AGREEMENT FOR TRANSFER OF
LIMITED PARTNERSHIP INTEREST
THIS AGREEMENT FOR TRANSFER OF LIMITED PARTNERSHIP INTEREST is entered
into as of August 8, 1997, by and between ILX Incorporated, an Arizona
corporation ("ILX") and ▇▇▇▇▇▇▇ Enterprises Incorporated, an Arizona corporation
("MEI").
RECITALS:
A. MEI desires to sell to ILX, and ILX desires to purchase from MEI,
all of its Class B Limited Partnership Interest (the "LAP Interest") in Los
Abrigados Partners Limited Partnership, an Arizona limited partnership ("LAP"),
subject to the terms and conditions set forth in this Agreement.
B. The parties desire that the transfer of the LAP Interest be
effective as of January 1, 1997 (the "Effective Date").
AGREEMENTS:
NOW, THEREFORE, for good and valuable consideration, the sufficiency
and receipt of which are hereby acknowledged, the parties hereto agree as
follows:
1. Transfer of LAP Interest. MEI hereby sells to ILX and ILX hereby
purchases from MEI, all of MEI's right, title and interest in, to, and under the
LAP Interest, including without limitation all distributions payable (other than
those paid prior to August 8, 1997) in respect of, and allocations attributable
to, the LAP Interest from and after the Effective Date.
2. Consideration. In consideration for MEI's transfer of the LAP
Interest, ILX shall, upon Closing (as defined herein):
a. Pay to MEI One Hundred Thousand Dollars
($100,000.00);
b. Execute and deliver to MEI a secured promissory note
(the "Note") in the form attached as Exhibit A, in
the original principal amount of One Million Three
Hundred Thousand Dollars ($1,300,000.00).
3. Intent of LAP Transfer. MEI represents that the LAP Interest
constitutes all of its ownership interest in LAP and in the properties owned by
LAP. To the extent that, as of the Closing, MEI owns any other interest in any
such other properties, such interest shall be deemed transferred by this
Agreement except as otherwise agreed by the parties in writing. At the request
of ILX, MEI shall execute any additional documents to effect any intended
transfer not made by this Agreement or any document executed in connection
herewith.
4. Closing: Manner of Transfer. The "Closing" of the transactions
contemplated
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hereby shall be held on or after August 15, 1997, but in no event later than
August 22, 1997. At the Closing, ILX shall make the payments and deliver the
documents referenced in this Agreement, and MEI shall deliver the documents
referenced in this Agreement, including an assignment of the LAP Interest, in
each case in a form satisfactory to all parties.
5. Security Agreement. As security for the performance of ILX's
obligations under the Note, ILX shall grant to MEI a security interest in the
LAP Interest, evidenced by a security agreement in mutually satisfactory form.
6. Representations and Warranties of MEI. MEI represents and warrants
to ILX as follows, as of the Effective Date and as of the Closing hereunder:
6.1 Ownership of LAP Interest. MEI has good and marketable
title to the LAP Interest free of any lien, security interest, lease, or
encumbrance whatsoever, except as otherwise provided in the LAP Limited
Partnership Agreement. Upon delivery of appropriate instruments evidencing
transfer of the LAP Interest, ILX will own all right, title and interest in and
to the LAP Interest free and clear of any liens, encumbrances, equities or
claims.
6.2 Capacity. MEI has full power and authority to enter into
this Agreement and to carry out its obligations hereunder. This Agreement
constitutes a valid and legally binding obligation of MEI. MEI has no legal
obligation, absolute or contingent, to any person or firm to sell all or any
portion of the LAP Interest or with respect to the LAP Interest to effect any
merger, consolidation or other reorganization or to enter into any agreement
with respect thereto. To MEI's actual knowledge (as hereinafter defined),
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby nor compliance by MEI with any of the
provisions hereof will (i) violate, or conflict with, or result in a breach of
any provision of, or constitute a default (or an event which, with the giving of
notice or the lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
result in the creation of any lien, security interest, charge or encumbrance
upon the LAP Interest, under any term, condition or provision of any agreement
or other instrument or obligation to which MEI is bound, or by which the LAP
Interest or LAP is bound or (ii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to MEI or LAP, except as otherwise
provided in the LAP Limited Partnership Agreement.
6.3 No Breach of Statute, Decree or Order. To MEI's actual
knowledge no material claim, action or proceeding is pending or threatened
against MEI with respect to a default under, or a violation or breach in any
material respect of, any applicable statute, law, ordinance, decree, order, rule
or regulation of any governmental body, nor, to MEI's actual knowledge (as
hereinafter defined), is there any basis for such a claim, action or proceeding.
To MEI's actual knowledge (as hereinafter defined) the consummation of this
Agreement and the sale of the LAP Interest contemplated hereby will not
constitute or result in any such default, breach or violation.
6.4 Litigation. To MEI's actual knowledge (as hereinafter
defined) there is no material suit, claim, action, proceeding or governmental
investigation now pending or threatened
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against MEI ("MEI Third Party Litigation"), nor to MEI's actual knowledge (as
hereafter defined) is there any condition or set of facts which could give rise
to any material MEI Third Party Litigation before any court, administrative or
regulatory body or governmental agency, concerning or affecting any of the
transactions contemplated by this Agreement. To MEI's actual knowledge (as
hereinafter defined), there is no decree, injunction or order of any court or
governmental department or agency outstanding against MEI relating to its
ability to transfer the LAP Interest.
6.5 Incorporation of Other Representations and Warranties. Any
representation, warranty or covenant set forth in any instrument transferring
any of the LAP Interest is incorporated herein by this reference and made part
hereof.
6.6 Survival. All representations, warranties and covenants
made by MEI in this Agreement are true and correct in all material respects as
of the Effective Date and as of the Closing, and shall survive the Closing of
the transactions contemplated hereby.
6.7 Definition of "Actual Knowledge". As used in this Section
6, "actual knowledge" means knowledge as of the date of this Agreement
irrespective of any inquiry or investigation into matters that may have been
known or should have been known prior to the date of this Agreement.
7. Representations and Warranties of ILX. ILX as to its assets and
activities, represents and warrants to MEI as follows, as of the Effective Date
and as of the Closing hereunder:
7.1 Capacity. ILX has full power to enter into this Agreement
and to carry out its obligations hereunder. This Agreement constitutes a valid
and legally binding obligation of ILX. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby nor
compliance by ILX with any of the provisions hereof will violate any order,
writ, injunction, decree, statute, rule or regulation applicable to ILX.
7.2 No Breach of Statute, Decree or Order. To the actual
knowledge of ILX (as hereinafter defined), no claim, action or proceeding is
pending or threatened against ILX with respect to a default under, or a
violation or breach in any material respect of, any applicable statute, law,
ordinance, decree, order, rule or regulation of any governmental body, nor, to
the actual knowledge of ILX (as defined herein), is there any basis for such a
claim, action or proceeding.
7.3 Litigation. To the actual knowledge of ILX (as hereinafter
defined), there is no material suit, claim, action, proceeding or governmental
investigation now pending or, threatened against ILX ("ILX Third Party
Litigation") before any court, administrative or regulatory body or governmental
agency, (i) arising out of or relating to any aspect of the business, or any of
the properties, of ILX or (ii) concerning or affecting any of the transactions
contemplated by this Agreement.
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7.4 Survival. All representations, warranties and covenants
made by ILX in this Agreement are true and correct in all material respects as
of the Effective Date and as of the Closing, and shall survive the Closing of
the transactions contemplated hereby.
7.5 No Additional Warranties. ILX has made no representations
or warranties except as expressly set forth in this Agreement and MEI
acknowledges that it is relying on no representations or warranties of ILX other
than those expressly set forth herein.
7.6 Definition of "Actual Knowledge". As used in this Section
7, "actual knowledge" means knowledge as of the date of this Agreement
irrespective of any inquiry or investigation into matters that may have been
known or should have been known prior to the date of this Agreement.
8. Mutual Releases. As part of the consideration for the execution and
performance by both parties of this Agreement, effective as of the Closing:
(a) ILX and MEI, for themselves and their respective
affiliated entities, successors, subsidiaries, agents, employees,
representatives, and assigns do hereby fully release and forever discharge each
other and their heirs, successors, devisees, agents, independent contractors,
employees, attorneys, shareholders, officers, directors, subsidiaries,
representatives and assigns, of and from any and all liability, obligations,
claims and causes of action, known or unknown, which either of them may now have
or may hereafter have, growing out of or connected in any way with any
agreement, fact or event occurring prior to the date of this Agreement, except
for the obligations of the parties undertaken in this Agreement and in the Note
and the Security Agreement, and other documents executed in connection with this
Agreement.
(b) Each party represents and warrants to the other that it
has not assigned or otherwise transferred any rights or claims that, but for
such transfer, would be subject to the foregoing release.
9. Rescission. Notwithstanding any provision of this Agreement to the
contrary, either party hereto may rescind this Agreement in its entirety
(together with all documents and instruments related hereto) at any time prior
to the close of business on October 15, 1997, if, and, only if, ILX has not
acquired the interest of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ in Los Abrigados Partners Limited
Partnership on terms and conditions acceptable to ILX.
10. Miscellaneous
10.1 No Broker. Each Party represents and warrants to the
other that no person has acted in the capacity of broker or finder on their
behalf to bring about the negotiation or consummation of this Agreement. Each
party shall indemnify and hold harmless each other against every claim or
liability asserted against any of them by any person acting or claiming to act
as a broker or finder on behalf of each other.
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10.2 Notices. Any notice or other communication required or
permitted hereunder shall be sufficiently given if delivered in person or sent
by registered mail, postage prepaid, addressed to the appropriate party as
follows:
In the case of MEI:
▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
In the case of ILX:
ILX Incorporated
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, President
or such substituted address as any party (or other party to whom a copy is to be
sent) shall have given notice to the other in writing.
10.3 Amendment. This Agreement may be amended or modified in
whole or in part only by an agreement in writing executed in the same manner as
this Agreement and making specific reference hereto.
10.4 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original, but all of which
taken together shall constitute one instrument.
10.5 Binding on Successors and Assigns. This Agreement shall
be binding upon, inure to the benefit of and be enforceable by and against the
parties hereto and their respective successors, assigns, executors and personal
representatives.
10.6 Severability. If any one or more of the provisions
contained in this Agreement or any application thereof shall be invalid, illegal
or unenforceable in any respect, the validity, legality or enforceability of the
remaining provisions of this Agreement and any other application thereof shall
not in any way be affected or impaired thereby; provided, however, that to the
extent permitted by applicable law, any invalid, illegal or nonenforceable
provision may be considered for the purpose of determining the intent of the
parties in connection with the other provisions of this Agreement.
10.7 Waivers. The parties may, solely by written agreement,
(a) extend the time for the performance of any of the obligations or other acts
of the parties hereto, (b) waive any inaccuracy in any of the representations
contained in this Agreement or in any document delivered pursuant to this
Agreement, (c) waive compliance with, or modify, any covenant or condition
contained in this Agreement, and (d) waive or modify performance of any of the
obligations of
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any of the parties hereto; provided, that no such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or condition
shall operate as a waiver of, or an estoppel with respect to, any subsequent or
other matter or failure.
10.8 Headings. The headings of the Articles and Sections of
this Agreement are inserted for convenience only and in no way alter, amend,
modify, limit or restrict the contractual obligations of the parties.
10.9 Documentation Expenses. Each party shall share equally in
the costs and legal fees associated with the documentation of the transactions
contemplated hereby.
10.10 Expenses. Except to the extent provided herein to the
contrary, each party hereto shall bear its own expenses and no party shall be
responsible for any debt, liability or obligation, cost, expense or fee of any
nature whatsoever (including, without limitation, any and all legal, accounting
and other professional fees and expenses) incurred by any other party in
connection with the negotiation, execution or performance of this Agreement.
10.11 Attorney's Fees in Dispute. Notwithstanding the
foregoing, should either party hereto institute any action or proceeding against
the other to enforce any provision hereof, for injunction or for damages by
reason of any alleged breach of any provision of this Agreement or for a
declaration of such party's rights or obligations hereunder, or any judicial
remedy, the prevailing party shall be entitled to receive from the losing party
such amount as the court or arbiter may adjudge to be reasonable for attorneys'
fees, costs and expenses of the prevailing party. Should relief be awarded to
both parties, such attorneys' fees, costs and expenses shall be adjudged against
the parties in any manner the court or arbiter shall deem equitable.
10.12 Representation by Counsel. Each party acknowledges that
it has had the opportunity to consult with, and has consulted with, independent
counsel regarding this Agreement and the transactions contemplated hereby, and
that the fact that this Agreement or other document or instrument that is part
of this transaction was prepared by counsel for any one or more of them shall
not affect the interpretation of this Agreement, or such other document or
instrument.
10.13 Entire Agreement; Law Governing. All prior negotiations
and agreements between the parties hereto are superseded by this Agreement, and
there is no representation, warranty, understanding or agreement other than
those expressly set forth herein or in an Exhibit or Schedule delivered pursuant
hereto, except as modified in writing concurrently herewith or subsequent
hereto. This Agreement shall be governed by and construed and interpreted
according to the laws of the State of Arizona.
10.14 Announcements. MEI shall not make any public disclosure
of the transactions contemplated hereby or in connection herewith without the
prior written consent of ILX. MEI acknowledges that ILX will be issuing a press
release and filing appropriate documents with the Securities and Exchange
Commission regarding the transactions contemplated herein.
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10.15 Further Assurances. After the Closing hereunder, each of
the parties hereto shall execute, acknowledge and deliver or cause to be
executed, acknowledged and delivered such instruments and documents and take
such action as may be necessary or advisable to carry out its obligations under
this Agreement and under any schedule, exhibit, document, agreement, certificate
or other instrument delivered pursuant hereto, and with respect to any filing or
other documentation required in connection with the LAP Interest.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement to be effective as of the Effective Date.
ILX INCORPORATED ▇▇▇▇▇▇▇ ENTERPRISES INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------- -----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: President Its: Chairman
------------------------------- -----------------------------------
President Chairman
STATE OF ARIZONA )
) ss.
County of Maricopa )
The foregoing instrument was acknowledged before me this 15th day of
August 1997, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Chairman of ▇▇▇▇▇▇▇ Enterprises
Incorporated, on behalf of the corporation.
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Notary Public
My Commission Expires:
My Commission Expires March 20, 1998
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STATE OF ARIZONA )
) ss.
County of Maricopa )
The foregoing instrument was acknowledged before me this 15th day of
August 1997, by ▇▇▇▇▇ ▇. ▇▇▇▇▇, as President of ILX Incorporated, on behalf of
the corporation.
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Notary Public
My Commission Expires:
My Commission Expires March 20, 1998
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