▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇
OPTION TO PURCHASE REAL PROPERTY AND ESCROW INSTRUCTIONS
BETWEEN
PARADISE VALLEY COMMUNITIES NO. 1
("Seller")
AND
THE FORECAST GROUP, L.P.
("Buyer")
PARADISE VALLEY UNIT 3
OPTION TO PURCHASE REAL PROPERTY AND ESCROW INSTRUCTIONS
THIS OPTION TO PURCHASE REAL PROPERTY AND ESCROW INSTRUCTIONS
("Agreement") is made and effective as of October 3, 1996 by and between
Paradise Valley Communities No. 1, a California general partnership
("Seller"), and The Forecast Group, L.P., a California limited partnership
("Buyer"), with reference to the facts set forth below.
A. Seller is the owner of that certain land situated in the City of
Fairfield, County of ▇▇▇▇▇▇, State of California, more particularly described
in Exhibit A attached hereto and incorporated herein ("Land"). The Land is a
portion of a residential subdivision ("Subdivision") consisting of four units,
or neighborhoods. The Land consists of one unit or neighborhood, which is
referred to herein as "Unit 3." Unit 3 consists of undeveloped land, which
has been subdivided into 75 single-family residential lots pursuant to the
"Subdivision Map," as defined in Section 1.22 of this Agreement. The term
"Lots" refers to the single-family residential lots located in Unit 3 that are
specifically described in Exhibit A, attached hereto. Work on the Lots in
Unit 3 and the infrastructure improvements and amenities ("Improvements") for
Unit, as described in the Subdivision Map and related improvement plans and
specifications described in Exhibit B, attached hereto has not begun. The
Lots and Improvements are not complete.
B. Buyer has entered into the Paradise Valley Unit 2 Second Closing
Purchase Agreement and Escrow Instructions dated October 3, 1996 ("Unit 2
Second Closing Purchase Agreement"), pursuant to which Buyer has agreed to
purchase from Seller certain single-family residential lots located on land
near or adjacent to the Lots and comprising a portion of the Subdivision.
Buyer desires to obtain an option to purchase the Property (as defined herein)
and Seller desires to grant to Buyer an option to purchase the Property in
accordance with the terms and provisions set forth below.
NOW, THEREFORE, in consideration of the recitals set forth above, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as set forth below.
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ARTICLE 1
DEFINED TERMS
Terms used in this Agreement with their initial letters capitalized and
not otherwise defined shall have the meanings set forth below.
1.1 Agreement. The term "Agreement" shall mean this Option to
Purchase Real Property and Escrow Instructions between Seller and Buyer.
1.2 Approved Exceptions. The term "Approved Exceptions" shall mean
those exceptions to title that are approved in accordance with this Agreement.
1.3 Business Day. The term "Business Day" shall mean any day other
than a Saturday, Sunday or legal holiday in the State of California. All
periods of time described in this agreement that are not expressly measured by
Business Days shall be measured by calendar days.
1.4 Buyer. The term "Buyer" shall mean The Forecast Group, L.P., a
California limited partnership.
1.5 CLTA Owner's Title Policy. The term "CLTA Owner's Title Policy"
shall mean the California Land Title Association ("CLTA") owner's policy of
title insurance to be issued by the Title Company upon the Close of Escrow
pursuant to the terms of this Agreement.
1.6 Cash. The term "cash" shall mean: (i) currency of the United
States of America, (ii) cashier's check(s) currently dated and payable to
Escrow Agent or Seller, as required under this Agreement, drawn and paid
through a California banking or savings and loan institution, tendered to
Escrow Agent or Seller, as required under this Agreement one (1) Business Day
before funds are required to be delivered under this Agreement, or (iii) an
amount credited by wire transfer into Escrow Agent's or Seller's bank account,
as required under this Agreement.
1.7 Close of Escrow. The term "Close of Escrow" shall mean the
consummation of the purchase of the Property by Buyer from Seller and the
recordation of Seller's Grant Deed(s) in accordance with the terms and
provisions of this Agreement.
1.8 Closing Date. The term "Closing Date" shall mean the date on
which the closing will be held for the sale of the Property as set forth in
Section 8.1 of this Agreement.
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1.9 County. The term "County" shall mean the County of ▇▇▇▇▇▇, in
the State of California.
1.10 Effective Date. The term "Effective Date" shall mean October 3,
1996, the date on which this Agreement is effective and deemed to have been
made.
1.11 Escrow. The term "Escrow" shall mean the escrow opened by
Escrow Agent pursuant to the terms of this Agreement.
1.12 Escrow Agent. The term "Escrow Agent" shall mean Chicago Title
Company, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Chicago Title").
1.13 Feasibility Review Period. The term "Feasibility Review Period"
shall mean the period of time which commences on the Effective Date, and
terminates at midnight on May 1, 1998.
1.14 Governmental Action. The term "Governmental Action" shall mean
(a) any order of a court of competent jurisdiction, and/or (b) any enactment,
by the initiative or referendum process or otherwise, of any Governmental
Agencies (as defined below) affecting the Property, either directly or
indirectly, including, but not limited to, limitation on the number of permits
or licenses that can be issued, declaration of policy, resolution, ordinance,
statute, regulation, or any other enactment of any Governmental Agency (as
defined below) and irrespective of whether the orders or enactments listed
immediately above contain the words "moratorium," "moratoria" or similar
words.
1.15 Governmental Agencies. The term "Governmental Agencies" shall
mean any local, county, state and/or federal governmental or quasi-governmental
agencies, authorities or regulatory bodies and any public or
private utility companies having jurisdiction over the Property.
1.16 Opening of Escrow. The term "Opening of Escrow" shall mean the
date Escrow Agent executes the Consent of Escrow Agent attached hereto, which
consent shall be executed by Escrow Agent upon delivery of this Agreement to
Escrow Agent.
1.17 Preliminary Report. The term "Preliminary Report" shall mean
the Preliminary Title Report dated June 14, 1996, issued by the Title Company
to be reviewed by Buyer during the Feasibility Review Period.
1.18 Property Documents. The term "Property Documents" shall mean
the documents delivered by Seller to Buyer in connection with its feasibility
studies pursuant to Section 4.1 of this Agreement. The Property Documents are
listed in Exhibit B, attached hereto.
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1.19 Property. The term "Property" shall mean the Land and the
Subdivision Map and the Lots to the extent completed, and any public or
private entitlements, maps, utility deposits, plans, soils reports,
environmental reports, marketing studies, development agreements, permits and
similar items that relate to the development, sale and use of the Lots as
single-family residential building lots.
1.20 Purchase Price. The term "Purchase Price" shall mean the total
consideration to be paid by Buyer to Seller for the purchase of the Property
as set forth in Article 2 of this Agreement.
1.21 Seller. The term "Seller" shall mean Paradise Valley
Communities No. 1, a California general partnership.
1.22 Subdivision Map. The term "Subdivision Map" shall mean the
Subdivision Map of Paradise Valley North Unit No. 3, recorded on June 11,
1991, in Book 60 of Maps, at Page 82, et. seq., in the Official Records of
▇▇▇▇▇▇ County, as amended by that certain Certificate of Correction for
Subdivisions recorded September 23, 1991, in Book 1991, as Instrument No.
1991-00069160, Official Records of ▇▇▇▇▇▇ County.
1.23 Title Company. The term "Title Company" shall mean Chicago
Title.
ARTICLE 2
GRANT OF OPTIONS AGREEMENT OF PURCHASE AND SALE
2.1 Grant of Option. In consideration of Buyer's entering into the
Purchase Agreement and Buyer's delivery of $1,000 cash ("Option Payment") to
Seller, Seller hereby grants to Buyer the right and option to purchase and
acquire the Property at the Purchase Price and upon the terms and conditions
hereinbelow set forth. The option granted herein shall expire at midnight on
May 1, 1998 (the "Expiration Date").
2.2 Purchase Price. The purchase price ("Purchase Price") for the
Property is Two Million One Hundred Seventy-One Thousand Three Hundred and
00/100 Dollars ($2,171,300).
2.3 Payment of Purchase Price. The Purchase Price shall be paid in
cash upon the Close of Escrow. The Option Payment shall be credited against
the Purchase Price.
2.4 Assumption of Liabilities. Upon the terms and subject to the
conditions contained in this Agreement, Buyer shall assume, effective as of
the time of day on the Closing Date that Escrow Agent telephonically or in
writing notifies Seller and Buyer that Escrow has closed, Seller's obligations
under the Property Documents with respect to the Property purchased under this
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Agreement, which include, without limitation, the obligation to complete the
Lots and any necessary Improvements in accordance with the Subdivision Map and
all applicable documents, instruments, codes, ordinances, regulations and
permits.
ARTICLE 3
EXERCISE OF OPTION;
OPEN AND CLOSE OF ESCROW; DELIVERY OF DOCUMENTS
3.1 Exercise of Option. Buyer shall exercise the option to purchase
the Property under this Agreement by delivering to Seller, on or before the
Expiration Date, a written notice of Buyer's exercise of the option to
purchase the Property under this Agreement ("Notice of Exercise"). Buyer
shall have the right to deliver the Notice of Exercise and thereby exercise
the option to purchase the Property under this Agreement if, and only if, at
the time of Buyer's delivery of the Notice of Exercise, (i) Buyer is not in
default under this Agreement and (ii) Buyer has closed the escrow, and
acquired the lots and property upon the Second Closing with respect to ▇▇▇▇ ▇,
under the Unit 2 Second Closing Purchase Agreement. If the Notice of Exercise
is not delivered to Seller on or before the Expiration Date, Buyer's option to
purchase the Property and this Agreement shall immediately terminate upon the
Expiration Date. Upon any such termination of the option to purchase the
Property, the Buyer will execute, acknowledge and deliver to the Seller a
quitclaim deed and such other documentation as Seller may determine to be
reasonable and necessary in order to evidence the termination of any interest
of Buyer in the Property.
3.2 Opening of Escrow. Upon Buyer's timely delivery to Seller of
the Notice of Exercise, Buyer and Seller shall open Escrow by depositing with
Escrow Agent a fully executed original of this Agreement for use as escrow
instructions, and Escrow Agent shall execute the Consent of Escrow Agent
("Consent") which appears at the end of this Agreement and deliver a fully
executed Consent to Buyer and Seller. Seller shall also deposit the Option
Payment into Escrow upon the opening of Escrow. Escrow Agent's general
conditions ("General Conditions") are attached hereto as Exhibit C and
incorporated herein by reference to the extent they are not inconsistent with
the provisions of this Agreement. If there is any inconsistency between the
provisions of the General Conditions and this Agreement, the provisions of
this Agreement shall control. If Escrow Agent requires additional
instructions, the parties agree to make any deletions, substitutions and
additions as the parties shall mutually approve, as long as such deletions,
substitutions or additions do not materially alter the terms of this
Agreement.
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3.3 Buyer's Deliveries. Buyer shall, at least one (1) Business Day
prior to the Close of Escrow (unless required to be delivered at an earlier
date under the terms of this Agreement), deliver to Escrow Agent each of the
following:
3.3.1 Purchase Price. Cash in the amount of the Purchase
Price, less the Option Payment;
3.3.2 Documents. Fully executed and, where appropriate,
notarized counterparts of the documents required to be executed by Buyer under
this Agreement;
3.3.3 Prorations, Fees and Costs. The amount, if any,
required of Buyer under Article 9 of this Agreement entitled "Prorations, Fees
and Costs" and any other amounts payable upon the Close of Escrow under any
other provisions of this Agreement; and
3.3.4 General. Such other documents, instruments and
certificates as Seller may reasonably require to carry out the intent of this
Agreement; provided, however, that Buyer shall not be obligated to incur any
financial liability or obligation
in connection with the furnishing of any such documents, instruments or
certificates.
3.4 Seller's Deliveries. Seller shall, at least one (1) Business
Day prior to the Close of Escrow (unless required to be delivered at an
earlier date under the terms of this Agreement), deliver to Escrow Agent each
of the following:
3.4.1 Certificate of Non-Foreign Status. Prior to the Close
of Escrow, Seller shall execute and deposit into Escrow a Certificate of Non-
Foreign Status certifying that Seller is a non-foreign person in the form
attached hereto as Exhibit D and incorporated herein ("Certificate of Non-
Foreign Status");
3.4.2 Grant Deeds. Prior to the Close of Escrow, Seller
shall execute, acknowledge and deposit into Escrow Grant Deed(s) in the form
attached hereto as Exhibit E; and
3.4.3 General. Such other documents, instruments and
certificates as Buyer may reasonably require to carry out the intent of this
Agreement; provided, however, that Seller shall not be obligated to incur any
financial liability or obligation in connection with the furnishing of any
such documents, instruments or certificates.
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ARTICLE 4
FEASIBILITY REVIEW
4.1 Feasibility Review Period; Delivery of Property Documents.
During the Feasibility Review Period, Buyer shall analyze the feasibility of
its purchase and use of the Property. Buyer is solely responsible for any and
all costs incurred by Buyer in connection with its review and/or
investigations of the matters set forth in this Article 4. Seller has
delivered to Buyer the Property Documents. During the Feasibility Review
Period, Buyer shall review and analyze the Property Documents to determine
their individual and collective impact on the Property and its purchase and
use by Buyer.
4.1.1 Review of Preliminary Report. Seller has caused to be
provided to Buyer a Preliminary Report issued by the Title Company
("Preliminary Report"), together with legible copies of all recorded documents
described in the Preliminary Report. Buyer shall have the right to review and
approve the Preliminary Report during the Feasibility Review Period. If any
title exceptions are recorded against the Property before the Close of Escrow
in addition to those specified in the Preliminary Report, Escrow Agent shall
cause the Title Company to issue a supplemental preliminary report
("Supplemental Report"). Buyer shall have until the expiration of the
Feasibility Review Period with respect to any title exceptions shown in the
Preliminary Report, and five (5) Business Days after receipt of any
Supplemental Report, to review the title exceptions shown therein and to
deliver to Seller notice of approval or disapproval of any title exceptions
disclosed in any such report. Buyer's delivery of the Notice of Approval
described in Section 4.3 shall be deemed approval of the exceptions to title
shown on the Preliminary Report and any Supplemental Report issued as of the
date of such Notice of Approval. Any title exceptions approved by Buyer are
referred to herein as "Approved Exceptions." If any title exceptions are
specifically disapproved, and Seller elects, within five (5) Business Days
after the date of Buyer's disapproval, not to cure the disapproved item, then
Buyer shall have five (5) Business Days after the receipt of Seller's notice
of election not to cure the disapproved item to waive its prior disapproval.
If Buyer does not deliver notice of its election to waive its prior
disapproval, then the disapproved and uncured item will be deemed disapproved.
If a title exception is disapproved and uncured, Buyer may terminate the
Escrow by delivering a written notice of termination to Seller and the Escrow
Agent. Upon such termination, any deposits theretofore paid to Seller or
Escrow Agent (regardless of whether such deposits were released to Seller)
shall be immediately returned to Buyer, and this Agreement shall be
terminated. Seller shall thereupon be released from its obligation to sell
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the Property to Buyer, and Buyer shall be released from any obligation to
purchase the Property.
4.1.2 Governmental Actions. Buyer shall review and consider
the impact on the Property of any and all applicable governmental ordinances,
rules and regulations, and evaluate the effect of any pending or threatened
Governmental Actions pertaining to the Property.
4.1.3 Studies and Investigations. Buyer shall conduct such
independent investigations, studies and tests as it deems necessary or
appropriate concerning Buyer's proposed use, sale, development and/or the
suitability of the Property for Buyer's intended purposes. Such
investigations may include, without limitation, soils and engineering tests,
hazardous studies, investigations concerning the availability of the approvals
required from any Governmental Agencies for Buyer's proposed use of the
Property, investigations regarding the existence on the Property of any
threatened or endangered species, and of any archaeological artifacts on the
Property, the imposition or increase of any fees, charges or exactions by any
Governmental Agencies and such economic feasibility and marketing studies as
Buyer deems appropriate.
4.1.4 Physical Inspection. During the Feasibility Review
Period, Buyer shall have the right to inspect and approve of the physical
condition of the Property and shall conduct any soil, hazardous waste or
engineering studies with respect to the Property as Buyer may deem necessary
or appropriate. All such studies and inspections shall be conducted by Buyer
at its sole expense.
4.2 Additional Information from Seller. During the Feasibility
Review Period, Seller shall provide Buyer with such Additional Information (as
hereinafter defined) as Buyer reasonably may determine to be necessary to
complete its investigation of the Property, and Seller shall, and shall cause
its agents, employees and consultants to, respond to questions posed by Buyer
with respect to the Property. As used herein, the term "Additional
Information" shall mean and refer to information in the possession and/or
control of Seller concerning (i) the Property and (ii) material changes in
information and documents previously provided to Buyer by Seller during the
Feasibility Review Period.
4.3 Satisfaction of Feasibility Review. At any time during the
Feasibility Review Period, Buyer shall have the right to terminate this
Agreement if Buyer disapproves of any aspect of the Property or the
feasibility of Buyer using the Property as Buyer intends. If Buyer approves
of the Property and elects to continue this Agreement beyond the Feasibility
Review Period, Buyer shall, prior to expiration of the Feasibility Review
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Period, deliver notice of such election ("Notice of Approval") to Seller and
Escrow Agent. In such event, the terms and provisions of this Agreement shall
continue in full force and effect, subject to the provisions of Section 4.1.1
regarding disapproved and uncured title exceptions shown in any Supplemental
Report. The parties acknowledge and agree that the continued effectiveness of
this Agreement shall be conditioned upon Buyer's delivery of a Notice of
Approval and that Buyer's delivery of a Notice of Approval shall be deemed to
be its approval of all aspects of the Property, including, without limitation,
title issues, with the exception of matters specifically set forth in this
Agreement for which Buyer has continuing rights of approval after the
Feasibility Review Period. Buyer's failure to deliver its Notice of Approval
before expiration of the Feasibility Review Period shall be deemed to be
Buyer's disapproval of the Property. If no Notice of Approval has been
delivered by the expiration of the Feasibility Review Period, or within the
period described in Section 4.1.1 with respect to any title exception shown in
any Supplemental Report that is disapproved and uncured, this Agreement shall
upon such expiration immediately terminate, and Escrow Agent shall return all
funds, less applicable Escrow cancellation charges, and documents to the
parties who deposited them. Seller shall thereupon be released from its
obligation to sell the Property to Buyer, and Buyer shall be released from any
obligation to purchase the Property. Buyer shall also deliver to Seller,
without warranty, any documents related to the Property which Buyer has
created during the Feasibility Review Period.
ARTICLE 5
CONDITIONS PRECEDENT TO CLOSE OF ESCROW
5.1 Subject to Satisfaction or Waiver. The Closing of the purchase
and sale described in this Agreement and the obligations of the parties under
this Agreement shall be subject to satisfaction or waiver (by the party in
whose favor the condition precedent has been established) of all the
conditions precedent set forth below.
5.1.1 Title Policy. Escrow Agent shall be unconditionally
committed to procure from the Title Company the CLTA Owner's Title Policy for
the Property with a liability limit in the amount of the Purchase Price
insuring fee title vested in Buyer. Buyer shall take title to the Property
subject only to: (a) Non-delinquent general, special and supplemental taxes,
bonds and assessments, including ▇▇▇▇▇-▇▇▇▇ bonds, if any; (b) any matters set
forth in the printed form portion of the CLTA Owner's Title Policy; (c) the
Approved Exceptions; and (d) any items caused or permitted to be placed of
record by Buyer as of the Close of Escrow.
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5.1.2 Seller's Performance. Seller shall have duly performed
each and every undertaking and agreement to be performed by it hereunder prior
to the Close of Escrow.
5.1.3 Buyer's Performance. Buyer shall have duly performed
each and every undertaking and agreement to be performed by it hereunder prior
to the Close of Escrow.
5.1.4 Closing Under Purchase Agreement. Buyer shall have
closed escrow under the Purchase Agreement and acquired the Property described
therein.
5.1.5 Improvement Bonds. In accordance with Section 6.7,
Buyer shall have replaced the existing improvement bonds affecting the Lots
with improvement bonds obtained by Buyer and shall have obtained a release of
Seller with respect to any liability for such replaced improvement bonds.
5.2 Failure of Conditions Precedent. The conditions precedent in
Sections 5.1.1 and 5.1.2 are for Buyer's benefit and can be waived only by
Buyer. The conditions precedent in Sections 5.1.3, 5.1.4 and 5.1.5 are for
Seller's benefit and can be waived only by Seller. In the event that any of
the conditions precedent set forth above is neither satisfied nor waived by
the Closing Date, the party for whose benefit the condition has been created
may terminate the Escrow and this Agreement by giving a written notice of
termination to the other party and Escrow Agent, specifying the reason for
termination and the condition precedent that has not been satisfied. Upon
receipt of such notice of termination, Escrow Agent shall return any funds
that have been deposited in Escrow to the person who made such deposit, less
applicable Escrow cancellation charges, and any documents to the parties who
deposited them. If Buyer terminates the Escrow and this Agreement because a
condition precedent set forth in Section 5.1.1 or 5.1.2 is not satisfied,
Seller immediately shall return to Buyer any funds theretofore disbursed to
Seller from the Escrow. Seller shall thereupon be released from its
obligation to sell the Property to Buyer, and Buyer shall be released from its
obligation to purchase the Property.
5.3 Copy of Documents to Other Party. Each party will, concurrently
with its delivery to Escrow Agent of any documents described in this Article
5, deliver a copy of the same to the other party.
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ARTICLE 6
COVENANTS AND AGREEMENTS
6.1 No Concern. Escrow Agent shall have no concern with, liability
or responsibility for, this Article.
6.2 Additional Escrow Instructions. Buyer and Seller covenant and
agree that they will execute any additional escrow instructions not
inconsistent with the terms of this Agreement as shall be reasonably required
by Escrow Agent.
6.3 Cooperation. Buyer and Seller acknowledge that it may be
necessary to execute documents other than those specifically referred to
herein in order to complete the acquisition of the Property as provided
herein. Both Buyer and Seller hereby agree to cooperate with each other by
executing such other documents or taking such other action as may be
reasonably necessary to complete this transaction in accordance with the
intent of the parties as evidenced in this Agreement.
6.4 Entry Upon Property. After execution of this Agreement, Buyer
and its designated agents and independent contractors shall have the right to
enter upon the Property to conduct surveys, soils tests, physical inspections,
investigations and studies so long as Buyer has provided prior reasonable
notice of such entry to Seller and such activities will not interfere with
Seller's ownership and maintenance of the Property. Seller and Seller's
agents shall reasonably cooperate with Buyer, provided that such
investigations and studies shall be at the sole cost and expense of Buyer.
Buyer agrees to repair any damage caused by Buyer or its agents or independent
contractors to the Property and further agrees to indemnify, protect, defend
(with legal counsel acceptable to both Buyer and Seller) and hold Seller
harmless from and against any costs, expenses, losses, attorneys' fees and
liabilities (including, without limitation, claims of mechanics' liens)
incurred or sustained by Seller either prior or subsequent to the Close of
Escrow as a result of the conduct of Buyer, its agents, or independent
contractors under this Section 6.4. The covenants contained in this Section
6.4 shall survive the Close of Escrow or earlier termination of this
Agreement.
6.5 Indemnities of Buyer. Buyer agrees that it will protect,
defend, indemnify and hold Seller harmless from and against all actions,
causes of action, suits, claims, costs, losses, penalties, damages,
liabilities and expenses of any kind whatsoever, including reasonable
attorneys' fees ("Claims"), based upon or arising out of: (i) any Claim for
personal injury or property damage occurring on or about the Property after
the Closing Date or in connection with Buyer's or its agents' or independent
contractors' access to the Property prior to the Closing Date; (ii) any Claims
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related to construction defects, soil subsidence or other similar claims
related to the Land, the Lots or the Improvements or any other improvements of
any kind made thereto or constructed thereon; and (iii) any other Claim
arising out of Buyer's ownership or operation of the Property after the
Closing Date.
6.6 Indemnities of Seller. Seller agrees that it will protect,
indemnify, defend and hold Buyer harmless from and against all Claims based
upon or arising out of: (i) any claim for personal injury or property damage
based upon an event occurring on or about the Property prior to the Closing
Date (except those resulting from Buyer's access to the Property prior to the
Closing Date); (ii) any liability or obligation which Buyer is not obligated
to assume under this Agreement; and (iii) any loss or liability pertaining to,
or resulting from, the drainage system installed on the Tooby property, which
is adjacent to the eastern edge of the Land, including, without limitation,
any stoppage of construction on, or sales of, the Lots caused by such drainage
system or by any action or inaction by any Governmental Agency with respect to
such drainage system. Notwithstanding the foregoing sentence, Seller shall
not be obligated to protect, defend, indemnify or hold Buyer harmless from any
Claims related to construction defects, soil subsidence or other similar
claims related to the Land, the Lots or the Improvements or any other
improvements of any kind made thereto or constructed thereon.
6.7 Improvement Bonds. Prior to the Close of Escrow, Buyer will
obtain and provide improvement bonds for the Lots and related Improvements,
deliver to Seller evidence of such bonds and obtain Seller's release under any
bonds applicable to the Lots or Improvements.
6.8 Recreational Facility. Seller shall construct a recreational
facility, as described in the plans therefor included in the Project
Documents, upon the issuance of a building permit for the 351st dwelling unit
in the Paradise Valley development (exclusive of any building permits for the
NCROC project). Buyer shall provide Seller quarterly reports indicating the
number of closings in any given quarter to facilitate Seller's compliance with
this requirement.
6.9 Cost Sharing Agreement. Buyer acknowledges that Seller has
assumed certain obligations under that certain Paradise Valley Infrastructure
Cost Sharing Agreement dated October 20, 1989 ("Cost Sharing Agreement") with
Arcadia Homes and Winncrest Development. This Cost Sharing Agreement provides
for the completion of all infrastructure, common amenities, landscaping and
other similar items on parcels at the Paradise Valley project. Seller shall
remain responsible for completion of its responsibilities under the Cost
Sharing Agreement with respect to the Property. Buyer covenants and agrees
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(i) to cooperate in, and not to interfere with, the full and complete
implementation of the Cost Sharing Agreement and (ii) to supply Seller with
any information on actual or estimated costs of improvements as may be
requested and required by Seller for reporting purposes under the Cost Sharing
Agreement.
6.10 Water and Sewer Line Reimbursements. Buyer acknowledges that
Seller is currently working with the City of Fairfield on reimbursements for
increasing the size of various water and sewer lines. Any reimbursements for
infrastructure, including the water and sewer lines, provided by Seller shall
be the sole property of Seller, and Buyer , promptly after receipt, shall
deliver such reimbursement payments to Seller if they are received by Buyer
after the Close of Escrow.
6.11 Pacific Gas & Electric Deposits. Buyer and Seller acknowledge
that there are no Pacific Gas & Electric deposits or other utility deposits
applicable to the Lots.
6.12 Transfer of Entitlements. Seller shall cooperate with Buyer and
execute, deliver, acknowledge and record such documents, instruments and
certificates as Buyer may reasonably require to effect the transfer of any
entitlements applicable to the Land, the Lots and the Improvements from the
City of Fairfield or any other Governmental Agency to Buyer.
6.13 Confidentiality. The parties hereto agree that they shall
maintain in confidence and not disclose any information, including, without
limitation, the Purchase Price and the price per Lot, related to this
Agreement, the Land, the Lots, the Improvements or any other Property without
the prior written consent of the other party to this Agreement. The preceding
sentence shall not prevent either party from disclosing the terms and
conditions of this Agreement and any and all information regarding the Land,
the Lots, the Improvements and the Property to the parties' respective counsel
and Governmental Agencies, such as the Securities Exchange Commission, having
jurisdiction over either party.
6.14 Completion of Lots. Buyer acknowledges that no work on the Lots
and Improvements has been done and the Lots and Improvements are not complete.
Buyer covenants and agrees to complete the Lots and the related Improvements
in accordance with the Subdivision Map and any and all applicable documents,
instruments, codes, ordinances, regulations and permits.
6.15 Status of Buyer as Declarant; Annexation of Lots. Upon the
Close of Escrow, Seller shall record in the County and deliver to Buyer a
certificate, as required under Section 2.11 of that certain Master Declaration
of Covenants, Conditions and Restrictions of Paradise Valley, which was
recorded in the Office of the County Recorder of ▇▇▇▇▇▇ County, State of
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California, on August 25, 1995, Serial No. 95-51486 ("CC&Rs"), designating
Buyer as a "Declarant," as defined in the CC&Rs, with respect to the Lots.
Buyer will undertake, with Seller's reasonable cooperation, the responsibility
of preparing documentation for annexation of the Lots under the CC&Rs and
taking such other steps, including, without limitation, obtaining from the
California Department of Real Estate a Subdivision Public Report pertaining to
the sale of the Lots, as Buyer may determine to be necessary or appropriate to
effectively develop, market, improve and sell Lots.
6.16 Possession. Possession of the Property shall be delivered by
Seller to Buyer on the Closing Date upon recordation of the Grant Deed(s).
6.17 Survival of Covenants and Agreements. The covenants and
agreements set forth in Sections 6.5, 6.6, 6.8, 6.9, 6.10, 6.12, 6.13, 6.14
and 6.15 of this Agreement shall survive the Close of Escrow.
ARTICLE 7
ACKNOWLEDGMENTS AND REPRESENTATIONS
7.1 Seller's Representations.
7.1.1 No Rights to Acquire Property. No person, firm or
entity other than Buyer has any rights in, or right to acquire, the Property
or any part thereof, and as long as this Agreement remains in force, Seller
will not, without Buyer's prior written consent, lease, transfer, mortgage,
pledge, or convey, its interest in the Property, or any portion thereof, nor
any right therein, or grant any right or option to anyone to effect any such
transaction.
7.1.2 Organization. Seller is a general partnership duly
organized and validly existing under the laws of the State of California with
full power to enter into this Agreement.
7.1.3 Authority. The execution and delivery of this
Agreement have been duly authorized and approved by all requisite partnership
action, and the consummation of the transactions contemplated hereby will be
duly authorized and approved by all requisite partnership action of Seller.
7.1.4 FIRPTA Affidavit. Seller is not a foreign corporation,
foreign partnership, foreign trust or foreign estate (as those terms are
defined in the Internal Revenue Code and the Treasury Regulations promulgated
thereunder) but rather a partnership formed under the laws of one of the
United States. Seller understands and agrees that the certification made in
14
this Section 7.1.4 may be disclosed to the Internal Revenue Service by Buyer
and that any false statement contained herein could be punished by fine,
imprisonment or both.
7.1.5 Latent Defects. Seller has no actual knowledge of any
latent defects on, in, under or above the Land, the Lots or the Improvements
(to the extent completed as of the date of this Agreement). Buyer
acknowledges that Seller has disclosed that there are issues to be resolved by
Seller in connection with the drainage system installed on the Tooby property,
which is adjacent to the eastern edge of the Land. For purposes of this
representation, the actual knowledge of Seller shall mean the actual knowledge
of only ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and no other person.
7.2 Buyer's Representations.
7.2.1 Organization. Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the State
of California with full power to enter into this Agreement.
7.2.2 Authority. The execution and delivery of this
Agreement have been duly authorized and approved by all requisite partnership
action of Buyer and the consummation of the transactions contemplated hereby
will be duly authorized and approved by all requisite partnership action of
Buyer.
7.3 Purchase "As-Is"; Limitation of Liability.
7.3.1 Buyer acknowledges that (i) the Land does not have on
it finished Lots or Improvements, (ii) no work has been done with respect to
the Lots and the Improvements, (iii) the Lots and related Improvements are not
complete, (iv) except for Section 7.1.5, Seller is not making and has not made
any warranties or representations, express or implied, as to the legal,
physical and/or financial condition now or in the future of the Land, the
Lots, the Improvements or any Property, and (v) Buyer is buying the Property
in an "as-is" condition based solely on Buyer's own studies and
investigations.
7.3.2 Buyer acknowledges that Seller shall have no liability
for any latent or patent defects discovered upon the Property following the
Close of Escrow.
7.3.3 Buyer confirms, acknowledges and agrees that no
officer, director, employee or representative of Seller or Seller's partners
(whether or not such individual has signed this Agreement on behalf of Seller)
makes any express or implied representation or warranty of any kind or nature
whatsoever concerning the Land, the Lots, the Improvements or any of the
Property. Buyer further acknowledges, confirms and agrees that any liability
with respect of this Agreement and the transactions contemplated herein shall
result in the liability of Seller or Seller's general partners only and not
any individual officer, director, employee or representative of Seller or
15
Seller's partners. Buyer therefore confirms, acknowledges and agrees that
Buyer may seek recourse only against Seller or Seller's general partners for
any liability arising out of or in connection with this Agreement and the
transactions contemplated hereby.
7.4 Survival. The representations made by Seller in Sections 7.1.1,
7.1.2, 7.1.3, 7.1.4 and 7.1.5, and by Buyer in Sections 7.2.1 and 7.2.2, and
the acknowledgments and covenants of Buyer in Sections 7.3.1, 7.3.2 and 7.3.3
of this Agreement shall survive the Close of Escrow.
ARTICLE ▇
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
8.1 Close of Escrow. If Buyer timely and properly exercises its
option to purchase the Property under this Agreement, Escrow shall close on
the date that is thirty (30) days after the date upon which Buyer delivers the
Notice of Exercise described in Section 3.1 of this Agreement ("Closing
Date").
8.2 Closing Procedure. Escrow Agent shall close the Escrow on or
before the Closing Date by (i) recording Seller's Grant Deed(s) and such other
documents as may be necessary to procure the Title Policy and satisfy the
terms and conditions of this Agreement and (ii) delivering funds and documents
as set forth in Article 10 entitled "Recordation and Distribution of Funds and
Documents" WHEN AND ONLY WHEN each of the following requirements has been
satisfied:
8.2.1 Funds and Instruments. All funds and instruments
required pursuant to Articles 2 and 3 have been delivered to Escrow Agent.
8.2.2 Satisfaction of Conditions Precedent. Each of the
conditions precedent set forth in Section 5.1 has been, or upon such closing
shall be, satisfied as provided for in Section 5.1.
8.2.3 Recordation. Escrow Agent shall have recorded the
documents deposited into Escrow for recordation in the Official Records of the
County.
8.3 Earlier Closing. If all of the conditions set forth in Sections
8.2.1 and 8.2.2 are satisfied at a date earlier than the Closing Date, Escrow
Agent shall close the Escrow at such earlier date provided Escrow Agent
obtains the written consent of Buyer and Seller to do so.
16
8.4 Termination of Escrow. If Escrow Agent cannot close the Escrow
on or before the Closing Date, it will, nevertheless, close the Escrow when
all conditions have been satisfied or waived as provided for in this
Agreement, notwithstanding that one or more of such conditions has not been
timely performed, unless (i) a notice of termination has therefore been
delivered to Escrow Agent in accordance with the provisions of Section 5.2,
13.1 or 13.2, or (ii) after the Closing Date and prior to the Close of Escrow,
Escrow Agent receives a written notice to terminate the Escrow and this
Agreement from a party who, at the time such notice is delivered, is not in
default hereunder. The right to terminate the Escrow and this Agreement under
the provisions of clause (ii) of this Paragraph 8.4 shall be optional, not
mandatory; no delay in the giving of such notice shall affect the rights
hereunder of the party giving the same.
8.4.1 Notice of Termination. Escrow Agent shall have no
liability or responsibility for determining whether or not a party giving a
notice of termination is or is not in default hereunder. Within two (2)
working days after receipt of such notice from one party, Escrow Agent shall
deliver one copy of such notice to the other party. Unless written objection
to termination of the Escrow is received by Escrow Agent within ten (10) days
after Escrow Agent so delivers such notice, (i) Escrow Agent shall forthwith
terminate the Escrow and return all documents, funds or other items held by it
to the party depositing same, except that Escrow Agent may retain such
documents and other items usually retained by escrow agents in accordance with
standard escrow termination procedures and practices, and (ii) each party
shall forthwith pay to Escrow Agent one-half of Escrow Agent's reasonable
escrow termination charges. Notwithstanding the foregoing provisions of this
Section 8.4.1, Escrow Agent may (i) retain any funds on deposit with it until
such time as its Escrow termination charges are paid in full and/or (ii)
deduct from any cash held by it sufficient funds to pay for its Escrow
termination charges in full. If written objection to the termination of the
Escrow is delivered to Escrow Agent within such 10-day period, Escrow Agent is
authorized to hold all funds and instruments delivered to it in connection
with the Escrow and may, in Escrow Agent's sole discretion, take no further
action until otherwise directed either by the parties' mutual written
instructions or final order of a court of competent jurisdiction.
8.4.2 Return of Deposits. If the Escrow is terminated under
either Section 13.1 or Section 13.2 or as a result of Seller's default under
or breach of this Agreement, Seller shall return to Buyer any funds disbursed
from the Escrow to Buyer prior to the termination of the Escrow.
17
ARTICLE 9
PRORATIONS, FEES AND COSTS
9.1 Prorations. Escrow Agent will prorate as of the Close of Escrow
between the parties, in cash, county, city and special district (if any) real
property taxes and assessments for the Property based on the latest
information available to Escrow Agent.
9.2 Thirty Day Month. All prorations and/or adjustments called for
in this Agreement are to be made on the basis of a thirty (30) day month,
unless otherwise specifically instructed in writing.
9.3 Seller's Fees and Costs. Seller shall pay (i) one-half of
Escrow Agent's escrow fee, (ii) usual Seller's document-drafting and recording
charges, (iii) the title insurance premium for the CLTA Owner's Title Policy
and any endorsements reasonably requested by Buyer's lender, and (iv) the
County Documentary Transfer Tax in the amount determined by Escrow Agent and
the County Recorder.
9.4 Buyer's Fees and Costs. Buyer shall pay (i) one-half of Escrow
Agent's escrow fee, (ii) usual Buyer's document-drafting and recording charges
and (iii) the additional premium for an American Land Title Association (ALTA)
title insurance policy, if Buyer desires that Title Company issue such a
policy.
9.5 Escrow Cancellation Charges Due to a Default. Notwithstanding
the provisions of Sections 9.3 and 9.4 above, if Escrow fails to close due to
Seller's default, Seller shall pay all Escrow cancellation charges. If Escrow
fails to close due to Buyer's default, Buyer shall pay all Escrow cancellation
charges. If Escrow fails to close for any reason other than the foregoing,
Buyer and Seller shall each pay one-half of any Escrow cancellation charges.
"Escrow cancellation charges" means all fees, charges and expenses incurred by
Escrow Agent, including all expenses incurred in connection with issuance of
the Preliminary Report and other title matters.
ARTICLE 10
RECORDATION AND DISTRIBUTION OF FUNDS AND DOCUMENTS
10.1 Disbursements. Except as provided in Section 10.4, below, all
disbursements by Escrow Agent shall be made by checks of Escrow Agent.
10.2 Recorded Documents. Escrow Agent shall cause the County
Recorder of the County to mail Seller's Grant Deed (and each other documents
which are herein expressed to be, or by general usage are, recorded) after
18
recordation, to the grantee, beneficiary or person (i) acquiring rights under
said document or (ii) for whose benefit said document was acquired.
10.3 Unrecorded Documents. Escrow Agent shall, at the Close of
Escrow, deliver by certified mail, overnight courier or United States mail (or
will hold for personal pickup, if requested) one (1) copy of each unrecorded
document received hereunder by Escrow Agent to the payee or person (i)
acquiring rights under said document or (ii) for whose benefit said document
was acquired.
10.4 Payment of Funds at Close of Escrow. Escrow Agent shall, at the
Close of Escrow, deliver by wire transfer, in accordance with Seller's
instructions (or will hold for personal pickup, if requested) (i) to Seller,
or order, the cash, plus any proration or other credits to which Seller will
be entitled less any appropriate proration, deposits or other charges, and
(ii) to Buyer, or order, any excess funds theretofore delivered to Escrow
Agent by Buyer.
10.5 Conformed Copies. Escrow Agent shall, at the Close of Escrow,
deliver to Seller and Buyer a copy of the Seller's Grant Deed(s) (conformed to
show recording date) and conformed copies of each document recorded to place
title in the condition required by this Agreement.
ARTICLE 11
REMEDIES
11.1 Liquidated Damages to Seller. If all of the conditions to
Closing for Buyer's benefit have either been satisfied or waived by Buyer by
the Closing Date, and the purchase and sale of the Property described herein
fails to close due to default by Buyer, it is agreed that the amounts released
from Escrow to Seller under this Agreement ("Released Amount") shall be
retained and accepted by Seller as liquidated damages and not as a penalty and
Seller shall be released from its obligation to sell the Property to Buyer,
and Buyer shall be released from its obligation to purchase the Property. It
is agreed that the Released Amount constitutes a reasonable estimate of the
damages to Seller. Buyer and Seller agree that it is impossible or
impractical presently to predict what monetary damages Seller would suffer in
such event. Buyer desires to limit the monetary damages for which Buyer might
be liable hereunder and Buyer and Seller desire to avoid the costs and delays
they would incur if a lawsuit were commenced to collect damages and therefore
agree that the liquidated damages provided hereunder shall constitute Seller's
sole and exclusive remedy hereunder. By the act of an authorized
19
representative of each party affixing its initials herein, each party
specifically confirms the accuracy of the above statements and its agreement
with them.
/s/ P.W. /s/ L.J.Y.
Seller's Initials Buyer's Initials
11.2 Specific Performance. If all of the conditions to Closing for
Seller's benefit have either been satisfied or waived by Seller by the Closing
Date, and the purchase and sale of the Property described herein fails to
close due to default by Seller, Buyer shall be entitled to bring an action for
specific performance of Seller's obligations under this Agreement.
ARTICLE 12
ASSIGNABILITY
12.1 Assignment. Neither party shall voluntarily or by operation of
law assign or otherwise transfer any of its rights or obligations under this
Agreement without obtaining the prior written consent of the other party,
which consent may not be unreasonably withheld. Notwithstanding the foregoing
sentence, Buyer shall have the right to assign its rights under this Agreement
without consent of Seller to a corporation, partnership, limited liability
company or other entity in which the beneficial owners of at least 51% of the
equity interests in such entity own at least 51% of the equity interests in
Buyer, provided that Buyer shall remain liable for, and be responsible for the
performance of, any and all liabilities, obligations, representations,
covenants and agreements under this Agreement.
ARTICLE 13
EMINENT DOMAIN AND MATERIAL LOSS
13.1 Eminent Domain. In the event that, prior to the Close of
Escrow, all or any material portion of the Property is taken or appropriated
by any public or quasi-public authority under the power of eminent domain, or
Seller receives actual notice of any pending or threatened condemnation
proceedings, then either Buyer or Seller may terminate this Agreement without
further liability hereunder and the parties shall proceed in accordance with
Section 8.4, and, in such event, any portion of Buyer's Deposit, regardless of
whether or not it has been released from Escrow to Seller, shall be
immediately returned to Buyer, and any condemnation proceeds shall be the sole
property of Seller. If neither Seller nor Buyer elects to terminate this
Agreement in the event of any such taking, or threat of taking, and provided
that all conditions precedent to the Close of Escrow have either been
satisfied or waived, Escrow shall close in accordance with this Agreement, and
Seller shall assign to Buyer all of its right, title and interest in any
condemnation proceeds or award made by the governmental entity.
20
13.2 No Material Loss. If, prior to the Close of Escrow, and subject
to the satisfaction or waiver of all conditions precedent in favor of Buyer
and Seller, the Property shall suffer a Material Loss, Buyer shall have the
right to elect, within 30 days of receipt of notice of such Material Loss, (a)
to terminate this Agreement under Section 8.4.1 and receive a return of
Buyer's Deposit or (b) to purchase the Property as provided in this Agreement
and receive an assignment of any insurance proceeds Seller receives, or to
which Seller is or may become entitled, with respect to such Material Loss
upon Seller's receipt of such proceeds. The parties acknowledge and agree in
no event shall the Close of Escrow be extended due to a Material Loss.
Notwithstanding the foregoing, the assignment of any insurance proceeds as
provided herein shall not include any proceeds received for items not related
to the physical condition of the Property, such as proceeds from Seller's
business interruption insurance, if any. For purposes of this Agreement, a
"Material Loss" means a loss resulting from a casualty that either (i)
diminishes the value of the Property in an amount of at least 10% of the
Purchase Price or (ii) results in a loss of at least 10% of the aggregate
square footage of the Land as of the Effective Date.
ARTICLE 14
GENERAL PROVISIONS
14.1 Attorneys' Fees. In the event any action, arbitration,
mediation or other dispute resolution proceeding shall be instituted between
Seller and Buyer in connection with this Agreement, the party prevailing in
such proceeding shall be entitled to recover from the other party all of its
costs of such proceeding, including, without limitation, attorneys' fees and
costs as fixed by the court therein.
14.2 Captions. The captions used herein are for convenience only and
are not a part of this Agreement and do not in any way limit or amplify the
terms and provisions hereof.
14.3 Construction of Agreement. The agreements contained herein
shall not be construed in favor of or against either party, but shall be
construed as if both parties prepared this Agreement.
14.4 Counterparts. This Agreement may be executed in counterparts,
all of which, when taken together, shall constitute a fully executed original.
14.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof
and all prior and contemporaneous agreements, representations, negotiations
and understandings of the parties hereto, oral or written, are hereby
superseded and merged herein. The foregoing sentence shall in no way affect
21
the validity of any instruments executed by the parties in the form of the
exhibits attached to this Agreement.
14.6 Exhibits and Schedules. All Exhibits and Schedules attached
hereto are incorporated herein by reference. Any Exhibits or Schedules that
are to be attached to the Agreement after the Effective Date but prior to the
Close of Escrow, shall be initialled by Buyer and Seller on each page and,
once so initialled, shall be sent to Escrow Agent for attachment to this
Agreement.
14.7 Gender and Number. The use herein of (i) the neuter gender
includes the masculine and the feminine and (ii) the singular number includes
the plural, whenever the context so requires.
14.8 Governing Law. This Agreement and the documents in the forms
attached as exhibits hereto shall be governed by and construed under the laws
of the State of California. This Agreement shall be deemed made and entered
into in the County.
14.9 Joint and Several Liability. If any party consists of more than
one person or entity, the liability of each such person or entity signing this
Agreement shall be joint and several.
14.10 Modification. No modification, waiver, amendment, discharge or
change of this Agreement shall be valid unless the same is in writing and
signed by the party against which the enforcement of such modification,
waiver, amendment, discharge or change is or may be sought.
14.11 Real Estate Brokerage Commission. Seller shall pay a real
estate brokerage commission in the amount of $65,200 to ▇▇▇▇ ▇▇▇▇▇▇ upon the
Close of Escrow. Except as provided in the preceding sentence, neither party
is obligated to pay any real estate, brokerage or other commission or fee in
connection with the purchase and sale of the Property. Each party hereby
indemnifies, protects, defends (with legal counsel reasonably acceptable to
the other party) and holds the other party free and harmless from and against
any and all costs and liabilities, including, without limitation, reasonable
attorneys' fees and costs, for causes of action or proceedings which may be
instituted by any broker, agent or finder, licensed or otherwise, claiming
through, under or by reason of the conduct of such party in connection with
this transaction.
14.12 No Partnership or Joint Venture. Seller or Buyer shall not, by
virtue of this Agreement, in any way or for any reason be deemed to have
become a partner of the other in the conduct of its business or otherwise, or
a joint venturer. In addition, by virtue of this Agreement there shall not be
deemed to have occurred a merger of any joint enterprise between Buyer and
Seller.
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14.13 Notice and Payments. Any notice to be given or other document to
be delivered by any party to the other or others hereunder, and any payments
from Buyer to Seller, may be delivered in person or by facsimile transmission
(provided that a confirming copy is sent by mail or overnight delivery as
herein specified) to an officer of any party, or may be deposited in the
United States mail, duly certified or registered, return receipt requested,
with postage prepaid, or by Federal Express or other similar overnight
delivery service, and addressed to the party for whom intended, as follows:
To Seller at its business office:
Paradise Valley Communities No. 1
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
K. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Duckor ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
To Buyer at its business office:
The Forecast Group, L.P.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
General Counsel
c/o The Forecast Group, L.P.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
To Escrow Agent:
Chicago Title Company
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Any party hereto may from time to time, by written notice to the other,
designate a different address which shall be substituted for the one above
specified. Unless otherwise specifically provided for herein, all notices,
payments, demands or other communications given hereunder shall be in writing
23
and shall be deemed to have been duly given and received (i) upon personal
delivery, or (ii) as of the third business day after mailing by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as set forth above, or (iii) the immediately succeeding Business Day
after deposit with Federal Express or other similar overnight delivery system.
14.14 Remedies Cumulative. All rights and remedies of Buyer and
Seller contained in this Agreement shall be construed and held to be
cumulative.
14.15 Severability. In the event that any phrase, clause, sentence,
paragraph, section, article or other portion of this Agreement shall become
illegal, null or void or against public policy, for any reason, or shall be
held by any court of competent jurisdiction to be illegal, null or void or
against public policy, the remaining portions of this Agreement shall not be
affected thereby and shall remain in force and effect to the fullest extent
permissible by law.
14.16 Successors and Assigns. Subject to the restrictions and
prohibitions on assignment set forth in Article 12, each and all of the
covenants and conditions of this Agreement shall inure to the benefit of and
shall be binding upon the successors-in-interest, assigns, and legal
representatives of the parties hereto. As used in the foregoing, "successors"
shall refer to the parties' interest in the Property and to the successors to
all or substantially all of their assets and to their successors by merger or
consolidation.
14.17 Waiver. No waiver by Buyer or Seller of a breach of any of the
terms, covenants or conditions of this Agreement by the other party shall be
construed or held to be a waiver of any succeeding or preceding breach of the
same or any other term, covenant or condition herein contained. No waiver of
any default by Buyer or Seller hereunder shall be implied from any omission by
the other party to take any action on account of such default if such default
persists or is repeated, and no express waiver shall affect a default other
than as specified in such waiver. The consent or approval by Buyer or Seller
to or of any act by the other party requiring the consent or approval of the
first party shall not be deemed to waive or render unnecessary such party's
consent or approval to or of any subsequent similar acts by the other party.
14.18 Gender and Number. In this Agreement (unless the context
requires otherwise), the masculine, feminine and neuter genders and the
singular and the plural include one another.
24
14.19 Time of the Essence. Time is of the essence of each and every
provision of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
SELLER:
PARADISE VALLEY COMMUNITIES
NO. 1, a California
general partnership
By: HomeFed Communities, Inc.,
a California corporation,
General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
President
By: HomeFed Resources
Corporation, a California
corporation, General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
President
BUYER:
THE FORECAST GROUP, L.P.,
a California limited partnership
By: FORECAST HOMES, INC., a
California corporation, General
Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Division President
25
CONSENT OF ESCROW AGENT
The undersigned Escrow Agent hereby agrees to (i) accept the foregoing
Agreement, (ii) be Escrow Agent under said Agreement and (iii) be bound by said
Agreement in the performance of its duties as Escrow Agent; provided, however,
the undersigned shall have no obligations, liability or responsibility under (i)
this Consent or otherwise unless and until said Agreement, fully signed by the
parties, has been delivered to the undersigned or (ii) any amendment to said
Agreement unless and until the same shall be accepted by the undersigned in
writing.
Dated: October 3, 1996 (the "Opening of the Escrow")
Chicago Title Company
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
Its: CSEO
LIST OF EXHIBITS
Exhibit A. . . . . . . . . . . . . . . .Legal Description of Land
Exhibit B . . . . . . . . . . . . . . . . . . Property Documents
Exhibit C. . . . . . . . . . . . . . General Conditions of Escrow
Exhibit D. . . . . . . . . . . .Certificate of Non-Foreign Status
Exhibit E. . . . . . . . . . . . . . . . . . . . . .Grant Deed(s)
EXHIBIT A
Legal Description of Land
ALL THE REAL PROPERTY SITUATED IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
OF CALIFORNIA, DESCRIBED AS FOLLOWS:
LOTS 1 THROUGH 75, AS SHOWN ON THAT CERTAIN MAP ENTITLED: "FINAL MAP OF
PARADISE VALLEY NORTH UNIT NO. 3, BEING ALL OF PARCEL 4 AS SHOWN ON THE PARCEL
MAP FILED IN BOOK 34 OF PARCEL MAPS, PAGE 8, ▇▇▇▇▇▇ COUNTY RECORDS," FILED JUNE
11, 1991 IN THE OFFICE OF THE RECORDER OF ▇▇▇▇▇▇ COUNTY IN BOOK 60 OF MAPS, AT
PAGE 82, ▇▇▇▇▇▇ COUNTY RECORDS, AND AS AMENDED BY THAT CERTAIN CERTIFICATE OF
CORRECTION FOR SUBDIVISIONS RECORDED SEPTEMBER 23, 1991 IN BOOK 1991 AS
INSTRUMENT NO. 1991-00069160, ▇▇▇▇▇▇ COUNTY RECORDS.
APN'S: ▇▇▇-▇▇▇-▇▇▇ THROUGH 060; ▇▇▇-▇▇▇-▇▇▇ THROUGH 340; ▇▇▇-▇▇▇-▇▇▇
THROUGH 200; ▇▇▇-▇▇▇-▇▇▇ THROUGH 140; ▇▇▇-▇▇▇-▇▇▇ THROUGH 080
EXHIBIT B
Unit 3
Property Documents
- Rough Grading and Erosion Plans dated March 1990 (6 copies)
- Final Map ▇▇▇▇ ▇ dated July 1989 (6 copies), recorded on June 11,
1991, ▇▇▇▇▇▇ County Recorder
- Improvement Plans for ▇▇▇▇ ▇ dated July 1989 (6 copies)
- Development Agreement dated July 20, 1988
- First Amendment to Development Agreement dated September 15, 1994 (not
yet fully executed)
- Second Amendment to Development Agreement (not yet dated or fully
executed)
- Covenants, Conditions, and Restrictions dated August 25, 1995
- ▇▇▇▇▇▇▇▇ Consulting Group Report dated September 15, 1994
- Department of Real Estate Public Report dated September 1, 1995
- Letter to City of Fairfield regarding acceptance of improvements dated
May 28, 1996
- Unapproved Plans for the Paradise Valley Recreation Facility
- Cost Sharing Agreement dated October 20, 1989
- Agreement with City of Fairfield regarding construction of
recreational facility dated August 31, 1995
- Utility Deposit Balances dated May 31, 1996
- Paradise Valley Master Association documents dated September 1995
- Paradise Valley Master Association Bylaws dated August 21, 1995
- Information regarding improvement bonds and maintenance obligations
for Unit 3
EXHIBIT C
General Conditions of Escrow
GENERAL PROVISIONS
1. The phrase "close of escrow" (for ▇▇▇) as used in this
escrow means the date on which documents are recorded,
unless otherwise specified.
2. Recordation of any instruments delivered through this
escrow, if necessary or proper for the issuance of the
policy of title insurance called for, is authorized.
3. No examination or insurance as to the amount or payment of
personal property taxes is required unless specifically
requested.
4. You and any of your affiliates or employees are authorized
to use the information and documents in this escrow for any
purpose. You are further authorized to furnish to any
broker or lender identified with this transaction or anyone
acting on behalf of such broker or lender, any instructions,
amendments, statements, or notices of cancellation given in
connection with this escrow.
5. All written notices, communications, change of instructions
and documents are required to be delivered timely at the
office of Chicago Title Company as set forth herein.
6. All funds received in this escrow shall be deposited with
other escrow funds in one or more escrow (demand) accounts
of Chicago Title Company in any state or national bank. The
parties to this escrow understand that the escrow accounts
you maintain with the depository institutions contribute to
your value as a customer of these institutions which, in
turn, may make available to Chicago Title Company an array
of bank services, accommodations or other benefits. You
shall have no obligation to account for the value realized
by Chicago Title Company from these services, accommodations
or other benefits. All disbursements shall be made by your
check, unless otherwise instructed. You shall not be
responsible for any delay in closing if funds received by
escrow are not available for immediate withdrawal. Chicago
Title Company may, at its option, require concurrent
instructions from all principals prior to release of any
funds on deposit in this escrow.
7. If demand to cancel is submitted after the Time Limit Date,
any principal so requesting you to cancel this escrow shall
file notice of demand to cancel in your office in writing.
You shall within three (3) working days thereafter mail by
certified mail one copy of such notice to each of the other
principals at the address stated in this escrow. Unless
written objection thereto is filed in your office by a
principal within fifteen (15) calendar days after the date
of such mailing, you are instructed to cancel this escrow.
If this is a sale escrow, you may return the lender's papers
and/or funds upon lender's demand.
8. In the event that this escrow is canceled, any fees or
charges due Chicago Title Company including cancellation
fees and any expenditures incurred or authorized shall be
paid from funds on deposit unless otherwise specifically
agreed to or determined by a court of competent
jurisdiction. Upon payment thereof, return documents and
monies to the respective parties depositing same, or as
ordered by the court, and void any executed instruments.
9. If there is no written activity by a principal to this
escrow within any six-month period after the Time Limit Date
set forth herein, Chicago Title Company may, at its option,
terminate its agency obligation and cancel this escrow,
returning all documents, monies or other items held, to the
respective parties entitled thereto, less any fees and
charges as provided herein.
10. If, for any reason, funds are retained or remain in escrow
after the closing date, you may deduct therefrom a
reasonable charge as custodian, of not less than $25.00 per
month, unless otherwise specified.
11. In the event that you should receive or become aware of
conflicting demands or claims with respect to this escrow,
or the rights of any of the parties hereto, or any money or
property deposited herein, you shall have the absolute right
at your option to discontinue any or all further acts until
such conflict is resolved to your satisfaction.
12. In the event that any Offer to Purchase, Deposit Receipt, or
any other form of Purchase Agreement is deposited in this
escrow, it is understood that such document will be
effective only as among the parties signing said document.
You as escrow holder are not to be concerned with the terms
of such document and are relieved of all responsibility in
connection therewith. You are to be concerned only with the
directives specifically set forth in these escrow
instructions and amendments thereto. Further, you are not
to be concerned or liable for items designated as
"memoranda" in these escrow instructions nor with any other
agreement or contract between the parties.
13. You are released from and shall have no liability,
obligation or responsibility with respect to (a) withholding
of funds pursuant to Section 1445 of the Internal Revenue
Code of 1986 as amended, and to Sections 18662 and 18668 of
the California Revenue and Taxation Code, (b) advising the
parties as to the requirements of said Section 1445, (c)
determining whether the transferor is a foreign person or a
non-resident under such Section, nor (d) obtaining a
nonforeign affidavit or other exemption from withholding
under said Sections nor otherwise making any inquiry
concerning compliance with such Sections by any party to the
transaction.
14. The parties hereto, by execution of these instructions
acknowledge that the escrowholder assumes no responsibility
or liability whatsoever for the supervision of any act or
the performance of any condition which is a condition
subsequent to the closing of this escrow.
15. In the absence of instructions to the contrary, you are
hereby authorized to utilize wire services, overnight, next
day, or other expedited delivery services (as opposed to the
regular U.S. Mail) and to charge the respective party's
account accordingly.
16. If you pay a demand to reconvey a revolving line of credit
or equityline deed of trust, you are hereby instructed on my
behalf and for my benefit, to request that the lender
issuing said demand cancel said revolving line or equityline
of credit.
17. You are authorized to destroy or otherwise dispose of any
and all documents, papers, instructions, correspondence and
other material pertaining to this escrow at the expiration
of six (6) years from the close of escrow or cancellation
thereof, without liability and without further notice.
IMPORTANT NOTICE
Except for wire transfers, funds remitted to this escrow are
subject to availability requirements imposed by Section 12413.1
of the California Insurance Code. CASHIER'S, CERTIFIED or
TELLER'S checks, payable to CHICAGO TITLE COMPANY are generally
available for disbursement on the next business day following
the date of deposit.
Other forms of payment may cause extended delays in the closing
of your transaction pursuant to the requirements imposed by
State Law.
(Wire transfer information available upon request)
ALL PARTIES TO THIS ESCROW ACKNOWLEDGE THAT CHICAGO TITLE COMPANY
DOES NOT PROVIDE LEGAL ADVICE NOR HAS IT MADE ANY INVESTIGATION,
REPRESENTATIONS OR ASSURANCES WHATSOEVER REGARDING THE LEGAL
ASPECTS OR COMPLIANCE OF THIS TRANSACTION WITH ANY TAX,
SECURITIES OR ANY OTHER STATE OR FEDERAL LAWS. IT IS RECOMMENDED
THAT THE PARTIES OBTAIN INDEPENDENT LEGAL COUNSEL AS TO SUCH
MATTERS.
EXHIBIT D
CERTIFICATE OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code of 1986, as amended ("Code"),
provides that a transferee (buyer) of a U.S. real property interest must
withhold tax if the transferor (seller) is a foreign person. Sections 18805 and
26131 of the California Revenue and Taxation Code provide that a transferee
(buyer) of a California real property interest must withhold tax if withholding
is required by Section 1445 of the United States Internal Revenue Code.
To inform The Forecast Group, L.P. ("Transferee"), that withholding of
tax under Section 1445 of the Code is not required upon disposition of certain
real property to the Transferee by Paradise Valley Communities No. 1, a
California general partnership, ("Transferor"), the undersigned hereby
represents and certifies the following on behalf of the Transferor:
1. The undersigned is the duly qualified and acting officer of the
Transferor;
2. The Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations), but rather is a corporation formed
under the laws of one of the United States;
3. The Transferor's U.S. employer identification number is
▇▇-▇▇▇▇▇▇▇;
4. The Transferor's address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇;
5. The Transferor understands that this certification may be
disclosed to the Internal Revenue Service and/or the California Franchise Board
by the Transferee and that any false statement contained herein could be
punished by fine, imprisonment, or both.
Under penalty of perjury, the undersigned declares that the undersigned
hasexamined this certification and to the best of its knowledge and belief it is
true, correct, and complete.
Dated:_______________, 1996 TRANSFEROR:
PARADISE VALLEY COMMUNITIES NO. 1,
a California general partnership
By: HomeFed Communities, Inc.,
a California corporation,
General Partner
By: ________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
President
By: HomeFed Resources
Corporation, a California
corporation, General Partner
By: ________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
President
EXHIBIT E
Grant Deed(s)
[To Be Prepared and Attached Prior to Close of Escrow]