PURCHASE AGREEMENT
(Rancho Franciscan Apartments; Santa Barbara, California)
THIS AGREEMENT is made and entered into as of the 7th day of
January, 1997, by and between CARLYLE INCOME PLUS, LTD., an
Illinois limited partnership (hereinafter called "Seller"), and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, a married man as his sole and separate property,
as to an undivided ____% interest, and ▇▇▇▇▇▇▇ TOWBES, an
unmarried man, as to an undivided ____% interest, as tenants in
common (hereinafter called "Buyer").
R E C I T A L S
A. Seller is the owner of that certain real property
located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ of Santa ▇▇▇▇▇▇▇, State of California, consisting
primarily of an apartment complex sometimes known as "Rancho
Franciscan Apartments".
B. Buyer desires to purchase such premises on the terms
and conditions hereinafter documented.
NOW, THEREFORE, in consideration of the mutual undertakings
of the parties hereto, it is hereby agreed as follows:
1. Purchase and Sale. Seller shall sell to Buyer, and
Buyer shall purchase from Seller, the land (the "Land") described
in Exhibit "A" attached hereto and made a part hereof, together
with all right, title and interest of Seller in and to all
improvements, structures and fixtures located upon the Land, all
right, title and interest of Seller in and to those items of
personal property described in Exhibit "B" attached hereto and
made a part hereof, all right, title and interest of Seller in
and to the name "Rancho Franciscan Apartments", and, to the
extent assignable, all right, title and interest of Seller in and
to all leases, contract rights, agreements, tenant lists,
advertising material and telephone exchange numbers (hereinafter,
collectively, the "Property"), all upon the terms, covenants and
conditions hereinafter set forth.
2. Purchase Price. The purchase price (the "Purchase
Price") for the Property shall be the sum of $8,302,200.
3. Payment of Purchase Price. The Purchase Price shall be
paid to Seller by Buyer as follows:
A. Escrow Deposit. Concurrently herewith, Buyer shall
deliver $100,000 (the "Initial Escrow Deposit") (which amount,
together with all interest earned thereon, is herein called the
"Escrow Deposit") to Ticor Title Insurance Company, at its
offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ (which company, in
its capacity as escrow holder hereunder, is called "Escrow
Holder"). In addition, if Buyer shall deliver the "Approval
Notice" prior to the expiration of the "Due Diligence Period", as
provided (and defined) in paragraph 4B(1) hereof, Buyer shall
concurrently therewith deliver an additional deposit of $100,000
(the "Additional Escrow Deposit") to Escrow Holder. Each deposit
to be made hereunder shall be made by Buyer delivering the
applicable amount to Escrow Holder by wire transfer of
immediately available federal funds or by check evidencing good
funds and the amounts so deposited shall be held by Escrow Holder
as a deposit against the Purchase Price in accordance with the
terms and provisions of this Agreement. As used herein, the term
"Escrow Deposit" shall mean the Initial Escrow Deposit and, from
and after the deposit thereof, the Additional Escrow Deposit,
together with all interest earned on such deposits while the same
are held by Escrow Holder hereunder. The amounts deposited
hereunder shall be held by Escrow Holder as a deposit against the
Purchase Price in accordance with the terms and provisions of
this Agreement. At all times that the Escrow Deposit is being
held by the Escrow Holder, the Escrow Deposit shall be invested
by Escrow Holder in the following investments ("Approved
Investments"): (i) United States Treasury obligations, (ii)
United States Treasury-backed repurchase agreements issued by a
major money center banking institution reasonably acceptable to
Seller and Buyer, or (iii) such other manner as may be reasonably
agreed to by Seller and Buyer.
B. Closing Payment. The balance of the Purchase Price, as
adjusted by the application of the Escrow Deposit and by the
prorations and credits specified herein, shall be paid in cash on
the "Closing Date", as hereinafter defined (the amount to be paid
under this subparagraph C being herein called the "Closing
Payment").
4. Conditions Precedent
A. Title Matters.
(1) Title Report. Seller has delivered to Buyer a copy of
that certain preliminary title report number 000961786 dated
October 22, 1996 ("Preliminary Title Report") covering the
Property from Chicago Title Insurance Company (which company, in
its capacity as title insurer hereunder, is herein called the
"Title Company"). In addition, Seller has delivered to Buyer an
update dated November 22, 1996 of that certain ALTA survey of the
Property originally dated November 10, 1988, prepared by Penfield
& ▇▇▇▇▇, which survey is to be certified to Buyer ("Survey").
Buyer shall have until the end of the "Due Diligence Period" (as
hereinafter defined) to review and approve of the Survey and the
Preliminary Title Report. If, prior to the expiration of the Due
Diligence Period, Buyer delivers a written notice (a "Title
Objection Notice") setting forth those title and survey matters
to which Buyer objects, Seller shall have seven (7) days after
receipt thereof to cause the removal of, or to obtain a
commitment from the Title Company to issue a title endorsement
insuring over, the disapproved matters set forth in such Title
Objection Notice; provided, however, Seller shall have no
obligation to cause such removal or any liability if for any
reason such objections are not removed or insured over as of the
Closing Date. If Buyer shall fail to deliver to Seller a Title
Objection Notice prior to the expiration of the Due Diligence
Period, Buyer shall be deemed to have approved the exceptions to
title shown on the Preliminary Title Report and the matters
disclosed on the Survey. If Seller elects not to cause any or
all such disapproved matters to be removed or insured over as
aforesaid, Buyer shall have three (3) business days from receipt
of written notice thereof (or from the date of Seller's deemed
election as aforesaid) to notify Seller in writing either that
(x) Buyer revokes its disapproval and will proceed with the
purchase of the Property without any reduction in the Purchase
Price and will take subject to such matters, or (y) Buyer
terminates this Agreement. Failure to deliver any written
notification by Buyer of its election within such period shall be
deemed to be an election to terminate this Agreement. Approval
by Buyer of any additional exceptions to title or survey matters
first disclosed after the end of the Title Review Period shall be
a condition precedent to Buyer's obligation to purchase the
Property; provided, however, such approval shall not be
unreasonably withheld. Unless Buyer gives written notice that it
disapproves any such additional exceptions to title or survey
matters, stating the exceptions so disapproved, on or before the
sooner to occur of (i) three (3) business days after receipt of
written notice thereof and (ii) the Closing Date, Buyer shall be
deemed to have approved said additional exceptions or survey
matters. If, for any reason, Seller does not cause such
additional exceptions to title or survey matters which Buyer
disapproves (to the extent Buyer is permitted hereunder to so
disapprove) either to be removed or to obtain a title endorsement
(if available) insuring over such disapproved matter on or before
the Closing Date at no cost or expense to Buyer (Seller having
the right but not the obligation to do so), the obligation of
Seller to sell, and Buyer to buy, the Property as herein provided
shall terminate (and Seller and Buyer shall have no further
obligations in connection herewith). Buyer shall have the option
to waive the condition precedent set forth in this
paragraph 4A(1) by notice to Seller. In the event of such
waiver, such condition shall be deemed satisfied. All matters
set forth on the Preliminary Title Report which are not timely
objected to by Buyer are herein called the "Permitted
Exceptions". The term "Permitted Exceptions" shall additionally
include (i) any title matters objected to by Buyer, which
objections are subsequently waived in writing by Buyer, and (ii)
any title matters objected to by Buyer, which objections are
removed or which are otherwise cured to Buyer's reasonable
satisfaction. Following the expiration of the Due Diligence
Period, Seller shall prevent any further liens, encumbrances or
other title defects (other than Permitted Exceptions) with
respect to the Property.
(2) Exceptions to Title. Seller shall deliver title to the
Property at closing, and Buyer shall be obligated to accept title
to the Property, subject to the following exceptions to title:
(a) Real estate taxes and assessments not yet due and
payable;
(b) The printed exceptions which appear in the standard
form owner's policy of title insurance issued by Title Company in
the State of California; and
(c) Such exceptions to title as may be approved by Buyer
pursuant to the provisions of subparagraph A(1) above.
Conclusive evidence of the availability of such title shall be
the willingness of Title Company to issue to Buyer on the Closing
Date an ALTA owner's title insurance policy in the standard form
issued in the State of California ("Owner's Policy"), in the face
amount of the Purchase Price, which policy shall show (i) title
to the Property to be vested of record in Buyer, and (ii) the
above exceptions to be the only exceptions to title.
B. Due Diligence Reviews. Buyer shall have until 5:00
p.m. (Central time) on January 17, 1997 (the "Due Diligence
Period") within which to perform and complete all of Buyer's due
diligence examinations, reviews and inspections of all matters
pertaining to the purchase of the Property, including all leases
and service contracts, title and survey, and all physical,
environmental and compliance matters and conditions respecting
the Property. During the Due Diligence Period, Seller shall
provide Buyer with reasonable access to the Property upon
reasonable advance notice and shall also make available to Buyer
such leases and service contracts and other contracts as Buyer
shall reasonably request, all upon reasonable advance notice.
Buyer shall promptly commence, and shall diligently and in good
faith pursue, its due diligence review hereunder. Buyer shall at
all times conduct its due diligence review, inspections and
examinations in a manner so as to not cause damage, loss, cost or
expense to Seller or the Property and so as to not interfere with
or disturb any tenant at the Property, and Buyer will indemnify,
defend, and hold Seller and the Property harmless from and
against any such damage, loss, cost or expense (the foregoing
obligation surviving any termination of this Agreement). Without
limitation on the foregoing, in no event shall Buyer after the
date hereof contact any tenant of the Property without Seller's
express written consent nor shall Buyer contact any governmental
authority having jurisdiction over the Property without Seller's
express written consent (which consent as to governmental
authorities shall not be unreasonably withheld). Seller shall
have the right, at its option, to cause a representative of
Seller to be present at all inspections, reviews and examinations
conducted hereunder. At Seller's request, Buyer shall promptly
deliver to Seller true, accurate and complete copies of any
written reports relating to the Property prepared for or on
behalf of Buyer by any third party. In the event of any
termination hereunder, Buyer shall return all documents and other
materials furnished by Seller hereunder. Buyer shall keep all
information or data received or discovered in connection with any
of the inspections, reviews or examinations strictly
confidential. If, on or before the expiration of the Due
Diligence Period, based upon such review, examination or
inspection, Buyer shall determine that it intends to proceed with
the acquisition of the Property, then Buyer shall promptly notify
Seller and Escrow Holder of such determination in writing (such
notice being herein called the "Approval Notice"), and
thereafter, Buyer shall have no further right to terminate this
Agreement pursuant to this paragraph 4B. If, however, on or
before the expiration of the Due Diligence Period, based upon
such review, examination or inspection, Buyer shall determine in
its sole and absolute discretion that it no longer intends to
acquire the Property, then Buyer shall promptly notify Seller of
such determination in writing (such notice being herein called
the "Termination Notice"), whereupon the Escrow Deposit shall be
returned to Buyer and this Agreement, and the obligations of the
parties hereunder, shall terminate. In the event that Buyer
shall fail to have delivered the Approval Notice to Seller on or
before the expiration of the Due Diligence Period, Buyer shall be
deemed to have elected not to proceed with the acquisition of the
Property whereupon the Escrow Deposit shall be returned to Buyer
and this Agreement, and the obligations of the parties hereunder,
shall terminate.
5. Closing Procedure. The sale and purchase herein
provided shall be consummated at a closing conference ("Closing
Conference"), which shall be held on the Closing Date at the
offices of Chicago Title Company in Santa Barbara, California, or
through escrow through the mail. As used herein, "Closing Date"
means January 22, 1997, or such earlier date as may be agreed
upon by Buyer and Seller, as provided in the "Escrow
Instructions" (as hereinafter defined) to be signed by Buyer and
Seller as provided below, consistent with the terms of this
Agreement, and which Escrow Instructions shall provide that in
the event of any inconsistency between the Escrow Instructions
and this Agreement, the terms of this Agreement shall prevail.
A. Escrow. On or before the Closing Date, the parties
shall deliver to Title Company at its offices located in Santa
Barbara, California, the following: (1) by Seller, a duly
executed and acknowledged original grant deed ("Deed") in the
form of Exhibit "C" attached hereto and made a part hereof, and
(2) by Buyer, the Closing Payment in immediately available
federal funds. Such deliveries shall be made pursuant to escrow
instructions ("Escrow Instructions") to be executed among Buyer,
Seller and Title Company in form reasonably acceptable to such
parties in order to effectuate the intent hereof. The conditions
to the closing of such escrow shall include the Title Company's
receipt of the Deed, the commitment of the Title Company to issue
the Owner's Policy in the form specified in paragraph 4A(2)
hereof, the Closing Payment and a notice from each of Buyer and
Seller authorizing Title Company to close the transactions as
contemplated herein (each of Buyer and Seller being obligated to
deliver such authorization notice at the Closing Conference as
soon as it is reasonably satisfied that the other party is in a
position to deliver the items to be delivered by such other party
under subparagraph B below).
B. Delivery to Parties. Upon the full satisfaction of the
conditions set forth in the Escrow Instructions, the Deed shall
be recorded by the Title Company when the Title Company is
prepared to issue to Buyer the Title Policy as provided herein,
whereupon the then Closing Payment (and the Deposit) shall be
delivered by Title Company to Seller, less such expenses as are
required to be paid by Seller and Buyer as provided herein, and
at the Closing Conference, the following items shall be
delivered:
(1) Seller Deliveries. Seller shall deliver to Buyer the
following:
(a) A duly executed and acknowledged ▇▇▇▇ of sale,
assignment and assumption agreement ("Assignment and Assumption
Agreement") in the form of Exhibit "D" attached hereto and made a
part hereof;
(b) Duly executed and acknowledged certificates regarding
the "non-foreign" status of Seller;
(c) Evidence reasonably satisfactory to Buyer and Title
Company respecting the due organization of Seller and the due
authorization and execution of this Agreement and the documents
required to be delivered hereunder;
(d) Such additional documents as may be reasonably required
by Buyer and Title Company in order to consummate the
transactions hereunder (provided the same do not materially
increase the costs to, or liability or obligations of, Seller in
a manner not otherwise provided for herein); and
(e) A certificate from Seller certifying to Buyer that
originals (or copies if originals are not available) of the
"Leases" and "Service Agreements" (as each term is hereinafter
defined) being assigned to Buyer at closing were delivered to
Buyer in the management office of the Property as of the Closing
Date.
(2) Buyer Deliveries. Buyer shall deliver to Seller the
following:
(a) A duly executed and acknowledged Assignment and
Assumption Agreement;
(b) Evidence reasonably satisfactory to Seller and Title
Company respecting the due organization of Buyer and the due
authorization and execution of this Agreement and the documents
required to be delivered hereunder; and
(d) Such additional documents as may be reasonably required
by Seller and Title Company in or to consummate the transactions
hereunder (provided the same do not materially increase the costs
to, or liability or obligations of, Buyer in a manner not
otherwise provided for herein).
C. Closing Costs. Seller shall pay (i) any documentary or
transfer taxes attributable to the Deed, (ii) the title insurance
premium for the Owner's Policy at a rate not in excess of
standard issue rates and only to the extent attributable to
standard CLTA owner's coverage, and (iii) the costs to obtain the
Survey. Buyer shall pay all title insurance premiums
attributable to the Owner's Policy in excess of standard CLTA
coverage, as well as any costs attributable to ALTA coverage in
connection therewith or for other so-called "extended coverage"
or for any endorsements to the Owner's Policy, to the extent any
of the foregoing is requested by Buyer, all costs and expenses
related to Buyer's due diligence examinations, reviews and
inspections, and all intangible, sales or use taxes attributable
to the transactions hereunder. Seller and Buyer shall each pay
one-half of the cost of recording the Deed and any closing escrow
charges. Seller and Buyer shall each pay its own attorney's fees
and expenses and its own respective shares of prorations as
hereinafter provided.
D. Prorations.
(1) Items to be Prorated. The following shall be prorated
between Seller and Buyer as of the Closing Date:
(a) All real estate taxes and assessments on the Property
for the current year. In no event shall Seller be charged with
or be responsible for any increase in the taxes on the Property
resulting from this sale of the Property or from any improvements
made or leases entered into on or after the Closing Date. If any
assessments on the Property are payable in installments, then the
installment for the current period shall be prorated (with Buyer
assuming the obligation to pay any installments due after the
Closing Date).
(b) All fixed and additional rentals under the leases, and
any refundable security deposits. Seller shall deliver or
provide a credit in an amount equal to all prepaid rentals for
periods after the Closing Date and all refundable security
deposits (to the extent the foregoing are held by Seller and are
not applied or forfeited prior to the Closing Date) to Buyer on
the Closing Date. Rents which are delinquent as of the Closing
Date shall not be prorated on the Closing Date. Buyer shall
include such delinquencies in its normal billing and shall
diligently pursue the collection thereof in good faith after the
Closing Date (but Buyer shall not be required to litigate or
declare a default in any lease). To the extent Buyer receives
rents on or after the Closing Date, such payments shall be
applied first toward then current rent owed to Buyer in
connection with the applicable lease for which such payments are
received, and any excess monies received shall be applied toward
the payment of any delinquent rents, with Seller's share thereof
being promptly delivered to Seller. Buyer may not waive any
delinquent rents nor modify a lease so as to reduce or otherwise
affect amounts owed thereunder for any period in which Seller is
entitled to receive a share of charges or amounts without first
obtaining Seller's written consent. Seller hereby reserves the
right to pursue any remedy against any tenant owing delinquent
rents and any other amounts to Seller. Buyer shall reasonably
cooperate with Seller in any collection efforts hereunder (but
shall not be require to litigate or declare a default in any
lease). With respect to delinquent rents and any other amounts
or other rights of any kind respecting tenants who are no longer
tenants of the Property as of the Closing Date, Seller shall
retain all rights relating thereto.
(c) All operating expenses.
(2) Calculation. The prorations and payments shall be made
on the basis of a written statement submitted to Buyer and Seller
by Escrow Holder prior to the Close of Escrow and approved by
Buyer and Seller, which approval shall not be unreasonably
withheld by either of Buyer or Seller. In the event any
prorations or apportionments made under this subparagraph D shall
prove to be incorrect for any reason, then any party shall be
entitled to an adjustment to correct the same. Any item which
cannot be finally prorated because of the unavailability of
information shall be tentatively prorated on the basis of the
best data then available and reprorated when the information is
available. The obligations of Seller and Buyer under this
paragraph 5D(2) shall survive the closing.
6. Condemnation or Destruction of Property. In the event
that, after the date hereof but prior to the Closing Date, either
any portion of the Property is taken pursuant to eminent domain
proceedings or any of the improvements on the Property are
damaged or destroyed by any casualty, Seller shall have no
obligation to repair or replace any such damage or destruction.
Seller shall, upon consummation of the transaction herein
provided, assign to Buyer all claims of Seller respecting any
condemnation or casualty insurance coverage, as applicable, and
all condemnation proceeds or proceeds from any such casualty
insurance received by Seller on account of any casualty (the
damage from which shall not have been repaired by Seller prior to
the Closing Date), as applicable. In connection with any
assignment of insurance proceeds hereunder, Seller shall credit
Buyer with an amount equal to the applicable deductible amount
under Seller's insurance; provided, however, if the amount of
such deductible shall exceed $100,000, Seller shall have the
right to terminate this Agreement by notice to Buyer given on or
before the Closing Date (whereupon the Escrow Deposit shall be
returned to Buyer). In the event the condemnation award or the
cost of repair of damage to the Property on account of a
casualty, as applicable, shall exceed $100,000, Buyer may, at its
option, terminate this Agreement by notice to Seller, given on or
before the Closing Date.
7. Representations, Warranties and Covenants.
A. Representations, Warranties and Covenants of Seller.
(1) General Disclaimer. Except as specifically set forth
in paragraph 7A(2) below, the sale of the Property hereunder is
and will be made on an "as is" basis, without representations and
warranties of any kind or nature, express, implied or otherwise,
including, but not limited to, any representation or warranty
concerning title to the Property, the physical condition of the
Property (including, but not limited to, the condition of the
soil or the Improvements), the environmental condition of the
Property (including, but not limited to, the presence or absence
of hazardous substances on or respecting the Property), the
compliance of the Property with applicable laws and regulations
(including, but not limited to, zoning and building codes or the
status of development or use rights respecting the Property), the
financial condition of the Property or any other representation
or warranty respecting any income, expenses, charges, liens or
encumbrances, rights or claims on, affecting or pertaining to the
Property or any part thereof. Buyer acknowledges that, during
the Due Diligence Period, Buyer will examine, review and inspect
all matters which in Buyer's judgment bear upon the Property and
its value and suitability for Buyer's purposes. Except as to
matters specifically set forth in paragraph 7A(2) below, Buyer
will acquire the Property solely on the basis of its own physical
and financial examinations, reviews and inspections and the title
insurance protection afforded by the Owner's Policy.
(2) Limited Representations and Warranties of Seller.
Subject to the provisions of paragraph 7A(1) above, Seller hereby
represents and warrants that, except as set forth in Exhibit "E"
attached hereto and made a part hereof, Seller has no knowledge
that any of the following statements is untrue (and, for this
purpose, Seller's knowledge shall mean the present actual
knowledge of ▇▇▇▇▇ ▇▇▇▇▇▇▇ after having the property manager of
Seller's third party property manager substantively review the
representations and warranties set forth herein):
(a) List of Leases. Attached as Exhibit "F" and made a
part hereof is a true, complete and accurate list, as of the date
thereof, of all tenant leases respecting the Property ("List of
Leases"), and Seller has not received any written notice of a
material default under any of such tenant leases that remains
uncured.
(b) Litigation. There is no pending (or threatened in
writing) action, litigation, condemnation or other proceeding
against the Property or against Seller with respect to the
Property.
(c) Compliance. Seller has no knowledge or has received no
written notice from any governmental authority having
jurisdiction over the Property to the effect that the Property is
not in compliance with applicable laws and ordinances.
(d) Service Agreements. Seller has not entered into any
service agreements or contracts ("Service Agreements") or other
agreements (other than as set forth in this Agreement) relating
to the Property which will be in force on the Closing Date,
except as described in Exhibit "G" attached hereto, and Seller
has not received any written notice of any material default
thereunder that remains uncured.
(e) Due Authority. This Agreement and all agreements,
instruments and documents herein provided to be executed or to be
caused to be executed by Seller are and on the Closing Date will
be duly authorized, executed and delivered by and are binding
upon Seller. Seller is a limited partnership, duly organized and
validly existing and in good standing under the laws of the State
of Illinois, and is duly authorized and qualified to do all
things required of it under this Agreement. Seller has the
capacity and authority to enter into this Agreement and
consummate the transactions herein provided.
(g) Environmental Matters. Except as set forth in the
reports described in Exhibit "H" attached hereto and made a part
hereof (the "Environmental Reports"), Seller has no knowledge or
has received no written notice of the existence, deposit,
storage, removal, burial or discharge of any material known to
Seller to be a "Hazardous Material" at, upon, under, within or
adjacent to the Property, in an amount which would, as of the
date hereof, give rise to an "Environmental Compliance Cost".
The term "Hazardous Material" shall mean (i) asbestos and any
chemicals, flammable substances or explosives, any radioactive
materials (including radon), any hazardous wastes or substances
which have, as of the date hereof, been determined by any
applicable Federal, State or local government law to be hazardous
or toxic by the U.S. Environmental Protection Agency, the U.S.
Department of Transportation, and/or any instrumentality now or
hereafter authorized to regulate materials and substances in the
environment which has jurisdiction over the Property
("Environmental Agency"), and (ii) any oil, petroleum or
petroleum derived substance, any drilling fluids, produced waters
and other wastes associated with the exploration, development or
production of crude oil, which materials listed under items (i)
and (ii) above cause the Property (or any part thereof) to be in
material violation of any applicable environmental laws or the
regulations of any Environmental Agency; provided, however, that
the term "Hazardous Material" shall not include motor oil and
gasoline contained in or discharged from vehicles not used
primarily for the transport of motor oil or gasoline. The term
"Environmental Compliance Cost" means any reasonable
out-of-pocket cost, fee or expense incurred directly to satisfy
any requirement imposed by an Environmental Agency to bring the
Property into compliance with applicable Federal, State and local
laws and regulations directly relating to the existence on the
Property of any Hazardous Material.
(h) No Employees. As of the Closing Date, Seller will have
no employees, as Seller's third party property manager manages
the Property.
B. Representations and Warranties of Buyer. Buyer hereby
represents and warrants that this Agreement and all agreements,
instruments and documents herein provided to be executed or to be
caused to be executed by Buyer are and on the Closing Date will
be duly executed and delivered by and are binding upon Buyer;
Buyer is duly authorized and qualified to do all things required
of it under this Agreement; and Buyer has the capacity and
authority to enter into this Agreement and consummate the
transactions herein provided.
C. Survival. Any cause of action of a party for a breach
of the foregoing representations and warranties shall survive
until December 15, 1997, at which time such representations and
warranties (and any cause of action resulting from a breach
thereof not then in litigation) shall terminate. Notwithstanding
the foregoing, if Buyer shall have actual knowledge as of the
Closing Date that any of the representations or warranties of
Seller contained herein are false or inaccurate or that Seller is
in breach or default of any of its obligations under this
Agreement, and Buyer nonetheless closes the transactions
hereunder and acquires the Property, then Seller shall have no
liability or obligation respecting such false or inaccurate
representations or warranties or other breach or default (and any
cause of action resulting therefrom shall terminate upon such
closing hereunder).
D. Interim Covenants of Seller. Until the Closing Date or
the sooner termination of this Agreement:
(1) Seller shall maintain the Property in the same manner
as prior hereto pursuant to its normal course of business (such
maintenance obligations not including extraordinary capital
expenditures or expenditures not incurred in such normal course
of business), subject to reasonable wear and tear and further
subject to destruction by casualty or other events beyond the
control of Seller.
(2) Seller shall not enter into any additional service
contracts or other similar agreements without the prior consent
of Buyer, except those deemed reasonably necessary by Seller
which are cancelable on 30 days' notice.
(3) Seller shall continue to offer the Property for lease
in the same manner as prior hereto pursuant to its normal course
of business and shall keep Buyer reasonably informed as to the
status of leasing prior to the Closing Date. After the
expiration of the Due Diligence Period (unless Buyer shall have
theretofore failed to deliver an Approval Notice or the
Additional Escrow Deposit pursuant to paragraph 4B hereof),
Seller shall not enter into any new leases or modifications of
existing leases thereafter without the consent of Buyer (which
consent will not be unreasonably withheld or materially delayed).
In the event that Seller enters into a new lease or modifies an
existing lease after the expiration of the Due Diligence Period
(unless Buyer shall have theretofore failed to deliver an
Approval Notice or the Additional Escrow Deposit pursuant to
paragraph 4B hereof) without the consent of Buyer, Buyer shall
have the right to terminate this Agreement by notifying Seller of
its exercise of such right by delivering to Seller written notice
thereof within five (5) days after Seller enters into such new
lease or modification. In the event of the delivery by Buyer to
Seller of such written notice, this Agreement, and the
obligations of the parties hereunder, shall terminate and the
Escrow Deposit shall be returned to Buyer. If Buyer shall fail
to deliver such written notice on or before the end of such five
(5) day period, Buyer shall be deemed to have agreed that the new
lease or modification is or are acceptable to Buyer and that
Buyer intends to proceed with the acquisition of the Property
(and, thereafter, Buyer shall have no further right to terminate
this Agreement as a result of such new lease or modification).
Notwithstanding anything herein to the contrary, Buyer shall bear
all costs and expenses related to any new leases or modifications
of existing leases entered into after the expiration of the Due
Diligence Period (unless Buyer shall have theretofore failed to
deliver an Approval Notice or the Additional Escrow Deposit
pursuant to paragraph 4B hereof).
8. Indemnification.
A. By Buyer. Buyer shall hold harmless, indemnify and
defend Seller from and against: (1) any and all third party
claims for personal injury or property damage to such third party
caused by Buyer's torts related to the Property and occurring on
or after the Closing Date; (2) any and all third party claims
respecting any security deposits or other amounts paid or
credited to Buyer in connection with the closing of the
transactions hereunder; (3) any and all loss, damage or third
party claims in any way arising from Buyer's inspections or
examinations of the Property prior to the Closing Date, other
than any cost of repair or remediation required due to a defect
or contamination discovered but not created or caused by Buyer;
and (4) all costs and expenses, including reasonable attorney's
fees, incurred by Seller as a result of the foregoing.
B. By Seller. Seller shall hold harmless, indemnify and
defend Buyer from and against: (1) any and all third party
claims for personal injury or property damage to such third party
caused by Seller's torts related to the Property and occurring
prior to the Closing Date; and (2) all costs and expenses,
including reasonable attorney's fees, incurred by the Buyer as a
result of such claims. The foregoing indemnity shall not cover
any matters relating to title or marketability of the Property
(Buyer relying on the coverage provided by the Owner's Policy as
to such matters).
C. Generally. Each indemnification under this Agreement
shall be subject to the following provisions: The indemnitee
shall notify indemnitor of any such claim against indemnitee
within 30 days after it has notice of such claim, but failure to
notify indemnitor shall in no case prejudice the rights of
indemnitee under this Agreement unless indemnitor shall be
prejudiced by such failure and then only to the extent of such
prejudice. Should indemnitor fail to discharge or undertake to
defend indemnitee against such liability within 10 days after the
indemnitee gives the indemnitor written notice of the same, then
indemnitee may settle such liability, and indemnitor's liability
to indemnitee shall be conclusively established by such
settlement, the amount of such liability to include both the
settlement consideration and the reasonable costs and expenses,
including attorneys' fees, incurred by indemnitee in effecting
such settlement.
9. DISPOSITION OF DEPOSITS. IF THE TRANSACTION HEREIN
PROVIDED SHALL NOT BE CLOSED BY REASON OF SELLER'S DEFAULT UNDER
THIS AGREEMENT OR THE FAILURE OF SATISFACTION OF THE CONDITIONS
DESCRIBED THIS AGREEMENT OR THE TERMINATION OF THIS AGREEMENT IN
ACCORDANCE WITH THE TERMS HEREOF, AND BUYER SHALL NOT HAVE
DEFAULTED UNDER THIS AGREEMENT, THEN THE ESCROW DEPOSIT SHALL BE
RETURNED TO BUYER, AND NEITHER PARTY SHALL HAVE ANY FURTHER
OBLIGATION OR LIABILITY TO THE OTHER; PROVIDED, HOWEVER, IF THE
TRANSACTIONS HEREUNDER SHALL FAIL TO CLOSE SOLELY BY REASON OF
SELLER'S DEFAULT, AND BUYER SHALL HAVE FULLY PERFORMED ITS
OBLIGATIONS HEREUNDER AND SHALL BE READY, WILLING AND ABLE TO
CLOSE, THEN BUYER SHALL BE ENTITLED TO SPECIFICALLY ENFORCE THIS
AGREEMENT; PROVIDED FURTHER HOWEVER, IF SELLER SHALL WILLFULLY
TAKE ACTIONS SO AS TO PREVENT THE AVAILABILITY OF SPECIFIC
PERFORMANCE REMEDIES TO BUYER, BUYER SHALL BE ENTITLED TO A
RETURN OF THE ESCROW DEPOSIT AND REIMBURSEMENT OF ITS ACTUAL OUT-
OF-POCKET COSTS PAID TO THIRD PARTIES IN CONNECTION WITH THE
TRANSACTIONS HEREUNDER (SUCH REIMBURSEMENT NOT TO EXCEED $25,000
IN THE AGGREGATE) (BUT NO OTHER ACTION, FOR DAMAGES OR OTHERWISE,
SHALL BE PERMITTED). IN THE EVENT THE TRANSACTION HEREIN
PROVIDED SHALL NOT CLOSE FOR ANY REASON OTHER THAN THE FAILURE OF
SATISFACTION OF THE CONDITIONS DESCRIBED IN THIS AGREEMENT OR THE
TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH THE TERMS HEREOF
OR THE DEFAULT OF SELLER, THEN THE ESCROW DEPOSIT SHALL BE
DELIVERED TO SELLER AS FULL COMPENSATION AND LIQUIDATED DAMAGES
UNDER AND IN CONNECTION WITH THIS AGREEMENT. IN THE EVENT THE
TRANSACTION HEREIN PROVIDED SHALL CLOSE, THE ESCROW DEPOSIT SHALL
BE APPLIED AS A PARTIAL PAYMENT OF THE PURCHASE PRICE. IN
CONNECTION WITH THE FOREGOING, THE PARTIES RECOGNIZE THAT SELLER
WILL INCUR EXPENSE IN CONNECTION WITH THE TRANSACTION
CONTEMPLATED BY THIS AGREEMENT AND THAT THE PROPERTY WILL BE
REMOVED FROM THE MARKET; FURTHER, THAT IT IS EXTREMELY DIFFICULT
AND IMPRACTICABLE TO ASCERTAIN THE EXTENT OF DETRIMENT TO SELLER
CAUSED BY THE BREACH BY BUYER UNDER THIS AGREEMENT AND THE
FAILURE OF THE CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY
THIS AGREEMENT OR THE AMOUNT OF COMPENSATION SELLER SHOULD
RECEIVE AS A RESULT OF BUYER'S BREACH OR DEFAULT. IN THE EVENT
THE SALE OF THE PROPERTY SHALL NOT BE CONSUMMATED ON ACCOUNT OF
BUYER'S DEFAULT, THEN THE RETENTION OF THE ESCROW DEPOSIT SHALL
BE SELLER'S SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT BY
REASON OF SUCH DEFAULT, SUBJECT TO THE PROVISIONS OF
PARAGRAPH 10I HEREOF.
Seller's Initials Buyer's Initials
10. Miscellaneous.
A. Brokers.
(1) Except as provided in subparagraph (2) below, Seller
represents and warrants to Buyer, and Buyer represents and
warrants to Seller, that no broker or finder has been engaged by
it, respectively, in connection with any of the transactions
contemplated by this Agreement or to its knowledge is in any way
connected with any of such transactions. In the event of a claim
for broker's or finder's fee or commissions in connection
herewith, then Seller shall indemnify and defend Buyer from the
same if it shall be based upon any statement or agreement alleged
to have been made by Seller, and Buyer shall indemnify and defend
Seller from the same if it shall be based upon any statement or
agreement alleged to have been made by Buyer. The
indemnification obligations under this paragraph 10 A(1) shall
survive the closing of the transactions hereunder or the earlier
termination of this Agreement.
(2) If and only if the sale contemplated herein closes,
Seller agrees to pay a brokerage commission to ▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
and Leider Commercial Real Estate (collectively, the "Brokers")
pursuant to a separate written agreement between Seller and
Broker.
B. Limitation of Liability.
(1) Notwithstanding anything to the contrary contained
herein, if the closing of the transactions hereunder shall have
occurred (and Buyer shall not have waived, relinquished or
released any applicable rights in further limitation), the
aggregate liability of Seller arising pursuant to or in
connection with the representations, warranties,
indemnifications, covenants or other obligations (whether express
or implied) of Seller under this Agreement (or any document
executed or delivered in connection herewith) shall not exceed
$250,000.
(2) Without limitation on the foregoing, in no event
shall Buyer have any liability pursuant to or in connection with
the representations, warranties, indemnifications, covenants or
other obligations (whether express or implied under this
Agreement or any document executed or delivered in connection
herewith) unless and until such liabilities shall exceed $25,000
in the aggregate; provided, however, nothing contained in the
foregoing shall limit Seller's liability for any proration
amounts provided for in this Agreement.
(3) No constituent partner in or agent of Seller, nor
any advisor, trustee, director, officer, employee, beneficiary,
shareholder, participant, representative or agent of any
corporation or trust that is or becomes a constituent partner in
Seller (including, but not limited to, JMB Realty Corporation)
shall have any personal liability, directly or indirectly, under
or in connection with this Agreement or any agreement made or
entered into under or pursuant to the provisions of this
Agreement, or any amendment or amendments to any of the foregoing
made at any time or times, heretofore or hereafter, and Buyer and
its successors and assigns and, without limitation, all other
persons and entities, shall look solely to Seller's assets for
the payment of any claim or for any performance, and Buyer, on
behalf of itself and its successors and assigns, hereby waives
any and all such personal liability. Notwithstanding anything to
the contrary contained in this Agreement, neither the negative
capital account of any constituent partner in Seller (or in any
other constituent partner of Seller), nor any obligation of any
constituent partner in Seller (or in any other constituent
partner of Seller) to restore a negative capital account or to
contribute capital to Seller (or to any other constituent partner
of Seller), shall at any time be deemed to be the property or an
asset of Seller or any such other constituent partner (and
neither Buyer nor any of its successors or assigns shall have any
right to collect, enforce or proceed against or with respect to
any such negative capital account of partner's obligation to
restore or contribute).
C. Entire Agreement. This Agreement contains the entire
agreement between the parties respecting the matters herein set
forth and supersedes all prior agreements between the parties
hereto respecting such matters. This Agreement may not be
modified or amended except by written agreement signed by both
parties.
D. Time of the Essence. Time is of the essence of this
Agreement.
E. Interpretation. Paragraph headings shall not be used
in construing this Agreement. Each party acknowledges that such
party and its counsel, after negotiation and consultation, have
reviewed and revised this Agreement. As such, the terms of this
Agreement shall be fairly construed and the usual rule of
construction, to the effect that any ambiguities herein should be
resolved against the drafting party, shall not be employed in the
interpretation of this Agreement or any amendments, modifications
or exhibits hereto or thereto.
F. Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of California.
G. Successors and Assigns. Buyer may not assign or
transfer its rights or obligations under this Agreement without
the prior written consent of Seller (in which event such
transferee shall assume in writing all of the transferor's
obligations hereunder, but such transferor shall not be released
from its obligations hereunder); provided, however, Buyer may
assign its interest to any entity in which Buyer is a principal
having not less than a 25% interest in capital and profits in
such entity, to Buyer's property management company, to ▇▇▇▇▇▇▇
Towbes individually, or to an intermediary as part of Buyer's
"1031 Exchange" (as hereinafter defined). No consent given by
Seller to any transfer or assignment of Buyer's rights or
obligations hereunder shall be construed as a consent to any
other transfer or assignment of Buyer's rights or obligations
hereunder. No transfer or assignment in violation of the
provisions hereof shall be valid or enforceable. Subject to the
foregoing, this Agreement and the terms and provisions hereof
shall inure to the benefit of and be binding upon the successors
and assigns of the parties.
H. Notices. Any notice which a party is required or may
desire to give the other shall be in writing and shall be sent by
personal delivery or by mail (either [i] by United States
registered or certified mail, return receipt requested, postage
prepaid, or [ii] by Federal Express or similar generally
recognized overnight carrier regularly providing proof of
delivery), addressed as follows (subject to the right of a party
to designate a different address for itself by notice similarly
given):
To Buyer:
c/o Mr. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With Copies To:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
And To:
The Towbes Group, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. Michael Towbes
To Seller:
c/o JMB Realty Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇
With Copies To:
Pircher, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
1999 Avenue of the Stars
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Real Estate Notices (RDJ)
And To:
▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
Three First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Delivery shall be deemed given the first business day after
delivery to a nationally recognized overnight delivery service.
Any such notice not so given shall be deemed given upon receipt
of the same by the party to whom the same is to be given.
I. Legal Costs. The parties hereto agree that they shall
pay directly any and all legal costs which they have incurred on
their own behalf in the preparation of this Agreement, all deeds
and other agreements pertaining to this transaction and that such
legal costs shall not be part of the closing costs. In addition,
if either Buyer or Seller brings any suit or other proceeding
with respect to the subject matter or the enforcement of this
Agreement, the prevailing party (as determined by the court,
agency or other authority before which such suit or proceeding is
commenced), in addition to such other relief as may be awarded,
shall be entitled to recover reasonable attorneys' fees, expenses
and costs of investigation actually incurred. The foregoing
includes, but is not limited to, attorneys' fees, expenses and
costs of investigation (including, without limitation, those
incurred in appellate proceedings), costs incurred in
establishing the right to indemnification, or in any action or
participation in, or in connection with, any case or proceeding
under Chapter 7, 11 or 13 of the Bankruptcy Code (11 United
States Code Sections 101 et seq.), or any successor statutes.
J. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same document.
K. 1031 Exchange. Solely as an accommodation to Buyer,
Seller agrees to reasonably cooperate with Buyer in accomplishing
a Section 1031 of the Internal Revenue Code of 1986, as amended
(a "1031 Exchange"). In connection with such 1031 Exchange, the
following provisions shall apply:
(1) Without limitation on the foregoing, all documents
respecting a 1031 Exchange shall recognize that Seller is an
accommodating party, has no liability with respect thereto, and
makes no representation, warranty or other statement respecting
the qualification of the 1031 Exchange for tax or other purposes;
(2) Seller shall not be required to acquire legal
title to, or any beneficial interest in, any other property;
(3) The transaction contemplated herein shall not be
contingent upon Buyer's acquisition of the Property as a 1031
Exchange, and Buyer's inability to consummate such 1031 Exchange
shall not be deemed to excuse or release Buyer from any
covenants, obligations and liabilities under this Agreement, or
otherwise postpone or extend the Closing Date;
(4) All representations, guarantees, covenants and
warranties made herein by Buyer shall survive the 1031 Exchange,
shall remain in full force and effect, and shall continue to
inure to the benefit of Seller. All representations and
warranties made herein by Seller shall survive the 1031 Exchange,
shall remain in full force and effect, and shall continue to
inure to the benefit of Buyer;
(5) Buyer shall bear any and all costs and expenses
arising from the 1031 Exchange, including, but not limited to,
any increased costs of escrow, document preparation fees,
insurance premiums, recording fees and documentary or other
transfer taxes. Buyer shall indemnify and hold Seller harmless
(using counsel reasonably satisfactory to Seller) from any and
all liabilities, claims, costs, expenses and losses (including,
but not limited to, attorneys' fees and costs) that Seller
sustains or incurs by reason of, or in connection with, the 1031
Exchange. The foregoing indemnity shall be a payment obligation
and not merely a reimbursement obligation, it being expressly
understood that the parties have a "contrary intention" with
respect to the provisions of paragraph 2 of Section 2778 of the
California Civil Code. The indemnity obligations of Buyer under
this subsection shall survive any termination of this Agreement
or the delivery of the Grant Deed and the transfer of title to
the Property; and
(6) Notwithstanding the 1031 Exchange, all Documents
shall be executed by, and shall be binding upon, Buyer.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
CARLYLE INCOME PLUS, LTD.,
an Illinois limited partnership
By: JMB REALTY CORPORATION,
a Delaware corporation,
General Partner
By: ________________________________
Name: _________________________
Title: _________________________
"Seller"
___________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
___________________________
▇▇▇▇▇▇▇ TOWBES
"Buyer"
ESCROW HOLDER'S ACKNOWLEDGEMENT
The undersigned hereby executes this Agreement to evidence
its agreement to act as Escrow Holder in accordance with the
terms of this Agreement.
Date: ________________ TICOR TITLE INSURANCE COMPANY,
a ______________________________________
By: ___________________________________
Name: _____________________________
Title: ____________________________
"Escrow Holder"
JOINDER OF BROKERS
The Brokers have executed this Agreement solely for the purpose
of evidencing their agreement (i) to the terms of paragraph 10A
hereof, and (ii) that the Brokers shall make no public disclosure
of the terms of the transactions contemplated by this Agreement
without the prior written consent of Seller, except as may be
required by law or applicable governmental regulation. The
Brokers shall continue to comply with any confidentiality
requirements set forth in any letter of intent or confidentiality
agreement previously entered into between Seller and Buyer, and
the Brokers shall not (without first obtaining Seller's written
consent) disclose to any third party any information or data with
respect to the Property, except such disclosure as may be
expressly contemplated or permitted by this Agreement.
Dated: _______________________ BROKERS:
▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
By: _______________________
Name: _____________________
Title: ____________________
Dated: _______________________ LEIDER COMMERCIAL REAL ESTATE
By: _______________________
Name: _____________________
Title: ____________________
EXHIBIT LIST
"A" - Property Description
"B" - Personal Property
"C" - Deed
"D" - Assignment and Assumption Agreement
"E" - Exceptions to Seller's Representations
and Warranties
"F" - List of Leases
"G" - Service Agreements
"H" - Environmental Reports
EXHIBIT "A"
LEGAL DESCRIPTION
▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇,▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
of Santa ▇▇▇▇▇▇▇, State of California, as per map filed in Book
150, Pages 50 through 54, inclusive of Maps, in the Office of the
County Recorder of said County.
EXHIBIT "E"
EXCEPTIONS TO SELLER'S REPRESENTATIONS AND WARRANTIES
None.
EXHIBIT "G"
LIST OF SERVICE AGREEMENTS
Progressive Landscape
Tri County Elevator
H&H Roofing
SAS Alarm Service
Durbiano Fire Equipment
Kummins & ▇▇▇▇▇ Heating
Delta Pro-Tech
Oasis Pools
▇▇▇▇ Pest Control
Professional Womens Painters
All Star Janitorial
Dalgenes Interiors
Bathcrest
▇▇▇▇ and Burger Plumbing
The Appliance Store
BFI
Community Environmental Council
EXHIBIT "H"
LIST OF ENVIRONMENTAL REPORTS
None.