PURCHASE AGREEMENT
BARRINGTON HILLS APARTMENTS,
LITTLE ROCK, ARKANSAS
SELLER:
WATERTON RAINTREE, LLC,
a Delaware limited liability company
BUYER:
KelCor, INC.,
a Missouri corporation
June 7, 2001
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made as of June 7, 2001 (the
"Effective Date"), by and between Waterton Raintree, LLC, a Delaware limited
liability company ("Seller"), and KelCor, Inc., a Missouri corporation
("Buyer").
R E C I T A L S
Buyer and Seller have heretofore entered into that certain non-binding
letter of intent (the "Letter of Intent"), dated March 5, 2001 with respect to
the Property (as defined below).
Buyer desires to purchase, and Seller desires to sell, the Property, on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the respective promises contained in
this Agreement, Buyer and Seller agree as follows:
A G R E E M E N T S
1. Purchase and Sale. Subject to the terms and conditions of this
Agreement, Seller shall sell to Buyer, and Buyer shall purchase from Seller, all
of Seller's right, title and interest in and to the following (collectively, the
"Property"): (A) the land (the "Land") located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, as more particularly described in Exhibit A; (B) all
improvements, structures and fixtures located upon the Land (the
"Improvements"); (C) all tangible personal property (the "Personal Property")
located on and used solely in connection with the Improvements and described in
Exhibit B; (D) the interest of the landlord in and to all leases of space of all
or any portion of the Improvements (the "Tenant Leases"); and (E) to the extent
assignable without the consent of third parties, the name "Barrington Hills
Apartments", all contracts, agreements, permits, licenses and warranties held
solely for use in connection with all or any portion of the Improvements or the
Personal Property (the "Intangible Property").
2. Purchase Price. The purchase price for the Property shall be Seven
Million One Hundred Fifty Thousand and No/100 Dollars ($7,150,000.00) (the
"Purchase Price").
3. Payment of Purchase Price. The Purchase Price shall be paid to Seller by
Buyer as follows:
A. Deposit. Buyer will deliver to New York Land Title Services, as
agent for Commonwealth Land Title Insurance Company, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Title Company"), not later than two (2)
business days following the execution of this Agreement by Buyer and Seller, a
cashier's check or wire transfer of immediately available federal funds, in the
amount of Fifty Thousand and No/100 Dollars ($50,000.00) (the "Initial
Deposit"). If Buyer elects to proceed with the transaction as evidenced by the
delivery of the Due Diligence Notice (as hereinafter
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defined), the Buyer shall deliver a copy of the Due Diligence Notice to the
Title Company along with a cashier's check or wire transfer of immediately
available federal funds, in the amount of One Hundred Thousand and No/100
Dollars ($100,000.00) (the "Additional Deposit"). The Initial Deposit and
Additional Deposit are hereinafter referred to as the "Deposit". The Deposit
shall be held by the Title Company in accordance with the terms of Paragraph 3D
below and the terms of a separate escrow agreement in the form of Exhibit C
attached hereto and dated as of the date hereof by and among Buyer, Seller and
the Title Company (the "Escrow Agreement").
B. Closing Payment. The balance of the Purchase Price, as adjusted by
the prorations and credits specified in this Agreement, shall be paid to the
Title Company by wire transfer of immediately available federal funds on or
before 10:00 a.m. Central Time on the date ("Closing Date") which is fifteen
(15) days after the expiration of the "Due Diligence Period" (as defined in
Paragraph 5), except as provided in Paragraph (D)(5) below. The amount to be
paid under this subparagraph B is referred to in this Agreement as the "Closing
Payment."
C. REMEDIES, LIQUIDATED DAMAGES. IF THE CLOSING DOES NOT OCCUR DUE TO
BUYER'S DEFAULT UNDER THIS AGREEMENT, IT WOULD BE IMPRACTICAL AND EXTREMELY
DIFFICULT TO ESTIMATE THE AMOUNT OF DAMAGES WHICH SELLER MAY SUFFER. THEREFORE,
THE PARTIES HAVE AGREED THAT THE AMOUNT NECESSARY TO COMPENSATE SELLER FOR SUCH
DAMAGES IS AND SHALL BE THE TITLE COMPANY'S DELIVERY OF THE DEPOSIT TO SELLER AS
LIQUIDATED DAMAGES, AS SELLER'S SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT
(SUBJECT TO THOSE PROVISIONS OF THIS AGREEMENT WHICH, BY THEIR EXPRESS TERMS,
SURVIVE A TERMINATION OF THIS AGREEMENT). SUCH LIQUIDATED DAMAGES ARE NOT
INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF APPLICABLE LAW. IF THE
CLOSING DOES NOT OCCUR FOR ANY REASON OTHER THAN BUYER'S DEFAULT UNDER THIS
AGREEMENT, THEN THIS AGREEMENT SHALL TERMINATE AND NEITHER PARTY SHALL HAVE ANY
FURTHER RIGHTS OR OBLIGATIONS TO EACH OTHER HEREUNDER, EXCEPT FOR (1) THE RIGHT
OF BUYER TO THE RETURN OF THE DEPOSIT, (2) THOSE PROVISIONS OF THIS AGREEMENT
WHICH, BY THEIR EXPRESS TERMS, SURVIVE A TERMINATION OF THIS AGREEMENT, AND (3)
IF THE CLOSING FAILS TO OCCUR SOLELY BECAUSE OF SELLER'S DEFAULT, THEN, BUYER,
AS ITS SOLE AND EXCLUSIVE REMEDY MAY EITHER (A) RECOVER THE DEPOSIT OR (B) BRING
AN ACTION FOR SPECIFIC PERFORMANCE OF THIS AGREEMENTIN WHICH EVENT, AND ONLY IN
SUCH EVENT SHALL BUYER HAVE THE RIGHT TO RECORD A LIS PENDENS AGAINST THE
PROPERTY. IF THE CLOSING OCCURS IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT,
SELLER SHALL APPLY THE DEPOSIT AS A CREDIT TOWARD THE PURCHASE PRICE. THIS
PARAGRAPH 3C SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT AND NOTHING IN THIS
PARAGRAPH 3C IS INTENDED TO LIMIT THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER PARAGRAPH 11E.
____________________________________ ___________________________________
BUYER'S INITIALS SELLER'S INITIALS
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D. Existing Mortgage.
(1). Assumption. The Property is to be conveyed without release
of, and Buyer shall assume, the lien of the existing mortgage and related
security instruments and documents (collectively, the "Existing Mortgage") in
favor of Berkshire Mortgage Finance Limited Partnership, a Massachusetts limited
partnership ("Lender"), which secures payment of a promissory note in favor of
Lender in the original principal amount of $6,100,000 (the "Loan"). All
documents and instruments evidencing, securing or otherwise relating to the Loan
including the Existing Mortgage are herein collectively called the "Loan
Documents".
(2) Consent. It shall be a condition precedent to the obligation
of Seller to sell, and Buyer to purchase, the Property: (i) that all
requirements under the Loan Documents with respect to the conveyance of the
Property subject to the Existing Mortgage are met to the Lender's satisfaction;
(ii) as to the Seller's obligation, that Seller is released from all liabilities
under the Loan Documents first accruing from and after the Closing Date (in the
event that Seller does not obtain such a release, but Buyer executes and
delivers to Seller an indemnification in form and substance reasonably
satisfactory to Seller, with respect to such obligations first accruing from and
after the Closing Date, on terms and conditions reasonably satisfactory to
Seller, then the delivery of a release by Lender shall not constitute a
condition precedent to Seller's obligation to close the transactions described
herein); (iii) the Lender shall release to Seller all escrow funds (other than
impounds for real estate taxes, insurance and replacement reserves to the extent
Seller receives a credit as provided below) and (iv) the Lender delivers at the
Closing a certificate or other written confirmation as to the outstanding
principal balance, accrued interest and other sums due and owing, or accrued,
under the Loan and any certificate, statement or other evidence that the Lender
customarily gives to assumptors with respect to the absence of default under the
Loan. Within (10) business days of the Effective Date, Buyer shall have
delivered to Lender an application and all required deposits in order to
commence the assumption process. Buyer shall, with diligence, endeavor to obtain
within the Due Diligence Period the Lender's approval of Buyer or its affiliates
as the intended Borrower and of any changes to the Loan Documents or
modification to the Lender's requirements that are necessary to accommodate or
are consistent with the intended borrower's and its affiliates' organizational
structure (collectively, the "Lender's Approval"). If Buyer has obtained the
Lender Approval during the Due Diligence Period, Buyer shall include
confirmation with in the Diligence Notice pursuant to Paragraph 5. If Buyer
fails to obtain the Lender Approval on or before the expiration of the Due
Diligence Period, Buyer shall have an additional fifteen (15) days from the
expiration of the Due Diligence Period (the "Lender Approval Period") to obtain
the Lender's Approval. If Buyer fails to obtain the Lender Approval prior to the
expiration of the Lender Approval Period, Buyer shall have the right to
terminate this Agreement solely as a result of the failure to obtain the Lender
Approval by delivering written notice to Seller and the Title Company, in which
event the Deposit (less Buyer's share of escrow cancellation costs, if any)
shall be returned to Buyer. If Buyer fails to deliver written notice of
termination this Agreement shall continue in full force and effect.
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(3) Assumption Costs. All transfer or other fees charged by
Lender and any costs and expenses charged by Lender in connection with the
transfer of the Property, recording costs and expenses relating to the
recordation of any mortgage assignment agreement or other documentation relating
to the transfer of the Property, attorneys' fees incurred by Lender, any title
insurance premiums or costs for endorsements required by Lender, and any other
costs and expenses relating to the transfer of the Property subject to the Loan
shall be paid by the Buyer (the "Assumption Costs").
(4) Adjustment of Buyer Price. At Closing, Buyer shall receive a
credit against the Purchase Price in the amount, as of the Closing Date, of the
principal balance of the Existing Mortgage, plus all accrued and unpaid interest
and other sums then due and payable pursuant to the Existing Mortgage and any
impounds that are retained by Lender. Accrued interest for the day of Closing
shall be charged to the Buyer.
(5) Extension of Closing. If, despite Buyer's reasonable efforts
pursuant to subparagraph 2, the Lender's requirements (other than the Lender's
Approval, which must be obtained by the expiration of the Due Diligence Period
or the Lender Approval Period, if applicable) for transfer of the Property by
Seller under the Loan Documents are not met by the expiration of the Due
Diligence Period, then the Buyer may extend the Closing Date up to thirty (30)
days in order to meet such requirements. In addition, to the extent Buyer is
diligently pursuing to satisfy the Lender's requirements (other than Lender's
Approval), Buyer shall have the one time additional right to extend the Closing
Date up to an additional thirty days.
4. Title.
A. Title Report. Within five (5) business days after the Effective
Date Seller shall cause the Title Company to deliver to Buyer (1) a title
insurance commitment covering the Property from the Title Company; and (2)
copies of the documents evidencing the exceptions to title stated therein
(collectively, the "Title Report"). Buyer shall order, and, upon its receipt,
Buyer will deliver to Seller either an update of the survey previously delivered
to Buyer by Seller, or a new survey (collectively, the "Survey") of the
Property. Unless Buyer gives written notice ("Title Disapproval Notice") that it
disapproves the exceptions to title shown on the Title Report or the matters
disclosed by the Survey, stating the exceptions so disapproved, within ten (10)
days of Buyer's receipt of both the Title Report and the Survey, but in no event
later than the expiration of the Due Diligence Period, Buyer shall be
conclusively deemed to have approved the Survey and the exceptions listed in the
Title Report. Seller shall provide notice to Buyer, not later than seven (7)
days after its receipt of any Title Disapproval Notice indicating whether or
not, on or before the Closing Date, Seller will (i) remove any such disapproved
exceptions or cause the Title Company to issue an endorsement affirmatively
insuring against such exceptions or matters in a form reasonably acceptable to
Buyer at no cost or expense to Buyer (other than instruments executed by Seller
which secure monetary obligations, any mechanic's liens affecting the Property,
and any real property taxes which will be past due as of the Closing Date, all
of which Seller shall be obligated to remove or cause the Title Company to
insure over), and (ii) correct any disapproved Survey matter. If Seller
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has provided notice to Buyer that Seller will not remove or cause the Title
Company to insure over any such disapproved exception, or correct any
disapproved Survey matter, then, Buyer will have the right, which it may elect
in writing at any time during the seven (7) day period following delivery of
Seller's notice to Buyer, either to waive Buyer's objection to such disapproved
exception or Survey matter, or to terminate this Agreement. In the event of any
such termination, the Deposit shall be promptly delivered by the Title Company
to Buyer.
B. Title Contingency. A condition precedent to Buyer's obligation to
purchase the Property shall be the willingness of the Title Company to issue to
Buyer on the Closing Date an A.L.T.A. owner's policy of title insurance policy
("Owner's Policy"), in the face amount of the Purchase Price, which Owner's
Policy shall show a fee simple estate in the Land to be vested of record in
Buyer, subject solely to the following exceptions (the "Permitted Exceptions"):
(1) the lien of any real estate taxes and assessments for the "Current Tax Year"
(as defined below) and subsequent periods, provided that the same are prorated
in accordance with this Agreement; (2) the lien of the Existing Mortgage and
related security documents; (3) such state of facts as an accurate survey or
physical inspection of the Property would disclose; (4) present and future
zoning laws, ordinances, codes, resolutions, orders and regulations of all
municipal, county, state or federal governments having jurisdiction over the
Property and the use of improvements thereon; (5) all matters caused directly or
indirectly by Buyer, its agents, employees or contractors; (6) the printed
exceptions which appear in the standard form Owner's Policy of title insurance
issued by the Title Company in Arkansas; (7) any exceptions approved or deemed
approved by Buyer pursuant to subparagraph A above; and (8) any covenant,
condition, restriction, right, right of way, or easement of record as of the
Effective Date that does not materially and adversely affect the continued use
of the Property for the purpose for which the Property is being currently used.
In addition, if a new matter ("New Matter") affecting the estate in the Land
comes into existence after the effective date of the Title Report or the Survey,
and Buyer promptly notifies Seller of its disapproval of such New Matter after
Buyer's discovery of same, Seller shall be obligated to remove or cause the
Title Company to insure over such New Matter within thirty (30) days from the
date of receipt of notice from Buyer with respect to the New Matter (and the
Closing Date shall be extended to accommodate such cure period). In the event
that Seller does not remove or cause the Title Company to insure over such New
Matter within such thirty (30) day period, Buyer shall have the right, as
Buyer's sole and exclusive remedy hereunder for such failure, either (a) to
terminate this Agreement by written notice to Seller, in which case, the Deposit
shall be returned to Buyer, this Agreement shall be null and void and of no
further force or effect and the parties hereto shall have no further obligations
to the other, or (b) to waive the foregoing right of termination and all other
rights and remedies on account of such New Matter and to close the transaction
contemplated by this Agreement.
5. Due Diligence Contingency. Within five (5) business days of the
Effective Date Seller shall provide Buyer with copies of or access to the
information (the "Property Documents") described in Exhibit D attached hereto.
Subject to the terms of the Tenant Leases, Seller shall provide Buyer with
reasonable access to the Property during regular business hours upon not less
than forty-eight (48) hours notice. Seller, upon reasonable advance notice,
shall also make available to Buyer for its inspection and
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photocopying during regular business hours such Property Documents which were
not delivered to Buyer but are in Seller's or the manager of the Property's
possession. Seller shall have no obligation to deliver to Buyer any of the
following confidential and proprietary materials: (1) information contained in
Seller's credit reports, credit authorizations, credit for financial analyses or
projections, steering committee sheets, account summaries or other internal
documents relating to the Property, including any valuation documents and the
book value of the Property; (2) material which is subject to attorney client
privilege or which is attorney work product; (3) appraisal reports or letters;
(4) financials of Seller or any affiliate of Seller; or (5) material which
Seller is legally required not to disclose.
Commencing on the Effective Date and continuing until 5:00 p.m.
Central Time on July 9, 2001 (the "Due Diligence Period"), Buyer shall in good
faith diligently perform and complete, at its sole expense, its due diligence
review, examination and inspection of all matters pertaining to its acquisition
of the Property, including the Tenant Leases, Intangible Property, and all
financial, physical, environmental and compliance matters, entitlements and
other conditions respecting the Property.
Buyer shall at all times conduct such due diligence in compliance with
applicable laws and the terms of the Tenant Leases, and in a manner so as to not
cause damage, loss, cost or expense to Seller, the Property or the tenants of
the Property (and without interfering with or disturbing any tenant at the
Property). In no event shall Buyer contact any tenant of the Property nor shall
Buyer contact any governmental authority having jurisdiction over the Property
without Seller's express written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Buyer shall provide Seller with
certificates evidencing the comprehensive general liability insurance policies
which shall be maintained by Buyer and each consultant which Buyer will have
present on the Property in connection with its investigations upon the Property
prior to the date of entry upon the Property, with the limits, coverage and
insurer under such policies being reasonably satisfactory to Seller. Without
limitation on the foregoing, Buyer must maintain commercial general liability
insurance, in an amount not less than $1,000,000 combined limits for any
injuries, deaths or property damage sustained as a result of any one accident or
occurrence, (ii) worker's compensation insurance at statutory limits, and (iii)
employer's liability insurance in an amount not less than $1,000,000 for each
accident, disease per employee and disease policy limit. Any representative of
Buyer which conducts environmental inspections of the Property shall also
provide evidence of environmental liability insurance of not less than
$1,000,000. In addition, Buyer and Buyer's representatives waive any claims
against Seller and Seller's employees and agents for any injury to persons or
damage to property arising out of any inspections or physical testing of the
Property, including any damage to the tools and equipment of Buyer and Buyer's
representatives, all of which shall be brought on the Property at the sole risk
and responsibility of Buyer and Buyer's representatives. Buyer shall conduct its
investigations, reviews and examinations of the Property solely during business
hours (unless otherwise approved in writing by Seller) and upon at least twenty
four (24) hours prior written notice to Seller, and Seller shall have the right,
at its option, to cause a representative of Seller to be present at all such
inspections, reviews and examinations. Buyer's right to enter hereunder shall
terminate upon the termination of this Agreement. Buyer shall keep all
information or data received or discovered in connection with such
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due diligence strictly confidential in accordance with Paragraph 11F (except as
disclosure thereof is required to be made to third parties in connection with
Buyer's good faith due diligence investigations of the Property and its lawyers,
accountants, advisors and consultants, in connection with Buyer's purchase of
the Property). The obligation of confidentiality by Buyer and its agents and
representatives as set forth above shall not apply to any data and information
with respect to the Property which is a matter of public record. Any intrusive
physical testing (environmental, structural or otherwise) at the Property (such
as soil borings or the like) shall be conducted by Buyer only after obtaining
Seller's prior written consent to such testing, which consent shall not be
unreasonably withheld or delayed, but which may be conditioned upon, among other
things, Seller's approval of the following: (a) the contractor who will be
conducting such testing; (b) such contractor's insurance coverage as provided
above; (c) the scope and nature of the testing to be performed by such
contractor; and (d) the written agreement by such contractor to be bound by the
confidentiality provisions of Paragraph 11F.
Upon the completion of any inspection or test, Buyer shall promptly
restore the Property to its condition prior to such inspection or test. Buyer
shall keep the Property free and clear of any liens and will indemnify, protect,
defend, and hold Seller, its officers, employees, agents, independent
contractors and such other parties in interest as Seller may reasonably require,
harmless from and against all claims (including any claim for damage to property
or injury to or death of any persons), liabilities, obligations, liens or
encumbrances, losses, damages, costs or expenses, including reasonable
attorney's fees, whether or not legal proceedings are instituted or asserted
against Seller or the Property as a result of, or in any way arising from, any
entry onto the Property by Buyer, its agents, employees or representatives.
If, based upon such reviews, examinations or inspections, Buyer shall
determine that it intends to acquire the Property and Buyer notifies Seller and
the Title Company of such determination in writing prior to the expiration of
the Due Diligence Period ("Due Diligence Notice"), this Agreement shall continue
in full force and effect and thereafter the Deposit shall be nonrefundable to
Buyer (except in the case of a default by Seller hereunder). In addition, Buyer
shall deliver to the Title Company the Additional Deposit along with a copy of
the Due Diligence Notice. If Buyer fails to deliver the Due Diligence Notice to
Seller and the Title Company prior to the expiration of the Due Diligence
Period, then this Agreement shall terminate and the Deposit (less Buyer's share
of escrow cancellation costs, if any) shall be returned to Buyer.
6. Closing. The sale and purchase herein provided shall be consummated
through the mail with all deliveries required hereunder being made to the Title
Company on or before 10:00 a.m. Central Time on the Closing Date. Buyer
acknowledges and agrees that the Closing Date is of extreme importance to Seller
as the Purchase Price is needed by Seller on the Closing Date in order to
satisfy certain obligations of Seller and its affiliates, and that Buyer's
covenant to close the transaction contemplated by this Agreement on the Closing
Date constitutes a material inducement to the entry by Seller into this
Agreement.
A. Escrow. On or before 10:00 a.m. Central Time on the Closing Date,
the parties shall deliver to the Title Company the following:
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(1) By Seller. Seller shall deliver (a) a duly executed and
acknowledged special warranty deed covering the Land and the Improvements in the
form of Exhibit E attached hereto (the "Deed"); (b) four (4) duly executed and
acknowledged counterpart originals of the ▇▇▇▇ of sale covering the Personal
Property and assignment and assumption covering the the Service Contracts that
Buyer elects to assume, the Tenant Leases and Intangible Property, in the form
of Exhibit F (the "▇▇▇▇ of Sale, Assignment and Assumption"); (c) a certificate
of Seller respecting the "non-foreign" status of Seller in the form of Exhibit
G; (d) duly executed counterpart originals of a form of notice to each tenant of
the Property in the form of Exhibit H (collectively, the "Notice to Tenants");
(e) to the extent Seller or the manager of the Property has in its possession
original counterparts of the Tenant Leases, such original counterparts; (f) a
closing statement (the "Closing Statement"), dated as of the Closing Date and
duly executed by Seller, setting forth, among other things, all payments to and
from the closing escrow in connection with the purchase and sale of the
Property; (g) a certified rent roll dated within five days of the Closing
Date;(h) transfer tax declarations ("Transfer Declarations") duly executed by
Seller in the form required by applicable governmental authorities; (i) subject
to Paragraph 3(D), any documents or deliveries by or on behalf of Seller that
are required under the Loan Documents in connection with Buyer's assumption of
the Existing Mortgage; and (j) evidence reasonably satisfactory to the Title
Company that all necessary authorizations of the transaction provided herein
have been obtained by Seller, and such other documents and instruments as may be
reasonably requested by the Title Company in order to consummate the transaction
contemplated hereby and to issue the Owner's Policy (provided that the same do
not materially decrease Seller's rights or materially increase Seller's
obligations hereunder).
(2) By Buyer. Buyer shall deliver (a) the Closing Payment by wire
transfer of immediately available federal funds; (b) four (4) duly executed and
acknowledged counterpart originals of the ▇▇▇▇ of Sale, Assignment and
Assumption; (c) duly executed counterpart originals of the form of Notice to
Tenants; (d) a duly executed counterpart of the Closing Statement; (e) duly
executed Transfer Declarations in the form required by applicable governmental
authorities; (f) any documents or deliveries by or on behalf of Buyer that are
required under the Loan Documents in connection with Buyer's assumption of the
Existing Mortgage; and (g) evidence reasonably satisfactory to the Title Company
that all necessary authorizations of the transaction provided herein have been
obtained by Buyer, and such other documents and instruments as may be reasonably
requested by the Title Company in order to consummate the transaction
contemplated hereby and to issue the Owner's Policy (provided that the same do
not materially decrease Buyer's rights or materially increase Buyer's
obligations hereunder).
B. Conditions to Closing; Delivery to Parties. The conditions to the
closing of such escrow shall be the Title Company's receipt of funds and
documents described in subparagraph A above and the items to be delivered by
third parties as described in the Escrow Agreement. Upon the satisfaction of the
above conditions, then the Title Company shall deliver the items described in
subparagraph A above in accordance with the Escrow Agreement and take all other
actions authorized by the Escrow Agreement.
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C. Closing Costs. Buyer shall pay (a) 50% of all costs and expenses of
the escrow arrangements; (b) all title charges in connection with the
transaction contemplated by this Agreement, other than the costs of a base
Owner's Policy; (c) the costs and expenses of the Survey; (d) all recordation
costs payable in connection with the transaction contemplated by this Agreement;
(e) the cost of any of Buyer's examinations and inspections and audits of the
Property, including the cost of any of its appraisals, environmental, physical
and financial audits; and (f) the Assumption Costs. Seller shall pay (a) 50% of
all costs and expenses of the escrow arrangements; (b) the costs of the base
Owner's Policy; and (c) the "Commission" (as defined below). All other closing
costs not specifically allocated herein shall be paid by the parties as is
customary in the county in which the Property is located. Seller and Buyer shall
each pay their respective (i) legal fees and expenses, (ii) share of prorations
(as provided below), and (iii) cost of all opinions, certificates, instruments,
documents and papers required to be delivered, or caused to be delivered, by it
hereunder and the cost of all its performances under this Agreement.
D. Prorations.
(1) Items to be Prorated. The following shall be prorated between
Seller and Buyer as of the Closing Date:
(a) Taxes and Assessments. All real estate taxes and
assessments on the Property shall be prorated as provided in this subparagraph
(a). Real estate and personal property taxes due and payable with respect to the
Property in the year in which the Closing occurs (regardless of when such taxes
accrue) shall be prorated based on the portion of the year which has elapsed
prior to the Closing Date. If the amount of any such taxes has not been
determined as of Closing, such credit shall be based on the most recent
ascertainable taxes, and the tax proration shall not be re-calculated following
the Closing. Seller shall also give Buyer a credit for any special assessments
against the Property which are due and payable prior to Closing, and Buyer shall
be responsible for all special assessments due and payable on or after the
Closing.
Upon the Closing Date and subject to the adjustment provided
above, Buyer shall be responsible for real estate taxes and assessments on the
Property payable following the Closing Date. In no event shall Seller be charged
with or be responsible for any increase in the taxes or assessments on the
Property resulting from the sale of the Property or from any improvements made
or leases entered into at any time or for any reason. With respect to the
current year and all prior periods, Seller hereby reserves the right to
institute or continue any proceeding or proceedings for the reduction of the
assessed valuation of the Property, and, in its sole discretion, to settle the
same. Seller shall have sole authority to control the progress of, and to make
all decisions with respect to, such proceedings. All net tax refunds and credits
attributable to any period prior to the Closing Date shall belong to and be the
property of Seller. All net tax refunds and credits attributable to any period
subsequent to the Closing Date shall belong to and be the property of Buyer.
Buyer agrees to cooperate with Seller in connection with the prosecution of any
such proceedings and to take all steps, whether before or after the Closing
Date, as may be necessary to carry out the intention of this subparagraph,
including the delivery to Seller, upon demand, of any relevant books and
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records, including receipted tax bills and cancelled checks used in payment of
such taxes, the execution of any and all consent or other documents, and the
undertaking of any acts necessary for the collection of such refund by Seller.
Buyer agrees that, as a condition to the transfer of the Property by Buyer,
Buyer will cause any transferee to assume the obligations set forth herein.
(b) Rents. Buyer shall receive a credit at Closing for all
rents collected by Seller prior to the Closing and allocable to the period after
Closing. No credit shall be given Seller for accrued and unpaid rent or any
other non-current sums due from tenants until said sums are paid, and Seller
shall retain the right to collect any such rent provided Seller does not ▇▇▇ to
evict any tenants or terminate any Tenant Leases. Buyer shall use reasonable
efforts after Closing to collect any rent under the Tenant Leases which has
accrued as of the Closing; provided, however, Buyer shall not be obligated to
▇▇▇ any tenants or exercise any legal remedies under the Tenant Leases. Any
portion of any rents collected subsequent to the Closing Date and properly
allocable to periods prior to the Closing Date shall be paid, promptly after
receipt, to Seller, but subject to all of the provisions of this Section hereof;
and any portion thereof properly allocable to periods on or subsequent to the
Closing Date shall be paid to Buyer. All payments collected from tenants after
Closing shall first be applied to the month in which the Closing occurs, then to
any rent due to Buyer for the period after Closing and finally to any rent due
to Seller for the period prior to Closing; provided, however, notwithstanding
the foregoing, if Seller collects any payments from tenants after Closing
through its own collection efforts, Seller may first apply such payments to rent
due Seller for the period prior to Closing.
(c) Operating Expenses. All operating expenses under the
service contracts and agreements assumed by Buyer under the ▇▇▇▇ of Sale,
Assignment and Assumption shall be prorated, and as to each service provider,
operating expenses payable or paid to such service provider in respect to the
billing period of such service provider in which the Closing Date occurs (the
"Current Billing Period"), shall be prorated on a per diem basis based upon the
number of days in the Current Billing Period prior to and including the Closing
Date (which shall be allocated to Seller) and the number of days in the Current
Billing Period after the Closing Date (which shall be allocated to Buyer), and
assuming that all charges are incurred uniformly during the Current Billing
Period. If actual bills for the Current Billing Period are unavailable as of the
Closing Date, then such proration shall be made on an estimated basis based upon
the most recently issued bills, subject to readjustment upon receipt of actual
bills.
(2) Security Deposits; Prepaid Rents. Prepaid rentals and other
tenant charges for periods after the Current Month, and the current balance of
the security deposits (including any portion thereof which may be designated as
prepaid rent) under Tenant Leases, if and to the extent that such deposits are
in Seller's actual possession and have not been otherwise applied by Seller to
any obligations of any tenants under the Tenant Leases, shall be credited
against the Purchase Price, and upon the closing of the transaction contemplated
hereby, Buyer shall assume full responsibility for all security deposits to be
refunded to the tenants under the Tenant Leases (to the extent the same are
required to be refunded by the terms of such Tenant Leases or applicable).
11
(3) Existing Mortgage. Seller shall receive the credits described
in Paragraph 3(D)(4) above.
(4) Calculation; Reproration. Seller shall cause its property
manager ("Manager") to prepare and deliver to the parties no later than five (5)
days prior to the Closing Date an estimated closing statement which shall set
forth the costs payable under ▇▇▇▇▇▇▇▇▇ ▇▇ and the prorations and credits
provided for in this Paragraph 6D and elsewhere in this Agreement. Other than
real estate taxes and assessments, which shall not be the subject of a
re-proration, 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 adjusted when the information is available in
accordance with this subparagraph. Buyer shall notify Seller within two (2) days
after its receipt of such estimated closing statement of any items which Buyer
disputes, and the parties shall attempt in good faith to reconcile any
differences not later than one (1) day before the Closing Date. The estimated
closing statement as adjusted as aforesaid and approved in writing by the
parties (which shall not be withheld if prepared in accordance with this
Agreement) shall be referred to herein as the "Closing Statement". If the
prorations and credits made under the Closing Statement shall prove to be
incorrect or incomplete for any reason, then either party shall be entitled to
an adjustment to correct the same; provided, however, that any adjustment shall
be made, if at all, within sixty (60) days after the Closing Date, and if a
party fails to request an adjustment to the Closing Statement by a written
notice delivered to the other party within the applicable period set forth above
(such notice to specify in reasonable detail the items within the Closing
Statement that such party desires to adjust and the reasons for such
adjustment), then the prorations and credits set forth in the Closing Statement
shall be binding and conclusive against such party.
(5) Items Not Prorated. Seller and Buyer agree that (a) none of
the insurance policies relating to the Property will be assigned to Buyer and
Buyer shall responsible for arranging for its own insurance as of the Closing
Date; and (b) utilities, including telephone, electricity, water and gas, shall
be read on the Closing Date and Buyer shall be responsible for all the necessary
actions needed to arrange for utilities to be transferred to the name of Buyer
on the Closing Date, including the posting of any required deposits (it being
understood, however, that Seller shall be entitled to a credit at the Closing
any utility deposits which it or its predecessors have made prior to the Closing
Date, to the extent the same are transferred to Buyer, and Seller shall be
entitled to recover and retain from the providers of such utilities any refunds
or overpayments to the extent applicable to the period prior to and including
the Closing Date, and any utility deposits for which it does not receive a
credit hereunder). Accordingly, there will be no prorations for insurance,
utilities (except to the extent provided above for utility deposits), or
payroll. In the event a meter reading is unavailable for any particular utility,
such utility shall be prorated in the manner provided in subparagraph (1)(d)
above.
(6) Indemnification. Buyer shall indemnify, protect, defend and
hold Seller harmless from and against any Claim in any way arising from the
matters for which Buyer receives a credit or otherwise assumes responsibility
pursuant to this Paragraph 6D or the ▇▇▇▇ of Sale, Assignment and Assumption.
12
(7) Survival. This Paragraph 6D shall survive the Closing Date.
7. Destruction/Condemnation of Property. In the event that all or any
portion of the Land or Improvements is damaged or destroyed by any casualty or
by a taking or condemnation under the provisions of eminent domain law after the
Effective Date but prior to the Closing Date, Seller shall give Buyer prompt
written notice of the same ("Casualty/Condemnation Notice"), but Seller shall
have no obligation to repair or replace any damage or destruction caused by the
foregoing. Seller shall, upon consummation of the transaction herein provided,
assign to Buyer all claims of Seller under or pursuant to any casualty insurance
coverage, or under the provisions of eminent domain law, as applicable, and all
proceeds from any such casualty insurance or condemnation awards received by
Seller on account of any such casualty or condemnation, as the case may be (to
the extent the same have not been applied by Seller prior to the Closing Date to
repair the resulting damage), and there shall be no reduction of the Purchase
Price (except that in connection with a casualty covered by insurance, Buyer
shall be credited with the lesser of the remaining cost to repair the damage or
destruction caused by such casualty or the amount of the deductible under
Seller's casualty insurance policy [except to the extent such deductible was
expended by Seller to repair the resulting damage]). In the event the cost of
repair or restoration of the damage to such improvements on account of such
casualty or condemnation shall exceed an amount equal to Ten Percent (10%) of
the Purchase Price, either party may, at its option, terminate this Agreement by
written notice to the other, given within five (5) business days after the
delivery of the Casualty/Condemnation Notice (and if the Closing Date falls
within such five (5) business day period, the Closing Date shall be extended
until the day after the expiration of such five (5) business day period).
8. Representations and Warranties; Certain Covenants.
A. Representations and Warranties of Seller. Seller hereby represents
and warrants the following to Buyer:
(1) Authority. Seller has all requisite corporate power and
authority to execute and deliver, and to perform all of its obligations under,
this Agreement.
(2) Due Execution. The execution, delivery and performance of
this Agreement has been duly authorized by all necessary corporate action on the
part of Seller.
(3) Enforceability. This Agreement constitutes a legal, valid and
binding obligation of Seller enforceable against Seller in accordance with its
terms, except as limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws of general applicability relating to or affecting the
enforcement of creditors' rights and general equitable principles.
(4) No Bankruptcy or Dissolution. No "Bankruptcy/Dissolution
Event" (as defined below) has occurred with respect to Seller. As used herein, a
"Bankruptcy/Dissolution Event" means any of the following: (a) the commencement
of
12
a case under Title 11 of the U.S. Code, as now constituted or hereafter amended,
or under any other applicable federal or state bankruptcy law or other similar
law; (b) the appointment of a trustee or receiver of any property interest; (c)
an assignment for the benefit of creditors; (d) an attachment, execution or
other judicial seizure of a substantial property interest; (e) the taking of,
failure to take, or submission to any action indicating an inability to meet its
financial obligations as they accrue; or (f) a dissolution or liquidation, death
or incapacity.
(5) Tenant Leases. Exhibit I contains a true and complete rent
roll and lease summary ("Rent Roll") as of the date hereof, which sets forth all
tenants and occupants ("Tenants") of the Property under "Tenant Leases," which
term, as used herein, means the leases and other documents or agreements
governing the occupancy of the Property by Tenants. To the best knowledge of
Seller but without independent investigation, each Tenant Lease is in full force
and effect, and, except as noted on the Rent Roll, the term of the same and the
obligation to pay rent thereunder has commenced and the Tenant thereunder is in
full possession and actual occupancy thereof, and all improvements required to
be completed under the provisions thereof have been completed.
(6) Litigation. To the best knowledge of Seller, except as may be
set forth in Exhibit J, Seller has received no written notice of any pending
action, litigation, condemnation or other proceeding against the Property or
against Seller with respect to the Property.
(7) Compliance. To the best knowledge of Seller, except as may be
set forth in Exhibit J, Seller 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, regulations and
ordinances, including without, limitation zoning and environmental laws,
regulations, and ordinances.
(8) Service Contracts. To the best knowledge of Seller, the
Service Contracts identified in Exhibit K constitute all of the service
contracts and equipment leases that are presently in effect with respect to the
Property.
(9) Knowledge. As used in this Agreement, "the best knowledge of
Seller," shall mean the present actual knowledge of ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇
without any duty to make inquiry and excluding any constructive or imputed
knowledge; provided, however, that nothing in this Agreement shall be deemed to
create or impose any personal liability of any kind on ▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇
▇▇▇▇▇▇.
B. Representations and Warranties of Buyer. Buyer hereby represents
and warrants the following to Seller:
(1) Authority. Buyer has all requisite power and authority to
execute and deliver, and to perform all its obligations under this Agreement.
(2) Due Execution. The execution, delivery and performance of
this Agreement has been duly authorized by all necessary action on the part of
Buyer and
13
does not and will not (a) require any consent or approval that has not been
obtained or (b) violate any provision of Buyer's organizational documents.
(3) Enforceability. This Agreement constitutes a legal, valid and
binding obligation of Buyer enforceable against Buyer in accordance with its
terms, except as limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws of general applicability relating to or affecting the
enforcement of creditors' rights and general equitable principles.
(4) No Bankruptcy/Dissolution Event. No Bankruptcy/Dissolution
Event has occurred with respect to Buyer, or if Buyer is a partnership, any of
the general partners in Buyer. Buyer has sufficient capital or net worth to meet
its obligations, including payment of the Purchase Price, under this Agreement.
(5) Condition of Property . The Purchase Price reflects Buyer's
underwriting of the costs of any capital improvements or repairs that may be
required with respect to the Property.
C. Survival. Any cause of action with respect to a breach of the
representations and warranties set forth in this subparagraphs A and B above
shall survive for a period of twelve (12) months from the Closing Date, at which
time such representations and warranties (and any cause of action resulting from
a breach thereof not then in litigation) shall terminate.
D. Knowledge as a Defense. Seller shall have no liability with respect
to a breach of the representations and warranties set forth in subparagraph A
above to the extent that Buyer proceeds with the closing of the transaction
contemplated hereby with actual knowledge of such breach or should have known of
such breach, through the exercise of reasonable diligence prior to the Closing
Date.
E. Certain Limitations. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
THIS AGREEMENT AND WITHOUT LIMITATION UPON THE LIMITATIONS ELSEWHERE IN THIS
AGREEMENT UNDER NO CIRCUMSTANCES SHALL SELLER BE LIABLE TO BUYER ON ACCOUNT OF
THIS AGREEMENT, ANY COVENANT, REPRESENTATION, WARRANTY, OR INDEMNIFICATION
OBLIGATION HEREIN, ANY DOCUMENT EXECUTED IN CONNECTION WITH THIS AGREEMENT OR
ANY TRANSACTION OR MATTER CONTEMPLATED HEREBY, IN AN AGGREGATE AMOUNT IN EXCESS
OF TWO PERCENT (2%) OF THE PURCHASE PRICE. NOTHING IN THE FOREGOING PROVISIONS
OF THIS PARAGRAPH 8E IS INTENDED TO LIMIT THE EFFECT OF THE REMEDIES PROVIDED
FOR IN PARAGRAPH 3D WITH RESPECT TO A BREACH OF THIS AGREEMENT PRIOR TO THE
CLOSING OR IN EVENT SUCH BREACH IS A RESULT OF FRAUD BY SELLER. IN THE EVENT OF
A BREACH OF THIS AGREEMENT, THE BENEFITTING PARTY SHALL NOT BE ENTITLED TO
RECOVER CONSEQUENTIAL DAMAGES.
F. Certain Interim Covenants of Seller. Until the Closing Date or the
sooner termination of this Agreement:
14
(1) Property Maintenance. Seller shall maintain the Property in
the same manner as prior hereto pursuant to its normal course of business (such
maintenance obligation 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
eminent domain or other events beyond the control of Seller, including changes
in laws, rules, ordinances and regulations.
(2) Service Contracts and Agreements. Seller shall not enter into
any additional service contracts or other similar agreements affecting the
Property without the prior consent of Buyer (not to be unreasonably withheld);
provided, however, that Seller may enter into service contracts and agreements
which are cancelable on thirty (30) days' notice without penalty without the
consent of Buyer.
(3) Tenant Leases. 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.
(4) Approval Standard. All approvals by Buyer under this
Paragraph 8F shall not be unreasonably withheld. Without limitation on the
foregoing, if Seller delivers a written request to Buyer for Buyer's approval of
any matter for which Buyer's approval is required under this Paragraph 8F (an
"Approval Request"), and Buyer fails to deliver to Seller its written
disapproval of such Approval Request within five (5) days after its receipt of
such Approval Request, then Buyer shall be deemed to have approved the matter
that is the subject of such Approval Request.
(5) Rent Ready. Seller shall deliver the Property at Closing with
all vacant apartment units having cleaned carpets, freshly painted interior
walls, working kitchen appliances, (and water heaters and HVAC to the extent
serving only the individual vacant units), and no material damage to the doors,
walls, ceilings, floors or windows inside such vacant units. Representatives of
Seller and Buyer shall inspect the vacant units five (5) days prior to the
Closing Date, and at Closing, in full satisfaction of Seller's obligations
hereunder, Buyer shall receive a credit against the Purchase Price in the amount
of the actual cost to make rent-ready each non-rent ready vacant unit existing
as of five days before Closing to be agreed upon by the parties.
9. DISCLAIMER AND RELEASE. AS AN ESSENTIAL INDUCEMENT TO SELLER TO ENTER
INTO THIS AGREEMENT, BUYER ACKNOWLEDGES, UNDERSTANDS AND AGREES AS OF THE DATE
HEREOF AND AS OF THE CLOSING DATE AS FOLLOWS:
A. DISCLAIMER.
(1) AS-IS, WHERE-IS. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
PARAGRAPH 8A OR IN THE DEED, THE SALE OF THE PROPERTY HEREUNDER IS AND WILL BE
MADE ON AN "AS IS, WHERE IS" BASIS AND THAT SELLER HAS NOT MADE, DOES NOT MAKE
AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES OR
GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL
15
OR WRITTEN, PAST, PRESENT OR FUTURE OF, AS TO, CONCERNING OR WITH RESPECT TO THE
PROPERTY OR ANY OTHER MATTER WHATSOEVER.
(2) SOPHISTICATION OF BUYER. BUYER IS A SOPHISTICATED PURCHASER
WHO IS FAMILIAR WITH THE OWNERSHIP AND OPERATION OF REAL ESTATE PROJECTS SIMILAR
TO THE PROPERTY AND THAT BUYER HAS OR WILL HAVE ADEQUATE OPPORTUNITY TO COMPLETE
ALL PHYSICAL AND FINANCIAL EXAMINATIONS RELATING TO THE ACQUISITION OF THE
PROPERTY HEREUNDER IT DEEMS NECESSARY, AND WILL ACQUIRE THE SAME SOLELY ON THE
BASIS OF SUCH EXAMINATIONS AND THE TITLE INSURANCE PROTECTION AFFORDED BY THE
OWNER'S POLICY AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER
(OTHER THAN AS EXPRESSLY PROVIDED IN PARAGRAPH 8A OR IN THE DEED).
(3) INTERIM/PASSIVE OWNER. SELLER (A) DID NOT DEVELOP OR
CONSTRUCT THE PROPERTY; AND (B) HAS DELEGATED THE DAY-TO-DAY MANAGEMENT OF THE
PROPERTY TO MANAGER.
(4) DUE DILIGENCE MATERIALS. ANY INFORMATION PROVIDED OR TO BE
PROVIDED WITH RESPECT TO THE PROPERTY IS SOLELY FOR BUYER'S CONVENIENCE AND WAS
OR WILL BE OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY
INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO
REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION (EXCEPT
TO THE EXTENT PROVIDED IN PARAGRAPH 8A AND IN THE DEED). SELLER SHALL NOT BE
LIABLE FOR ANY NEGLIGENT MISREPRESENTATION OR ANY FAILURE TO INVESTIGATE THE
PROPERTY NOR SHALL SELLER BE BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN
STATEMENTS, REPRESENTATIONS, APPRAISALS, ENVIRONMENTAL ASSESSMENT REPORTS, OR
OTHER INFORMATION PERTAINING TO THE PROPERTY OR THE OPERATION THEREOF, FURNISHED
BY SELLER, MANAGER, OR BY ANY REAL ESTATE BROKER, AGENT, REPRESENTATIVE,
AFFILIATE, EMPLOYEE, SERVANT OR OTHER PERSON OR ENTITY ACTING ON SELLER'S BEHALF
(COLLECTIVELY, "SELLER RELATED PARTIES").
B. RELEASE. BUYER RELEASES SELLER AND ALL SELLER RELATED PARTIES FROM
ALL CLAIMS WHICH ANY BUYER OR ANY PARTY RELATED TO OR AFFILIATED WITH BUYER (A
"BUYER RELATED PARTY") HAS OR MAY HAVE ARISING FROM OR RELATED TO ANY MATTER OR
THING RELATED TO OR IN CONNECTION WITH THE PROPERTY INCLUDING THE DOCUMENTS AND
INFORMATION REFERRED TO HEREIN, THE TENANT LEASES AND THE TENANTS THEREUNDER,
ANY CONSTRUCTION DEFECTS, ERRORS OR OMISSIONS IN THE DESIGN OR CONSTRUCTION AND
ANY ENVIRONMENTAL CONDITIONS, AND BUYER SHALL NOT LOOK TO ANY SELLER RELATED
PARTIES IN CONNECTION WITH THE FOREGOING FOR ANY REDRESS OR RELIEF, EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN PARAGRAPH 8 AND THOSE
OBLIGATIONS OF SELLER UNDER THIS AGREEMENT WHICH ARE EXPRESSLY INTENDED TO
SURVIVE THE
16
CLOSING. THIS RELEASE SHALL BE GIVEN FULL FORCE AND EFFECT ACCORDING TO EACH OF
ITS EXPRESSED TERMS AND PROVISIONS, INCLUDING THOSE RELATING TO UNKNOWN AND
UNSUSPECTED CLAIMS, DAMAGES AND CAUSES OF ACTION. BUYER MAY HAVE NO REMEDY
AGAINST SELLER'S PREDECESSORS (IF ANY).
C. SURVIVAL. THIS PARAGRAPH 9 SHALL SURVIVE THE TERMINATION OF THIS
AGREEMENT OR THE CLOSING DATE AND SHALL NOT BE DEEMED TO HAVE MERGED INTO ANY OF
THE DOCUMENTS EXECUTED OR DELIVERED AT CLOSING. TO THE EXTENT REQUIRED TO BE
OPERATIVE, THE DISCLAIMERS OR WARRANTIES CONTAINED HEREIN ARE "CONSPICUOUS"
DISCLAIMERS FOR PURPOSES OF ANY APPLICABLE LAW, RULE, REGULATION OR ORDER.
__________________________________
INITIALS OF BUYER
10. Conditions to Closing.
A. Seller's Conditions to Closing. In addition to the conditions
provided in other provisions of this Agreement, Seller's obligations to perform
its undertakings provided in this Agreement (including its obligation to sell
the Property) are conditioned on the following:
(1) Partner Approvals. Within seven (7) business days of the
Effective Date Seller shall obtain all requisite approvals of its partners to
the proposed sale.
(2) Performance by Buyer. The due performance by Buyer of
each and every undertaking and agreement to be performed by it hereunder
(including the delivery to Seller of the items specified to be delivered by
Buyer in Paragraph 6 hereof).
(3) No Bankruptcy or Dissolution. That at no time on or
before the Closing Date shall any Bankruptcy/Dissolution Event have occurred
with respect to Buyer, and if Buyer is a partnership, any general partners of
Buyer.
B. Buyer's Conditions to Closing. In addition to the conditions
provided in other provisions of this Agreement, Buyer's obligations to perform
its undertakings provided in this Agreement (including its obligation to
purchase the Property) are conditioned on the following:
(1) Performance by Seller. The due performance by Seller of
each and every undertaking and agreement to be performed by it hereunder
(including the delivery to Buyer of the items specified to be delivered by
Seller in Paragraph 6).
17
(2) No Bankruptcy or Dissolution. That at no time on or
before the Closing Date shall a Bankruptcy/Dissolution Event have occurred with
respect to Seller.
11. Miscellaneous.
A. Brokerage Issues.
(1) Generally. 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, protect, defend and hold Buyer harmless from and against
the same if it shall be based upon any statement or agreement alleged to have
been made by Seller, and Buyer shall indemnify, protect, defend and hold Seller
harmless from and against the same if it shall be based upon any statement or
agreement alleged to have been made by Buyer.
(2) Broker's Commission. CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ Corp.
(collectively, the "Broker") has been engaged in connection with the transaction
contemplated by this Agreement, and without limitation on the foregoing
provisions of this Paragraph, if and only if the transaction contemplated hereby
shall close in accordance with the terms of this Agreement, Seller shall pay
Broker the commission (the "Commission") pursuant to a separate agreement
between Seller and Broker.
B. Limitation of Liability. No present or future partner, member,
manager, director, officer, shareholder, employee, advisor, affiliate or agent
of or in Seller or any affiliate of Seller shall have any personal liability,
directly or indirectly, under or in connection with this Agreement or any
agreement made or entered into under or in connection with 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 interest in the Property for the payment of any claim or for
any performance, and Buyer hereby waives any and all such personal liability.
For purposes of this subparagraph B, no negative capital account or any
contribution or payment obligation of any partner or member in Seller shall
constitute an asset of Seller. The limitations of liability contained in this
Paragraph shall survive the termination of this Agreement or the Closing Date,
as applicable, and are in addition to, and not in limitation of, any limitation
on liability applicable to Seller provided elsewhere in this Agreement or by law
or by any other contract, agreement or instrument.
C. Successors and Assigns. Buyer may not assign or transfer its rights
or obligations under this Agreement (or make an offer or enter into negotiations
to do so) 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 in this Agreement
without the consent of Seller to Barrington Hills Acquisition, L.P.
18
("Affiliate") or to a single-purpose bankruptcy remote entity which is
controlled by Affiliate (in either of which events such transferee shall assume
in writing all of the transferor's obligations hereunder, but Buyer shall not be
released from its obligations hereunder). As used herein, "controlled by
Affiliate" with respect to an entity means that Affiliate: (1) has the sole
ability to direct the management, policies and operation of such entity,
directly or indirectly, through voting securities or otherwise; and (2)
Affiliate owns more than fifty percent (50%) of the direct or indirect ownership
interests in such entity. Any change in control or majority ownership of Buyer
or Affiliate constitutes an assignment for purposes of this subparagraph. 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. In addition, neither
Buyer nor Affiliate shall not re-sell the Property or assign its rights or
obligations under this Agreement (or make an offer or enter into negotiations to
do so) through a "double escrow" or other similar mechanism without Seller's
prior written consent. 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 shall be
binding upon the successors and assigns of the parties.
D. Notices. Any notice which a party is required or may desire to give
the other party shall be in writing and may be delivered (1) personally, (2) by
United States registered or certified mail, postage prepaid, (3) by Federal
Express or other reputable courier service regularly providing evidence of
delivery (with charges paid by the party sending the notice); or (4) by
telecopy, provided that such telecopy shall be immediately followed by delivery
of such notice pursuant to clause (1), (2) or (3) above. Any such notice shall
be addressed as follows (subject to the right of a party to designate a
different address for itself by notice similarly given):
To Buyer:
KelCor, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone:816/▇▇▇-▇▇▇▇
Telecopier:816/221-1829
With Copy To:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
19
To Seller:
Waterton Associates, L.L.C
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To:
Pircher, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Real Estate Notices (EJML)
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
To Title Company:
New York Land Services, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice so given by mail shall be deemed to have been given as of the date of
delivery (whether accepted or refused) established by U.S. Post Office return
receipt or the overnight carrier's proof of delivery, as the case may be. Any
such notice not so given shall be deemed given upon actual receipt of the same
by the party to whom the same is to be given. Notices may be given by facsimile
transmission and shall be deemed given upon the actual receipt of the same by
the individual to which they are addressed, and shall be promptly followed by a
hard copy notice by mail as provided above. The attorneys for any party hereto
shall be entitled to provide any notice that a party desires to give or is
required to give hereunder.
E. Legal Costs. In the event any action be instituted by a party to
enforce this Agreement, the prevailing party in such action (as determined by
the court, agency or other authority before which such suit or proceeding is
commenced), shall be entitled to such reasonable attorneys' fees, costs and
expenses as may be fixed by the decision maker. The foregoing includes, but is
not limited to, reasonable attorneys' fees, expenses and costs of investigation
incurred in (1) appellate proceedings; (2) in any post-judgement proceedings to
collect or enforce the judgement; (3) establishing the right to indemnification;
and (4) 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. This provision is
separate and several
20
and shall survive the consummation of the transaction contemplated by Agreement
or the earlier termination of this Agreement.
F. Confidentiality. The terms of the transfers contemplated in this
Agreement, including the Purchase Price and all other financial terms, as well
as the information discovered by Buyer and its agents in connection with its due
diligence investigation of the Property shall remain confidential and shall not
be disclosed by either party hereto without the written consent of the other
except (1) to such party's directors, officers, partners, members, employees,
legal counsel, accountants, engineers, architects, financial advisors and
similar professionals and consultants to the extent such party deems it
necessary or appropriate in connection with the transaction contemplated
hereunder (and such party shall inform each of the foregoing parties of such
party's obligations under this Paragraph and shall secure the agreement of such
parties to be bound by the terms hereof); or (2) as otherwise required by law or
regulation. Each party shall indemnify, defend and hold the other party harmless
from and against any Claims arising from a breach by it of this Paragraph. The
restrictions in this Paragraph shall survive a termination of this Agreement but
shall terminate upon the purchase of the Property by Buyer.
G. Further Instruments. Each party will, whenever and as often as it
shall be requested so to do by the other, cause to be executed, acknowledged or
delivered any and all such further instruments and documents as may be necessary
or proper, in the reasonable opinion of the requesting party, in order to carry
out the intent and purpose of this Agreement.
H. Matters of Construction.
(1) Incorporation of Exhibits. All exhibits attached and
referred to in this Agreement are hereby incorporated herein as fully set forth
in (and shall be deemed to be a part of) this Agreement.
(2) 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 except the Escrow Agreement.
(3) Time of the Essence. Subject to subparagraph (4) below,
time is of the essence of this Agreement.
(4) Non-Business Days. Whenever action must be taken
(including the giving of notice or the delivery of documents) under this
Agreement during a certain period of time (or by a particular date) that ends
(or occurs) on a non-business day, then such period (or date) shall be extended
until the immediately following business day. As used herein, "business day"
means any day other than a Saturday, Sunday or federal holiday.
(5) Severability. If any term or provision of this Agreement
or the application thereof to any person or circumstance shall, to any extent,
be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or
21
provision to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each such term and
provision of this Agreement shall be valid and be enforced to the fullest extent
permitted by law.
(6) Interpretation. Words used in the singular shall include
the plural, and vice-versa, and any gender shall be deemed to include the other.
Whenever the words "including", "include" or "includes" are used in this
Agreement, they should be interpreted in a non-exclusive manner. The captions
and headings of the Paragraphs of this Agreement are for convenience of
reference only, and shall not be deemed to define or limit the provisions
hereof. Except as otherwise indicated, all Exhibit and Paragraph references in
this Agreement shall be deemed to refer to the Exhibits and Paragraphs in this
Agreement. Each party acknowledges and agrees that this Agreement (a) has been
reviewed by it and its counsel; (b) is the product of negotiations between the
parties, and (c) shall not be deemed prepared or drafted by any one party. In
the event of any dispute between the parties concerning this Agreement, the
parties agree that any ambiguity in the language of the Agreement is to not to
be resolved against Seller or Buyer, but shall be given a reasonable
interpretation in accordance with the plain meaning of the terms of this
Agreement and the intent of the parties as manifested hereby.
(7) No Waiver. Waiver by one party of the performance of any
covenant, condition or promise of the other party shall not invalidate this
Agreement, nor shall it be deemed to be a waiver by such party of any other
breach by such other party (whether preceding or succeeding and whether or not
of the same or similar nature). No failure or delay by one party to exercise any
right it may have by reason of the default of the other party shall operate as a
waiver of default or modification of this Agreement or shall prevent the
exercise of any right by such party while the other party continues to be so in
default.
(8) Consents and Approvals. Except as otherwise expressly
provided herein, any approval or consent provided to be given by a party
hereunder may be given or withheld in the absolute discretion of such party.
(9) Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE JURISDICTION WHERE THE LAND
IS LOCATED (WITHOUT REGARD TO CONFLICTS OF LAW).
(10) Third Party Beneficiaries. Except as otherwise expressly
provided in this Agreement, Seller and Buyer do not intend by any provision of
this Agreement to confer any right, remedy or benefit upon any third party
(express or implied), and no third party shall be entitled to enforce or
otherwise shall acquire any right, remedy or benefit by reason of any provision
of this Agreement.
(11) Amendments. This Agreement may be amended by written
agreement of amendment executed by all parties, but not otherwise.
22
(12) Survival. Unless otherwise expressly provided for in
this Agreement, the representations, warranties, covenants and conditions of the
parties set forth in this Agreement shall not survive the consummation of the
transaction contemplated by this Agreement and the delivery and recordation of
the Deed. Notwithstanding the foregoing (a) all indemnification obligations in
this Agreement shall survive the closing of the transaction on the Closing Date
for the period specified therein; and (b) the indemnification obligations set
forth in Paragraphs 5 and 11A and 11F shall survive the termination of this
Agreement.
I. Back-Up Offers. Seller reserves the right, prior to the Closing
Date, to solicit, consider, negotiate and accept one or more offers by third
parties to purchase the Property from Seller (and to enter into purchase
contracts with such third parties to that end); provided that the rights or any
such third party to purchase the Property shall not be effective until after the
termination of this Agreement in accordance with its terms.
J. Buyer's Delivery of Certain Information. In the event the
transaction contemplated hereby shall fail to close for any reason other than a
default by Seller hereunder, Buyer shall, at its expense, promptly deliver to
Seller, to the extent in Buyer's possession or control, (1) all existing
originals and copies of the written information and materials supplied to Buyer
by Seller, Manager or their respective agents; and (2) true, accurate and
complete copies of any written information concerning the Property prepared by
or on behalf of Buyer in connection with its investigations hereunder (including
any reports, audits and appraisals prepared by any third parties). Seller shall
not hold Buyer responsible for the accuracy of any information prepared by third
parties which is delivered to Seller in connection with this Paragraph.
K. Post Closing Access. For a period of six (6) months subsequent to
the Closing Date, Seller and its employees, agents and representatives shall be
entitled to access during business hours to all documents, books and records
given to Buyer by Seller at the Closing for tax and audit purposes, regulatory
compliance, and cooperation with governmental investigations upon reasonable
prior notice to Buyer, and shall have the right to make copies of such
documents, books and records at Seller's expense.
L. Indemnification Obligations. If the Closing occurs then the parties
shall have the following respective indemnification obligations:
A. Indemnification by Seller . Seller shall protect,
defend, indemnify and hold Buyer harmless from and against any Claim in any way
related to the Property and arising or accruing prior to Closing Date
B. Indemnification by Buyer . Buyer shall protect,
defend, indemnify and hold Seller harmless from and against any Claim in any way
related to the Property and first arising or accruing on or after the Closing
Date.
For purposes of this Agreement a Claim shall be any obligation,
liability, claim (including any claim for damage to property or injury to or
death of any persons), lien or encumbrance, loss, damage, cost or expense
(including any judgment, award,
23
settlement, reasonable attorneys' fees and other costs and expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim [including appellate proceedings], and any collection costs or enforcement
costs).
This Paragraph 11L shall survive the Closing Date for a period of
twelve months.
M. Indemnification Obligations. The indemnification obligations under
this Agreement shall be subject to the following provisions:
(1) The party seeking indemnification ("Indemnitee") shall
notify the other party ("Indemnitor") of any Claim against Indemnitee within
forty-five (45) 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 (with counsel approved by
Indemnitee), within thirty (30) days after Indemnitee gives Indemnitor written
notice of the same, then Indemnitee may settle such Claim, 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. Indemnitee shall have the right to
employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of Indemnitee unless: (a) the employment of such
counsel shall have been authorized in writing by Indemnitor in connection with
the defense of such action, (b) Indemnitor shall not have employed counsel to
direct the defense of such action, or (c) Indemnitee shall have reasonably
concluded that there may be defenses available to it which are different from or
additional to those available to Indemnitor (in which case Indemnitor shall not
have the right to direct the defense of such action or of Indemnitee), in any of
which events such fees and expenses shall be borne by Indemnitor.
(2) The indemnification obligations under this Agreement
shall cover the costs and expenses of Indemnitee, including reasonable
attorneys' fees, related to any actions, suits or judgments incident to any of
the matters covered by such indemnities.
(3) The indemnification obligations under this Agreement
shall also extend to any present or future advisor, trustee, director, officer,
partner, member, manager, employee, beneficiary, shareholder, participant or
agent of or in Indemnitee or any entity now or hereafter having a direct or
indirect ownership interest in Indemnitee.
N. Jurisdiction; Venue. Each party hereby consents to the exclusive
jurisdiction of any state or federal court located within the jurisdiction where
the Land is located, waives personal service of any and all process upon it,
consents to service of process by registered mail directed to each party at the
address for notices herein, and acknowledges that service so made shall be
deemed to be completed upon actual delivery thereof (whether accepted or
refused). Each party further consents and agrees
24
that venue of any action instituted under this Agreement shall be proper solely
in the jurisdiction where the Land is located, and hereby waives any objection
to such venue.
O. Waiver of Trial by Jury. The parties hereby irrevocably waive their
respective rights to a jury trial of any claim or cause of action based upon or
arising out of this Agreement. This waiver shall apply to any subsequent
amendments, renewals, supplements or modifications to this Agreement. In the
event of litigation, this Agreement may be filed as a written consent to a trial
by the court.
P. No Recordation. In no event shall this Agreement or any document or
other memorandum related to the subject matter of this Agreement be recorded
without the consent of Seller.
Q. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original, but all
of which, when taken together, shall constitute one and the same instrument,
with the same effect as if all of the parties to this Agreement had executed the
same counterpart.
THE SUBMISSION OF THIS AGREEMENT FOR EXAMINATION IS NOT INTENDED TO NOR
SHALL CONSTITUTE AN OFFER TO SELL, OR A RESERVATION OF, OR OPTION OR PROPOSAL OF
ANY KIND FOR THE PURCHASE OF THE PROPERTY. IN NO EVENT SHALL ANY DRAFT OF THIS
AGREEMENT CREATE ANY OBLIGATION OR LIABILITY, IT BEING UNDERSTOOD THAT THIS
AGREEMENT SHALL BE EFFECTIVE AND BINDING ONLY WHEN A COUNTERPART HEREOF HAS BEEN
EXECUTED AND DELIVERED BY EACH PARTY HERETO AND THE DEPOSIT IS DELIVERED TO THE
TITLE COMPANY.
BALANCE OF PAGE INTENTIONALLY LEFT BLANK.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SELLER:
WATERTON RAINTREE, LLC,
a Delaware limited liability company
By: Waterton Residential Property Fund II, L.P.
Its managing member
By: Waterton Fund II Managers, L.P.
Its general partner
By: VS Managers, L.L.C.
Its general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Member
BUYER:
KelCor, INC.,
a Missouri corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
ADDENDUM TO PURCHASE AND SALE AGREEMENT
Disclosure of Information on Lead-Based
Paint and/or Lead-Based Paint Hazards
Lead Warning Statement
Every purchaser of any interest in residential real property on which a
residential dwelling was built prior to 1978 is notified that such property may
present exposure to lead from lead-based paint that may place young children at
risk of developing lead poisoning. Lead poisoning in young children may produce
permanent neurological damage, including learning disabilities, reduced
intelligence quotient, behavioral problems, and impaired memory. Lead poisoning
also poses a particular risk to pregnant women. The seller of any interest in
residential real property is required to provide the purchaser with any
information on lead-based paint hazards from risk assessments or inspections in
the seller's possession and notify the purchaser of any known lead-based paint
hazards. A risk assessment or inspection for possible lead-based paint hazards
is recommended prior to purchase.
Seller's Disclosure
Presence of lead-based paint and/or lead-based paint hazards (check (i) or (ii)
below):
| | Known lead-based paint and/or lead-based paint hazards are present in the
housing (explain).
___________________________________________________________________________
___________________________________________________________________________
|X| Seller has no knowledge of lead-based paint and/or lead-based paint hazards
in the housing.
Records and reports available to the seller (check (i) or (ii) below):
|X| Seller has provided the purchaser with all available records and reports
pertaining to lead-based paint and/or lead-based paint hazards in the
housing (list documents below).
Phase I ___________________________________________________________________
| | Seller has no reports or records pertaining to lead-based paint and/or lead
based paint hazards in the housing.
Purchaser's Acknowledgment (initial)
___ Purchaser has received copies of all information listed above.
___ Purchaser has received copies of the pamphlet "Protect Your Family From
Lead in Your Home".
___ Purchaser has (check (i) or (ii) below):
27
| | Received not less than a 10-day opportunity to conduct a risk assessment or
inspection for the presence of lead-based paint and/or lead-based paint
hazards.
| | Waived the opportunity to conduct a risk assessment or inspection for the
presence of lead-based paint and/or lead based paint hazards.
Agent's Acknowledgement (initial)
___ Agent has informed the Seller of the seller's obligations under 42 U.S.C.
4852d and is aware of his/her responsibility to ensure compliance.
Certification of Accuracy
The following parties have reviewed the information above and certify, to
the best of their knowledge, that the information they have provided above is
true and accurate.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
28
SELLER: WATERTON RAINTREE, LLC,
a Delaware limited liability company
WATERTON RAINTREE, LLC,
a Delaware limited liability company
By: Waterton Residential Property Fund II, L.P.
Its managing member
By: Waterton Fund II Managers, L.P.
Its general partner
By: VS Managers, L.L.C.
Its general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Member
Date: May 8, 2001
PURCHASER: KelCor, INC.
a Missouri corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President
Date: June 7, 2001
29
PURCHASE AGREEMENT
EXHIBIT LIST
Exhibit A - Description of Land
Exhibit B - Inventory of Tangible Personal Property
Exhibit C - Form of Deposit Escrow Agreement
Exhibit D - Property Documents
Exhibit E - Form of Deed
Exhibit F - Form of ▇▇▇▇ of Sale, Assignment and Assumption
Exhibit G - Form of Certificate of "Non-Foreign" Status
Exhibit H - Form of Notice to Tenants
Exhibit I - Rent Roll
Exhibit J - Exceptions to Seller's Representations and Warranties
Exhibit K - List of Service Contracts
EXHIBIT A
DESCRIPTION OF LAND
▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, and Addition to the City of Little Rock, Pulaski
County, Arkansas, as shown on plat recorded in Plat Book 32, Page 19, records of
Pulaski County, Arkansas.
And
▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, an Addition to the City of Little Rock, Pulaski
County, Arkansas, as shown on plat recorded in Plat Book 32, Page 19, records of
Pulaski County, less and except that part described and platted as ▇▇▇ ▇▇, ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, an Addition to the City of Little Rock, Pulaski County, Arkansas,
as shown on plat recorded as Plat No. A-774, records of Pulaski County,
Arkansas.
And
All of that part of the lands dedicated as right of way for Raintree Lane by
said plat of White Rock Terrace Addition recorded in Plat Book 32, Page 19,
records of Pulaski County, Arkansas.
And
The North Half of the forty (40) foot street right of way, closed by City
Ordinance No. 14,125, filed as Instrument No. 81-40181, records of Pulaski
County, Arkansas.
All being described as follows: Beginning at the Northwest corner of said ▇▇▇ ▇
(▇▇▇▇▇ ▇▇▇▇▇▇▇▇), ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ degrees 55 minutes 30 seconds East, along the
north corner of said Lot 1, 458.76 feet to the Northeast corner of said Lot 1
(Pagis Monument); thence South 02 degrees 04 minutes 30 seconds West, 15.0 feet;
thence South 87 degrees 55 minutes 30 seconds East, 742.6 feet to the Northeast
corner of said Lot 2; thence South 01 degree 19 minutes 30 seconds West along
West right of way line of Brookside Drive, 256.74 feet to the the Northeast
corner of Lot 2A; thence North 88 degrees 08 minutes 30 seconds West along the
North line of said lot 2A, a distance of 300.2 feet; thence South 63 degrees 51
minutes 30 seconds West along said Northerly line of Lot 2A a distance of 418.5
feet; thence North 88 degrees 08 minutes 30 seconds West along said Northerly
line of Lot 2A a distance of 109.73 feet; thence South 49 degrees 51 minutes 30
seconds West along said Northerly line of Lot 2A a distance of 40.2 feet; thence
South 30 degrees 19 minutes 50 seconds East along the Westerly line of said Lot
2A, a distance of 156.92 feet to the Southwest corner of said lot 2A; thence
South 01 degree 51 minutes 30 seconds West, 20.00 feet; thence North 88 degrees
08 minutes 30 seconds West, 178.06 feet; thence North 87 degrees 51 minutes 30
seconds West, 295.49 feet to the East right of way line of Reservoir Road;
thence North 01 degree 28 minutes 30 seconds East along said East right of way
line of Reservoir Road a distance of 651.03 feet to the point of beginning. Less
and except White Rock Lane right of Way.
EXHIBIT B
INVENTORY OF TANGIBLE PERSONAL PROPERTY
EXHIBIT C
FORM OF DEPOSIT ESCROW AGREEMENT
Escrow Agreement among Seller, Buyer and Escrow Holder.
RECITAL
Seller and Buyer have entered into the Purchase Agreement dated effective
as of May 4, 2001 for the Property. In connection with the transactions
contemplated by the Purchase Agreement, Buyer and Seller have requested Escrow
Holder to hold the Escrow Deposit (as defined in the Purchase Agreement) under
such Purchase Agreement in escrow in accordance with the terms of this
Agreement.
NOW THEREFORE, in consideration of the covenants herein and other valuable
consideration, Seller, Buyer and Escrow Holder agree as follows:
1. Definition of Terms - Throughout this Agreement the following terms
shall be defined as indicated.
Term Definition
---- ----------
Seller Waterton Raintree, LLC
Seller's Address c/o Waterton Associates, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Buyer KelCor, Inc.
Buyer's Addresses ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Escrow Holder New York Land Services, Inc.
Address of Escrow Holder ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Purchase Agreement Dated effective as of June 7, 2001
Property See Annex A attached hereto
Initial Escrow Deposit $50,000
Additional Escrow Deposit: $100,000
Date of this Escrow Agreement June 7, 2001
2. Receipt of Escrow Check - Escrow Holder acknowledges receipt of the
check or payment representing the Initial Escrow Deposit under the Purchase
Agreement. If Buyer delivers the Due Diligence Notice (as such term is defined
in the Purchase Agreement), Buyer is obligated to deliver the Additional Escrow
Deposit to Escrow Holder (the Initial Escrow Deposit, Additional Escrow Deposit
and any interest accrued thereon is hereinafter called the "Deposit"). Escrow
Holder agrees to hold the Deposit on the terms and conditions set forth in this
Agreement.
3. Disposition of Contract Deposit - Escrow Holder shall hold and dispose
of the Deposit in accordance with the terms of this Agreement or in accordance
with any instruction or instructions which shall be signed jointly by both
Seller and Buyer, or in accordance with separate instructions of like tenor
signed by Seller and Buyer. Seller and Buyer hereby instruct and authorize
Escrow Holder to invest the Deposit in any of the following: (i) United States
Treasury obligations; (ii) United States Treasury-backed repurchase agreements
issued by a major national money center banking institution reasonably
acceptable to Seller; or (iii) such other investments as may be reasonably
acceptable to Seller and Buyer. If Escrow Holder shall receive an instruction
(hereinafter the "Instruction") with respect to the Deposit, or any part
thereof, from Seller but not from Buyer, or from Buyer but not from Seller (the
party giving the Instruction being hereinafter referred to as the "Instructing
Party" and the party which shall not have given the Instruction being
hereinafter referred to as the "Non-Instructing Party"), Escrow Holder shall
transmit a copy of the Instruction received from the Instructing Party to the
Non-Instructing Party. Escrow Holder shall not act in accordance with the
Instruction unless and until the Non-Instructing Party shall notify Escrow
Holder in writing that Escrow Holder is to comply with the Instruction. If the
Non-Instructing Party shall advise Escrow Holder not to comply with the
Instruction, Escrow Holder shall not act in accordance with the Instruction, but
may thereafter either
(a) act solely in accordance with any of the following:
(i) a new Instruction signed jointly by Seller and Buyer;
(ii) separate Instructions of like tenor from each of Seller and
Buyer;
(iii)a certified copy of an arbitrator's award issued under the
rules of the American Arbitration Association as to which
Escrow Holder shall have received an opinion of a law firm
satisfactory to Escrow Holder in its sole and absolute
discretion that such award is final beyond appeal; or
(iv) a certified copy of a judgment of a court of competent
jurisdiction as to which Escrow Holder shall have received
an opinion of a law firm satisfactory to Escrow Holder in
its sole and
absolute discretion that such award is final beyond
appeal; or
(b) deposit the Deposit with a court selected by Escrow Holder and in
such event all liability and responsibility of Escrow Holder
shall terminate upon such deposit having been made.
4. Responsibility - Escrow Holder shall not be bound in any way by the
Purchase Agreement or any other agreement between Seller and Buyer, whether or
not it has knowledge thereof, and Escrow Holder's only duties and
responsibilities shall be to hold and to dispose of the Deposit in accordance
with the terms of this Agreement.
5. Notice - Any notice, report, demand or instruction required or permitted
under this Agreement shall be deemed to have been sufficiently transmitted,
delivered, given or served for all purposes if delivered by nationally
recognized overnight courier service which provides a receipt to the parties at
their addresses hereinabove set forth (if to Seller, with a copy to Pircher,
▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Real
Estate Notices (EJML); if to Purchaser, with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 4324
Belleview, Suite 201,Kansas City, MO. 64111, or at such other address as a party
may hereafter designate by written notice as herein provided. The effective date
of delivery or transmittal of a notice, report, demand or instruction shall be
the actual date that delivery is effected.
6. Miscellaneous - This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois and shall bind and inure to
the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. This Agreement may not be changed or
amended except by a writing signed by each of the parties hereto and Escrow
Holder.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
SELLER:
WATERTON RAINTREE, LLC
a Delaware limited liability company
By: _________________________________________
Name:________________________________________
Title:_______________________________________
BUYER:
KelCor Inc.
a Missouri corporation
By: _________________________________________
Name:________________________________________
Title:_______________________________________
ESCROW HOLDER:
New York Land Services, Inc.
By: _________________________________________
Name:________________________________________
Title:_______________________________________
EXHIBIT D
PROPERTY DOCUMENTS
1. Existing ALTA/ACSM survey of the Property.
2. All architectural drawings and specifications in the possession of Seller
or its property manager, relating to the Property including CAD drawings
and those affecting approved or permitted improvements not yet built, or
partially built.
3. Evidence in the possession of Seller or its property manager that the
present structure, use, operation and maintenance of the Property is
authorized by, and in compliance with and governmental regulations
including, but not limited to, certificates of occupancy, permits and
licenses.
4. Annual operating (i.e., income and expense) statements and a record of
capital expenditures for the Property for the last two (2) years and the
current partial year.
5. All assessments and bills affecting the Property (including, without
limitation, special assessments) for the preceding two (2) years and the
current partial year for real estate, personal property and any other
taxes, for special assessments, and for water, sewer and other charges, and
a summary of any contested tax assessments.
6. The current Rent Roll for the Property in the form of Exhibit I to this
Agreement.
7. All service and other contracts (excluding property management agreements
which will be terminated as of the Closing Date).
8. Copies of all engineering and physical inspection reports in Seller's
possession (or the possession of its property manager), including, without,
limitation all materials relating to any termite inspections.
9. Copies of all warranties and guarantees on property which Seller shall
transfer to Buyer at closing, all of which shall be located at the Property
on the closing date.
10. The Loan Documents
EXHIBIT E
FORM OF DEED
[OBSERVE STATE REQUIREMENTS AND CUSTOMS]
EXHIBIT F
FORM OF ▇▇▇▇ OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
FOR VALUABLE CONSIDERATION, receipt and adequacy of which is hereby
acknowledged, as of the date hereof (the "Effective Date"), the undersigned,
Waterton Raintree, LLC, a Delaware limited liability company ("Assignor"),
hereby sells, transfers, assigns and conveys to __________________________, a
___________________ ("Assignee"), all right, title and interest of Assignor in
and to the "Personal Property", the "Tenant Leases" and the "Intangible
Property", as each of the foregoing is defined in that certain agreement
("Purchase Agreement") captioned "PURCHASE AGREEMENT", dated as of April __,
2001, by and between Assignor and Assignee, providing for, among other things,
the conveyance of the Personal Property, the Tenant Leases, and the Intangible
Property. Unless otherwise defined herein, all terms used in a capitalized
manner herein shall have the meaning set forth in the Purchase Agreement.
The covenants, agreements, representations, warranties, indemnities and
limitations provided in the Purchase Agreement with respect to the property
conveyed hereunder (including, without limitation, the limitations of liability
provided in Paragraphs 3, 8, 9 and 11B of the Purchase Agreement), are hereby
incorporated herein by this reference as if herein set out in full and shall
inure to the benefit of and shall be binding upon Assignee and Assignor and
their respective successors and assigns.
This ▇▇▇▇ of Sale, Assignment and Assumption is made subject to the title
exceptions approved or deemed approved by Assignee pursuant to Paragraph 4 of
the Purchase Agreement.
This ▇▇▇▇ of Sale, Assignment and Assumption may be executed in one or more
identical counterparts, each of which such counterpart shall be deemed an
original for all purposes and all such counterparts collectively consisting of
one such ▇▇▇▇ of Sale, Assignment and Assumption.
As of the Effective Date, Assignee hereby accepts the foregoing ▇▇▇▇ of
Sale, Assignment and Assumption and hereby agrees to assume and discharge, in
accordance with the terms thereof, all of the burdens and obligations of
Assignor relating to the Tenant Leases and Intangible Property first arising and
accruing on and after the Effective Date; subject, however, to any provisions in
the Tenant Leases which limit the liability of the lessor thereunder.
IN WITNESS WHEREOF, Assignor and Assignee have executed this ▇▇▇▇ of Sale,
Assignment and Assumption as of __________, 2001.
ASSIGNOR:
______________________________________________,
a _____________________________________________
By: ___________________________________________
Name:__________________________________________
Title:_________________________________________
ASSIGNEE:
______________________________________________,
a _____________________________________________
By: ___________________________________________
Name:__________________________________________
Title:_________________________________________
EXHIBIT G
FORM OF CERTIFICATE OF NON-FOREIGN STATUS
_________
FEDERAL FIRPTA CERTIFICATE
Section 1445 of the Internal Revenue Code provides that a transferee of a
U.S. real property interest must withhold tax if the transferor is a foreign
person. To inform __________________________, a ___________________ ("Buyer"),
that withholding of tax is not required upon the disposition of a U.S. real
property interest by _______, ____, a _______________ ("Seller"), the
undersigned hereby swears, affirms and certifies the following on behalf of
Seller:
1. Seller 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).
2. Seller's U.S. employer identification number is ____________.
3. Seller's office address is:
___________________________________
___________________________________
___________________________________
Attention: ________________________
4. Seller understands that this certification 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.
Under penalties of perjury, the undersigned declares that he has examined
this certification and to the best of his knowledge and belief it is true,
correct and complete, and he/she further declares that he has the authority to
sign this document on behalf of Seller.
Executed as of the _____ day of _________, 2001.
______________________________________________,
a _____________________________________________
By: ___________________________________________
Name:__________________________________________
Title:_________________________________________
[ADD STATE FORM AS NECESSARY OR APPROPRIATE]
EXHIBIT H
FORM OF NOTICE TO TENANTS
As of ____________, 2001
_________________________
_________________________
_________________________
Attention: _____________
Re: Your lease ("Lease") at
__________________________ (the "Property")
Dear Tenant:
We are pleased to announce that, as of the date of this letter, __________,
a ______________ ("Former Owner"), has sold its interest in the Property, the
landlord's interest in the Lease and the current security deposit balance of
$_______ under the Lease to __________________________, a ___________________
("New Owner"); and New Owner has assumed and agreed to perform all of the
landlord's obligations under the Lease on and after such date. Accordingly, all
of your obligations under the Lease on and after such date (including your
obligation to pay rent) shall be performable to and for the benefit of New
Owner, and its successors and assigns; and all of the obligations of the
landlord under the Lease on and after such date shall be the binding obligations
of New Owner, and its successors and assigns.
Unless and until you are otherwise notified in writing by New Owner, the
address of New Owner for all purposes under your Lease (including the giving of
any notices provided for in your Lease) is as follows:
_________________________
_________________________
_________________________
Attention: ______________
Until you are notified to the contrary by New Owner, the Property will be
managed by _________________________________________, and as in the past, your
rental payment is due and payable on the first of each month. Except as
otherwise notified by New Owner, rent should be made payable to
"_____________________" and sent to the above address.
Please feel free to call _____________________ (___) ___-____, if you have
any questions.
Very truly yours,
FORMER OWNER:
________________________________________,
a Delaware corporation
By: ___________________________________________
Name:__________________________________________
Title:_________________________________________
NEW OWNER:
______________________________________,
a _____________________________________________
By: ___________________________________________
Name:__________________________________________
Title:_________________________________________
EXHIBIT I
RENT ROLL
EXHIBIT J
EXCEPTIONS TO SELLER'S REPRESENTATIONS AND WARRANTIES
NONE
EXHIBIT K
LIST OF SERVICE CONTRACTS
Type Vendor Date of Contract
Locator Listing Agreement Apartment Hunters 1/30/01
Copier Central Copiers 8/23/00
Pest Control ▇▇▇▇▇ Exterminating Co. 10/06/97
Landscaping Associated Landscaping Services 5/09/94
Advertising Apartments For Rent 9/29/00
Advertising Southwestern ▇▇▇▇ 10/30/00
Telephone Service Southwestern ▇▇▇▇ Telephone 4/28/00
Laundry Aptomat, Inc. 4/1/00
