PURCHASE AND SALE AGREEMENT
(Costa del Sol Apartments)
This PURCHASE AND SALE AGREEMENT ("Agreement") is entered into as of
the ________ day of April, 1996.
1. Parties. The parties to this Agreement are as follows:
Walden Residential Properties, Inc., a Maryland corporation,
maintaining its principal office at One Lincoln Center, 5400 LBJ Freeway, Suite
400, Dallas, Texas 75240.
IBEX Costa del Sol Corp., maintaining offices at c/o IBEX Capital
Group, 2333 Ponce de Leon Boulevard, Suite 650, Coral Gables, Florida 33134.
2. Definitions. As used in this Agreement, the following terms
shall have the meanings hereinafter set forth in this Paragraph:
(a) Additional Earnest Money: An amount equal to $50,000
in cash, together with all earnings (if any) thereon.
(b) Agencies: All governmental agencies having
jurisdiction over the construction, zoning and operation of the Property.
(c) Applicable Environmental Laws: Any and all applicable
laws pertaining to health or the environment, including, without limitation,
the Superfund Reauthorization and Amendments Act of 1986 ("SARA"), the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
("CERCLA"), the Resource Conservation and Recovery Act of 1976 ("RCRA"), the
Texas Water Code, the Texas Solid Waste Disposal Act, and the Texas Toxic
Substances Control Act ("TSCA"), as well as any and all other laws, ordinances,
rules and/or regulations created or imposed by any governmental authority
having jurisdiction with respect to the Property, whether local, state or
federal, pertaining to environmental regulation, contamination, cleanup or
disclosure, as now existing and/or as hereafter amended.
(d) Appurtenant Interests: All of the Seller's interest
in and to the appurtenances to the Land and in and to all streets, alley and
other public ways adjacent thereto.
(e) Closing: The consummation of the transfer of title
to the Property as contemplated hereunder and payment of the consideration
thereof in the manner provided at Paragraph 8 hereof.
(f) Current Rent Roll: The current schedule attached
hereto as Exhibit
G, dated not more than thirty (30) days prior to the Effective Date, setting
forth, as of the date hereof, the Tenant Leases.
(g) Earnest Money Deposit: The Initial Deposit together
with the Additional Earnest Money.
(h) Effective Date: The date upon which this Agreement,
executed by both Purchaser and Seller, shall have been delivered to Title
Insurer together with the Initial Deposit.
(i) Excluded Personal Property: The tangible personal
property listed at Exhibit F hereto.
(j) Existing Indebtedness: All indebtedness currently
outstanding and secured by, or related to, the Property, all as more
particularly described on Schedule IV attached hereto and incorporated herein
by reference for all purposes.
(k) Existing Lender(s): Whether one or more, the
holder(s) of the Existing Indebtedness.
(l) Existing Lender Estoppel Letter(s): Whether one or
more, the executed letters obtained from the Existing Lender(s) in form and
content reasonably acceptable to Purchaser, including verification of the
absence of defaults under the Existing Indebtedness, the amount required to be
paid at Closing (including penalties and interest), and that the Existing
Lender will accept such payment in full satisfaction of the Existing
(m) Feasibility Period: The period commencing with the
delivery to Purchaser of the documents and other items listed in Schedule I
attached hereto and incorporated herein by reference, and ending on the
forty-fifth (45th) day thereafter.
(n) Hazardous Materials: Any toxic materials, hazardous
waste or hazardous substance as these terms are defined in the Applicable
(o) Improvements: All of the buildings, fixtures and
improvements located on the Land, together with all mechanical systems,
fixtures and equipment, electrical systems, fixtures and equipment, plumbing
fixtures, systems and equipment, heating fixtures, systems and equipment and
air conditioning fixtures, systems and equipment installed in, belonging to or
constructed as components of the Improvements.
(p) Included Personal Property: All tangible personal
property listed at Exhibit E hereto, together with, for each apartment unit
comprising the Improvements, whether or not thus listed, all existing (or
replacements thereof as required under the terms
PURCHASE AND SALE AGREEMENT PAGE 2
of this Agreement) carpeting, window coverings, ranges, ovens, dishwashers,
ceiling fan(s), bookshelves, range hoods, refrigerators, heating units, air
conditioning units, sinks and garbage disposals, and washers and dryers, the
same to be in the same condition at Closing as existed at the expiration of the
Feasibility Period, normal wear and tear excepted or as otherwise provided
under the terms of this Agreement, and all other furniture, fixtures,
equipment, machinery, supplies and other tangible personal property and all
leases of tangible personal property located on the Land and Improvements and
belonging to the Seller and used in the normal operation and maintenance of the
Land and Improvements.
(q) Initial Deposit: An amount equal to $50,000 in cash,
to be delivered by Purchaser to Title Company on or before the Effective Date,
together with all earnings (if any) thereon.
(r) Land: The land more particularly described at
(s) Intentionally Deleted.
(t) Material Damage: Damage to the Property of a nature
such that the cost of restoring the Improvements located on Property to its
condition prior to the fire or other casualty, as mutually agreed by the Seller
and Purchaser or as otherwise determined in accordance with this Agreement,
(but in full compliance with all then applicable building, health, zoning, and
similar laws, ordinances, and regulations) will exceed an amount equal to two
percent (2%) of the Purchase Price, whether or not such damage is covered by
(u) Other Properties. The parcels of real property more
commonly known as the Villas of St. Moritz Apartments and the Summer Oaks
Apartments pursuant to the Purchase and Sale Agreements of even date with this
Agreement executed by and between Purchaser, as purchaser, and certain
affiliates of Seller, as sellers, all as more particularly described in
Schedule III attached hereto and incorporated herein by reference.
(v) Owner Policy: An Owner Policy of Title Insurance
issued by the Title Insurer in the standard form promulgated by the Texas State
Board of Insurance, as modified pursuant to Paragraph 6(d) hereof.
(w) Permitted Title Exceptions: Any items to which
Purchaser does not object within the time period provided in Paragraph 6(c)
hereof or which Purchaser approves as otherwise provided in this Agreement.
(x) Plans and Specifications: The plans and
specifications, if any, with respect to the Property.
PURCHASE AND SALE AGREEMENT PAGE 3
(y) Property: The parcel of real property to be
purchased and sold pursuant to this Agreement and comprised of the Land,
Improvements, Included Personal Property, Appurtenant Interests, Tenant Leases
and all other property described in Paragraph 4 hereof.
(z) Proration Date: 12:01 a.m., Central Daylight Time, on
the date immediately preceding the date of Closing or such other date as shall
be specified in Paragraph 9 hereof.
(aa) Purchase Price: The total consideration to be paid
by Purchaser for the Property as set forth in Paragraph 5 hereof.
(bb) Purchaser: Walden Residential Properties, Inc., a
Maryland corporation, together with any designee thereof described in Paragraph
(cc) Rent Roll: Collectively, the Current Rent Roll and
the Revised Rent Roll, or either of them as of the context may required.
(dd) Revised Rent Roll: A revision of the Current Rent
Roll dated not earlier than five (5) days prior to Closing.
(ee) Seller: IBEX Costa del Sol Corp.
(ff) Seller's Knowledge, Seller's Actual Knowledge, to the
Best of Seller's Knowledge. The current, actual knowledge of Jose F. Rosado,
Elmer Tague and Deborah Bruckner, without independent inquiry or investigation.
(gg) Service Contracts: All service or maintenance
contracts relating to the Property as described at Exhibit K hereto.
(hh) Street Rents: The rents for space in the Property
being offered to the public as of the date of this Agreement.
(ii) Intentionally Deleted
(jj) Survey: With respect to the Property, an on-the-
ground survey of the Land and Improvements prepared by a qualified, registered
public surveyor selected by Seller and reasonably acceptable to Purchaser and
the Title Insurer (and Purchaser hereby acknowledges that the Surveyor
described in Schedule II attached hereto is acceptable to Purchaser) (i)
containing a field note description of the Land which (A) establishes a
beginning point by reference to a permanent monument, (B) states the distances,
bearing and angles of all sides or boundaries of the Land, (C) if appropriate,
states the length of arc, central angle and radius of circle for arc, central
angle and radius
PURCHASE AND SALE AGREEMENT PAGE 4
of circle for arc and chord distance and bearing of all curving sides or
boundaries of the Land, (D) establishes a single perimeter description, and (E)
references all abutting or encroaching streets, roadways and fence lines,
including a statement of width, (ii) noting, by plat, the size and location of
all Improvements and other physical conditions affecting the Property, (iii)
noting, by plat, the size and location of all abutting or encroaching streets,
roadways and fence lines, (iv) noting, by plat, the size and location of all
encroachments or protrusions, (v) noting, by plat, the size, location and
recording data of all easements, ditches, rights-of-way, setback lines, curb
cuts and similar matters, (vi) locating any portion of the Land or Improvements
determined to be flood prone or within the 100-year flood plain under the Flood
Disaster Protection Act of 1973 or otherwise determined to be flood prone or
within the flood plain by the Federal Emergency Management Agency, the United
States Army Corps of Engineers, a unit or department of the United States, the
engineer preparing the Survey, or any other state or federal agency, (vii)
certifying the number of acres of land in the Land, both as to total acreage
and as to net acreage, (viii) certified by the surveyor as conforming to the
current Texas Surveyor's Association Standards and Specifications for a
Category 1A Condition II Survey, (ix) being dated or recertified as of a date
not earlier than the Effective Date, and (x) containing a certificate
substantially in the form attached hereto as Exhibit C.
(kk) Tenant Leases: The lease agreements relating to the
Land and Improvements and existing at Closing.
(ll) Title Commitment: A Commitment for Title Insurance
issued by the Title Insurer in the standard form promulgated by the Texas State
Board of Insurance.
(mm) Title Insurer: Chicago Title Insurance Company, or
other title insurance company acceptable to Purchaser in its sole discretion,
acting through its agent, Safeco Land Title of Dallas, 1201 Elm Street, Suite
5220, Dallas, Texas 75270, Attn: L. Lamar Tims.
3. Agreement of Purchase and Sale. Subject to the terms and
conditions thereof and for the consideration of One Hundred and No/100 Dollars
($100.00) paid to Seller by Purchaser on the Effective Date, the receipt and
sufficiency of which hereby is acknowledged and which sum is nonrefundable to
Purchaser and in no event shall be applied against the Purchase Price and for
the Purchase Price set forth at Paragraph 5, Purchaser hereby agrees to
purchase, and Seller hereby agrees to sell, the Property, all as more
particularly described at Schedule III attached hereto and incorporated herein
4. Property to be Sold. The Property to be purchased hereunder
by Purchaser shall be comprised of (i) the Land, (ii) the Improvements, (iii)
all Included Personal Property, but not the Excluded Personal Property, (iv)
the Appurtenant Interests, (v) the Tenant Leases, and (vi) all of Seller's
right, title and interest, if any, in and to (A)
PURCHASE AND SALE AGREEMENT PAGE 5
warranties covering the Included Personal Property and the Improvements, (B)
the trademarks or tradenames set forth on Schedule III attached hereto and
incorporated herein by reference for all purposes; (C) the Service Contracts
(to the extent assignable and not terminated as provided elsewhere in this
Agreement) and (D) all licenses, permits, approvals and other intangible
property rights relating to the Property.
5. Purchase Price.
(a) Purchase Price. Subject to the adjustments provided
in subparagraphs (b) and (c) below and elsewhere in this Agreement, the
Purchase Price shall be SEVEN MILLION TWO HUNDRED FIFTY THOUSAND AND NO/100
DOLLARS ($7,250,000), payable as follows:
(i) Earnest Money Deposit. $100,000, payable by
delivery of the Earnest Money Deposit to the Title Insurer in accordance with
this Agreement; and
(ii) Cash at Closing. $7,250,000, payable in cash
at Closing, less (A) the amount of the Existing Indebtedness and (B) any sum
paid Seller at Closing from the Earnest Money Deposit; and
(iii) Intentionally Deleted.
(iv) Intentionally Deleted.
(b) Occupancy Reserve. In the event that this Agreement
is not otherwise terminated previously, the Title Insurer shall withhold from
proceeds to Seller at Closing an amount ("Reserve") equal to difference between
$117,144 ("Guaranteed Revenue") and the actual monthly gross rental for the
Property established by certified rent roll on the date ("Estimation Date")
which is thirty (30) days prior to the Closing Date ("Estimated Revenue")
multiplied by six (6). (e.g., Reserve = [Guaranteed Revenue-Estimated Revenue]
x 6). Purchaser shall deposit the Reserve in an interest-bearing escrow
account ("Reserve Account") held by Title Insurer or such other independent
party as the parties may mutually select for the six (6) month period ("Reserve
Period") following the Closing Date. During the Reserve Period, Purchaser
shall have the right to draw from the Reserve Account on a monthly basis an
amount equal to the shortfall between the Guaranteed Revenue and the actual
rental revenues for the Property for the applicable month pursuant to an Escrow
Agreement in form and content to be agreed upon by the parties with in fifteen
(15) days following the Effective Date. At the expiration of the Reserve
Period, Title Insurer shall deliver to Seller the remaining balance of the
Reserve Account. For purposes of this paragraph, the term "actual monthly
gross rental" shall mean the aggregate of the monthly rental amount established
in the Leases for units which are occupied as reflected on the Rent Roll in
effect on the Estimation Date. Such actual monthly gross rental amount shall
not be reduced by rent abatement occurring prior to or
PURCHASE AND SALE AGREEMENT PAGE 6
in the month of the Closing Date or prepayment of rent under such Leases.
(c) Additional Consideration. In the event that this
Agreement is not terminated previously, if the Estimated Revenue exceeds the
Guaranteed Revenue ("Surplus") as of the Closing Date, Purchaser shall deliver
to Seller at Closing an amount equal to the Surplus multiplied by 12 multiplied
by a factor of 7.5 (e.g., [Surplus x 12] x 7.5) (the "Additional
Consideration"), the product of which shall not exceed $351,360.
6. Evidence of Title.
(a) Title Commitment. Within twenty (20) days from and
after the Effective Date, Seller, at Seller's sole expense, shall order and
deliver, or cause to be delivered, to Purchaser or Purchaser's attorney, a
current Title Commitment from the Title Insurer covering the Property, in the
amount of the Purchase Price covering the Land and Improvements located on the
Property. The Title Commitment shall be issued as of or subsequent to the
Effective Date and shall include good, legible copies of all documents
constituting exceptions to the Seller's title as reflected in the Title
Commitment. The Title Commitment shall reflect good and indefeasible fee
simple title vested in the Seller.
(b) Survey. Within thirty (30) days from the Effective
Date, Seller, at Seller's sole expense, shall order and deliver, or shall cause
to be delivered, to Purchaser or Purchaser's attorney, the Survey of the Land
and Improvements. The Survey shall be sufficient to permit the Title Insurer
to modify the standard printed exception in the Owner Policy pertaining to
discrepancies, conflicts, shortages in area or boundary lines, encroachments,
overlapping of improvements or similar matters, as provided below.
(c) Review. Purchaser shall have through and including
the expiration of the Feasibility Period in which to review the Title
Commitment, Survey and exception documents and to deliver to Seller in writing
such objections as Purchaser may have to anything contained or set forth
therein. Any items to which Purchaser does not object to prior to the
expiration of the Feasibility Period or which Purchaser accepts as otherwise
provided herein shall be Permitted Title Exceptions. Seller may, at its sole
discretion, elect to attempt to cure any of Purchaser's title and survey
objections. If Seller so elects, Seller shall have a period of thirty (30)
days from and after receipt of Purchaser's written objections within which to
attempt to cure same. In the event that Seller fails or refuses to cure such
objections within such thirty (30) day period, Purchaser shall have the right
to terminate this Agreement and receive an immediate return of the Earnest
Money Deposit or proceed to Closing subject to such objections which shall be
deemed waived and shall become Permitted Title Exceptions.
(d) Owner Policy. At Closing, the special warranty deeds
to the Land and Improvements referred to in Subparagraph 8(b)(i) hereof shall
be recorded, and Seller shall furnish or cause to be furnished to Purchaser, at
Seller's sole expense, the Owner
PURCHASE AND SALE AGREEMENT PAGE 7
Policy covering the Property, insuring good and indefeasible fee simple title
to be vested in Purchaser and insuring Purchaser's title to the Property in an
amount equal to the Purchase Price for the Property, subject only to the
Permitted Title Exceptions and the standard printed exceptions, except that:
(i) the exception relating to restrictions
against the Property shall be endorsed by Title Insurer to read "None of
record" except for such restrictions as may be included in the Permitted Title
(ii) the exception relating to discrepancies,
conflicts, shortages in area, boundaries, encroachments, or overlaps shall be
modified, at Purchaser's sole cost and expense, by deleting such exception,
save any shortages in area; and
(iii) the exception relating to ad valorem taxes
shall except only to taxes owing for the current year of Closing and subsequent
years and subsequent assessments for prior years due to change in land usage or
ownership, not yet due and payable.
If Title Insurer is unable or unwilling to provide the Title Policy at
Closing, Purchaser shall accept in lieu thereof an endorsement to the Title
Commitment confirming that all requirements for issuance of the Title Policy in
the form required by this Agreement have been satisfied.
(e) Evidence of Reinsurance. In the event that the
capital and surplus of the Title Insurer, as reflected on its most recent
annual statement, are less than $30,000,000, Seller also shall deliver to
Purchaser at Closing evidence reasonably satisfactory to Purchaser to the
effect that a title insurance company having capital and surplus of more than
said sum has reinsured all liabilities of the Title Insurer under the aforesaid
(f) Remedies of Purchaser. If Seller is unable to
furnish Purchaser the Title Commitment pursuant to Subparagraph 6(a) or the
Owner Policy in the manner provided at Subparagraph 6(d), then, at Purchaser's
sole discretion, Purchaser may cancel this Agreement and shall have the right
to the return of the Earnest Money Deposit, and the parties shall have no
further obligation to each other, except as is expressly provided in
Subparagraph 16(c). Seller shall have no liability for its inability to
deliver the Title Commitment or Owner Policy.
(g) Uniform Commercial Code Search. Seller also shall
deliver at Closing, at Seller's cost and expense, Uniform Commercial Code
financing statement searches covering Seller and any general partner of Seller
for the state constituting the situs of the Property and the county in which
the Property is located showing that all of the Included Personal Property is
free and clear of all liens and encumbrances other than the
PURCHASE AND SALE AGREEMENT PAGE 8
Permitted Title Exceptions and also shall deliver copies of receipts showing
payment of all taxes levied and payable on the Property.
7. Covenants, Representations and Warranties of Seller. Seller
and Purchaser agree that, except as expressly provided herein, the Property is
being conveyed to Purchaser in "AS IS" condition, without representation or
warranty by Seller. Notwithstanding the foregoing, as an inducement to
Purchaser to enter into and perform this Agreement, Seller represents and
warrants to, and covenants with, Purchaser, as of the date of this Agreement
and thereafter in accordance with Paragraph 7(w) as follows:
(a) Legal and Beneficial Title. Seller is the sole
person holding good and indefeasible fee simple title to the Property, free and
clear of all liens and encumbrances except as set forth in the Title
(b) Due Authorization and Execution and Validity, Binding
Effect and Enforceability. This Agreement has been duly authorized and
executed by Seller and is a valid and binding obligation of, and is
enforceable, in accordance with its terms, against Seller. The documents
delivered to Purchaser at Closing will be duly authorized and executed by
Seller and will be a valid and binding obligation of, and will be enforceable
in accordance with their terms against, Seller.
(c) The Rent Roll. Attached hereto as Exhibit G is the
Current Rent Roll. Not earlier than five (5) days prior to Closing, Seller
shall deliver a Revised Rent Roll to Purchaser, certified by Seller in writing
as true and correct. The Revised Rent Roll shall set forth the following:
(i) the name of each tenant;
(ii) the lease commencement and expiration dates;
the nature of any renewal options;
(iii) the amount of any security deposits;
(iv) a list of vacant apartment units;
(v) the size and type of each vacant unit; and
(vi) the amount and description of any concessions
and any rights of first refusal.
(d) Representations as to Rent Roll. Except as expressly
set forth in the Rent Roll:
PURCHASE AND SALE AGREEMENT PAGE 9
(i) All of the information contained on the Rent
Roll is true, correct and complete as of its date, in all material respects.
(ii) No rent under any Tenant Lease has been, or
prior to Closing will be, prepaid for a period in excess of thirty (30) days.
(iii) No tenant has any right of first refusal or
option with respect to the leasing of any portion of the Property.
(iv) No one, including any tenant, has any option
or right of first refusal to purchase the Property or any part thereof.
(v) To the best of Seller's knowledge, there are
no oral agreements with anyone, including tenants, with respect to the Property
or any portion thereof, except as set forth in a Rent Roll or at Exhibit K.
(vi) All of the present Tenant Leases for rental
space in the Improvements are in writing, on a standard form (which form is
attached hereto as Exhibit N) and, to the best of Seller's knowledge, are (A)
in full force and effect and (B) valid and binding agreements of, and fully
enforceable in accordance with their terms against, the tenants, and (C) duly
executed by all parties.
(vii) The Tenant Leases will not be amended in any
way after the date hereof, other than in the ordinary course of business,
without the prior, written consent of Purchaser, which consent shall not be
unreasonably withheld. Purchaser, unless it otherwise shall advise Seller in
writing within five (5) days following Seller's request for such consent, shall
be deemed to have consented to any such amendment.
(viii) To Seller's knowledge, except as stated in
the Rent Roll, there are no uncured defaults on the part of any party to any of
the Tenant Leases, and Seller is in material compliance with all of lessor's
(ix) None of the rentals due or to become due
under the Tenant Leases will be assigned, encumbered, or subject to any liens
at the Closing other than the Permitted Title Exceptions.
(x) Except as set forth at Exhibit G, at the time
of Closing, all tenants will be paying charges for electricity consumed in
their space, including heating and air conditioning, on an individually metered
(e) Street Rents. The Street Rents are as follows:
PURCHASE AND SALE AGREEMENT PAGE 10
Unit Type Number Square Feet Monthly Rent
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
_____________ __________ ___________ $___________
Total __________ ___________ $___________
(f) Operating Statements. Attached at Exhibit I is the
most recent monthly statement of income and expense in connection with the
operation and maintenance of the Property. Statements for the preceding
fifteen (15) months shall be made available to Purchaser promptly upon request.
Such statements are unaudited and were prepared on an accrual basis of
accounting by an accountant employed by Seller. Seller agrees to make
available to Purchaser or its representatives, at Seller's office (or to
provide Purchaser with photocopies thereof upon request), all existing
supporting documentation for such statements in Seller's possession or control.
(g) Financial Statements. At least thirty (30) days prior
to Closing, Seller shall provide Purchaser with the then existing most current
audited financial statements of the Property.
(h) Compliance with Applicable Regulations.
(i) To the best of Seller's knowledge, there
exist no commitments or agreements between Seller and any of the Agencies
affecting the Property which have not been fully disclosed to Purchaser in
(ii) To Seller's knowledge, Seller has received no
notices and is unaware of any facts or conditions which, with notice or lapse
of time, would constitute uncured violations at the Property of any applicable
statute, ordinance or regulation, relating to the Property, its construction,
zoning or any occupancy thereof, nor, to the best of Seller's knowledge, are
there presently pending or threatened against Seller or against the Property
any judgments relating to any of the above matters, any judicial proceedings or
administrative actions or any state of facts which, to the best knowledge of
Seller, with notice or lapse of time, could reasonably be expected to give rise
to any such proceedings or actions.
(iii) To the best of Seller's knowledge, the
Property and Seller are not currently subject to (A) any existing, pending or
threatened investigation or inquiry by any governmental authority or (B) any
remedial obligations, under any Applicable Environmental Laws; and Seller has
not obtained and is not required to obtain, and Seller has no knowledge of any
reason Purchaser will be required to obtain, any permits, licenses, or similar
authorizations to occupy, renovate, operate or use any portion of the
PURCHASE AND SALE AGREEMENT PAGE 11
Property by reason of any Applicable Environmental Laws.
(iv) To the best of Seller's knowledge, no
Hazardous Materials are located on the Property. To the best of Seller's
knowledge, the Property does not contain any underground tanks for the storage
or disposal of Hazardous Materials. Further, to the best of Seller's
knowledge, (A) the Property during Seller's ownership has not been used for the
storage, manufacture or disposal of Hazardous Material, and (B) no written
complaint, order, citation or notice with regard to air emissions, water
discharges, noise emissions and Hazardous Materials, if any, or any other
Applicable Environmental Laws from the Agencies has been issued to and received
(v) If, prior to Closing, (A) Seller has received
any written notices from any of the Agencies, or (B) any legal action has been
instituted and served upon Seller relating to violations at the Property of
zoning, building, fire, rental controls or Applicable Environmental Laws or (C)
any written notice or advice from any current insurer of the Property or any
part thereof, requesting any improvements alterations, additions, corrections
or other work in, on or about the Improvements, whether related to the Property
or to the activities of any occupant thereof is received by Seller, the parties
shall agree in writing on an amount to be delivered to Title Insurer or such
other party agreed upon by Seller and Purchaser in escrow for the cost of
curing or eliminating any such items and the amount as so determined shall be
withheld from the proceeds of sale and shall be paid over to Seller upon
completion by Seller of such items. If the parties shall fail to agree on the
cost of curing or eliminating said items prior to Closing, either party shall
have the right to terminate this Agreement by giving written notice thereof to
the other not later than the date of Closing and, in such event, Purchaser
shall have the right to the return of the Earnest Money Deposit, and neither
party shall have any future obligations to the other, except for Purchaser's
surviving indemnity relating to inspections. The foregoing provision to the
contrary notwithstanding, if the notice is received or the action served within
fifteen (15) days of the Closing, Seller may elect, in its sole and absolute
discretion, to extend the Closing for a period not to exceed thirty (30) days
in order to attempt to cure or eliminate any such matter.
(i) Liens on Property. No action has been taken with
respect to work performed or delivery of material which would give rise to a
lien on the Property for which adequate provision for payment has not been
made. At Closing, there will be no claim in favor of any person or entity
which is or could become a lien on the Land, the Improvements, or the Included
Personal Property, arising out of the furnishing of labor or materials to the
Property for which adequate provision for payment has not been made; there will
be no unpaid assessments against the Property, except for Property taxes
assessed but not due and payable at the time of Closing; and there will be no
claim in favor of any person or entity (including the present management) for
any unpaid commissions or fees for leasing of the Property. In the event of any
such claims at Closing, Seller, at its option and in lieu of the foregoing,
either may (i) establish with the Title
PURCHASE AND SALE AGREEMENT PAGE 12
Insurer or Existing Lender an escrow of funds in an amount and upon conditions
reasonably acceptable to Seller and Purchaser, or (ii) provide a bond in favor
of Purchaser or Title Insurer or Existing Lender in such amounts, upon such
conditions and for such purposes as may be satisfactory to Purchaser, Seller
and Title Insurer or Existing Lender, in either case for the purpose of
providing for such claims and/or inducing the Title Insurer to insure
Purchaser's title to the Property free and clear of such claims.
(j) Insurance. To Seller's knowledge, the insurance
policies listed and described at Exhibit J are presently in force, and all such
policies or their equivalent will be maintained in force until Closing. Seller
will not renew, amend, or reduce the coverage under, or cancel, any existing
policy or procure any new policy without Purchaser's prior, written consent,
which shall not be unreasonably withheld or delayed. Purchaser, at Closing,
shall obtain its own insurance coverage. Seller has received no written
notices from any insurer of the Property or any part thereof requesting any
improvements, alterations, additions, correction or other work in, on or about
the Improvements, whether related to the Property or to the operation of any
occupant thereof, which have not been cured or satisfied.
(k) Pending or Threatened Litigation. There are no
lawsuits or legal proceedings instituted and served upon Seller or, to the best
of Seller's knowledge, threatened, regarding ownership, construction, use or
possession of the Property or any portion thereof.
(l) Inspection of Plans and Specifications, Reports and
Books and Records. The Property and the Plans and Specifications, all reports
(including but not limited to soil tests and construction inspection reports),
the books and records and all Tenant Leases and other documents related thereto
regarding the construction, management and operation of the Property in
Seller's possession or control shall be open to inspection by Purchaser or
Purchaser's agents during regular business hours from and after the Effective
Date, and Seller shall reasonably cooperate with Purchaser or its agents with
respect to the inspection of the Plans and Specifications, all reports, the
books and records, the Tenant Leases, the Property or the construction,
management and operation thereof. Such cooperation shall not be deemed to
include incurring any cost or expense.
(m) Maintenance of Property Until Closing.
(i) Until Closing, the Property will be managed,
operated and maintained, in the ordinary course of business and materially the
same manner in which the Property is currently being managed, operated and
maintained and Seller will not remove any fixtures, furnishings, equipment or
personalty subject to this Agreement, except for repair or replacement. In
addition, from and after the Effective Date, Seller agrees not to lease any
unit in the Property for an amount less than $25.00 below Street Rents.
PURCHASE AND SALE AGREEMENT PAGE 13
(ii) All vacant rental units shall be in
"market-ready" rentable condition as of the date of Closing; provided, however,
Seller and Purchaser acknowledge that rental units that are vacated within five
(5) business days prior to the date of Closing will be in varying conditions of
make-ready for leasing, as is ordinary in Seller's course of business. As to
any vacant units that are not in "market-ready" rentable condition as of the
date of the Closing, Purchaser and Seller understand and agree that Purchaser
shall be entitled to credit against the Purchase Price at Closing an amount
equal to $500.00 per unit which Seller and Purchaser agree is the amount
required to put in "market-ready" rentable condition any units that are not in
such condition as of the date of the Closing. For purposes of this paragraph,
the term "market-ready" shall mean units that are cleaned (including carpets),
painted, in good repair, with all appliances in good-working order. Purchaser
shall have the right to reinspect the Property during the period commencing not
earlier than five (5) days prior to the Closing and ending on the Closing
solely for purposes of verifying the maintenance of the Property in accordance
with the applicable provisions of this Agreement.
(n) Service Contracts.
(i) All Service Contracts are listed in Exhibit
K. Seller will not enter into any other service, operating or management
contracts relative to the Property that cannot be canceled on thirty (30) days'
notice, nor will Seller make, or agree to, prior to Closing, any material
change or modification to the contracts set forth in Exhibit K without the
prior, written consent of Purchaser which shall not be unreasonably withheld.
The agreement concerning the management of the Property currently in effect set
forth at Exhibit K shall be terminated effective on the date of Closing. After
the expiration of the Feasibility Period, provided Purchaser has not terminated
this Agreement and has delivered the Additional Earnest Money, Seller shall,
upon written notice from Purchaser, send termination notices with respect to
such cancelable Service Contracts specified by Purchaser.
(ii) Seller has no employees in connection with
the Property. Any persons who work at the Property (other than pursuant to
Service Contracts) are employees of the Seller's property manager pursuant to a
property management agreement which shall be terminated at Closing. Seller
agrees that benefits or compensation accrued prior to Closing, and due or
claimed to be due either before or after Closing, to employees or former
employees of the property manager shall constitute obligations of the property
manager only, and Seller agrees to indemnify and hold Purchaser harmless from
all such obligations and claims.
(o) Restrictions on Additional Indebtedness. Seller will
not borrow any money or do, or fail to do, any other act or thing which would
cause the Land, the Improvements or any Included Personal Property to become
pledged or otherwise utilized as collateral or in any way stand as security for
any indebtedness or obligation, other than
PURCHASE AND SALE AGREEMENT PAGE 14
as presently existing or in the ordinary course of business.
(p) Closing Not Constituting Breach. To Seller's
knowledge, the consummation of the transaction contemplated herein will not
result in the breach of any provision in any lease or other agreement affecting
(q) Access to Property. To Seller's knowledge, Seller
has received no written notices of the existence of any fact or condition which
would result in the termination or restriction of the current access from the
Property to any presently existing highways and roadways adjoining the Property
or to any sewer or other utility serving the Property.
(r) Improvements and Amenities.
(i) Description of Improvements and Amenities. A
description of the improvements and amenities of each Property is more
particularly set forth at Schedule V attached hereto and incorporated herein by
reference for all purposes, which, to Seller's knowledge, is materially
(ii) Utilities. To Seller's knowledge, utility
systems for the transmission of gas, telephone, electricity, storm and sanitary
services, and water are available at the property lines of the Property.
(s) Seller's Nonforeign Status. Seller is not a "foreign
person" within the meaning of Sections 1445 and 7701 of the Internal Revenue
Code of 1954, as amended; that is, Seller is not a nonresident alien, foreign
corporation, foreign partnership, foreign trust, or foreign estate (as those
terms are defined in the Internal Revenue Code of 1986, as now existing or
(t) Taxes and Assessments. All ad valorem taxes and
personal property taxes which are due and payable, together with all special
assessments for improvements to the Property have been paid in full.
(u) Exhibits. To Seller's knowledge, all exhibits
attached hereto are true and correct in all material respects.
(v) Seller's Affidavit at Closing. The representations,
warranties and covenants of the Seller contained in this Agreement or in any
document delivered to Purchaser pursuant to the terms of this Agreement
(whether in this Paragraph 7 or elsewhere) (i) shall be true and correct in all
material respects and not in default at the time of Closing, just as though
they were made at such time, and Seller shall deliver to Purchaser, at Closing,
an Affidavit to that effect, and (ii) in the event of a breach of such
representations, warranties or covenants prior to or at Closing, Purchaser
shall have the
PURCHASE AND SALE AGREEMENT PAGE 15
right to make a claim hereunder against Seller for a period of one (1) year
after the date as of which such Affidavit was delivered to Purchaser. The
foregoing provision and any other provision in this Agreement to the contrary
notwithstanding, the failure of any warranty or representation of Seller to be
true and correct due to events which arise between the date hereof and the
Closing Date which is in the ordinary course of business or beyond the
reasonable control of Seller shall not constitute a default or breach by
Seller. Instead, such change of condition, if material, shall constitute a
failure of condition precedent to Purchaser's obligations (a "Failure of
Condition"). For purposes of this provision, "material" shall mean changes
which in the aggregate adversely impact the Property by an amount greater than
one percent (1%) of the Purchase Price. In the event of a change of condition
which is not material, Seller shall be obligated to cure such condition and
shall be afforded a reasonable period of time to do so; or, Purchaser shall be
given a credit against the Purchase Price for the amount necessary to cure the
condition, as mutually agreed by the parties. In the event of a Failure of
Condition, Seller shall have the right, but not the obligation, to remedy such
change; and if Seller elects, in its sole discretion, to attempt to do so, it
shall have a reasonable period of time, but in no event shall such period
extend more than thirty (30) days subsequent to Closing. If Seller fails or
refuses to cure such Failure of Condition, Seller shall reimburse Purchaser for
Purchaser's reasonable out-of-pocket costs and expenses (including attorneys'
fees and expenses) incurred by Purchaser in connection with this Agreement not
to exceed in the aggregate one percent (1%) of the Purchase Price.
(w) Seller's Representatives. Seller represents and
warrants that during the entire period of Seller's ownership of the Property,
IBEX Capital Group ("ICG") has been the asset manager and that IBEX Management
Company Inc. ("IMC") and its assignee, IBEX Management Partners ("IMP"), have
been the property managers of the Property. Seller further warrants and
represents that during the entire period of Seller's ownership of the Property,
Jose F. Rosado has been the President and /or Chief Executive Officer of
Seller, ICG, IMP, and IMC; and that during the entire period of asset and
property management by ICG, IMP and IMC, Elmer Tague has been the Chief
Financial Officer of those entities; and that since February, 1991, Deborah
Bruckner has been a Vice-President of IMP and IMC and the individual primarily
responsible for the day-to-day supervision of management of the Property.
7A. Covenants, Representations and Warranties of Purchaser. As an
inducement to Seller to enter into and perform this Agreement, Purchaser makes
the following covenants, representations and warranties which covenants,
representations and warranties shall be true and correct in all material
respects on the date hereof and on the Closing Date, and shall be a condition
precedent to Seller's obligation to close the transaction contemplated herein:
(a) Organization and Authority. Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of Maryland, and has all
PURCHASE AND SALE AGREEMENT PAGE 16
requisite power, authority and capacity to execute and enter into this
Agreement; and the transactions contemplated herein by Purchaser have been duly
authorized and approved by all requisite corporate actions, and this Agreement
has been duly executed and delivered on behalf of Purchaser by its duly
authorized officers and constitutes the legal, valid and binding obligations of
Purchaser. Purchaser has no knowledge of any item or provision of this
Agreement which is unenforceable.
(b) No Conflict; Required Filings and Consents.
(i) The execution and delivery of this Agreement
by Purchaser do not and the transactions contemplated by this Agreement will
not (A) conflict with, or result in any violation or breach of any provision of
Purchaser's Charter or Bylaws, (B) result in any violation or breach of, or
constitute (with or without notice or lapse of time, or both) a default (or
give rise to a right of termination, cancellation or acceleration of any
obligation or loss of any benefit) under any note, bond, mortgage, indenture,
lease, contract or other agreement, instrument or obligation to which Purchaser
is a party or by which Purchaser or any of its properties or assets are bound,
or (C) conflict or violate any permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Purchaser or any of its properties or assets, except in the case of (B) and
(C) for any such violations, breaches, defaults, terminations, cancellations,
accelerations or conflicts which would not, in the aggregate, have or result in
a material adverse effect on Purchaser or impair the ability of Purchaser to
consummate the transactions contemplated by this Agreement.
(ii) No consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental entity, is
required with respect to Purchaser in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
(c) Litigation. There is no action, suit or proceeding,
claim, arbitration or investigation pending or, to the best of Purchaser's
knowledge, threatened against Purchaser which would have a material adverse
effect on Purchaser or impair the ability of Purchaser to consummate the
transactions contemplated by this Agreement.
(d) Compliance with Laws. Purchaser has received no
notice and Purchaser has no knowledge that Purchaser is not in compliance in
all material respects with any applicable laws.
(e) Defaults. Purchaser has received no notice of
material default and, to the best of Purchaser's knowledge, there is no
threatened default or dispute of a material nature under the terms of any
material agreement or contract to which Purchaser is a party.
PURCHASE AND SALE AGREEMENT PAGE 17
(f) Bankruptcy. There are no attachments, executions,
assignments for the benefit of creditors, or voluntary or involuntary
proceedings in bankruptcy, or any other debtor relief laws, contemplated by
Purchaser or pending against Purchaser, or to the best of Purchaser's
knowledge, threatened against Purchaser.
8. Closing and Conditions to Closing.
(a) The Closing Generally. The Closing shall occur at
10:00 a.m. on or before but no later than June 30, 1996; provided, however, at
Seller's option, Closing may occur as early as May 31, 1996; provided, further,
however, that in no event shall the Closing occur prior to ten (10) days
following the expiration of the Feasibility Period without Purchaser's prior
written consent. In the event that Seller elects to exercise such option,
Seller shall give written notice to Purchaser of such election not less than
ten (10) days prior to the earlier Closing Date. The Closing will be held at
the offices of the Title Insurer, or at such other time and place as to which
the parties hereafter may agree upon in writing. At Closing, the Purchase
Price shall be delivered to Seller in the manner provided at Paragraph 5,
together with the documents to be delivered by Purchaser to Seller hereunder,
and possession of, and title to, the Property shall be delivered and conveyed
to Purchaser by Seller in the manner provided herein, together with all other
documents to be delivered by Seller to Purchaser hereunder.
(b) Documents Delivered by Seller at Closing. With
respect to the Property, at the Closing, Seller, at its sole cost and expense,
shall deliver, or shall cause to be delivered, to Purchaser the documents
(i) Special Warranty Deed. A special warranty
deed, duly executed and acknowledged, conveying to Purchaser good and
indefeasible fee simple title to the Land and Improvements free and clear of
all liens and encumbrances, except the Permitted Title Exceptions, in the form
attached at Exhibit M.
(ii) Bill of Sale and Assignment. A bill of sale,
duly executed and acknowledged, with special warranties of title, subject only
to the Permitted Title Exceptions, conveying to Purchaser (A) the Included
Personal Property, (B) Seller's interest in and to all assignable Service
Contracts which were not terminated as herein provided, together with copies of
the originals of each of said contracts, if in Seller's possession, (C) all
existing warranties, if any, on the Improvements, including, but not limited
to, roofs, foundations, plumbing, heating, air conditioning, and electrical, if
any, (D) Seller's right, title and interest, if any, in and to the name of the
apartment complex set forth on Schedule III attached hereto and (E) Seller's
right, title and interest, if any, in any and all licenses, permits, approvals
and other intangible property or rights relating to the Property, together with
appropriate endorsements or such other instruments as may be necessary to
transfer title to Seller's interest in the Included Personal Property in the
form attached at Exhibit M.
PURCHASE AND SALE AGREEMENT PAGE 18
(iii) Assignment of Tenant Leases. A transfer and
assignment of the Tenant Leases, together with all rents, other income and
deposits paid or payable thereunder, subject to the Permitted Title Exceptions
in the form attached as Exhibit M, together with delivery of all Tenant Leases
and information pertinent thereto.
(iv) Affidavit of Seller. An affidavit of Seller
in the form attached as Exhibit M, pursuant to Subparagraph 7(w) to the effect
that the representations and warranties of Seller pursuant to Paragraph 7
continue to be true and correct in all material respects and that all of
Seller's covenants (not otherwise waived by Purchaser) have been performed as
of the date of Closing.
(v) Owner Policy. Seller, at its sole cost and
expense, also shall deliver or cause to be delivered the Owner Policy.
(c) Conditions Precedent to Purchaser's Obligations.
Purchaser shall not be obligated to consummate the transfer of title to the
Property hereunder unless and until:
(i) Closing Documents. Seller has delivered (A)
to the Title Insurer the closing documents attached at Exhibit M and any other
documents reasonably required by the Title Insurer in order to insure
Purchaser's good and indefeasible fee simple title to the Property free and
clear of all liens and encumbrances, except the Permitted Title Exceptions and
(B) to Purchaser all other instruments required by the terms of this Agreement.
(ii) No Uncured Breach. There has been no uncured
breach by Seller of any of the agreements, representations, warranties or
covenants contained in Paragraph 7, except as may be otherwise expressly
provided in this Agreement.
(iii) Title Vested in Seller. Good and
indefeasible title to the Property has been shown to be vested in Seller
subject only to the Permitted Exceptions.
(iv) Delivery of Plans and Specifications, Reports
and Books and Records. Seller shall have delivered to Purchaser the Plans and
Specifications and all reports and books and records concerning the
construction, management and operation of the Property through the date of
Closing required to be delivered pursuant to this Agreement.
(v) Occupancy. Purchaser's obligations to
consummate the transactions contemplated by this Agreement shall be expressly
conditioned upon the Property achieving as of the date which is thirty (30)
days prior to the Closing Date a monthly gross rental, based on a certified
rent roll, of $104,128. In the event that such occupancy level is not achieved
for the Property, Purchaser shall have the right but not the obligation to
terminate this Agreement and receive an immediate return of the Earnest
PURCHASE AND SALE AGREEMENT PAGE 19
Money, whereupon the parties shall have no further obligations one to the
(vi) Other Properties. The sale to Purchaser of
the Other Properties in accordance with the Purchase and Sale Agreements
governing those transactions shall close simultaneously with the transactions
contemplated by this Agreement.
(vii) Waiver by Purchaser. Purchaser, at any time
at or prior to Closing, may waive any one or more of the preceding requirements
by written notice to Seller to that effect.
(d) Closing Costs. The premiums for the Owner Policy in
accordance with paragraph 6(d), the recording costs for the special warranty
deed described in Subparagraph 8(b)(i) hereof and the recording costs for any
other of the Closing documents necessary to convey good and indefeasible fee
simple title to the Property to Purchaser in accordance with this Agreement,
except as otherwise provided herein, any and all prepayment penalties or
premiums with respect to existing debts secured by the Property which will not
constitute Permitted Exceptions and the costs of obtaining any Estoppel Letter
shall be borne by Seller. The escrow fees, if any, charged by the Title
Company shall be borne equally by Purchaser and Seller. Purchaser and Seller
each shall pay their respective attorneys' fees and expenses. All other costs
and expenses in connection with the transaction contemplated by this Agreement,
unless otherwise expressly set forth herein to the contrary, shall be borne by
Seller and Purchaser in the manner in which such costs and expenses customarily
are allocated between the parties at closings of real property similar to the
situs of the Property, respectively.
(e) Existing Lender Estoppel Letter. Prior to the
expiration of the Feasibility Period, Seller, at its sole cost and expense,
shall deliver or shall cause to be delivered, the Existing Lender Estoppel
8A. Purchaser's Documents and Deliveries. As a condition
precedent to Seller's obligations to close the transaction contemplated herein,
at the Closing Purchaser shall deliver the items specified herein and the
following documents and instruments duly executed and acknowledged, in
recordable form, as appropriate:
(a) Cash Portion of Purchase Price. The cash portion of
the Purchase Price in accordance with Paragraph 5(a) hereof.
(b) Intentionally Deleted.
(c) Authority Documents. Incumbency certificates and
corporate resolutions or other entity consents authorizing the consummation by
Purchaser of the purchase and sale transaction contemplated hereby and the
execution and delivery of any
PURCHASE AND SALE AGREEMENT PAGE 20
closing documents required to be executed and delivered on behalf of Purchaser
pursuant to this Agreement.
(d) Organizational Documents. Appropriate certificates
evidencing that Purchaser and all other entities, if any, comprising Purchaser
were legally formed and are currently in good standing and qualified to
transact business in all applicable jurisdictions.
(e) Closing Statement. A Closing Statement in form and
substance reasonably acceptable to Seller and Purchaser.
(f) Assignment of Leases. The acceptance and assumption
contained in the Assignment of Leases, wherein Purchaser accepts and assumes
the obligations of Landlord under the Tenant Leases including all obligations
with respect to any security deposits.
(g) Intentionally Deleted.
(h) Title Insurer Documents. Such documents as may be
reasonably required by the Title Insurer to be executed and delivered by
Purchaser, including without limitation, a Mechanic's Lien Affidavit and
Indemnity, Tax Agreement and Utility Agreement.
(i) Intentionally Deleted.
(j) Intentionally Deleted.
(k) Receipts. Such documents as may be reasonably
required by Seller pursuant to which Purchaser acknowledges receipt of such
documents, items and property as may be delivered to and received by Purchaser
at the Property, including books and records, contracts, plans and
specifications, licenses and permits, keys, and the like.
(l) Purchaser Closing Certificate. A certificate (the
"Purchaser Closing Certificate") in form and content reasonably satisfactory to
Seller, duly executed by Purchaser, which Purchaser Closing Certificate shall
certify, represent and warrant to Seller, as of the Closing Date, that each of
the representations, warranties and covenants of Purchaser contained in this
Agreement has been satisfied in all material respects and were true and correct
in all material respects on the Effective Date and continue to be true and
correct in all material respects as of the Closing Date (provided, should an
event occurring during the pendency of this Agreement make any representations,
warranties or covenants not true and correct in all material respects on the
Closing Date, such noncompliance shall be indicated and described on the
Purchaser Closing Certificate);
PURCHASE AND SALE AGREEMENT PAGE 21
provided, however, that in the event the Purchaser Closing Certificate provides
that any of the representations, warranties or covenants are not true and
correct in all material respects on the Closing Date, Seller shall have the
right to terminate this Agreement, whereupon Title Insurer shall immediately
deliver to Purchaser the Earnest Money Deposit (together with any and all
accrued interest thereon), less all costs and expenses incurred by Seller in
connection with this Agreement and the transaction contemplated herein not to
exceed the amount of the Earnest Money Deposit, which shall be delivered to
Seller, and no party hereto shall have any further obligations to the others
except as otherwise expressly provided herein. The obligation of Seller to
close the transaction contemplated by this Agreement is expressly conditioned
upon the representations and warranties of Purchaser being true and correct in
all material respects on the Closing Date and the covenants of Purchaser being
fully satisfied in all material respects on the Closing Date.
(m) Escrow Agreement. The agreement (the "Escrow
Agreement") among Purchaser, Seller and Title Insurer (or other party agreed
upon by Purchaser and Seller) governing the Occupancy Reserve, in accordance
with paragraph 5(b) hereof, in form reasonably acceptable to all parties
(n) Tenant Notices. Written notices to all tenants under
Tenant Leases as of the Closing Date notifying the tenants of the change of
ownership of the Property and otherwise complying with applicable law.
(o) Other Documents. All other documents and instruments
which Seller may reasonably request or to which Seller may be reasonably
entitled under any of the other provisions of this Agreement.
(p) Other Properties. The consummation of and
corresponding delivery of all relevant documents to be executed by Purchaser in
connection with the sale to Purchaser of the Other Properties in accordance
with their respective Purchase and Sale Agreements simultaneously with the
transactions contemplated by this Agreement.
9. Prorations and Adjustments.
(a) Items Prorated. All prorations and adjustments shall
be made and determined as of the Proration Date as follows:
(i) Rents. Collected rents shall be prorated.
Seller shall not receive any proration credit for rents accrued and delinquent
for months prior to the Proration Date, and all rentals received after such
date shall be applied, first, to current and, then, delinquent obligations, the
latter of which shall be paid to Seller; provided, however, nothing herein
shall operate to require Purchaser to institute a lawsuit to recover such
amounts. Seller shall not be charged for uncollected rent for the month within
which the Proration Date shall occur, it being the intent of the parties to
prorate only the rents
PURCHASE AND SALE AGREEMENT PAGE 22
that have been collected at such date. Any delinquent rents for periods prior
to the Proration Date and a prorated portion of rents for the month uncollected
as of the Proration Date which are collected by Purchaser and which are not
necessary to bring a tenant current as described above shall be forwarded to
(ii) Prepaid Rents and Security and Other
Deposits. Prepaid rents and security and other tenant deposits (including but
not limited to pet deposits and key deposits), if any, under assigned leases
shall be paid to Purchaser by Seller (or credited against the Purchase Price)
at Closing. Purchaser shall assume full liability therefor and shall indemnify
and hold Seller harmless with respect to all such deposits.
(iii) Service Contracts. Prepaid or unpaid amounts
under those Service Contracts listed in Exhibit K, which shall be assigned to
and assumed by Purchaser at Closing shall be prorated. Notwithstanding the
foregoing, Purchaser shall receive no credit or proration for initial payments
and incentive compensation paid on long- term contracts including but not
limited to laundry contracts and leases.
(iv) Property Taxes. Taxes assessed upon the
Property for calendar year 1996 shall be prorated based on the assumption that
the actual taxes for the entire calendar year 1996 will be the same as calendar
year 1995, which amount Seller and Purchaser agree is a reasonable estimate of
1996 taxes. Taxes prorated at Closing shall be reprorated between the parties
promptly upon the receipt of the 1996 real estate tax bill and proper
adjustments promptly paid.
(v) Deposits With Mortgagees. The amount of any
tax and insurance deposits made by Seller with any Existing Lender shall be
paid to Seller and assigned to Purchaser at Closing.
(vi) Utilities. Utility charges shall not be
prorated but, rather, instructions shall be given to the utility companies by
Seller (with a duplicate copy of such instruction being provided concurrently
to Purchaser) to read the meters on the date of Closing and to issue separate
statements thereafter. If applicable, utility deposits will be credited to
Seller and assigned to Purchaser at Closing. In the event that any provider of
utilities shall refuse to issue separate statements in the manner aforesaid,
applicable utility charges shall be adjusted to the effect that Seller shall
pay utility charges to the Proration Date and Purchaser shall pay utility
(vii) Other Adjustments. Such other items as are
adjusted pursuant to custom in the state constituting the situs of the Property
and on similar real estate transactions.
(viii) Delivery by Seller of Documents and Supplies.
Seller, at Closing, shall assign and deliver to Purchaser all original leases,
PURCHASE AND SALE AGREEMENT PAGE 23
contracts, and other items as to which proration is to be made. Seller also
shall deliver to Purchaser all Plans and Specifications, if any, relating to
the Property and all such other documents, books, records, and keys in Seller's
possession which relate to the operation, maintenance or management of the
Property. Seller also shall deliver to Purchaser its current supply, if any,
of printed leasing brochures, floor plans and other advertising literature with
respect to the Property.
10. Material Damage.
(a) Procedure. If, prior to Closing, a Property shall be
destroyed or sustain Material Damage as a result of fire or other casualty,
then, at Purchaser's option exercised in the manner provided hereunder, the
following shall occur with respect to the Property:
(i) This Agreement shall become null and void and
the Earnest Money Deposit shall be returned to Purchaser, provided that
Purchaser gives notice of such election at or prior to Closing, but in any
event within ten (10) days following receipt by Purchaser of notice of the
occurrence of any such event; or
(ii) If all other conditions precedent to
Purchaser's obligation to close have been satisfied, the purchase and sale
transaction shall close with a reduction in the cash portion of the purchase
price equal to the amount of the applicable insurance deductible, and
concurrently with such closing, Seller, Existing Lender and any other named
insured shall assign to Purchaser, in form reasonably satisfactory to
Purchaser, all claims arising under any policy of insurance covering such
casualty, and Seller shall have no further liability to Purchaser with respect
to such damage.
(iii) If the parties shall fail to agree on the
amount of the cost of such restoration, such cost of restoration shall be
determined by the following process: Seller and Purchaser together shall select
three (3) reputable independent third party contractors to submit estimates for
the cost of repair of the damage and shall accept the average of all of the
estimates as the amount of the damage for purposes of this paragraph.
(b) Damage Other Than Material Damage. In the event of
any damage to a Property other than Material Damage, the purchase and sale
transaction shall close in accordance with and subject to the conditions of
Subparagraph 10(a)(ii). If the Property is uninsured, the cash portion of the
Purchase Price shall be reduced by the cost to restore determined in the manner
11. Condemnation. If, prior to Closing, any governmental or
similar authority shall institute eminent domain or similar proceeding or take
any steps preliminary thereto (including the giving of any direct or indirect
notice of intent to institute any such
PURCHASE AND SALE AGREEMENT PAGE 24
proceeding) that, if successful, would materially, adversely affect the value
of the Property or materially interfere with the use thereof, Purchaser shall
be entitled to terminate this Agreement upon written notice to Seller prior to
Closing and to a return of the Earnest Money Deposit. As used in this
paragraph, the term "materially" shall mean condemnation proceeds in excess of
an amount equal to two percent (2%) of the Purchase Price.
12. Brokerage and Consultants.
(a) Representation of Seller. Seller represents and
warrants that, except for IBEX Capital Group and Inter Urban Management, Inc.
(collectively, "Brokers"), it has neither employed, retained nor consulted any
broker, consultant, agent or finder in carrying on the negotiations relative to
this Agreement or the purchase and sale referred to herein, and Seller shall
indemnify and hold Purchaser harmless from and against any and all claims,
demands, causes of action, debts, liabilities, judgments and damages (including
costs and reasonable attorneys' fees) which may be asserted or recovered
against it on account of any brokerage fee, consulting fee, commission or other
compensation arising by reason of the breach of this representation and
warranty. Seller further represents and warrants that, except for amounts to
be paid to Brokers under a separate commission agreement between Seller and
Brokers, no amount shall be paid by Seller to any party as a fee or a
commission, or any amount of a similar nature, whatever designated, as a result
of the purchase and sale referred to herein.
(b) Representation of Purchaser. Purchaser represents
and warrants that it has neither employed, retained, nor consulted any broker,
consultant, agent or finder in carrying on the negotiations relative to this
Agreement or the purchase and sale referred to herein, and Purchaser shall
indemnify and hold Seller harmless from and against any and all claims,
demands, actions, causes of action, debts, liabilities, judgments and damages
(including costs and reasonable attorneys' fees) which may be asserted or
recovered against it on account of any brokerage fee, consulting fee,
commission or other compensation arising by reason of the breach of this
representation and warranty. Purchaser further represents and warrants that no
amount shall be paid by any Purchaser to any party as a fee or a commission, or
any amount of a similar nature, whatever designated, as a result of the
purchase and sale referred to herein.
(c) Advice as to Title. Purchaser acknowledges that, at
the time of execution of this Agreement, Seller has advised Purchaser by this
writing that Purchaser should have the abstract covering the Property examined
by an attorney of Purchaser's own selection or that Purchaser should be
furnished with or should obtain a policy of title insurance.
(a) Indemnification of Purchaser. Seller hereby agrees
PURCHASE AND SALE AGREEMENT PAGE 25
defend and hold harmless the Purchaser and any other holder of record title to
the Property pursuant to Paragraph 21, their officers, directors, general
partners, agents and employees and their respective heirs, executors,
administrators, successors and assigns, from and against any and all liability
arising out of third party claims with respect to the ownership or operation of
the Property prior to Closing, including, but not limited to, any and all
claims, liabilities, damages, penalties and losses, costs or expenses
(including court costs and reasonable attorneys' fees) incurred, resulting from
or in any way arising out of any act or omission of Seller, its agents and
employees, in respect of the operation of the Property prior to Closing, any
injury to persons or damage to property happening or occurring in, on or about
the Property. Seller further agrees, upon notice and request from Purchaser,
to contest any such demand, claim, suit or action against which Seller has
hereinabove agreed to indemnify and hold Purchaser harmless, and to defend any
action that may be brought in connection with any such demand, claim, suit or
action or with respect to which Seller has hereinabove agreed to indemnify and
hold Purchaser harmless and to bear all costs and expenses of such contest and
defense, provided, however, that Seller shall have no obligation hereunder to
indemnify or hold Purchaser harmless from and against any claim, liability,
damage, penalty or loss, cost or expense incurred by Purchaser incident to,
resulting from or in any way arising out of any act or omission of Purchaser,
its agent or employees, it being understood and agreed, however, that the
employees engaged in the operation of the Property prior to Closing are and
shall be construed to be, for purposes of this provision, the employees of
Seller and the acts and omissions of said employees shall in no way be
attributable to Purchaser for the purposes of this provision.
(b) Indemnification of Seller. Subject to Subparagraph
13(a), Purchaser agrees to indemnify, defend and hold Seller, its officers,
directors, general partners, agents and employees and their respective heirs,
executors, administrators, successors and assigns, harmless from and against
any claim, liability, damage, penalty, loss, cost or expense (including court
costs and reasonable attorneys' fees) incurred by Seller incident to, resulting
from or in any way arising out of any act or omission of Purchaser, its agents
or employees, or arising out of, or in any way connected with, Purchaser's
inspections of the Property pursuant to this Agreement and the operation of the
Property from and after Closing and any injury to Persons or damage to property
happening on the Property after Closing; and Purchaser further agrees, upon
notice, and request from Seller, to contest any such demand, claim, suit, or
action against which Purchaser has hereinabove agreed to indemnify and hold
Seller harmless, and to defend any action that may be brought in connection
with any such demand, claim, suit or action or with respect to which Purchaser
has hereinabove agreed to indemnify and hold the Seller harmless and to bear
all costs and expenses of such contest and defense.
(c) Indemnification Procedure. To the extent of any
claims against Seller or Purchaser predicated upon facts which could reasonably
be interpreted as giving rise to potential liability of Seller or Purchaser
under this Paragraph 13, the party against whom
PURCHASE AND SALE AGREEMENT PAGE 26
such claim is asserted shall promptly give notice thereof to the other party
hereto. Thereupon, such other party shall have the option of retaining counsel
of its choice to defend both it and the remaining party in respect of such
claim and to control, in a manner reasonable in light of applicable
circumstances, the course and ultimate disposition of such claim. In the event
that a party to this Agreement shall elect to exercise the option provided in
the preceding sentence, the party electing such option, by reason thereof,
shall be deemed to have agreed to pay all reasonable costs and expenses of
defending against such claim and any liability of the party against whom such
claim was asserted on account thereof. Without regard to whether any party
hereto shall exercise such option, Seller and Purchaser and their counsel shall
consult with one another concerning such claim and with due regard to both the
mutual and the independent interests of Seller and Purchaser therein. Any such
claims must be asserted on or before the expiration of two (2) years following
the Closing Date.
(d) No Environmental Indemnity. The scope of the
indemnifications contained in this Paragraph 13 shall not include liability
with respect to environmental claims against either party or the Property.
14. Notice to Tenants. On the date of Closing or at any time
thereafter, upon request by Purchaser, Seller agrees to give notice, said
notice to be in compliance with local law and in form reasonably approved by
Purchaser, to each of the tenants of space located on the Property that Seller
has sold and conveyed the Property to Purchaser and that all future rental
payments due under the terms of the Tenant Leases are to be paid as directed by
Purchaser. On the date of Closing or at any time thereafter, upon request of
Seller, Purchaser agrees to give notice to all tenants that their security
deposit (if any) has been paid over to the Purchaser, and Purchaser has assumed
the liability therefor.
(a) General. All payments to be made under this
Agreement shall be made by the wire transfer of immediately available funds
pursuant to written wiring instructions from the parties and shall be deemed
paid when written confirmation of receipt has been issued by the receiving bank
and not before.
(b) Deposits to Account of Title Insurer. Unless and
until the Title Insurer shall advise Purchaser and Seller to the contrary in
writing, it is represented and acknowledged that deposits to the account of
Title Insurer made hereunder by Seller and/or Purchaser shall be made as
PURCHASE AND SALE AGREEMENT PAGE 27
ABA Routing No.:
16. Default and Remedies.
(a) Remedies of Seller. In the event that all conditions
to Purchaser's obligation to close have been satisfied and Purchaser fails to
close its purchase of the Property hereunder, the Earnest Money Deposit shall
be paid to Seller and retained by it as liquidated damages as Seller's sole and
exclusive remedy hereunder. The parties acknowledge that Seller's damages
occasioned by Purchaser's default hereunder would be difficult to ascertain,
but agree that the amount of the Earnest Money Deposit represents a reasonable
estimate of Seller's damages.
(b) Remedies of Purchaser. In the event that all
conditions to Seller's obligation to close have been satisfied and Seller fails
to close the sale of the Property in accordance with its obligations under the
terms and conditions specified hereunder, Purchaser, at its sole discretion,
either may (i) specifically enforce this Agreement and the sale and purchase
provided for herein according to its terms by suit filed within ninety (90)
days, or (ii) terminate this Agreement, whereupon the Earnest Money Deposit
shall be returned in full to Purchaser.
(c) Rightful Termination by Purchaser. In the event that
the conditions precedent to Purchaser's obligation to close are not satisfied
and Purchaser terminates this Agreement pursuant to the terms hereof, the
Earnest Money Deposit shall be returned in full to Purchaser as its sole
remedy, and the parties shall have no further liability to one another, except
as may otherwise be expressly provided hereunder.
(d) Attorneys' Fees. In the event of any arbitration or
other legal or equitable proceeding for enforcement of any of the terms or
conditions of this Agreement, or any alleged disputes, breaches, defaults or
misrepresentations in connection with any provision of this Agreement, the
prevailing party in such proceeding, or the nondismissing party where the
dismissal occurs other than by reason of a settlement, shall be entitled to
recover its reasonable costs and expenses, including, without limitation,
reasonable attorneys' fees and costs paid or incurred in good faith at the
arbitration, pre-trial, trial and appellate levels, and in enforcing any award
or judgment granted pursuant thereto. Any
PURCHASE AND SALE AGREEMENT PAGE 28
award, judgment or order entered in any such proceeding shall contain a
specific provision providing for the recovery of attorneys' fees and costs
incurred in enforcing such award or judgment, including, without limitation,
(a) postaward or postjudgment motions, (b) contempt proceedings, (c)
garnishment, levy, and debtor and third party examinations, (d) discovery and
(e) bankruptcy litigation. The "prevailing party," for purposes of this
Agreement, shall be deemed to be that party which obtains substantially the
result sought, whether by dismissal, award or judgment.
17. Notices. All notices and other communications hereunder shall
be effective as to any party only if, concurrent with notice to such party,
notice shall be given to such party's counsel. All notices shall be in writing
and shall be deemed to have been duly given the date deposited with a
commercial air courier service, telecopy or facsimile, or the United States
Postal Service, the latter being registered or certified mail, return receipt
requested, first class, postage prepaid, notice to be effective on the date of
receipt, as follows:
Notice as to Seller:
IBEX Costa del Sol Corp.
c/o IBEX Capital Group
2333 Ponce de Leon Boulevard
Coral Gables, Florida 33134
Attention: Jose F. Rosado
Notice to Seller's Counsel:
Guttman & Del Valle, P.A.
2333 Ponce de Leon Boulevard
Coral Gables, Florida 33134
Attention: Richard Guttman, Esq.
Notice as to Purchaser:
Walden Residential Properties, Inc.
One Lincoln Center
5400 LBJ Freeway, Suite 400
Dallas, Texas 75240
PURCHASE AND SALE AGREEMENT PAGE 29
Attention: Mr. Marshall B. Edwards
Notice to Purchaser's Counsel:
Munsch Hardt Kopf Harr & Dinan
4000 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202
Attention: Robin K. Minick, Esq.
18. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED, ENFORCED
AND GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF TEXAS. THE INITIAL
DRAFT OF THIS AGREEMENT WAS PREPARED BY PURCHASER ONLY AS A MATTER OF
CONVENIENCE AND SHALL NOT BE CONSTRUED FOR OR AGAINST EITHER PARTY ON THAT
19. Binding Effect. This Agreement and the exhibits attached
hereto shall be binding upon, and shall inure to the benefit of, the parties
hereto, their successors and permitted assigns, if any.
20. Entire Agreement. This Agreement and the exhibits attached
hereto shall constitute the entire contract between the parties and supersedes
all prior and contemporaneous agreements, representations and undertakings of
the parties regarding the subject matter of this Agreement. This Agreement may
not be modified except by a writing, one or more counterparts of which is
signed by all parties to this Agreement.
21. Vesting of Title to Property. Seller and Purchaser agree that
title to the Property will be conveyed at Closing to such other entity as
Purchaser may direct by written notice to Seller not less than fifteen (15)
days prior to Closing. Notwithstanding the foregoing right of Purchaser to
designate a nominee to take title to the Property, this Agreement shall not be
assignable by Purchaser.
22. Waiver. Except as expressly provided in this Agreement, no
inspection by Purchaser of the Property or of any item delivered by Seller to
Purchaser as provided in this Agreement shall constitute a waiver of any
representation, warranty or covenant made by Seller hereunder. The waiver by a
party hereto of any term, covenant, agreement or condition herein contained
shall not be deemed to be a waiver of any subsequent breach or failure of
condition as to the same or any other term, covenant, agreement or condition
herein contained, nor shall any custom or practice which may arise between the
PURCHASE AND SALE AGREEMENT PAGE 30
in the administration of the terms hereof be construed as a waiver of or in
such a manner as to lessen the rights of any party to insist upon the
performance by the other parties in strict accordance with such terms.
23. Time of the Essence. The time for performance of the
obligations of the parties hereunder is of the essence in this Agreement.
24. Survival of Agreement. Except as set forth in Paragraph 7(w),
the obligation of any parties to this Agreement, including any performance
specified or anticipated to occur following the Closing, to that extent shall
survive the Closing.
25. Headings. The subject headings of paragraphs and
subparagraphs of this Agreement are included for purposes of convenience only
and shall not affect the construction or interpretation of any of its
26. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(a) Memorandum of Terms. Neither Seller nor Purchaser
shall record or cause to be recorded in the public records, at any time prior
to Closing this Agreement or any memorandum or other evidence hereof.
(b) Time for Performance of Certain Obligations. At
either party's option, this Agreement shall be null and void unless one copy
hereof, executed by Purchaser and Seller, together with the Initial Deposit,
shall have been delivered to Title Insurer within three (3) business days
following the date of execution hereof by Seller.
(c) Limited Liability of Purchaser's Officers. This
Agreement and all documents, agreements, understandings, and arrangements
relating to this transaction have been executed by the undersigned in his/her
capacity as an officer or director of Purchaser which has been formed as a
Maryland corporation pursuant to the Articles of Incorporation of Purchaser,
and not individually, and neither the directors, officers or stockholders of
Purchaser shall be bound or have any personal liability hereunder or
thereunder. Seller shall look solely to the assets of Purchaser for
satisfaction of any liability of the Purchaser in respect of this Agreement and
all documents, agreements, understandings and arrangements relating to the
transaction contemplated by this Agreement and will not seek recourse or
commence any action against any of the directors, officers or stockholders of
Purchaser or any of their personal assets for the performance or payment of any
obligation hereunder or thereunder. The foregoing shall also apply to any
future documents, agreements, understandings, arrangements and
PURCHASE AND SALE AGREEMENT PAGE 31
transactions between the parties hereto.
(d) Limited Liability of Seller's Officers. This
Agreement and all documents, agreements, understandings, and arrangements
relating to this transaction have been executed by the undersigned in his/her
capacity as an officer or director of Seller, and not individually, and neither
the directors, officers or stockholders of Seller shall be bound or have any
personal liability hereunder or thereunder. Purchaser shall look solely to the
assets of Seller for satisfaction of any liability of the Seller in respect of
this Agreement and all documents, agreements, understandings and arrangements
relating to the transaction contemplated by this Agreement and will not seek
recourse or commence any action against any of the directors, officers or
stockholders of Seller or any of their personal assets for the performance or
payment of any obligation hereunder or thereunder. The foregoing shall also
apply to any future documents, agreements, understandings, arrangements and
transactions between the parties hereto.
(e) No Further Agreements. While this Agreement is in
full force and effect, Seller shall not enter into any other agreement or
Letter of Intent to sell the Property.
(f) Confidentiality. The parties hereto hereby agree
that they will maintain the confidentiality of all information and materials
provided to each other in connection herewith and the terms of the transaction
contemplated hereby, the contents of this Agreement and related documents, if
any, except that Purchaser may disclose material terms which are required to be
disclosed by applicable securities laws or as required by any national
securities exchange on which Purchaser's common stock may be listed and
Purchaser may include a copy of this Agreement and in its filings with the
Securities and Exchange Commission.
28. Processing Services. Commencing with the Effective Date and
ending with the termination or expiration of this Agreement as provided
elsewhere herein, Purchaser shall cause Resident Profiles, Inc. ("RPI") to
process lease applications for the Property based on standards no greater than
those currently used by Seller or otherwise agreed to by Seller at a cost of
$25.00 per application, payable monthly to RPI by the Seller which sums Seller
hereby agrees to pay, regardless of whether the Closing occurs hereunder.
29. DTPA Waiver. To the maximum extent possible under Texas law,
Purchaser hereby waives and relinquishes all provision of the Texas Deceptive
Trade Practices-Consumer Protection Act (Chapter 17, Subchapter E, of the Texas
Business and Commerce Code) in connection with the sales transaction
contemplated by this Agreement. In connection with such waiver, Purchaser
represents and warrants to Seller that: (a) Purchaser is not in a significantly
disparate bargaining position; (b) Purchaser is represented by legal counsel in
connection with the sale contemplated by this Agreement;
PURCHASE AND SALE AGREEMENT PAGE 32
and (c) Purchaser is knowledgeable and experienced in the purchase,
development, operation and ownership of real property, and is fully able to
evaluate the merits and risks of this transaction.
[PURCHASER TO CHECK ONE]
[ ] Purchaser has assets in excess of $5,000,000.00 according to
the most recent financial statement of Purchaser prepared in
accordance with generally accepted accounting principles.
[ ] Purchaser does not have assets in excess of $5,000,000.00
according to the most recent financial statement of Purchaser
prepared in accordance with generally accepted accounting
30. Date of Performance. In the event the expiration date of any
review period herein specified or the expiration date of any period of time in
which a party hereto is to deliver any item to any other party hereto should be
a legal holiday in the State of Texas or a Saturday or Sunday, such expiration
date shall be extended to the next business day which is not a legal holiday in
the State of Texas or a Saturday or Sunday, and such next business day shall be
considered such expiration date.
31. Invalid Provisions. If any one or more of the provisions of
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, all of which other provisions
shall remain in full force and effect.
32. Inspections. Prior to the expiration of the Feasibility
Period, Purchaser shall have received various reports, satisfactory to
Purchaser in its sole discretion, of inspections of the Property (including
without limitation structural, mechanical, environmental, cathodic and
financial). On the Effective Date, Purchaser shall have received the items
listed in Schedule I attached hereto. Seller shall make the Property and all
reports, books and records and agreements in Seller's possession or control
relating to the construction, management and operation of the Property
available to the Purchaser and its agents as provided in Paragraph 7(o) hereof
throughout the Feasibility Period. If the results of the inspections are
unsatisfactory to Purchaser, or for any reason whatsoever, in its sole and
absolute discretion, Purchaser, at its election, may terminate this Agreement
by giving written notice to Seller at any time prior to 5:00 P.M., C.D.T., on
or before the last day of the Feasibility Period, whereupon the Title Insurer
immediately shall return the Earnest Money Deposit to Purchaser, this Agreement
automatically shall terminate, and neither party shall have any further
obligation to the other except the indemnities contained elsewhere herein. In
the absence of such notice by such date, the inspections shall be deemed to
have been approved by Purchaser and Purchaser shall deliver to the Title
Insurer the Additional Earnest Money within three (3) business days of
PURCHASE AND SALE AGREEMENT PAGE 33
the expiration of the Feasibility Period. Except as expressly set forth
herein, Seller has not made, does not hereby make, and hereby specifically
disclaims any express or implied representations or warranties whatsoever with
respect to the condition of the Property, including without limitation any
representation or warranty regarding quality of construction, workmanship,
merchantability or fitness for any particular purpose; and Purchaser
acknowledges that Purchaser is entering into this Agreement without relying
upon any such warranty or representation by Seller, its agents or
representatives. Purchaser's failure to terminate this Agreement prior to the
expiration of the Feasibility Period shall conclusively establish that
Purchaser has fully examined and inspected the Property and is satisfied with
the condition thereof.
33. Ratification of Seller's Shareholders. As a condition
precedent to Seller's obligations hereunder, Seller shall have received
ratification of this Agreement by its shareholders on or before May 13, 1996.
In the event that Seller is unable to timely obtain such consent, Seller shall
have the right to terminate this Agreement, the Earnest Money Deposit shall be
returned to Purchaser immediately and the parties shall have no further
obligations one to the other except such indemnities as may be appropriate to
extend beyond the date of termination.
34. Notification of Non-Delivery. In the event that either party
hereto shall become aware of the non- delivery of any item or document required
to be delivered under this Agreement, a breach of a representation, warranty or
covenant set forth herein, or other failure of condition, the party becoming
aware of such event shall give prompt notice to the other party in accordance
with Paragraph 17 hereof.
[The remainder of this page has been intentionally left blank.]
PURCHASE AND SALE AGREEMENT PAGE 34
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the day and in the year entered below, effective as above written.
WALDEN RESIDENTIAL PROPERTIES, INC.,
a Maryland corporation
Marshall B. Edwards
Date Executed by Purchaser:
IBEX COSTA DEL SOL CORP.
Name: Jose F. Rosado
Date Executed by Seller:
The undersigned, constituting the Title Insurer, hereby agrees to
accept in escrow the moneys provided for in the above Agreement to be paid into
escrow and to hold and apply the same as provided in said Agreement.
SAFECO LAND TITLE OF DALLAS,
in its separate capacity and
as agent for Chicago Title Insurance Company
Date executed by Title Insurer:
PURCHASE AND SALE AGREEMENT PAGE 35
ITEMS TO BE DELIVERED
1. Seller's most current owner's title insurance policy and a copy of all
title reports and documents in Seller's possession.
2. A list and a copy of all Service Contracts, all documents pertaining
to any leased Personalty, and all warranties, guaranties and bonds relating to
the Property, or any part thereof.
3. A complete, itemized and detailed inventory of the Personalty to be
conveyed by Seller to Purchaser at the Closing.
4. A copy of (i) all income and expense statements for the Property, for
the year to date and for the most recently completed prior year (prepared on a
monthly basis), and annual operating statements for the three (3) most recent
fiscal years, certified by Seller or audited (when available) as having been
prepared in accordance with generally accepted accounting principles (except to
the extent prepared on a cash basis), (ii) operating budgets for the Property
for the current calendar year and the upcoming calendar year, and (iii) a
capital expenditure budget for the Property for the current calendar year and
the upcoming calendar year.
5. A copy of all ad valorem and other property tax statements (including
personal property tax statements) relating to the Property for the current tax
year and the immediately preceding three (3) tax years, including copies of any
assessments or statements for the current or forthcoming year, including a
summary of any contested tax assessments relating to the Property for the
preceding three (3) years, and the results thereof.
6. A copy of (i) a tenant rent roll for the Improvements, showing actual
occupancies, rentals, delinquencies, defaults, security deposits, assigned
parking spaces (if any), free rent, rent concessions, tenant incentives, lease
terms, unit numbers, unit types, and unit amenities, (ii) a current schedule of
rental rates for each type of unit within the Improvements, and (iii) such
other pertinent information regarding the tenant leases and rental units as is
reasonably available to Seller, including, without limitation a schedule of the
appliances and amenities included in each type of rental unit.
7. A copy of all site plans, surveys, soil and substrata reports and
studies, engineering plans and studies, environmental reports or studies,
architectural renderings, plans and specifications, construction contracts
(with all applicable change orders), floor plans, landscape plans, utility
schemes and other similar plans, diagrams of studies, if any, relating to the
8. A copy of the architect's certificate rendered at or after the
construction of the Improvements stating that the Improvements were constructed
substantially in accordance with the plans and specifications delivered to
9. A copy of all reports made by engineers, architects or others, if any,
relating to any structural problems or other defects with respect to any part
of the Property; and verification that the Property and the Improvements comply
fully with the Fair Housing Act, the Americans with Disabilities Act, and
Article 9102 of the Texas Department of Licensing and Regulation.
10. A copy of all certificates of occupancy for the Improvements, and a
letter from the cities in which the Property is located dated no earlier than
the Effective Date stating that the Property complies fully with all applicable
zoning ordinances and the operation of the Improvements as an apartment complex
is a permitted use under such ordinances, together with a copy of such
11. A copy of all swimming pool permits, boiler permits and other licenses
and permits for the Property required by law and issued by any governmental
authority having jurisdiction over the Property or Seller.
12. A list of all employees currently employed in the operation of the
Property, setting forth his/her name, address, telephone number, position,
salary, benefits, bonuses, leasing commissions, other incentives, apartment
allowance (if applicable) and tenure with the Property.
13. A schedule outlining, and invoices, contracts and/or work orders
pertaining to, any (i) carpet replacement, window replacement, and appliance
replacement over the past two (2) years relating to the Improvements, (ii) any
other capital expenditures over the past two (2) years at the Property, showing
the nature of the work, expense, date and unit or common area where the work
was done, and (iii) regular maintenance and repair at the Property over the
past twelve (12) months.
14. A copy of the standard form of tenant lease, leasing application,
security and pet deposit documents, rules and regulations, leasing brochures,
occupancy checklist, current marketing/leasing plans and business plans for the
Property, other standard forms and documents currently used in connection with
the leasing and marketing of the Property, and a profile of existing tenant
base, including data on age, income, sex, household structure, occupation,
etc., to the extent such information is available to Seller.
15. A list of all utility deposits or bonds for the Property and a copy of
all utility bills for the Property for the previous twelve (12) months,
excluding individually metered tenant utility bills; and a letter from each of
the utility providers stating that the utilities are available to the Property.
16. A summary of any approvals, requirements or prerequisites (if any)
imposed by any
current lender having a security interest in the Property (or any portion
thereof) as a condition to the execution of this Agreement by Seller or as a
condition to the Closing as contemplated by this Agreement.
17. Copies of and/or access throughout the Feasibility Period to all
18. Copies of any pertinent litigation of safety related issues with
respect to the Property.
19. Such other books, records, leasing files, contracts, agreements and
information relating to the Property that is in Seller's possession or are
readily available to Seller.
The chart(s) immediately following this Schedule I reflects the availability
and delivery, if any, of the items set forth in this Schedule I.
Villas of St. Moritz Apartments 216 Units San Antonio, Texas
Summer Oaks Apartments 256 Units San Antonio, Texas
[TO BE PROVIDED]
DESCRIPTION OF IMPROVEMENTS AND AMENITIES
____ dwelling units located in ________ buildings, consisting of _______
one-bedroom, _________ two-bedroom and ________ three-bedroom units, a
clubhouse, laundry facilities, ________ swimming pool(s), ___________ tennis
court(s) and ____________________________________.
Gross Potential Potential
Property Potential Rent Rent 80% Rent 90%
- -------- -------------- --------- ---------
COSTA DEL SOL 130,160 104,128 117,144
VILLAS OF ST. MORITZ 101,440 81,128 91,296
SUMMER OAKS 119,558 95,645 107,600
REMINGTON 84,750 87,800 76,275
TRAILS OF MARY MONT 212,890 170,312 191,601
- ------------------- ------- ------- -------
TOTAL 648,796 519,037 583,916
LEGAL DESCRIPTIONS OF LAND
[TO BE PROVIDED]
[TO BE PROVIDED]
[TO BE PROVIDED]
INCLUDED PERSONAL PROPERTY
[TO BE PROVIDED]
EXCLUDED PERSONAL PROPERTY
[TO BE PROVIDED]
[TO BE PROVIDED]
STATEMENTS OF INCOME AND EXPENSE
[TO BE PROVIDED]
SCHEDULE OF INSURANCE
[TO BE PROVIDED]
SCHEDULE OF SERVICE CONTRACTS
[TO BE PROVIDED]
STANDARD TENANT LEASE
[TO BE PROVIDED]