the obligations and provisions set forth in
Section 2.2, Article XI and Sections 7.7, 8.6 and 12.1 hereof, which shall
survive the termination of this Agreement, and except that no such
termination shall relieve any party from liability for any breach of this
Agreement, except as otherwise provided in Section 7.7 and 8.6.
ARTICLE XI
SURVIVAL; INDEMNIFICATION
11.1 SURVIVAL. All warranties, representations, covenants
obligations and agreements contained in this Agreement shall survive the
Closing hereof for a period of six (6) months, and any suit by Purchaser
against Seller with respect to any breach of the foregoing shall be brought
within six (6) months from the Closing Date or any cause of action arising
in connection therewith shall be forever barred; except that with respect
to (i) Sections 3.1, 3.2, 3.3, 3.4, 3.5, 4.1 and 4.2, the representations
and warranties shall survive indefinitely and actions with respect to
breaches thereof may be brought at any time and (ii) Section 3.6 and
Section 3.7, the representations and warranties shall survive, and actions
with respect to breaches thereof may be brought, until 90 days following
the full period of any statute of limitations (as such period may have been
extended by any waiver thereof) applicable to such obligation. In the
event that any Seller becomes aware of any fact that would cause a
representation or warranty to become false or misleading, such Seller shall
give Purchaser notice of the same promptly after becoming aware of such
fact. Unless Purchaser terminates this Agreement within five (5) days of
receiving Sellers' notice, the representations and warranties shall be
deemed modified to reflect such fact.
11.2 INDEMNIFICATION BY THE CASH SELLERS. Subject to the
limitations set forth in Sections 11.1 and 11.4 hereof, each of the Cash
Sellers shall, jointly and severally, indemnify, defend and hold harmless
Purchaser, its officers, directors, Affiliates, successors and assigns
("PURCHASER INDEMNIFIED PARTIES") against any and all Losses incurred or
suffered by any Purchaser Indemnified Party arising out of any of the
following: (a) any breach of or any inaccuracy in any representation or
warranty made by such Cash Seller in Section 3.1, 3.3, 3.4 or 3.5 of this
Agreement, and any breach of or failure by such Cash Seller to perform any
covenant or obligation of such Cash Seller set forth herein; or (b) the
ownership of its Partnership Interests prior to the Closing Date.
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11.3 INDEMNIFICATION BY THE OP UNITS SELLERS. Each of the OP Units
Sellers shall, jointly and severally, indemnify, defend and hold harmless
Purchaser Indemnified Parties against any and all Losses incurred or
suffered by any Purchaser Indemnified Party arising out of any of the
following: (a) any breach of or any inaccuracy in any representation or
warranty made by any OP Units Seller pursuant to this Agreement, and any
breach of or failure by any OP Units Seller to perform any covenant or
obligation of the Sellers set forth in this Agreement; (b) the ownership of
its Partnership Interests prior to the Closing Date or (c) Taxes or
liabilities attributable to taxable income of the Partnership, any Seller
or the Phase I Property otherwise allocable to periods (or any portion
thereof) on or prior to the Closing Date.
11.4 LIMITATION ON LIABILITY. Purchaser agrees that, except with
respect to breaches of the representation and warranties contained in
Section 3.1 through 3.7 hereof (i) Sellers' liability for breaches of
representations, warranties, covenants, obligations and agreements
contained herein and the liability of Phase II Partnership in the Verandah
Apartments Agreement shall be limited to an aggregate amount of $200,000
and (ii) no Seller shall be liable for punitive, special, consequential,
speculative, lost profits or any other damages with respect to breaches of
any representation, warranty, covenant, obligation or agreement of such
Seller contained herein.
11.5 INDEMNIFICATION BY PURCHASER. Purchaser agrees to indemnify,
defend and hold harmless the Sellers from any and all Losses incurred or
suffered by any of the Sellers arising out of any of the following: (a)
any breach of or any inaccuracy in any representation or warranty made by
Purchaser pursuant to this Agreement, and any breach of or failure by
Purchaser to perform any covenant or obligation of Purchaser set out in
this Agreement; or (b) the business or operation of the Partnership from
and after the Closing Date.
ARTICLE XII
MISCELLANEOUS
12.1 EXPENSES. Each party shall bear its own expenses and costs in
connection with this Agreement and the transactions contemplated thereby.
The OP Units Sellers shall pay all taxes, assessments, charges and
fees, if any, imposed by the United States or any state or political
subdivision thereof, required to be paid in connection with the transfer
and assignment of the Partnership Interests.
12.2 AMENDMENT. This Agreement may be amended, modified or
supplemented but only in writing signed by all of the parties hereto.
12.3 BROKERS. Each of the parties hereto represents that, other
than ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Realty Partners, Inc. (the "BROKERS") and ▇▇▇▇▇▇
▇▇▇▇▇▇, no broker or finder has acted for it in connection with this
Agreement or the transactions contemplated hereby and that no broker
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or finder is entitled to any brokerage or finder's fee or other commission
based on agreements, arrangements or understandings made by it. Sellers
will pay all costs and commissions owed to the Broker in connection with
this Agreement and the Verandah Apartments Agreement. The parties
acknowledge that ▇▇▇▇▇▇ ▇▇▇▇▇▇ is an employee of Purchaser, that he
represents the Purchaser only in connection with this transaction and owes
no fiduciary duties to the Sellers.
12.4 NOTICES. All notices, requests, instructions, documents or
other communications hereunder shall be in writing and shall be deemed to
have been given, (i) when received if given in person, (ii) on the date of
acknowledgment of receipt if sent by telex, facsimile or other wire
transmission or (iii) three days after being deposited in the U.S. mail,
certified or registered mail, postage prepaid:
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If to any of the Sellers, addressed as follows:
Bratty & Partners
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and to:
▇▇▇ ▇▇▇▇▇▇ Company L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
With copies to:
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
If to Purchaser:
Amli Residential Properties, L.P.
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-31-
With a copy to:
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ 103
Dallas, Texas 75231-4337
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
12.5 WAIVERS. The failure of a party hereto at any time or times
to require performance of any provision hereof shall in no manner affect
its right at a later time to enforce the same. No waiver by a party of any
condition or of any breach of any term, covenant, representation or
warranty contained in this Agreement shall be effective unless in writing,
and no waiver in any one or more instances shall be deemed to be a further
or continuing waiver of any such condition or breach in other instances or
a waiver of any other condition or breach of any other term, covenant,
representation or warranty.
12.6 COUNTERPARTS. This Agreement may be executed simultaneously
in counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
12.7 HEADINGS. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
12.8 GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Texas.
12.9 ASSIGNMENT. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
-32-
No party to this Agreement may assign any of its rights or obligations
under this Agreement without the prior consent of the other parties, except
that the rights and obligations of Purchaser may be assigned by Purchaser
to any of Purchaser's Affiliates; provided, that the rights and obligations
of Purchaser under the Verandah Apartments Agreement are assigned
simultaneously to such Affiliate; provided, further, that no such transfer
shall relieve Purchaser of its obligations hereunder.
12.10 OTHER INSTRUMENTS. Upon the reasonable request of Purchaser,
the Sellers will, on and after the Closing Date, execute and deliver to
Purchaser such other documents, releases, assignments and other instruments
as may be required to effectuate completely the transfer and assignment to
Purchaser of, and to vest fully in Purchaser title to, each of the Acquired
Interests.
12.11 ENTIRE AGREEMENT. This Agreement and the Verandah Apartments
Agreement constitute the entire agreement and understanding of the parties
hereto with respect to subject matter hereof and supersede all other prior
agreements and understandings, both written and oral, with respect to the
subject matter hereof and are not intended to confer upon any other person
any rights or remedies hereunder.
12.12 VERANDAH APARTMENTS AGREEMENT. Pursuant to the Verandah
Apartments Agreement, Purchaser has agreed to acquire the Phase II
Property. Purchaser agrees that any default by Purchaser under the
Verandah Apartments Agreement shall be deemed a default by Purchaser under
this Agreement, and any default by Purchaser under this Agreement shall be
deemed a default by Purchaser under the Verandah Apartments Agreement.
Sellers agrees that any default by the Phase II Partnership under the
Verandah Apartments Agreement shall be deemed a default by Sellers under
this Agreement, and any default by Sellers under this Agreement shall be
deemed a default by the Phase II Partnership under the Verandah Apartments
Agreement. In the event that Verandah Apartments Agreement is terminated
or otherwise fails to close for any reason other than default by the Phase
II Partnership thereunder, Sellers shall have the right to terminate this
Agreement. In the event that the Verandah Apartments Agreement is
terminated for any reason other than default by the Purchaser thereunder,
Purchaser shall have the right to terminate this Agreement.
12.13 RISK OF LOSS. Risk of Loss until the Closing shall be borne
by Sellers. In the event that damage, loss or destruction of the Phase I
Property or the Remainder or any part thereof, in an amount equal to
$250,000 or more, by fire or other casualty, or through condemnation or
sale in lieu thereof, occurs prior to the actual closing of the
transactions contemplated hereby, the Purchaser shall, at its option, elect
one of the following:
12.13.1 To terminate this Agreement.
12.13.2 To close the transactions contemplated hereby
and receive a credit against the cash portion of the Purchase Price due at
Closing in the amount of all insurance or condemnation proceeds payable as
a result of such casualty loss or
-33-
condemnation and any deductible applicable to such insurance coverage. If
the Purchaser elects to proceed under this Section 12.13.2 and the Review
Period has expired, then Purchaser shall have the right to settle any claim
with the applicable insurance company or condemning authority, subject to
Sellers' approval of any proposed settlement, Sellers' approval not to be
unreasonably withheld or delayed. Other than receiving a credit against
the cash portion of the purchase Price due at Closing as provided in this
Section 12.13.2, there shall be no reduction in the Purchase Price by
reason of such damage or condemnation.
Sellers shall cause the Partnership to maintain the current insurance
coverage in force for the Property in full force and effect through the
Closing Date. In the event that the damage, loss or destruction shall be
in an amount of less than $250,000.00, the Purchaser shall be required to
elect option 12.13.2 above. Purchaser shall be deemed to have elected to
proceed under option 12.13.2 above if Purchaser fails to send written
notice of Purchaser's election to Sellers within five (5) business days
after Purchaser learns of the casualty or condemnation.
-34-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered on the date first above written.
AMLI RESIDENTIAL PROPERTIES, L.P.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Title: Vice President
------------------------------
VERANDAH HOLDINGS PHAS I INC.
By: /s/ R.P. BRATTY
------------------------------
Name: R.P. Bratty
------------------------------
Title:
------------------------------
JSDP, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------
Title: President
------------------------------
M&B HOLDINGS GENERAL
PARTNERSHIP
By: /s/ R.P. BRATTY
------------------------------
Name: R.P. Bratty
------------------------------
Title:
------------------------------
FAIRGROWTH INTERNATIONAL
By: /s/ ▇▇▇▇▇▇ ▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇
------------------------------
Title: President
------------------------------
TVA SP PARTNERSHIP
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Title: General Partner
------------------------------
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. Partner
------------------------------
Title: General Manager
------------------------------
FIRST AMENDMENT TO AGREEMENT REGARDING
ACQUISITION OF PARTNERSHIP INTERESTS
THIS FIRST AMENDMENT is made and entered into by and between AMLI
RESIDENTIAL PROPERTIES, L.P., a Delaware limited partnership (hereinafter
referred to as "Purchaser") and Verandah Holdings Phase I, Inc., an
Ontario, Canada corporation, JSDP, Inc., a Texas corporation, M&B Holdings
General Partnership, a Texas general partnership, Fairgrowth International,
Inc., an Ontario, Canada corporation, and TVA SP Partnership, a Texas
general partnership (hereinafter collectively referred to as "Sellers") and
is dated as of the 16th day of January, 1997.
W I T N E S S E T H:
--------------------
Purchaser and Sellers entered into that certain Agreement Regarding
Acquisition of Partnership Interests (the "Agreement") dated as of December
___, 1996 [sic] and are desirous of amending the same (all terms not
defined herein shall have the same meaning as set forth in the Agreement).
NOW, THEREFORE, in consideration of the premises and the respective
undertakings of the parties hereinafter set forth, the receipt and
sufficiency of which consideration are hereby acknowledged, it is hereby
agreed as follows:
1. DATE OF AGREEMENT. The date of the Agreement shall be December
20, 1996.
2. THE PROPERTY. The Remainder was conveyed by the Partnership to
Verandah Condominiums by warranty deed dated November 11, 1996 and recorded
at Volume 12611, Page 2173, Real Property Records of Tarrant County, Texas.
The Planned Donation has occurred with the Release Parcel having been
conveyed to the City of Arlington, Texas on November 11, 1996, by warranty
deed of even date and recorded at Volume 12635, Page 1851, Real Property
Records of Tarrant County, Texas. Purchaser hereby consents to such
conveyances. The term "Phase I Land" shall include the Remainder, and all
other references to the Remainder are hereby deleted. Seller commenced the
process of causing the Phase I Land (which definition includes the
Remainder) to be replatted so that the Phase I Land (including the
Remainder) is platted as a single block. As currently platted, the Phase I
Land (including the Remainder) and the Release Parcel are platted as a
single block. Seller may, but is not obligated to, continue such
replatting efforts, or Seller may cease all work in connection therewith.
3. OP UNITS SELLERS' GUARANTY. The form of the guaranty has been
agreed to by the OP Units Sellers, Purchasers and Purchaser's lender.
4. REVIEW PERIOD. The Review Period shall expire on February 28,
1997.
5. CLOSING DATE. The Closing Date shall be held no later than
March 31, 1997, the actual date being designated by Purchaser as provided
in Section 9.1 of the Agreement and in any event simultaneous with the
closing under the Verandah Apartments Agreement.
Page 1
6. EXECUTION. This Amendment may be executed in any number of
counterparts, all of which shall have the effect of a single document. A
copy of an executed counterpart delivered by telecopy transmission shall
have the same effect as an original.
7. FULL FORCE AND EFFECT. Except as amended and modified hereby,
the Agreement is, and shall be, in full force and effect.
PURCHASER:
---------
AMLI RESIDENTIAL PROPERTIES, L.P., a
Delaware limited partnership
By: AMLI RESIDENTIAL PROPERTIES
TRUST, a Maryland real estate
investment trust, its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Printed
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Title: Vice President
------------------------------
SELLERS:
-------
VERANDAH HOLDINGS PHASE I, INC., an
Ontario, Canada corporation
By: /s/ R.P. BRATTY
------------------------------
Printed
Name: R.P. Bratty
------------------------------
Title:
------------------------------
JSDP, INC., a Texas corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Printed
Name:
------------------------------
Title:
------------------------------
Page 2
[Sellers' signatures continued on the following page]
[Sellers' signatures continued]
M&B HOLDINGS GENERAL PARTNERSHIP, a
Texas general corporation
By: Authorized Signatory
------------------------------
Printed
Name:
------------------------------
Title:
------------------------------
FAIRGROWTH INTERNATIONAL, INC., an
Ontario, Canada corporation
By: Authorized Signatory
------------------------------
Printed
Name:
------------------------------
Title: President
------------------------------
TVA SP PARTNERSHIP, a Texas general
partnership
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Page 3
SECOND AMENDMENT TO AGREEMENT REGARDING
ACQUISITION OF PARTNERSHIP INTERESTS
THIS SECOND AMENDMENT is made and entered into by and between AMLI
RESIDENTIAL PROPERTIES, L.P., a Delaware limited partnership (hereinafter
referred to as "Purchaser") and Verandah Holdings Phase I, Inc., an
Ontario, Canada corporation, JSDP, Inc., a Texas corporation, M&B Holdings
General Partnership, a Texas general partnership, Fairgrowth International,
Inc., an Ontario, Canada corporation, and TVA SP Partnership, a Texas
general partnership (hereinafter collectively referred to as "Sellers") and
is dated as of the 28th day of February, 1997.
W I T N E S S E T H:
--------------------
Purchaser and Sellers entered into that certain Agreement Regarding
Acquisition of Partnership Interests dated as of December 20, 1996, as
amended by First Amendment dated as of January 16, 1997 (as amended, the
"Agreement"), and are desirous of further amending the same (all terms not
defined herein shall have the same meaning as set forth in the Agreement).
NOW, THEREFORE, in consideration of the premises and the respective
undertakings of the parties hereinafter set forth, the receipt and
sufficiency of which consideration are hereby acknowledged, it is hereby
agreed as follows:
1. REVIEW PERIOD. The Review Period shall expire on March 6,
1997.
2. CREDIT FOR CODE ISSUES. At Closing, Purchaser shall receive a
credit against the Purchase Price in the amount of Twenty Three Thousand,
Seven Hundred and No/100 Dollars ($23,700.00). such credit shall satisfy
in full Sellers' obligations under Section 5.10 of the Agreement and said
Section 5.10 shall be deemed deleted from the Agreement. Such credit shall
be allocated Three Thousand, Five Hundred Fifty Five and No/100 Dollars
($3,555.00) to the OP Units Sellers and Twenty Thousand, One Hundred Forty
Five and No/100 Dollars ($20,125.00) to the Cash Sellers. As to the OP
Units Sellers, the figure of $1,053,000.00 set forth in Section 1.2.2 of
the Agreement shall be reduced by Three Thousand, Five Hundred Fifty Five
and No/100 Dollars ($3,555.00).
3. EXECUTION. This Amendment may be executed in any number of
counterparts, all of which shall have the effect of a single document. A
copy of an executed counterpart delivered by telecopy transmission shall
have the same effect as an original.
4. FULL FORCE AND EFFECT. Except as amended and modified hereby,
the Agreement is, and shall be, in full force and effect.
The rest of this page is intentionally left blank.
Signature pages to follow.
Page 1
PURCHASER: SELLERS CONTINUED:
AMLI RESIDENTIAL PROPERTIES, L.P., M&B HOLDINGS GENERAL PARTNERSHIP,
a Delaware Limited partnership a Texas general partnership
By: AMLI RESIDENTIAL PROPERTIES By: /s/ R.P. BRATTY
TRUST, A Maryland real estate -----------------------
investment trust, its general Printed
partner Name: R.P. Bratty
-----------------------
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ Title: Director
----------------------- -----------------------
Printed
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------- FAIRGROWTH INTERNATIONAL, INC.
Title: Vice President an Ontario, Canada Corporation
By: /s/ ▇▇▇▇▇▇ ▇▇
-----------------------
VERANDAH HOLDINGS PHASE I, INC., Printed
an Ontario, Canada corporation Name: ▇▇▇▇▇▇ ▇▇
-----------------------
By: /s/ R.P. BRATTY Title: President
----------------------- -----------------------
Printed
Name: R.P. Bratty
----------------------- TVA SP PARTNERSHIP, a Texas
Title: Director general partnership
-----------------------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
JSDP, INC., A Texas corporation
By:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ -----------------------
----------------------- ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Printed
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------
Title: President
-----------------------
Page 2