PURCHASE AND SALE AGREEMENT
Dated as of July 15, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ APARTMENTS, INC.
Seller,
and
▇▇▇▇▇▇ RESIDENTIAL OPERATING PARTNERSHIP, L.P.,
Purchaser
TABLE OF CONTENTS
SECTION HEADING PAGE
WITNESSETH . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE I
PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . .1
Section 1.01. Purchase and Sale . . . . . . . . . . .1
Section 1.02. Indemnity Letter. . . . . . . . . . . .1
ARTICLE II
INSPECTION AND DOCUMENT REVIEW PERIODS. . . . . . . . . . .1
Section 2.01. Inspection Period . . . . . . . . . . .2
Section 2.02. Deliveries by Seller. . . . . . . . . .3
Section 2.03. Financing Documents; Letter of Credit.4
Section 2.04. Costs . . . . . . . . . . . . . . . . .8
Section 2.05. Indemnification . . . . . . . . . . . .8
Section 2.06. Insurance . . . . . . . . . . . . . . .8
Section 2.07. Confidentiality . . . . . . . . . . . .8
Section 2.08. Seller Shall Not Market Project . . . 10
ARTICLE III
PURCHASE PRICE. . . . . . . . . . . . . . . . . . . . . . 10
Section 3.01. Purchase Price; Allocation of Purchase
Price. . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.02. Payment of Purchase Price . . . . . . 10
Section 3.03. Release of Liens. . . . . . . . . . . 11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 11
Section 4.01. Seller's Representations and Warranties11
Section 4.02. Purchaser's Representations and
Warranties, Covenants and Agreements . . . . . . . . 15
ARTICLE V
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.01. Closing Date. . . . . . . . . . . . . 15
Section 5.02. Escrow Closing. . . . . . . . . . . . 16
Section 5.03. Commitment for Title Insurance and Survey
. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.04. Seller's Escrow Deposits. . . . . . . 18
Section 5.05. Purchaser's Escrow Deposits . . . . . 19
Section 5.06. Concurrent Transactions . . . . . . . 20
ARTICLE VI
CLOSING COSTS AND PRORATIONS. . . . . . . . . . . . . . . 20
Section 6.01. Closing Costs . . . . . . . . . . . . 20
Section 6.02. Seller's Costs. . . . . . . . . . . . 21
Section 6.03. Proration of Income and Expenses. . . 21
Section 6.04. Post-Closing Adjustments. . . . . . . 23
Section 6.05. Delinquent Rents. . . . . . . . . . . 24
ARTICLE VII
BROKER. . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 7.01. Brokers . . . . . . . . . . . . . . . 24
ARTICLE VIII
DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.01. Default of Purchaser. . . . . . . . . 24
Section 8.02. Default of Seller . . . . . . . . . . 25
Section 8.03. Extension of Closing Date . . . . . . 25
ARTICLE IX
CASUALTY OR CONDEMNATION. . . . . . . . . . . . . . . . . 25
Section 9.01. Casualty or Condemnation. . . . . . . 25
ARTICLE X
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 27
Section 10.01. Time is of the Essence . . . . . . . 27
Section 10.02. Notices. . . . . . . . . . . . . . . 27
Section 10.03. Binding Agreement. . . . . . . . . . 28
Section 10.04. Counterparts . . . . . . . . . . . . 28
Section 10.05. No Assignments . . . . . . . . . . . 28
Section 10.06. No Recording . . . . . . . . . . . . 28
Section 10.07. Governing Law. . . . . . . . . . . . 29
Section 10.08. Captions . . . . . . . . . . . . . . 29
Section 10.09. Preparation of Agreement . . . . . . 29
Section 10.10. Authorized by Law. . . . . . . . . . 29
Section 10.11. Foreign Person . . . . . . . . . . . 29
Section 10.12. Return of Information to Seller. . . 29
Section 10.13. Indemnity Letter . . . . . . . . . . 29
Section 10.14. Mutual Indemnification Regarding
Determination of Taxability
. . . . . . . . . . . . . . . . . . . . . . . . . . 29
Exhibit A Legal Description of Project
Exhibit B Schedule of Personalty
Exhibit C Schedule of Financing Documents
Exhibit D Rent Roll
Exhibit E Schedule of Service Contracts
Exhibit F Real Estate Tax ▇▇▇▇
Exhibit G Form of Assignment of Service Contracts and
Assumption Agreement
Exhibit H Form of Assignment of Tenant Leases and Assumption
Agreement
Exhibit I Form of Assignment and Assumption Agreement
Exhibit J Form of Escrow Agreement
Exhibit K Permitted Exceptions
Exhibit L Form of Special Warranty Deed
Exhibit M Form of ▇▇▇▇ of Sale
Exhibit N Form of Audit Letter
Annex A Copy of Indemnity Letter
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT dated as of July 15, 1997 (as
hereafter amended or supplemented by written agreement, this
"Agreement"), by and between Windsor Park Apartments, Inc., an
Illinois corporation, having its principal place of business at ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ South, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as the "Seller"), and ▇▇▇▇▇▇ Residential
Operating Partnership, L.P., a Georgia limited partnership, having
its principal place of business at One Lincoln Centre, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (hereinafter
referred to as the "Purchaser"):
WITNESSETH:
WHEREAS, the Seller is the owner of certain real estate
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ Lane, in the City of Hendersonville,
Tennessee, which is legally described in Exhibit A attached hereto
and the real estate interests appurtenant thereto (collectively,
the "Site"), together with all of the buildings and improvements
located thereon (the "Improvements") and the tangible personal
property listed in Exhibit B attached hereto and located at such
Improvements (the "Personalty"; the Personalty together with the
Site and the Improvements are hereinafter collectively referred to
as the "Project"); and
WHEREAS, upon and subject to the terms and provisions of this
Agreement, the Seller desires to sell the Project to the Purchaser
and the Purchaser desires to purchase the Project from the Seller;
NOW, THEREFORE, in consideration of the mutual covenants,
agreements and representations contained herein, the Purchaser and
the Seller hereby agree as follows:
ARTICLE I
PURCHASE AND SALE
Section 1.01. Purchase and Sale. The Seller hereby agrees to
sell to the Purchaser, and the Purchaser hereby agrees to purchase
from the Seller, the Project upon the provisions and subject to the
terms and conditions of this Agreement.
Section 1.02. Indemnity Letter. The Purchaser and the Seller
hereby acknowledge and agree that in contemplation of the execution
and delivery of this Agreement and the transaction contemplated
herein, the Seller and the Purchaser entered into an agreement (the
"Indemnity Letter"), a true and correct copy of which is attached
hereto as Annex A and made a part hereof. Capitalized terms used
in the Indemnity Letter shall have the same meanings when used in
this Agreement unless otherwise provided or the context clearly
requires otherwise. In the event of any inconsistency between the
provisions of this Agreement and the Indemnity Letter, this
Agreement shall be controlling.
ARTICLE II
INSPECTION AND DOCUMENT REVIEW PERIODS
Section 2.01. Inspection Period. During the period (the
"Inspection Period") beginning as authorized in the Indemnity
Letter and ending at 12:00 p.m. Chicago time July 25, 1997 (the
"Outside Date"), the Seller shall allow the Purchaser and its
representatives, agents and contractors, during ordinary business
hours, upon twenty-four (24) hours prior telephonic notice to the
Seller (which notice shall include identification of the people who
will be making the inspection, what will be inspected and for what
purpose the inspection will be made), to make such reasonable
inspections of the Project as the Purchaser may request, and shall
assure reasonable access to the Project, subject to leases thereof
and the tenants' quiet enjoyment of the apartment units of the
Project, in connection with such inspections.
During the Inspection Period, and subject to the terms and
provisions of this Agreement, the Purchaser shall be permitted to
do the following (all at the Purchaser's sole cost and expense):
(a) Perform a physical inspection of the Project,
including but not limited to inspection of the roofs, building
structures, mechanical systems, plumbing systems, electrical
systems, utilities, drainage system and site improvements and
to perform soil tests and an environmental audit of the
Project. The Purchaser shall be permitted to engage such
professional engineers, surveyors and consultants as the
Purchaser may deem appropriate to conduct such inspections.
(b) Review all of the Seller's books and records
relating to the Project, including but not limited to
operating statements relating to the Project, which have been
certified by the Seller's property manager, RREEF Management
Company, in Chicago, Illinois (the "Project Manager") to be
true and correct in all material respects.
(c) Review all Service Contracts (as hereinafter
defined) currently in effect for the Project.
(d) Review the Project's operations, competitive market,
and position within its general market and particular sub-
market. In order to assist the Purchaser in performing such
review, the Seller agrees to make the Project's records
available to the Purchaser either at the project or at the
office of the Project Manager, wherever the Seller customarily
keeps such records.
(e) Have prepared an appraisal or analysis of the
Project which will verify, among other things, the historical
operating numbers for the Project and its competitive market.
(f) Review any of the following which are in possession
of the Seller: the tenant leases of the Project, tenant
eligibility and income verification certificates and
supporting materials and the continuing program compliance
certificates relating to the low or moderate income tenant
set-aside covenants to which the Project is subject.
Unless the Seller notifies the Purchaser otherwise, in which
event the Seller agrees to use reasonably diligent efforts to make
such items available for review by the Purchaser, the items
described in Subsection 2.01 (b) above are located at the office of
the Project Manager, and the items described in Subsections 2.01
(c) and 2.01 (f) are located at the Project.
The Purchaser shall conduct the inspections and reviews and
approve the Project and the other contingencies referenced in this
Section 2.01 on or before the Outside Date. If the Purchaser does
not approve the Project and other contingencies described in this
Section 2.01, the Purchaser must notify the Seller in writing of
its disapproval on or before 12:00 p.m. Chicago time on the Outside
Date. Failure to deliver to the Seller such notice in writing
prior to the end of such Inspection Period shall be deemed a waiver
of the Purchaser's right to terminate its obligations under this
Agreement to purchase the Project due to its disapproval of the
Project or the other contingencies described in this Section 2.01.
In the event the transaction contemplated herein does not
close, including without limitation if the obligation of the
Purchaser to purchase or the obligations of the Seller to sell the
Project is terminated for any reason, the Purchaser shall promptly
deliver to the Seller (i) true, correct and complete copies of all
appraisals, environmental audits and other written reports which
the Purchaser has commissioned or otherwise obtained with respect
to the Project and (ii) all documents and other showings,
including, without limitation, the hereinafter defined Due
Diligence Items and the hereinafter defined Financing Documents,
delivered by the Seller or the Seller's agents or attorney to the
Purchaser. If the Purchaser sends notice within such Inspection
Period of its disapproval of the Project as described hereinabove,
upon the delivery of the items described in (i) and (ii) above, the
Purchaser will be entitled to receive the ▇▇▇▇▇▇▇ Money Deposit,
subject, however, to the terms and provisions of Section 2.03(c)
hereof.
Section 2.02. Deliveries by Seller. The Seller shall deliver
to (or make available to with respect to items(b), (k), and (l))
the Purchaser within five (5) business days of the date of this
Agreement the following items, if any, which are in the possession
of the Seller:
(a) A copy of the Seller's title insurance policy for
the Project;
(b) Copies of any plans and specifications for the
Project;
(c) Copies of any "as-built" surveys of the Project;
(d) A copy of the current rent roll for the Project,
which has been certified by the Project Manager to the best of
its knowledge to be true and correct in all material respects.
(e) Copies of the most recent real estate and personal
property tax bills for the Project and any subsequent notices
of reassessment;
(f) A list of all property employees of the Project
Manager, if any, and their job titles and descriptions, their
present salaries and wages, benefits and terms of their
employment;
(g) Copies of the Project's monthly operating statements
for the past two (2) years, which have been certified by the
Project Manager to the best of its knowledge to be true and
correct in all material respects;
(h) A current schedule of any tenant security deposits
and confirmation by the Seller that such tenant security
deposits are in the Seller's possession;
(i) Copies of all operating and maintenance agreements
and service contracts, including but not limited to trash,
grounds maintenance, advertising, pest control or cable
television agreements or easements in effect at the Property
and paid by the Seller (collectively, the "Service
Contracts");
(j) A copy of the most recent environmental report of
the Project;
(k) Copies of the pool license and business license
currently in effect for the Project; and
(l) A list of all utility accounts serving the Project,
designating which are house metered, and copies of bills for
each house metered account for the preceding five (5) month
period.
In addition to the items listed in Sections 2.02(a) through
(l) above (herein collectively referred to as the "Due Diligence
Items"), the Seller will direct the Trustee under the Indenture
pursuant to which the Bonds (as hereinafter described) were issued
to allow the Purchaser to review, at the office of the Trustee
and/or Alternate Management Resource, Inc. d/b/a ▇▇▇▇▇▇▇▇
Associates (the "Monitoring Agent"), during the Inspection Period,
the filings, to the extent they are available, made by the Seller
or the previous owner of the Project which are required under the
financing documents relating to the Bonds; provided that the
Purchaser understands and agrees that failure of the Trustee and/or
the Monitoring Agent to cooperate with these requests shall not be
a default by the Seller under this Agreement.
The Purchaser shall review and approve the Due Diligence Items
and other information referenced in this Section 2.02 within the
Inspection Period. If the Purchaser does not approve such Due
Diligence Items and other information described in this Section
2.02 within the Inspection Period, the Purchaser must notify the
Seller in writing of its disapproval on or before 12:00 p.m.
Chicago Time on the Outside Date. Failure to provide the Seller
such notice in writing prior to the end of the Inspection Period
shall be deemed a waiver of the Purchaser's right to terminate its
obligations to purchase the Project under this Agreement due to the
Purchaser's disapproval of the Due Diligence Items described in
this Section 2.02. If the Purchaser sends notice within the
Inspection Period of its disapproval of the Due Diligence Items,
the Purchaser shall promptly deliver to the Seller (i) true,
correct and complete copies of all appraisals, environmental audits
and other written reports which the Purchaser commissioned or
otherwise obtained with respect to the Project and the hereinafter
defined Financing Documents and (ii) all documents and other
showings, including, without limitation, the Due Diligence Items,
delivered by the Seller or the Seller's agents or attorney upon
receipt of the items described in (i) and (ii) above, the Purchaser
shall be entitled to receive the ▇▇▇▇▇▇▇ Money Deposit, subject,
however, to the terms and provisions of Section 2.03(c) hereof.
Section 2.03. Financing Documents; Letter of Credit.
(a) The Seller has delivered to the Purchaser copies of
all documents relating to the financing of the Project in the
possession of the Seller which are listed on Exhibit C (the
"Financing Documents"). Within the Inspection Period the
Purchaser shall review and approve such Financing Documents
and the Purchaser shall obtain the approval of The Industrial
Development Board of the City of Hendersonville, Tennessee
(the "Issuer") and The Bank of New York, as successor trustee
(the "Trustee") under the Trust Indenture dated as of January
1, 1993 (the "Indenture") between the Issuer and the Trustee,
pursuant to which the Issuer issued its Multi-family Housing
Revenue Refunding Bonds (Windsor Park Project) in the original
aggregate principal amount of $6,870,000 (the "Bonds"), to the
transfer of the Project to the Purchaser. The Seller will use
its best efforts to cooperate with the Purchaser in obtaining
the required approvals by the Issuer and the Trustee. In
connection with the approvals described in this Section 2.03,
the Seller and Continental Casualty Company (the "Surety")
shall receive opinions of bond counsel and opinions of counsel
for the Purchaser for delivery on the Closing Date, obtained
at the sole cost and expense of the Purchaser, required by the
Regulatory Agreement (as defined on Exhibit C) and additional
opinions of bond counsel that the transfer of the Project to
the Purchaser will not result in a reissuance of the Bonds
under the Internal Revenue Code of 1954, as amended, and will
not cause interest on the Bonds to be included in gross income
for purposes of federal income taxation; provided that the
forms of such opinions shall be subject to the prior approval
of the Seller and the Surety. With respect to any of the
opinions or "forms of opinions" to be provided by the
Purchaser under this Section 2.03, the Purchaser shall deliver
the required opinions or "forms of opinions" not less than
five (5) days prior to the Outside Date, and if the Seller and
the Surety have not approved or rejected the opinions or the
"forms of opinions" by the Outside Date, such opinions or
"forms of opinions" shall be deemed disapproved by the Seller
and the Surety; provided that any opinions approved or deemed
approved by the Seller and the Surety shall not be deemed
approved by the Issuer, the Trustee or any other third party
entitled to approve such opinions.
(b) The Purchaser, at the sole cost and expense of the
Purchaser, shall deliver to the Surety on or before the
Outside Date a commitment letter providing for the issuance of
a letter of credit in favor of the Surety on the Closing Date
which letter of credit shall be (i) in the amount of
$6,870,000 together with an amount equal to interest on the
Bonds from the earlier of the Closing Date or August 1, 1997,
to but not including February 1, 1998 at the interest rate of
5.375% per annum, (ii) issued by BankBoston, National
Association unless such bank's short term credit rating is
downgraded from A-1 by Standard and Poor's or P-1 by ▇▇▇▇▇'▇
Investors Service or put on "credit-watch", in which event
such letter of credit shall be issued by an institution
satisfactory to Surety in its sole discretion (the "Bank"),
(iii) for a term expiring not less than three (3) days after
February 2, 1998, and (iv) accompanied by the proposed form of
the letter of credit, the terms and conditions of which must
be acceptable to the Surety, in its sole discretion, in all
respects (the "Letter of Credit"). On August 1, 1997, the
Surety shall pay a claim in the full amount of interest on the
Bonds. Pursuant to the terms of an Escrow Agreement to be
entered into among the Trustee, the Purchaser, the Seller and
the Surety, the parties shall and do hereby, agree as follows:
(1) On or prior to 11:00 A.M. (New York City time) on January
22, 1998 the Trustee shall submit a claim under the Surety
Bond to the Surety in an amount equal to the aggregate
principal amount of the Bonds outstanding, together with
accrued interest thereon to but not including February 1, 1998
(the "Claim Amount"); (2) On or before 11:00 A.M. (New York
City time) on January 30, 1998, and prior to payment by the
Surety of a claim under the Surety Bond on February 2, 1998,
the Purchaser shall have deposited with the Trustee an amount
equal to the aggregate principal amount of the Bonds, together
with interest accrued thereon to but not including February 1,
1998 (the "Reimbursement Funds"); (3) Immediately upon receipt
by the Trustee of the Reimbursement Funds, the Trustee shall
provide written notice (the "Trustee Notice") by telecopy to
the Surety, the Purchaser and the Seller that (i) the Trustee
has received the Reimbursement Funds and (ii) the Trustee will
wire transfer the Reimbursement Funds to the Surety on
February 2, 1998 on or before 1:30 P.M. (New York City time),
provided the Trustee has received payment from the Surety of
the Claim Amount (the "Surety Payment"); (4) Upon receipt by
the Surety of the Trustee Notice the Surety (i) shall promptly
and by the end of such business day deposit in overnight mail
the Letter of Credit to the Bank and (ii) shall promptly and
by the end of such business day deliver to Chicago Title
Insurance Company an executed and notarized release of any and
all liens held by the Surety with respect to the Project (the
"Release"); (5) On or prior to 1:00 P.M. on February 2, 1998,
the Surety shall pay to the Trustee the Surety Payment; (6) In
the event the Purchaser has not delivered payment to the
Trustee of the Reimbursement Funds, by 11:00 A.M. (New York
City time) on January 30, 1998 and the Trustee has filed a
claim under the Surety Bond with the Surety for payment on
February 2, 1998 of the Claim Amount, the Surety shall be
entitled to draw upon the Letter of Credit and use the
proceeds of the Letter of Credit to immediately reimburse the
Surety for the Surety Payment; (7) In the event the Surety
draws against the Letter of Credit pursuant to (6) above,
immediately upon receipt on February 2, 1998 by the Surety of
moneys drawn under the Letter of Credit, the Surety shall
deliver the Release to Chicago Title insurance Company; (8)
Provided the Trustee has received the Surety Payment, the
Trustee shall return the Surety Bond marked "cancelled and
discharged" to the Surety on February 2, 1998; (9) On February
2, 1998, the Trustee shall (i) pay the principal of and
interest on all of the Bonds outstanding with amounts drawn
under the Surety Bond (whether the Bonds are remarketed,
redeemed or purchased in lieu of redemption at the direction
of the Purchaser) as provided in the Indenture and shall
(ii) wire to the Surety, in accordance with wire instructions
from the Surety, an amount equal to the Reimbursement Funds;
and (10) The Trustee shall (i) instruct Chicago Title
Insurance Company in writing by telecopy to record the Release
and shall (ii) register the Bonds in the name of the Purchaser
or its designee.
Nothing contained in this Purchase and Sale Contract shall
amend, modify or limit the of the Trustee under the Indenture or
the Surety Bond, including but not limited to the obligation of the
Surety to pay the Claim Amount whether or not the Trustee receives
funds with which to reimburse the Surety.
The Purchaser hereby agrees to guarantee payment to the Surety
of all amounts due to the Surety under the Financing Documents in
respect of, and to indemnify, defend and hold the Surety harmless
from any loss, cost, damage, liability or expense arising from or
in connection with, a claim being made under the Surety Bond which
is not immediately reimbursed from Eligible Moneys or then
available to be drawn under the Letter of Credit or which is not
paid to the Surety by the Bank immediately upon drawing on the
Letter of Credit, including, without limitation, any losses, costs,
damages, liabilities and expenses (including attorneys' fees and
expenses) suffered or incurred by the Surety in enforcing its
rights and remedies in respect of the Bonds, the Surety Bond, the
Letter of Credit and this Agreement.
(c) On or before the end of the Inspection Period
described in Section 2.03(a) above, if (i) the Purchaser has
not approved the Financing Documents, or (ii) the Purchaser
has not received the approvals or the acknowledgments from the
Issuer or the Trustee referenced in Section 2.03(a) above, or
(iii) the Bank and the Surety fail to agree upon the terms of
the Letter of Credit, then the Purchaser may terminate its
obligation to purchase the Project by written notice to the
Seller, delivered not later than 12:00 p.m. Chicago time on
the Outside Date. Failure of the Seller to deliver an
instrument in writing affirmatively acknowledging that the
conditions specified in this Section 2.03(c) have been
satisfied or waived by the Seller shall be deemed to
constitute delivery by the Seller of such a termination notice
(a notice of termination from the Purchaser under this
Section 2.03(c) or a notice of disapproval from the Purchaser
under Section 2.01 or Section 2.02 is hereinafter referred to
as a "Termination Notice"). Failure of the Purchaser to
provide a Termination Notice within the time prescribed shall
be deemed a waiver by the Purchaser of the right to terminate
its obligations to purchase the Project hereunder by reason of
any of the matters specified in Section 2.01 or 2.02 hereof or
in this Section 2.03. In the event a Termination Notice by
either the Purchaser or the Seller is given or deemed given,
upon receipt by the Seller of all copies of the results of the
inspections, materials and documents (including copies of all
Due Diligence Items and all Financing Documents) relating to
the Project previously delivered to the Purchaser or its
agents or attorneys, and copies of all inspections and reports
ordered or commissioned by the Purchaser or its agents or
attorneys, and payment by the Purchaser of all of the costs
and expenses to third parties hired, commissioned or retained
by the Purchaser or its agents or attorneys, the Seller will
direct the escrowee to return the ▇▇▇▇▇▇▇ Money Deposit to the
Purchaser; provided that if the Purchaser has a dispute with
any such third parties over the amount of compensation to be
id to such third parties, the Purchaser will not be entitled
to receive all of the ▇▇▇▇▇▇▇ Money Deposit (it being agreed
that an amount equal to 150% of the aggregate of the highest
amounts claimed to be owed shall be retained by the escrowee
for the benefit of the Seller pending resolution of such
dispute(s)) until the Purchaser has resolved such dispute and
paid such third party in full; and provided further that,
notwithstanding the above provisions, in any event all third
parties shall be paid in full (which payment may be made (at
the Seller's sole discretion) from the portion of the ▇▇▇▇▇▇▇
Money Deposit retained by the escrowee in connection with such
dispute) on the earlier of (i) the date on which the Seller is
notified or has knowledge that any such third party has
commenced a foreclosure action against all or a portion of the
Project or (ii) ninety (90) days from the end of the
Inspection Period, and any balance remaining after all such
disputes are settled in full and all costs and expenses
incurred by the Seller in connection therewith are paid in
full shall be returned to the Purchaser.
(d) If a Termination Notice is not delivered by the
Purchaser or the Seller as provided in Section 2.01 or 2.02
hereof or in this Section 2.03, the Purchaser shall then be
obligated to perform all other requirements under this
Agreement relating to the Purchaser's purchase of the Project.
(e) The aggregate principal amount of Bonds which will
be outstanding on August 1, 1997, the anticipated date for
closing the purchase of the Project by the Purchaser (the
"Closing Date") is $6,870,000. It is the understanding and
intent of the parties that (I) the Purchase Price for the
Project will be as set forth in Section 3.01 hereof and (ii)
the Purchaser will pay the portion of the Purchase Price equal
to the outstanding principal amount of the Bonds on the
Closing Date by assuming the indebtedness of the Seller under
the Financing Documents to pay, among other things, the
outstanding principal amount of the Bonds, with the balance of
the Purchase Price (subject to any prorations or adjustments
resulting in credits to the Purchaser or the Seller, as
applicable) to be paid in cash by the Purchaser. Any funds in
the Interest Account in the Revenue Fund under the Indenture
have been or will be invested prior to the Closing, at the
sole discretion of the Seller, in "Eligible Investments" as
defined in the Indenture, to mature on or before February 1,
1998 (the "Investments") in anticipation of the Purchaser's or
its designee's purchase of the Bonds or other payment in full
of the Bonds on that date to secure the release and discharge
of the Surety Bond issued by the Surety in respect of the
Bonds.
Section 2.04. Costs. All of its costs and expenses in
obtaining, receiving and returning all of the reports, materials,
documents and other items described in Sections 2.01, 2.02 and 2.03
hereof, including, without limitation, the duplication of the Due
Diligence Items and the Financing Documents, and in obtaining the
consent of the Issuer and the Trustee to the transfer of the
Project and any required opinions of counsel, shall be paid by the
Purchaser.
Section 2.05. Indemnification. The Purchaser hereby
indemnifies, agrees to defend, and hold the Seller, the Project
Manager, the Surety, and their respective successors, assigns,
affiliates, officers, employees, agents and shareholders, harmless
from and against any losses, claims, damages, liabilities and
expenses (including attorneys' fees), incurred as a result of or
arising in whole or in part from, directly or indirectly, or as a
consequence of, or in any way connected with any actions or
omissions of the Purchaser or its agents, officers, contractors or
employees, including, without limitation, the Purchaser's
inspection of the Project; provided, however, that the Purchaser
shall not be required to indemnify, defend or hold harmless such
parties if such losses, claims, damages, liabilities and expenses
(including attorneys' fees) are a result of the gross negligence or
willful misconduct of the Seller, the Project Manager and the
Surety. If the Closing does not occur, including without
limitation if the obligation of the Purchaser to purchase or the
Seller to sell the Project is terminated for any reason, the
Purchaser agrees to promptly restore or repair any damage to the
Project caused by the Purchaser, or its agents, contractors,
employees or officers.
Section 2.06. Insurance. Prior to the commencement of the
Inspection Period, the Purchaser shall provide the Seller with
evidence of general public liability insurance and property
insurance in coverages and from insurers satisfactory in all
respects to the Seller, insuring against, inter alia, death, bodily
injury and property damage resulting from the acts of the Purchaser
and its agents, officers, contractors or employees at the Project.
The Purchaser's insurance policies described in this Section 2.06
above shall name the Seller, the Surety and the Project Manager as
"additional insureds" thereunder.
Section 2.07. Confidentiality.
(a) The Purchaser covenants and agrees that the
information obtained by the Purchaser or communicated to the
Purchaser or any of its respective agents, officers,
contractors or employees in the course of discussions and
negotiations regarding the sale of the Project (other than the
Financing Documents) and the terms and provisions of this
Agreement are confidential and that knowledge by third parties
of any information (including the terms and provisions of this
Agreement) provided to, or obtained by, the Purchaser could be
damaging to the Seller and its business. For purposes of this
Agreement, such information (the "Information") includes but
is not limited to (i) information obtained by or on behalf of
the Purchaser about the Project whether from the Seller or its
officers, agents, attorneys or employees or from unrelated
third parties; (ii) written or oral information concerning or
relating to the business operations, assets, policies,
financial status or other related business information; (iii)
information contained in the financial and business books and
records of the Project and the Seller; (iv) the exhibits,
schedules and other documents delivered or to be delivered
relating to the assets, liabilities, commitments, properties
and business of the Project and the Seller; and (v)
appraisals, engineering reports, environmental reports or
other reports evaluating any aspect of the Project.
(b) Except for those attorneys, accountants,
contractors, consultants, technical advisors, lenders, escrow
agents, title insurers, surveyors, property managers and other
persons or entities retained by the Purchaser for the sole
purpose of assisting in the due diligence review of, closing
upon, or operation or maintenance of the Project, the
Purchaser covenants and agrees to take all reasonable and
prudent steps necessary to prevent disclosure of the
Information to any other third parties or entities. The
Purchaser agrees to take reasonable and prudent steps to
require any such third parties to maintain such
confidentiality. The Purchaser also agrees not to disclose
the Project's rent roll and/or tenant list to any other
parties except its property manager and lender and except for
copies of the rent roll (without identification of tenants) to
appraisers and consultants. The Purchaser and the Seller
hereby agree that any default in the Purchaser's covenant set
forth in the immediately preceding sentence will result in the
payment of damages by the Purchaser to the Seller of $10,000.
The Purchaser also agrees to obtain written confidentiality
agreements from the entities or persons assisting the
Purchaser in its due diligence, which confidentiality
agreements shall (i) be reasonably acceptable to the Seller,
(ii) be delivered to the Seller, and (iii) be enforceable by
the Seller. Further, all Information shall be used by the
Purchaser solely for the purposes contemplated by this
Agreement, except that the Purchaser (i) may disclose material
terms which are required to be disclosed by applicable
securities laws or as required by any national securities
exchange on which the Purchaser's common stock may be listed,
(ii) may disclose any and all information with respect to the
Project, its operating history or current operations, reports
or any other information concerning the Project and its
ownership deemed necessary in accordance with current
securities disclosure practice in an offering document for
remarketing or refunding the Bonds, and (iii), if so required,
may include a copy of this Agreement in its filings with the
Securities and Exchange Commission. The Seller hereby agrees
to take all reasonable and prudent steps necessary to prevent
disclosure to third parties of any non-public information the
Purchaser provides to the Seller regarding itself and ▇▇▇▇▇▇
Residential Properties, Inc.
(c) The Purchaser covenants and agrees with the Seller
to keep a record of all written Information furnished by or on
behalf of the Seller including its location. Further, if the
purchase and sale of the Project is not consummated, at the
request of the Seller, the Purchaser shall immediately return
all Information, in whatever tangible form provided to the
Purchaser, together with all copies of the Information the
Purchaser may have made or which is in the possession of the
Purchaser or its attorneys, officers, agents, employees or
other representatives.
(d) The Purchaser covenants and agrees that a violation
of the terms of this Section 2.07 may cause irreparable damage
to the Seller for which monetary damages may not adequately
compensate the Seller. Therefore, the Seller shall be
entitled to equitable relief to enjoin the Purchaser from
committing any breach hereof and the Purchaser hereby consents
to the Seller obtaining all injunctive relief as is necessary
and proper with respect to the breach, attempted breach or
contemplated breach of any of the terms of this Agreement.
Section 2.08. Seller Shall Not Market Project. The Seller
agrees that it will not market the Project to any other parties,
until the earlier of (i) August 2, 1997 or August 15, 1997 (in the
event the 15-day cure period becomes approved), or (ii) such time
as (A) a Termination Notice is delivered or (B) the Purchaser shall
default in any of its obligations under this Agreement.
ARTICLE III
PURCHASE PRICE
Section 3.01. Purchase Price; Allocation of Purchase Price.
The Purchase Price of the Project shall be the sum of (a) NINE
MILLION FOUR HUNDRED FIFTY THOUSAND DOLLARS ($9,450,000), plus (b)
an amount equal to the amount on deposit in the Interest Account of
the Revenue Fund under the Indenture on the Closing Date (less the
amount of the Seller's pro rata share of any interest accrued and
unpaid on the Bonds as of the Closing Date), plus (c) an amount
equal to the amount on deposit in the Administrative Expenses
Account within the Revenue Fund on the Closing Date (less the
amount of any liability of the Seller for its pro rata share of
Administrative Expenses), plus (d) an amount equal to any other
funds held by the Trustee under the Indenture.
Section 3.02. Payment of Purchase Price. The Purchaser
agrees to pay to the Seller the Purchase Price as follows:
(a) On the date of this Agreement the Purchaser is
depositing the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000)
with Chicago Title Insurance Company, (Chicago, Illinois
office) as escrowee (the "Escrowee") as its ▇▇▇▇▇▇▇ money
deposit (referred to herein as the "▇▇▇▇▇▇▇ Money Deposit"),
for the benefit of the Seller, pursuant to the terms of the
▇▇▇▇▇▇▇ Money Escrow Agreement, a copy of which has been
previously provided to the Purchaser. Any interest earned on
the ▇▇▇▇▇▇▇ Money Deposit shall accrue to the benefit of the
Purchaser except as provided in Section 8.01.
(b) On the Closing Date, the Purchaser shall (i) assume
payment of the principal indebtedness in respect of the Bonds
in the aggregate principal amount then outstanding and unpaid
(the "Assumed Principal Indebtedness") and all interest and
other indebtedness due and payable from and after the Closing
Date under (A) that certain Secured Note dated January 15,
1993, payable to the Issuer, in the original principal amount
of SIX MILLION EIGHT HUNDRED SEVENTY THOUSAND DOLLARS
($6,870,000) (the "Note"), (B) that certain Loan Agreement
dated as of January 1, 1993 (the "Loan Agreement") between the
Issuer and the Seller, (C) that certain First Deed of Trust,
Assignment of Rents and Security Agreement dated as of January
1, 1993 (the "First Deed of Trust") from the Seller to a
trustee for the benefit of the Issuer and the Surety, (D) the
Indenture, and (E) all of the other Financing Documents;
(c) The balance of the Purchase Price, as provided in
Section 6.03 hereof, shall be deposited under the Escrow
Agreement (as defined in Section 5.02 hereof) pursuant to the
provisions thereof and shall be paid to the Seller on the
Closing Date (as defined in Section 5.01 hereof) by wire
transfer of immediately available funds pursuant to the terms
of the Escrow Agreement.
Section 3.03. Release of Liens. The Purchaser understands
and agrees that the Surety will not release or assign its interest
in the Loan Documents or the Second Deed of Trust Documents (as
defined in the Indenture) or any of the other documents to which
the Surety is a party unless and until all of the obligations
assumed by the Purchaser as of the Closing Date have been fully
satisfied and the Surety receives its Surety Bond from the Trustee
under the Indenture marked "canceled and discharged" upon payment
of the Bonds as contemplated by Section 2.03(b) of this Agreement,
without any claim being made under the Surety Bond which is not
immediately and irrevocably paid to the Surety from the proceeds of
a draw on the Letter of Credit or from other funds paid by or on
behalf of the Purchaser.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Seller's Representations and Warranties. The
Seller hereby represents and warrants to the Purchaser as follows:
(a) Except as set forth in Exhibit C attached hereto,
the Seller has not consented to any amendment or modification
of the Financing Documents. To the best of the Seller's
knowledge, no uncured default of the Seller exists under the
Financing Documents, and no other event has occurred which,
after notice or lapse of time or both, would be an Event of
Default thereunder.
(b) Attached as Exhibit D hereto is the rent roll of the
Project as of June 9, 1997. To the best of the Seller's
knowledge, the rent roll and all information therein are
accurate as of its date.
(c) Except for the property management contract, there
are no Service Contracts with respect to the Project or any
part thereof except as set forth in Exhibit E attached hereto.
Each of the Service Contracts is in full force and effect and,
to the best of the Seller's knowledge, neither party is in
material default thereunder. There are no amendments to the
Service Contracts or modifications except as set forth in
Exhibit E attached hereto.
(d) Attached hereto as Exhibit F are true and correct
copies of the most recent bills for real estate taxes and
personal property taxes relating to the Project.
(e) The Seller presently maintains in full force and
effect policies of insurance against loss or damage to the
improvements located at the Project.
(f) Between the date of this Agreement and the earlier
of the delivery of a Termination Notice or the Closing Date
set forth herein, without the consent or approval of the
Purchaser:
(i) The Seller will not make any material
alterations or changes to the Project, except in the
event of emergency as required for safety of persons or
property or except as required by any governmental
authority, and will not suffer or permit any material
deterioration in the condition of the improvements
thereon, ordinary wear and tear, fire and casualty and
acts of God, the Purchaser and its consultants and agents
excepted; and
(ii) The Seller will not enter into any amendments
to the Service Contracts and the Seller will not enter
into any service agreements or other contracts with
respect to the Project, other than Service Contracts or
similar contracts entered into in the ordinary course of
business (the term "Service Contracts" shall mean and
include all such amendments and service agreements and
other contracts entered into by the Seller with respect
to the Project in compliance with this provision or
approved by the Purchaser as of the Closing Date).
(g) The Seller has all legal authority and power (i) to
execute and deliver this Agreement and the documents which the
Seller is required to execute and deliver hereunder and (ii)
to perform its obligations hereunder.
(h) To the best of Seller's knowledge, the Seller has
not been advised by the applicable city, county, state or
federal authorities that the Project is in violation of any
applicable health, building, environmental, fire or zoning
codes or ordinances.
(i) The Seller has received no notice of any claim,
action, suit, investigation or proceeding, at law, in equity
or otherwise, now pending or, to the best of the Seller's
knowledge, threatened against the Seller or with respect to
the Project to which the Purchaser might become a party except
as set forth in paragraph (1) hereof. The Seller is not
subject to the terms of any decree, judgment or other action
of any court, administrative agency or arbitrator, which has
or could result in a material adverse effect on the Project or
the operation and leasing thereof or the Seller's obligations
hereunder.
(j) The Seller has no notice or knowledge of any pending
or threatened condemnation or eminent domain proceedings which
would affect any of the Project.
(k) Except for the consents and approvals required
hereunder and under the Financing Documents, neither the
execution nor the delivery of this Agreement or the documents
contemplated hereby, nor the consummation of the conveyance of
the Project to the Purchaser, will conflict with or cause a
breach of any of the terms and conditions of, or constitute a
default under, any agreement, commitment, note, mortgage,
lease, bond, license, permit or other instrument or obligation
by which the Seller is bound.
(l) The Seller has received notice from or on behalf of
the ▇▇▇▇▇▇ Homeowner's Association, Inc., as set forth in the
correspondence separately forwarded by the Seller to the
Purchaser, under letter dated June 26, 1997.
(m) Except as disclosed in writing to the Purchaser
during the Inspection Period and in the Environmental
Assessment - Phase I dated December, 1992 prepared by Delta
Environmental Consultants, Inc., to the best of the Seller's
knowledge, no Hazardous Materials are located on or about the
Project. To the best of the Seller's knowledge, the Project
does not contain any underground tanks for the storage or
disposal of Hazardous Materials. Further, to the best of the
Seller's knowledge, (A) the Project previously has not been
used for the storage, manufacture or disposal of Hazardous
Materials, and (B) no complaint, order, citation or notice
with regard to air emissions, water discharges, noise
emissions and Hazardous Materials, if any, or any other
Applicable Environmental Laws from any person, government or
entity has been issued to the Seller.
For the purposes of this Section 4.01(m):
(i) "Hazardous Materials" shall mean any toxic
materials, hazardous waste or hazardous substance (as
these terms are defined in the Applicable Environmental
Laws) and including, without limitation, any asbestos or
asbestos-related products or materials and any oils,
petroleum-derived compounds or pesticides, excluding,
however, materials in reasonable amounts that are
customarily used in the operation, cleaning and
maintenance of an apartment complex, and chemicals,
materials and products stored on site used in the
operation and maintenance of the pool and of the office.
(ii) "Applicable Environmental Laws" shall mean any
and all applicable laws pertaining to health or the
environment, including, without limitation, the Superfund
Reauthorization and Amendments Act of 1986 ("▇▇▇▇"), the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 ("CERCLA"), and the Resource
Conservation and Recovery Act of 1976 ("RCRA " ), as well
as any and all other laws, ordinances, rules and/or
regulations created or imposed by any governmental
authority having jurisdiction with respect to the
Project, whether local, state or federal, pertaining to
environmental regulation, contamination, clean-up or
disclosure.
(n) The Seller will not amend, or reduce the coverage
under, or cancel, any existing insurance policy without the
Purchaser's prior written consent, which shall not be
unreasonably withheld. In addition to the requirements of
Section 2.06, the Purchaser, at Closing, shall obtain its own
insurance coverage. The Seller has received no notice from
any insurer of the Project requiring any improvements,
alterations, additions, correction or other work relating to
the Project which have not been cured or satisfied.
(o) Until Closing, the Seller shall continue the
operation of the Project in the normal and usual manner and in
compliance with the Regulatory Agreement, will not remove any
improvements or Personalty, except for repair or replacement,
and the Project will be managed, operated, maintained,
repaired and redecorated in the ordinary course of business
and in such manner as to maintain the Project in all material
respects in no less satisfactory condition than exists as of
the date hereof. The Purchaser shall have the right to re-
inspect the Project during the period commencing not earlier
than five (5) days prior to the Closing and ending on the
Closing solely for purposes of verifying the maintenance of
the Project in accordance with this paragraph.
(p) During the Inspection Period, the Seller shall
permit and cooperate in a review by the Purchaser and its
accountants of such books, records, leasing files, contracts,
agreements and information relating to the Project that are in
the Seller's possession or are readily available to the
Seller, and as may be required by the Purchaser's accountants
to perform a complete audit of the Project for the twelve (12)
month period ended December 31, 1996. The Seller will cause
its Project Manager, prior to Closing, to deliver a letter to
the Purchaser's accountants substantially in the form ("Audit
Letter") attached hereto as Exhibit N.
(q) To the best of Seller's knowledge, (i) no Event of
Default (as such term is used therein) currently exists under
any of the Financing Documents, and the Seller has received no
notice from the Trustee or the Issuer of any such Event of
Default, and (ii) since the Seller became owner of the
Project, the Seller has complied with all material terms of
the Regulatory Agreement relating to the federal exemption of
interest on the Bonds.
(r) Other than rental units which have been vacated
within five (5) business days prior to the Closing Date (which
the Seller and the Purchaser acknowledge may be in varying
conditions of "make ready" for leasing, as is ordinary in
Seller's course of business (the "Excluded Units")), all
rental units shall be in "market ready" rental condition as of
the Closing Date. As to such units that are not in "market
ready" rentable condition as of the Closing Date (excluding
Excluded Units), the Purchaser and the Seller understand and
agree that the Purchaser shall be entitled to credit against
the Purchase Price at Closing an amount equal to the amount
agreed upon at Closing by the Purchaser and the Seller as
being required to put such units in "market ready" rentable
condition. "Market ready" rentable condition shall be the
normal condition a unit is placed in by the Seller prior to
marketing a unit for rental.
The aforesaid representations and warranties shall not be deemed to
apply to any change in the condition of the Project created or
occurring after Closing.
The Purchaser acknowledges that, except as provided in this
Section 4.01 above, the Purchaser is entering into this Agreement
without relying on any representation or warranty from the Seller,
the Project Manager, or any other person or entity related to,
affiliated with or employed by the Seller. Other than the
representations and warranties contained in this Section 4.01
above, the Seller sells the Project, and the Purchaser purchases
and accepts the Project, AS IS - WHERE IS, and the Purchaser
assumes all risks thereof.
SELLER'S INITIALS: PURCHASER'S INITIALS:
The representations and warranties set forth in this Section
4.01 shall be made as of the date hereof and shall be continuing
and shall be true and correct on and as of the Closing Date with
the same force and effect as if made at that time, and all of such
representations and warranties shall expire twelve (12) months
after delivery of the deed conveying the Project in accordance
herewith.
Section 4.02. Purchaser's Representations and Warranties,
Covenants and Agreements.
(a) As of the Closing Date, the Purchaser will assume
all of the obligations of the Seller under the Service
Contracts then in effect pursuant to an Assignment of Service
prior to Closing, to deliver a letter to the Purchaser's
accountants substantially in the form ("Audit Letter")
attached hereto as Exhibit N".
(b) As of the Closing Date, the Purchaser will assume
all of the obligations of the Seller under the Leases then in
effect pursuant to an Assignment of Tenant Leases and
Assumption Agreement in the form of Exhibit H attached hereto
(the "Assignment of Tenant Leases").
(c) As of the Closing Date, the Purchaser will assume
the obligations to pay the principal indebtedness then
outstanding and unpaid on the Note and all interest accruing,
and all other obligations of the Seller under the Financing
Documents due and payable, from and after the Closing Date
pursuant to an Assignment and Assumption Agreement in the form
of Exhibit I attached hereto (the "Assumption Agreement").
(d) The Purchaser has all legal authority and power to
(i) execute and deliver this Agreement and the documents which
the Purchaser is required to execute and deliver hereunder and
(ii) to perform its obligations hereunder.
(e) Except for the consents and approvals required
hereunder and under the Financing Documents, neither the
execution nor the delivery of this Agreement or the documents
contemplated hereby, nor the consummation of the conveyance of
the Project to the Purchaser, will conflict with or cause a
breach of any of the terms and conditions of, or constitute a
default under, any agreement, commitment, note, mortgage,
lease, bond, license, permit or other instrument or obligation
by which the Purchaser is bound.
ARTICLE V
CLOSING
Section 5.01. Closing Date. Subject to the terms and
provisions of this Agreement, the closing of the purchase and sale
of the Project will occur on August 1, 1997 or such other date as
may be mutually agreed to by the Purchaser and the Seller, subject
to the provisions of Section 8.03 hereof (the "Closing Date"). On
the Closing Date and as conditions precedent to the Closing:
(a) the Purchaser and the Seller shall each have
delivered to the Escrow Agent each of their respective
deposits required by the Escrow Agreement (as hereinafter
defined);
(b) the Title Company will have committed to issue the
Owner's Title Policy in the form required by Section 5.03 of
this Agreement, with no additional matter of record appearing
between the date of the Title Commitment and the Closing Date
unless approved (or deemed approved) by the Purchaser and
subject to any exceptions to title of the Project which are
created or caused by actions of the Purchaser or its agents,
employees or contractors;
(c) each and every warranty and representation of the
Purchaser and the Seller set forth in this Agreement shall be
true and correct in all material respects as of the Closing
and neither party shall be otherwise in default hereunder;
(d) the Purchaser shall have complied with all terms of
the Indenture and this Agreement, including, without
limitation, the timely delivery of the Letter of Credit, and
all required opinions and other documents and showings,
including the opinions of Bond Counsel and the other items
described in Section 2.03 hereof which will be delivered to
the Seller and the Surety;
(e) all documents deposited with the Title Company (as
hereinafter defined) under the Escrow Agreement will be
released in accordance with the terms and provisions of the
Escrow Agreement;
(f) the Letter of Credit will be delivered to the Surety
(accompanied by opinions of counsel, in form and substance
satisfactory to the Surety, as to the due authorization,
execution, delivery and enforceability thereof); and
(g) the Purchase Price, less the aggregate outstanding
principal balance of the Bonds, plus or minus prorations, will
be paid to the Seller.
The occurrence of the events described in the foregoing
paragraphs (a) through (g), inclusive, shall constitute the
"Closing. " The Closing shall take place at the offices of ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ or
such other place as the parties shall mutually agree. The Closing
shall be consummated pursuant to the Escrow Agreement as set forth
in Section 5.02 below.
In the event any of the above conditions are not satisfied at
the time specified for the Closing, the provisions of Sections 8.01
and 8.02 shall apply.
Section 5.02. Escrow Closing. The purchase and sale of the
Project shall be closed by means of an escrow agreement in the form
attached hereto as Exhibit J with such immaterial modifications as
may be required by the Title Company as escrowee thereunder (the
"Escrow Agreement"), with the concurrent delivery of the documents
of title, transfer of interests, assumption of liabilities and
obligations under the Financing Documents and the other items set
forth in Sections 5.04 and 5.05 hereof and the payment of the
Purchase Price pursuant to the Escrow Agreement established with
the Title Company. The Purchaser and the Seller shall each pay
one-half of the costs of the Title Company's escrow fees.
Section 5.03. Commitment for Title Insurance and Survey. The
Seller has delivered to the Purchaser at the Seller's cost a title
commitment (the "Title Commitment") issued by Chicago Title
Insurance Company (the "Title Company") in a stated amount equal to
$9,450,000. showing title to the Project in the Seller, subject to
(i) the exceptions shown in Exhibit K and the other specific
exceptions to title (hereinafter referred to as the "Title
Exceptions") and (ii) any exceptions to title of the Project which
are created or caused by the actions of the Purchaser or its
respective agents, employees or contractors, the Financing
Documents which are of record against the Project, and the other
general exceptions and exclusions contained in the Title Commitment
(hereinafter referred to as "Permitted Exceptions") to which the
Purchaser hereby consents. Such Title Commitment shall be
conclusive evidence of good title as therein shown. The Purchaser
shall have until the later of the Outside Date or five (5) days
from the date of delivery of such Title Commitment to object to the
Title Exceptions; and if the Purchaser does not object to any Title
Exceptions in writing within said period, the Purchaser shall be
deemed to have approved such Title Exceptions. The Seller has
delivered to the Purchaser a plat of survey of the Project showing
the boundary of the Site described in Exhibit A hereto and the
improvements situated thereon and all plattable easements and other
title exceptions (a "Survey"). if the Purchaser objects to a Title
Exception or the Survey shows a survey defect which is objected to
by the Purchaser during the Inspection Period (also for this
purpose an "Unpermitted Exception"), the Seller shall have until
the day prior to the Closing Date (the "Title Clearance Period") to
(i) cause the Title Company to remove or insure over by endorsement
such Unpermitted Exception or (ii) elect not to cause the Title
Company to remove or insure over by endorsement the Unpermitted
Exceptions; provided that the Purchaser may remove any Unpermitted
Exception on the Closing Date which can be removed with the payment
of money; provided, further, however, that the Seller shall notify
the Purchaser five (5) business days after the Outside Date of its
election to proceed under clause (i) or (ii) in respect of all
objections delivered by the Purchaser to any such Unpermitted
Exceptions. If the Seller elects to cause the Title Company to
remove or insure over by endorsement the Unpermitted Exceptions,
the Closing shall be held as scheduled on the Closing Date. If the
Seller elects not to have such Unpermitted Exceptions removed or
insured over by endorsement, the Purchaser may terminate this
Agreement by delivery of a Termination Notice on or before the
Outside Date. If the Purchaser does not deliver a Termination
Notice, the Purchaser shall be deemed to have elected to take title
to the Project subject to said Unpermitted Exceptions, without
recourse to the Seller with respect to said Unpermitted Exceptions.
If the Purchaser delivers a Termination Notice on or before the
Outside Date as provided in this Section by reason of an
Unpermitted Exception, the ▇▇▇▇▇▇▇ Money Deposit provided (together
with any interest earned thereon) shall be returned to the
Purchaser in accordance with the provisions of this Agreement
subject to retention for the purposes and as provided in Section
2.03(c) hereof and after receipt by the Seller of all (i) documents
(including the Financing Documents), rent rolls, surveys, all other
Due Diligence Items and all other items delivered by the Seller to
the Purchaser hereunder and (ii) inspections and reports (including
supporting materials) ordered or commissioned by or on behalf of
the Purchaser, and, subject to the above provisions of this Section
5.03, and neither the Purchaser nor the Seller shall have any
further right or obligation hereunder, except that the Purchaser's
obligations under Sections 2.04, 2.05 and 2.07 shall survive such
termination. In the event that any Unpermitted Exception or title
claim is asserted subsequent to the Closing Date, the Purchaser's
sole remedy shall be against the Title Company and the Seller shall
have no responsibility therefor.
Section 5.04. Seller's Escrow Deposits. As provided in the
Escrow Agreement, on or prior to the Closing Date, the Seller shall
deliver or cause to be delivered to the Title Company, as escrowee
under the Escrow Agreement (herein, the "Escrow Agent") the
following documents executed by the Seller:
(a) A Special Warranty Deed, in the form attached as
Exhibit L hereto, from the Seller to the Purchaser, sufficient
to convey the Project to the Purchaser subject to the Title
Exceptions and the Permitted Exceptions (the "Deed");
(b) An amount equal to the Seller's Closing Costs set
forth in Section 6.02, but only to the extent that the
Seller's Closing Costs exceed the amount of the Purchase Price
which will be paid to the Seller;
(c) A closing statement (the "Closing Statement")
showing the prorations between the Purchaser and the Seller in
accordance with Section 6.01 hereof,
(d) An Assignment of Service Contracts, assigning all of
the Seller's right, title and interest in and to all Service
Contracts, and providing for the Purchaser's assumption of the
obligations of the Seller under the Service Contracts;
(e) An Assignment of Tenant Leases, assigning all of the
Seller's right, title and interest in and to the Leases and
providing for the Purchaser's assumption of the Seller's
obligations as lessor or landlord under the Leases;
(f) Notices to tenants, in the form prepared by the
Seller and acceptable to the Purchaser, duly executed by the
Seller, advising the tenants of the sale of the Project and
directing that rent and other payments thereafter be sent to
the Purchaser (or its agent) at the address provided by the
Purchaser, unless otherwise directed by the Purchaser;
(g) A quitclaim ▇▇▇▇ of Sale in the form of Exhibit M
attached hereto (providing warranties of title for the period
the Seller held title to the Project) transferring to the
Purchaser all of the Seller's right, title and interest in and
to each and every item of Personalty WITHOUT WARRANTY OF
QUALITY, MERCHANTABILITY, FITNESS FOR USE OR OTHERWISE;
(h) An Assumption Agreement relating to the assignment
of the obligations under the Financing Documents by the Seller
to the Purchaser and the assumption of such obligations by the
Purchaser;
(i) An updated rent roll in the form of Exhibit D
attached hereto;
(j) A certificate as required by the Foreign Investment
in Real Property Tax Act of 1980;
(k) All information required to be reported to the
Internal Revenue Service pursuant to Section 6045(e) of the
Internal Revenue Code;
(l) Written consent to the transfer of the Project to
the Purchaser from the Surety;
(m) A certified copy of the corporate resolutions of the
Seller authorizing the sale of the Project and the delivery of
the Deed and the other transfer documents;
(n) Any customary transfer declarations or any form
required to facilitate the payment of any transfer,
documentary or use taxes required by the Title Company or the
State or local governmental authorities having jurisdiction of
the Project;
(o) A customary ALTA statement; and
(p) Written direction to the escrowee holding the
▇▇▇▇▇▇▇ Money Deposit to pay the ▇▇▇▇▇▇▇ Money Deposit, plus
interest thereon, to the Escrow Agent under the Escrow
Agreement.
The Seller shall deliver possession of the Project to the
Purchaser on the Closing Date upon completion of the Closing (as
described in Section 5.01 hereof). The Purchaser understands that
all keys, permits, leases, Service Contracts and tenants' income
certificates are maintained at the Project and the Purchaser will
take possession of those items when it takes possession of the
Project.
Section 5.05. Purchaser's Escrow Deposits. As provided in
the Escrow Agreement, on or prior to the Closing Date as required
in the Escrow Agreement, the Purchaser shall cause to be delivered
to the Escrow Agent:
(a) The Purchase Price payable to the Seller less the
aggregate outstanding principal balance of the Bonds in
immediately available funds, plus or minus prorations;
(b) The Assumption Agreement executed by the Purchaser;
(c) The Assignment of Tenant Leases executed by the
Purchaser;
(d) The Assignment of Service Contracts executed by the
Purchaser;
(e) The originally executed Letter of Credit, duly
executed by the Bank;
(f) The Closing Statement executed by the Purchaser;
(g) Any customary transfer declarations or any forms
required to facilitate the payment of any transfer,
documentary or use taxes and required by the Title Company or
the State or local governmental authorities having
jurisdiction over the Project;
(h) The opinions of counsel and other written evidence
satisfactory to Seller and the Surety that the Letter of
Credit and the Financing Documents constitute legal, valid and
binding contracts and agreements of the respective parties
thereto (other than the Seller and/or the Surety) enforceable
in accordance with their respective terms without notice to or
the consent or approval of the holders of the Bonds;
(i) A certified copy of the resolutions of the Purchaser
authorizing the purchase of the Project and the execution and
delivery of the Assumption Agreement, the Assignment of Tenant
Leases and the Assignment of Service Contracts;
(j) Written approval or acknowledgment of the Issuer and
the Trustee to the sale of the Project, as provided in
Sections 2.02(a) and 2.02(c) hereof and written evidence of
compliance with the provisions of the First Deed of Trust, the
Second Deed of Trust, the Regulatory Agreement (as defined in
Exhibit C attached hereto) and any other Financing Documents;
(k) A customary ALTA statement;
(l) The Purchaser's closing costs set forth in Section
6.01 hereof which the Purchaser has not previously paid; and
(m) Written directions to the Escrowee holding the
▇▇▇▇▇▇▇ Money Deposit to pay the ▇▇▇▇▇▇▇ Money Deposit, plus
any interest thereon, to the Escrow Agent under the Escrow
Agreement.
Section 5.06. Concurrent Transactions. All documents or
other deliveries or deposits required to be made by the Purchaser
or the Seller at or prior to the Closing, and all transactions
required to be consummated concurrently with the Closing, shall be
deemed to have been delivered and to have been consummated
simultaneously with all other transactions and all other
deliveries, and no delivery shall be deemed to have been made, and
no transaction shall be deemed to have been consummated, until all
deliveries required by the Purchaser and the Seller shall have been
made, and all concurrent or other transactions shall have been
consummated.
ARTICLE VI
CLOSING COSTS AND PRORATIONS
Section 6.01. Closing Costs. On or before the Closing Date
the Purchaser shall pay all of the following costs:
(a) All of the fees, costs and expenses incurred by the
Purchaser for its due diligence during the Inspection Period;
(b) The investment fee for the ▇▇▇▇▇▇▇ Money Deposit and
one-half of all of the other escrow fees of the Title Company;
(c) All applicable assumption, transfer, or similar
charges and fees of the Trustee, the Issuer and the Bank (and
their respective counsel) with respect to the transfer of the
Project and the delivery of the Letter of Credit, including
without limitation all costs, fees and expenses of the Bank,
the Trustee, the Issuer and their respective counsel and other
advisors, if any, and all costs, fees and expenses required
for the delivery of the opinions of counsel required by this
Agreement and/or any of the other parties to the Financing
Documents in connection with such transactions;
(d) The cost of recording the Deed and the Assumption
Agreement and any other conveyance documents that the
Purchaser may choose to record;
(e) The fees and expenses of the Trustee, the Issuer,
the Bank, Bond Counsel, the Trustee's counsel and, the
Issuer's counsel, and all other costs and expenses required to
be paid in connection with the transfer of the Project to the
Purchaser, and the issuance of the Letter of Credit;
(f) All transfer taxes, recordation taxes, deed stamps,
document taxes, mortgage taxes, intangible taxes, and similar
taxes or charges with respect to the transaction;
(g) The cost of recording all mortgages, deeds to secure
debt, financing statements or similar documents representing
or securing the obligations of the Purchaser or its designee
to the Bank, together with the premiums and any other title
charges incurred by the Purchaser in connection with any
mortgage title insurance charges; and
(h) The cost of any endorsement to the Title Policy.
To the extent the above costs or any other related costs are
not ascertainable as of the Closing Date, the Purchaser agrees to
pay such costs promptly upon receipt of any ▇▇▇▇ or invoice.
Section 6.02. Seller's Costs. The Seller shall pay all of
the following costs:
(a) The premium and related costs charged by the Title
Company for the Owner's Title Policy;
(b) The costs of the preparation of the Survey;
(c) One-half of the escrow fees of the Title Company
(other than the investment fee for the ▇▇▇▇▇▇▇ Money Deposit);
and
(d) The Seller's and the Surety's legal fees and
expenses incurred in connection with the preparation and
negotiation of this Agreement and the other documents,
instruments and agreements required to consummate the sale of
the Project to the Purchaser as provided herein.
To the extent the above costs or any other related costs are
not ascertainable as of the Closing Date, the Seller agrees to pay
such costs promptly upon receipt of any ▇▇▇▇ or invoice.
Section 6.03. Proration of Income and Expenses.
(a) The following items shall be adjusted or prorated
between the Seller and the Purchaser on the Closing Date
(unless for those items which the Purchaser would receive a
credit, the Seller has arranged to pay such invoices or
charges to and including the Closing Date):
(i) Real estate, ad valorem and similar taxes
(including assessments) for the then current tax year
relating to the Project shall be prorated to the Closing
Date. If the Closing occurs before the tax rate is fixed
for the then current tax year, the apportionment of taxes
shall be made on the basis of the last ascertainable tax
▇▇▇▇ for the preceding tax year, and when the taxes are
fixed for the tax year in which the Closing occurs, the
Seller and the Purchaser hereby agree to adjust the
proration of taxes and, if necessary, to refund or pay
such sums to the other party as shall be necessary to
effect such adjustment;
(ii) Special Assessments against the Project due for
the calendar year in which the Closing Date occurs;
(iii) Wages, vacation pay and other benefits of
all persons employed by the Seller in the operation of
the Project whose employment will not be terminated as of
the Closing Date;
(iv) Fuel and other supplies stored at the Project;
(v) Any permit or other fees relating to the
Project payable on a continuing basis;
(vi) Fees payable under the Service Contracts;
(vii) The fees of the Trustee, the Issuer, and
any other third parties due under the Financing Documents
in the ordinary course of the transactions contemplated
by those documents and not the transactions contemplated
by this Agreement;
(viii) Utility charges and deposits with utility
companies; and
(ix) All other operating charges of, or other
proratable items relating to, the Project.
(b) The Purchaser shall receive a credit against the
Purchase Price equal to the aggregate amount of rentals or
other income of the Project, including, but not limited to,
utility charges, tenant reimbursements, and other similar
amounts payable to the Seller as the owner of the Project
previously collected by the Seller which, as of the Closing
Date, represent advance payments attributable to periods after
the Closing Date.
(c) Any rental or other income, including, but not
limited to, utility charges, tenant reimbursements, and other
amounts payable to the Seller as the owner of the Project
which are payable for periods prior to the Closing Date but
which, as of the Closing Date, have not been received by the
Seller, whether because such amounts are delinquent or because
such amounts are not yet due, shall not be prorated as of the
Closing Date but shall be adjusted after the Closing Date but
as of the Closing Date, when and if such amounts are received
by the Purchaser, and the Purchaser covenants and agrees to
immediately pay to the Seller any such delinquent rents from
rents received by the Purchaser (after payment of current
rents) from such tenants after the Closing Date.
(d) At the Closing, the Purchaser shall receive a credit
against the Purchase Price equal to the amount of any and all
refundable deposits paid to the Seller by tenants of the
Project (collectively, the "Deposits"), as well as for the
amount of any unpaid bills (but subject to proration as set
forth in Section 6.03(a) hereof) relating to periods prior to
the Closing Date for which the Purchaser will be responsible
after the Closing. The Purchaser hereby agrees to apply the
respective Deposits in accordance with the provisions of the
respective Leases. Pursuant to the Assignment of Tenant
Leases, as of the Closing Date the Purchaser will assume all
obligations under the Leases to refund or otherwise apply the
Deposits pursuant to the provisions of the applicable Leases
and will indemnify the Seller, and hold the Seller harmless
for any failure to refund or misapplication of the Deposits.
(e) The Seller shall receive a credit for all amounts
(plus any accrued and unpaid interest or earnings thereon)
held under the Indenture by the Trustee in any of the funds or
accounts established under the Indenture (excepting, however,
amounts, if any, in the Interest Account and the
Administrative Expenses Account attributable to and held for
the payment of interest on the Bonds, and fees and expenses of
the Issuer and/or the Trustee and other Administrative
Expenses accrued and payable from such Accounts for the period
up to and including the Closing Date and not otherwise
credited to the Purchaser under Section 6.03 hereof), and the
Seller shall assign to the Purchaser all of its right, title
and interest in the amounts so held by the Trustee.
(f) Interest accruing on the Note, if any, prior to the
Closing Date which is not payable prior to the Closing Date
shall, to the extent not otherwise paid or provided for
hereunder (e.g., in the calculation of the Purchase Price or
prorations under Section 6.03), be a credit to the Purchaser,
and the Purchaser shall pay interest accruing on the Note
after the Closing Date.
(g) Subject to adjustments as set forth in this
Agreement, including, without limitation, Section 6.04 hereof,
for purposes of all prorations, the Seller will receive credit
of all income and will be responsible for the payment of all
expenses of the Project to and including the Closing Date and
the Purchaser will receive credit for all income and will be
responsible for the payment of all expenses after the Closing
Date. The Purchaser and the Seller shall indemnify each other
for its violation of this Section 6.03(g) as it relates to
responsibility for payment.
Section 6.04. Post-Closing Adjustments. The Seller and the
Purchaser agree that, to the extent items are prorated or adjusted
at the Closing on the basis of estimates, or are not prorated or
adjusted at the Closing pending actual receipt of funds or
compilation of information upon which such prorations or
adjustments are to be based, each of them will, upon a proper
accounting, pay to the other such amounts as may be necessary such
that Seller will receive the benefit of all income and will pay all
expenses of the Project accrued to and including the Closing Date
and the Purchaser will receive all income and will pay all expenses
of the Project accrued after the Closing Date. If on or after the
Closing, the Purchaser receives any ▇▇▇▇ or invoice which relates
to periods on or prior to the Closing Date, the Purchaser will
refer such ▇▇▇▇ to the Seller and the Seller agrees to pay such
▇▇▇▇ or invoice promptly upon receipt. If on or after the Closing,
the Seller receives any ▇▇▇▇ or invoice which relates to periods
subsequent to the Closing Date, the Seller will refer such ▇▇▇▇ to
the Purchaser and the Purchaser agrees to pay such ▇▇▇▇ or invoice
promptly upon receipt. Anything in this Agreement to the contrary
notwithstanding, the provisions of this Section 6.04 shall survive
the Closing.
Section 6.05. Delinquent Rents. Any rents or other amounts
which are delinquent as of the Closing shall not be adjusted or
prorated at the Closing, but the Purchaser shall make a reasonable
attempt to collect such amounts for the benefit of the Seller after
the Closing, and when and if such amounts are received by the
Purchaser, the Purchaser covenants and agrees to immediately pay to
the Seller any such delinquent rents from rents received by the
Purchaser (after payment of current rents) from such tenants after
the Closing Date.
ARTICLE VII
BROKER
Section 7.01. Brokers. The Purchaser represents and warrants
to the Seller and the Seller represents and warrants to the
Purchaser that it has not dealt with or been contacted by any
broker, finder, or real estate agent to act on its behalf except
for CB Commercial Real Estate Group, Inc. (the "Broker"). The
Seller will pay the Broker's commission at Closing. The Purchaser
and the Seller each agree to indemnify, defend and hold harmless
the other for any loss, cost, liability or damage arising from
inaccuracy of this representation and warranty.
ARTICLE VIII
DEFAULTS
Section 8.01. Default of Purchaser.
(a) In the event that the Purchaser has not delivered
the Termination Notice by the Outside Date under Section 2.01,
Section 2.02 or Section 2.03 hereof and if the Purchaser fails
to (1) consummate the purchase of the Project on the Closing
Date, (2) deliver the Letter of Credit on the Closing Date, or
(3) fully pay and perform all of the Purchaser's covenants,
agreements, or obligations hereunder, or breaches any of its
representations and warranties hereunder, then the Purchaser
agrees that the Seller shall have the right to cancel the
Purchaser's rights to purchase the Project under this
Agreement on not less than fifteen (15) days' prior written
notice to the Purchaser and, unless the Purchaser cures such
default within said fifteen (15) day period or the Seller is
in default hereunder, the Seller shall be entitled to be paid
and retain the entire ▇▇▇▇▇▇▇ Money Deposit and any interest
earned thereon (or an amount equal to the ▇▇▇▇▇▇▇ Money
Deposit and all interest thereon if for any reason the actual
▇▇▇▇▇▇▇ Money Deposit and all interest thereon is not
available to be immediately payable to the Seller) for
reimbursement of a portion of the Seller's out-of-pocket costs
incurred in connection with this Agreement and the
transactions contemplated hereunder and the economic loss of
taking the Project off the market. A default by the Purchaser
under this Agreement is herein sometimes referred to as a
"Purchaser's Default".
(b) In addition, the Purchaser understands and agrees
that if its rights to purchase the Project hereunder have been
terminated, nothing herein shall discharge or relieve the
Purchaser from paying all of the fees, costs and other
expenses which it is required to pay hereunder, and nothing
herein shall discharge or relieve it from its obligations
under Section 2.03(c) and Sections 2.04, 2.05 and 2.07 hereof.
Section 8.02. Default of Seller.
(a) If the Seller shall default hereunder in respect of
any covenants and agreements herein contained by the Seller to
be performed or complied with, the Purchaser may terminate
this Agreement on not less than fifteen (15) days' prior
written notice to the Seller and, unless the Seller cures such
default in said fifteen (15) day period or the Purchaser is in
default hereunder, the Purchaser shall be entitled to either
(i) return of its ▇▇▇▇▇▇▇ Money Deposit and all
interest earned thereon as its sole remedy, subject to
retention for the purposes set forth in Section 2.03(c)
hereof applicable to the return of the ▇▇▇▇▇▇▇ Money
Deposit and receipt by the Seller of all (A) documents
(including all Financing Documents), rent rolls, surveys,
all other Due Diligence Items and all other items
delivered by the Seller to the Purchaser hereunder and
(B) inspections and reports (including supporting
materials) ordered or commissioned by or on behalf of the
Purchaser, and neither the Purchaser nor the Seller shall
have any further right or obligation hereunder, except
that the Purchaser's obligations under Sections 2.04,
2.05 and 2.07 hereof shall survive, or
(ii) specific performance of the Seller's
obligations hereunder to transfer the Project in
accordance with the terms hereof, plus reimbursement of
the Purchaser's out-of-pocket third party expenses up to
$75,000 incurred in connection with enforcement of this
Section 8.02(a)(ii).
(b) It is expressly agreed by the parties that the
Purchaser hereby waives all legal and equitable right to
remedies not herein specified.
Section 8.03. Extension of Closing Date. The scheduled
Closing Date shall be August 1, 1997 which date may be extended for
up to fifteen (15) days to accommodate the cure periods provided
herein; provided, however, notwithstanding on which date the
Closing shall actually occur the Surety Bond shall be returned to
the Surety marked "canceled and discharged" on February 1, 1998 (or
if February 1, 1998 is not a business day then on the next
succeeding business day) as provided in Section 2.03(b) hereof.
ARTICLE IX
CASUALTY OR CONDEMNATION
Section 9.01. Casualty or Condemnation.
(a) The Seller and the Purchaser agree that if prior to
the Closing Date all or any material portion of the Project is
damaged or destroyed by any cause or is taken by eminent
domain or condemnation or a proceeding for the taking by
eminent domain or condemnation of all or a portion of the
Project is commenced prior to the Closing Date, the parties
shall have the following rights exercisable within ten (10)
days of receipt of notice of the first date on which the cost
of repairing or restoring the damage and the amount of
insurance proceeds or awards available to pay such cost is
known; provided that in the case of a taking or other loss in
respect of which such notice cannot be delivered by five (5)
business days prior to the Closing Date the cost of repairing
or restoring such damage shall be assumed to be more than
FIFTY THOUSAND DOLLARS ($50,000) and the Seller and the
Purchaser shall have the respective rights specified in
Sections 9.01(a)(ii) and (iii):
(i) If the cost of repairing or restoring such
damage or the award for such taking is FIFTY THOUSAND
DOLLARS ($50,000) or less, neither party shall have the
right to terminate this Agreement,
(ii) If the cost of repairing or restoring such
damage is more than FIFTY THOUSAND DOLLARS ($50,000) as
estimated by the Seller, and the Seller notifies the
Purchaser that it elects to consummate the transaction
described herein by providing for the repair or
restoration of the Project, the Purchaser shall not have
the right to terminate this Agreement if the Seller
assigns the right to insurance proceeds to the Purchaser
and deposits funds (or a surety bond from the Surety) in
an amount sufficient to cover the reasonably anticipated
costs of such repair or restoration in excess of such
insurance proceeds, or
(iii) If the cost of repairing or restoring such
damage is more than FIFTY THOUSAND DOLLARS ($50,000) as
estimated by the Seller, and the Seller notifies the
Purchaser that it does not intend to make such repair or
restoration, the Purchaser, by written notice to the
Seller within ten (10) days of receiving the Seller's
notice-that it will not repair or restore, may elect to
terminate its obligation to purchase the Project or to
proceed with the purchase of the Project without any
obligation on the part of the Seller for any such repair
or restoration. Failure to deliver a notice of election
within such ten (10) day period shall be deemed an
election by the Purchaser to proceed with the purchase.
(b) If this Agreement is not terminated as provided in
Section 9.01(a), the Seller shall assign and deliver to
Purchaser at Closing all of the Seller's right and interest in
the award for such taking or the proceeds of any insurance for
such damage or destruction (except the Seller shall be
entitled to retain all insurance proceeds received in
connection with the loss of rents or business interruption for
the period up to and including the Closing Date). If,
alternatively, this Agreement is terminated as provided in
Section 9.01(a), all obligations of the parties under this
Agreement (except the obligations of the Purchaser under
Section 2.03(c) and Sections 2.04, 2.05 and 2.07 of this
Agreement) shall be terminated and the Seller shall promptly
return, subject to retention for the purposes and as set forth
in Section 2.03(c) of this Agreement, any portion of the
Purchase Price (including, without limitation, the ▇▇▇▇▇▇▇
Money Deposit) theretofore deposited with the Seller or
otherwise paid by the Purchaser. Notwithstanding the
foregoing, unless the parties otherwise agree in writing, in
the case of any such damage or taking in excess of FIFTY
THOUSAND DOLLARS ($50,000), if the election and notice process
provided for in this Section is not effected in time for the
Closing to occur no later than August 1, 1997, either party
may terminate this Agreement on five (5) business days after
notice, with the parties having their respective rights to the
▇▇▇▇▇▇▇ Money Deposit as provided in the preceding sentences.
ARTICLE X
MISCELLANEOUS
Section 10.01. Time is of the Essence. All times, whether
specified herein for the performance by the Seller or the Purchaser
of their respective obligations hereunder, are of the essence of
this Agreement.
Section 10.02. Notices. All notices, approvals or
disapprovals or other communications required or permitted to be
given by either party hereunder shall be in writing and shall be
personally delivered or by overnight express courier, postage
prepaid, addressed to the party to whom such notice is to be given
as follows:
If to the Purchaser: ▇▇▇▇▇▇ Residential Operating
Partnership, L.P.
One Lincoln Centre
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Seller: Windsor Park Apartments, Inc.
▇/▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
CNA Insurance Companies
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Either party may change said address by notice in writing to the
other party of such change Notice personally delivered shall be
deemed given when delivered. Notice mailed by overnight express
courier shall be deemed given when delivered, unless delivery is
refused, in which event notice shall be deemed given upon the date
of attempted delivery.
Section 10.03. Binding Agreement. Upon the mutual execution
and delivery of this Agreement, this Agreement will become a
binding agreement between the parties hereto and shall constitute
the entire understanding between the parties with respect to the
transaction contemplated herein, and all prior agreements,
understandings, representations and statements, warranties,
undertakings, oral or written, are merged into this Agreement.
Neither this Agreement nor any provision hereof may be waived,
modified, amended, discharged or terminated except by an instrument
executed by the party against whom the enforcement of such waiver,
modification, amendment, discharge or termination is sought, and
then only to the extent set forth in such instrument.
Section 10.04. Counterparts. This Agreement may be executed
in various counterparts, and each copy so executed shall constitute
an original and all such copies shall constitute one and the same
Agreement.
Section 10.05. No Assignments. The Purchaser shall not
assign, transfer or convey its interest in this Agreement without
the prior written consent of the Seller, which consent can be
withheld for any reason or no reason, at the discretion of the
Seller, and any such assignment, transfer or conveyance without
such written consent shall be void. Subject to the foregoing
provisions of this Section 10.05, this Agreement shall be binding
upon and inure to the benefit of the heirs, executors,
administrators, successors and assigns of the parties hereto.
Section 10.06. No Recording. The Purchaser agrees it shall
not record this Agreement, or a memorandum thereof, and, in the
event the Purchaser does make such recording, then the Purchaser
shall be deemed in default hereunder, and at the option of the
Seller. The Purchaser's rights under this Agreement shall be null
and void and of no further force and effect, and the Seller and the
Surety shall have all of their rights under Section 8.01 hereof.
Section 10.07. Governing Law. This Agreement shall be
governed by and shall be construed and interpreted in accordance
with the laws of the State of Tennessee.
Section 10.08. Captions. The captions in this Agreement are
inserted for convenience of reference only and in no way define,
describe or limit the scope or intent of this Agreement or any of
the provisions hereof.
Section 10.09. Preparation of Agreement. This Agreement and
the Exhibits, Appendices and Schedules attached to this Agreement
have been reviewed by the Seller and the Purchaser and therefore
neither party shall have the burden of having the construction of
ambiguous provisions hereunder construed against them.
Section 10.10. Authorized by Law. The Purchaser and the
Seller mutually covenant to each other that the execution of this
Agreement is authorized by the laws, regulations and instruments
governing the Purchaser and the Seller, and the Seller and the
Purchaser hold each other harmless in the event that this Agreement
was executed without authority.
Section 10.11. Foreign Person. The Seller hereby warrants
and represents that theSeller is not a"foreign person" within the
meaning of Section 1445(f)(d) of the InternalRevenue Code of 1954,
as amended.
Section 10.12. Return of Information to Seller. If for any
reason the purchase of the Project is not consummated, the
Purchaser shall within five (5) days of such date when it is
determined that the purchase will not be consummated, return to the
Seller all copies of the materials, documents, agreements and
Information previously delivered to the Purchaser by the Seller or
which the Purchaser has in its possession.
Section 10.13. Indemnity Letter. In the event of any
inconsistency between this Agreement and the Indemnity Letter, the
provisions of this Agreement shall supersede the Indemnity Letter
and be controlling.
Section 10.14. Mutual Indemnification Regarding Determination
of Taxability. The Seller and the Purchaser (an "Indemnifying
Party") each hereby agree to indemnify, defend, save and hold
harmless each other and their respective parents, affiliates,
officers, employees, agents, and representatives (an "Indemnified
Party") from and against any loss, liability, claim, cause of
action or damage suffered by such Indemnified Party arising from a
Determination of Taxability (as defined in the Indenture) occurring
on or before February 1, 2006 and caused solely by such
Indemnifying Party's failure to lease the Project in compliance
with the requirements of the Regulatory Agreement while such
Indemnifying Party held legal title to the Project.
IN WITNESS WHEREOF, the parties hereto have executed this Sale
and Purchase
Agreement as of the day and year first above written.
PURCHASER:
▇▇▇▇▇▇ RESIDENTIAL OPERATING PARTNERSHIP,
L.P.
By: ▇▇▇▇▇▇ Operating, Inc., a Delaware
corporation, its general partner
By:
Its:
SELLER
WINDSOR PARK APARTMENTS, INC.
By:
Its Vice President
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
IN WITNESS WHEREOF, the parties hereto have executed this Sale
and Purchase
Agreement as of the day and year first above written.
PURCHASER:
▇▇▇▇▇▇ RESIDENTIAL OPERATING
PARTNERSHIP, L.P.
By: ▇▇▇▇▇▇ Operating, Inc., a Delaware
corporation, its general partner
By:
Its:
SELLER:
WINDSOR PARK APARTMENTS, INC.
By:
Its Vice President
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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