EXHIBIT 10(bb)
AGREEMENT OF PURCHASE AND SALE
BETWEEN
WATERFORD PARTNERSHIP,
A CONNECTICUT GENERAL PARTNERSHIP, SELLER
AND
CASE VENTURES, INC.,
AN OKLAHOMA CORPORATION, PURCHASER
TABLE OF CONTENTS
Page
Article I. Property........................................................................................1
Article II. Purchase Price and Deposits ....................................................................4
Article III. Failure to Close................................................................................6
3.1 Purchaser's Default....................................................................6
3.2 Seller's Default.......................................................................7
3.3 Termination of Agreement in Accordance with its Terms..................................7
Article IV. Closing and Transfer of Title...................................................................8
4.1 Closing................................................................................8
4.2 Closing Procedure......................................................................8
4.3 Purchaser's Performance...............................................................11
4.4 Bond-Related Documentation; Special Condition to Purchaser's
Obligations; Release of Seller from Bond Obligations..................................11
4.4.1 Bond-Related Documentation...........................................11
4.4.2 Special Condition to Purchaser's Obligations.........................13
4.4.3 Release of Seller from Bond Obligations and from Existing
Credit Enhancement Liability.........................................15
4.4.4 Fees and Costs.......................................................16
4.4.5 No Covenants.........................................................16
4.5 Evidence of Authority; Miscellaneous..................................................17
4.6 Assignment and Assumption of Partnership Interests in Seller..........................17
Article V. Prorations of Rents, Taxes, Etc................................................................18
Article VI. Purchaser Inspections and Contingencies........................................................20
6.1 Document Inspection...................................................................20
6.2 Physical Inspection...................................................................21
6.3 Feasibility Period ...................................................................21
6.4 Survey Contingency....................................................................22
6.5 Title Contingency.....................................................................22
Article VII Loss due to Casualty or Condemnation...........................................................24
7.1 Loss due to Condemnation..............................................................24
7.2 Loss due to Casualty..................................................................25
Article VIII. Seller's Operation and Maintenance of the Property Prior to Closing............................26
Article IX. Broker.........................................................................................27
Article X. Representations and Warranties.................................................................27
10.1 Limitations on Representations and Warranties.........................................27
10.2 Representations and Warranties of Seller..............................................28
TABLE OF CONTENTS (CONTINUED)
Page
10.3 Seller's Knowledge.............................................................................32
10.4 Representations and Warranties of Purchaser...........................................32
10.5 Survival..............................................................................33
Article XI. Liability of Seller............................................................................34
Article XII. Assignment.....................................................................................35
Article XIII. Notices........................................................................................36
Article XIV. Expenses.......................................................................................37
Article XV. Miscellaneous..................................................................................38
15.1 Successors and Assigns................................................................38
15.2 Gender................................................................................38
15.3 Captions..............................................................................38
15.4 Construction..........................................................................38
15.5 Entire Agreement......................................................................39
15.6 Recording.............................................................................39
15.7 No Continuance........................................................................39
15.8 Time of Essence.......................................................................39
15.9 Counterparts..........................................................................39
15.10 Governing Law.........................................................................40
15.11 Acceptance of Offer...................................................................40
15.12 Confidentiality.......................................................................40
15.13 Surviving Covenants...................................................................40
15.14 Real Estate Reporting Person..........................................................41
15.15 Independent Contract Consideration....................................................41
15.16 Exclusive Period......................................................................41
15.17 Approval..............................................................................41
15.18 Business Day(s).......................................................................42
EXHIBIT A DESCRIPTION OF LAND
EXHIBIT B RENT ROLL
EXHIBIT C CONSENT AND RELEASE AGREEMENT
EXHIBIT D SPECIAL WARRANTY DEED
EXHIBIT E BILL OF SALE AND GENERAL ASSIGNMENT
EXHIBIT F ASSIGNMENT AND ASSUMPTION OF LEASES AND SECURITY
DEPOSITS
EXHIBIT G INDEMNIFICATION AGREEMENT
EXHIBIT H FORM OF SELLER'S AFFIDAVIT OF NON-FOREIGN STATUS
EXHIBIT I DUE DILIGENCE MATERIALS
EXHIBIT J PENDING LITIGATION
EXHIBIT K ASSIGNMENT OF AND AMENDMENT TO AGREEMENT OF PURCHASE
AND SALE
EXHIBIT L LIST OF PERSONAL PROPERTY
EXHIBIT M LIST OF SERVICE CONTRACTS
EXHIBIT N BOND DOCUMENTS
EXHIBIT O ASSIGNMENT AND ASSUMPTION OF PARTNERSHIP INTERESTS
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE (THIS "AGREEMENT") is made
by and between WATERFORD PARTNERSHIP, a Connecticut general partnership
("SELLER"), and CASE VENTURES, INC., an Oklahoma corporation, ("PURCHASER") or
its designee, or assignee as of the "EFFECTIVE DATE" (as defined below).
Article I
Property
Seller hereby agrees to sell, and Purchaser hereby agrees to
buy, all of the following property: (a) a parcel of real property, located in
the City of Tulsa, Oklahoma, more particularly described on Exhibit A attached
to this Agreement and made a part hereof, together with Assignor's assignable
right, title, and interest in, to and under (i) all and singular easements,
covenants, agreements, rights, privileges, tenements, hereditaments and
appurtenances thereunto now or hereafter belonging or appertaining thereto and
(ii) any and all oil, gas and mineral rights relating to the real estate, water
and water rights, and water stock, and all right, title and interest of Seller
(whether now or hereafter existing) in and to any land lying in the bed of any
street, alley, road or avenue (whether open, closed or proposed) within, in
front of, behind or otherwise adjoining the real estate or any of it and if, and
only to the extent expressly provided elsewhere in this Agreement, all right,
title and interest of Seller (whether now or hereafter existing) in and to any
award made or to be made as a result or in lieu of condemnation, and if and only
to the extent
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expressly provided elsewhere in this Agreement, in and to any award for damage
to the Property or any part thereof by reason of casualty (collectively, "THE
LAND"); (b) the buildings, structures, fixtures, facilities, installations and
other improvements now or hereafter located in, on, over and under the Land,
being a 344-unit apartment complex containing an aggregate of approximately
230,676 square feet of net rentable area, generally known as "Waterford
Apartments", including, without limitation, any and all plumbing, air
conditioning, heating, ventilating, mechanical, electrical and other utility
systems, parking lots and facilities, landscaping, roadways, sidewalks, swimming
pools and other recreational facilities, security devices, signs and light
fixtures (collectively, the "IMPROVEMENTS"); (c) the landlord's interests under
all tenant leases relating to the Improvements, being the leases referred to on
the Rent Roll attached hereto as Exhibit B (as such leases may expire or be
terminated in the ordinary course of business), together with any tenant leases
hereafter entered into pursuant to the provisions of this Agreement
(collectively, the "LEASES") (the Land, Improvements, and the Leases are
referred to herein, collectively, as the "REAL PROPERTY"); (d) all of Seller's
assignable right, title and interest, all furniture, furnishings, fixtures,
fittings, appliances, apparatus, equipment, machinery, maintenance vehicles and
equipment, tools, parts, recreational equipment, carpeting, window treatments,
stationery and other office supplies, and other personal property (the "TANGIBLE
PERSONAL PROPERTY"), including, without limitation, the items shown on Exhibit L
attached hereto and made a part hereof; (e) all Seller's assignable right, title
and interest in all existing surveys, blue prints, drawings, plans and
specifications (including, without limitation, structural, HVAC, mechanical and
plumbing plans and specifications) and other documentation for or with respect
to the Real Property or the Tangible Personal Property, or any part thereof; all
use, occupancy, building and
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operating permits, licenses and approvals relating to the Real Property or the
Tangible Personal Property; all marketing artwork, construction drawings, all
guaranties, warranties, booklets, manuals and promotional and advertising
materials exclusively concerning the Real Property or the Tangible Personal
Property, or any part thereof; and such other existing books, records and
documents (including, without limitation, those relating to ad valorem taxes and
leases) used exclusively in connection with and integral to the operation of the
Real Property or the Tangible Personal Property, or any part thereof, and all
other intangible personal property, together with any associated good will, now
or hereafter owned by Seller or in which Seller otherwise has an interest and
used exclusively in connection with or arising from the business now or
hereafter conducted on or from the Real Property or any part thereof, including,
without limitation, claims, choses in action, lease and other contract rights,
names, and, if available, telephone exchange numbers (collectively, the
"INTANGIBLE PERSONAL PROPERTY") (the Tangible Personal Property and the
Intangible Personal Property shall hereinafter be referred to collectively as
the "PERSONAL PROPERTY"); (f) all Seller's assignable right, title and interest
in and to all purchase, service and maintenance agreements, cable television
agreements, laundry facility leases, equipment leases and any other agreements,
contracts, licenses and permits exclusively affecting or exclusively pertaining
in any way to the Real Property or the Personal Property, or any part thereof,
including, without limitation, the property management agreement and those
listed on Exhibit M attached hereto and made a part hereof, (the "SERVICE
CONTRACTS") (collectively, the Real Property, the Personal Property and the
Service Contracts are sometimes referred to herein as the "PROPERTY"). As used
herein, unless otherwise expressly stated, the term "assignable" shall mean
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assignable without any additional cost to Seller on account of such assignment,
other than de minimis and incidental transactional costs.
Article II
Purchase Price and Deposits
The purchase price which the Purchaser agrees to pay and the
Seller agrees to accept for the Property shall be the sum of Fourteen Million
Six Hundred Seventy-Five Thousand Dollars ($14,675,000) (the "PURCHASE PRICE"),
subject to adjustment as provided in Article V hereof, as to which Purchaser
shall receive a credit against the balance of such Purchase Price at Closing in
the amount equal to the unpaid principal balance (as of the Closing Date) of the
Bonds (as defined in Section 4.4.1 hereof). The Purchase Price shall be payable
as follows:
(a) An initial earnest money deposit (together with any
interest earned thereon, the "INITIAL DEPOSIT") in the amount of One
Hundred Thousand Dollars ($100,000), in cash, which has already been
deposited with Frisco Title Insurance Company (the "TITLE COMPANY") in
Tulsa, Oklahoma, such amount to be held in escrow in accordance with
the terms of this Agreement in an interest-bearing account (the
"INITIAL ACCOUNT");
(b) An additional earnest money deposit (together with
interest thereon, the "ADDITIONAL DEPOSIT") in the amount of Two
Hundred Thousand Dollars ($200,000) to be deposited with the Title
Company at the time Purchaser delivers this Agreement to the
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Title Company in accordance with the last paragraph of this Article II,
such amount to be held in escrow in accordance with the terms of this
Agreement in an interest-bearing account in the State of Oklahoma
according to this Agreement (the "ESCROW ACCOUNT"), at which time the
Title Company shall transfer the Initial Deposit from the Initial
Account to the Escrow Account to be held pursuant to the terms of this
Agreement (the Initial Deposit and, upon deposit of the Additional
Deposit as provided above, the Additional Deposit are collectively
referred to as the "DEPOSIT");
(c) The execution and delivery by Purchaser at Closing of a
Release and Indemnification Agreement substantially in the form
attached hereto as Exhibit C (the "RELEASE AGREEMENT"), whereby
Purchaser shall assume all of Seller's obligations under the Bond
Documents (as defined in Section 4.4.1 hereof) occurring from and after
the Closing, all in accordance with the terms of the Release Agreement;
and
(d) The balance of the Purchase Price (less the amount of the
Deposit) shall be paid at time of Closing by Federal wire transfer,
with the transfer of funds to Seller to be completed and the sale
proceeds received by Seller no later than 4:00 p.m. E.S.T. on the day
of the Closing.
Purchaser shall provide the Title Company with its tax
identification number, and all interest shall be for Purchaser's account for tax
purposes.
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In addition, Purchaser shall deposit three (3) fully executed
original counterparts of this Agreement with the Title Company immediately after
both parties have executed it. The date of such deposit shall be acknowledged by
the Title Company on all such counterparts, and such date shall be the
"EFFECTIVE DATE" of this Agreement. The Title Company shall retain one copy of
this Agreement and deliver one (1) copy hereof to each of Purchaser and Seller.
Article III
Failure to Close
3.1 Purchaser's Default. If Seller has complied with all of the
covenants and conditions contained herein and is ready, willing and able to
convey the Property in accordance with this Agreement and Purchaser defaults in
its obligations under this Agreement, including, without limitation, failing to
consummate this Agreement and take title, then the parties hereto recognize and
agree that the damages that Seller will sustain as a result thereof will be
substantial, but difficult if not impossible to ascertain. THEREFORE, THE
PARTIES AGREE THAT, IN THE EVENT OF PURCHASER'S DEFAULT, THE DEPOSIT SHALL BE
FORFEITED TO SELLER AS LIQUIDATED DAMAGES, AND AS SELLER'S SOLE AND EXCLUSIVE
REMEDY AT LAW AND IN EQUITY, AND BOTH PARTIES SHALL BE RELIEVED OF AND RELEASED
FROM ANY FURTHER LIABILITY UNDER THIS AGREEMENT, EXCEPT FOR THE SURVIVING
COVENANTS (AS HEREINAFTER DEFINED). SELLER AND PURCHASER AGREE THAT THE EARNEST
MONEY IS A FAIR AND REASONABLE AMOUNT TO BE RETAINED BY SELLER AS AGREED AND
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LIQUIDATED DAMAGES IN LIGHT OF SELLER'S REMOVAL OF THE PROPERTY
FROM THE MARKET AND THE COSTS INCURRED BY SELLER AND SHALL NOT
CONSTITUTE A PENALTY OR FORFEITURE.
Initials:Seller_____________ Purchaser____________
3.2 Seller's Default. In the event that Purchaser has complied with all
of the covenants and conditions contained herein and is ready, willing and able
to take title to the Property in accordance with this Agreement, and Seller
defaults in its obligations under this Agreement, including, without limitation,
failing to consummate this Agreement and convey title as set forth herein, or
breaches any representations or warranties set forth herein, then Purchaser may,
as its sole remedy, either (i) terminate this Agreement and pursue recovering
all actual expenses incurred by Purchaser in connection with this Agreement,
including, without limitation, its reasonable attorney's fees, or (ii) bring an
action for specific performance of this Agreement.
3.3 Termination of Agreement in Accordance with its Terms. In the event
that this Agreement is terminated in accordance with its terms pursuant to a
right to do so as expressly provided in this Agreement (other than a termination
by Seller pursuant to Section 3.1 above), the Deposit shall be returned to
Purchaser and no other party shall have any further rights or obligations
hereunder, except for the Surviving Covenants.
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Article IV
Closing and Transfer of Title
4.1 Closing. The parties hereto agree to conduct a closing of this sale
(the "CLOSING") on or before April 9, 1999 [30 days after end of the Feasibility
Period], or on or before April 13, 1999 [15 days after the end of the Extended
Bond Financing Approval Period], if applicable, (such actual date of Closing
shall be referred to herein as the "CLOSING DATE"), in the local office of the
Title Company, or at such other place as may be agreed upon by the parties
hereto. This Agreement shall automatically terminate, subject to any Surviving
Covenants, if transfer of title is not completed by the date provided above
(unless (i) such failure to close is due solely to Seller's default, (ii) the
date for Closing is extended pursuant to any express provision hereof, or (iii)
the date for Closing is extended by agreement of the parties, which agreement
shall be confirmed in writing).
4.2 Closing Procedure. At the Closing, Seller shall execute and/or
deliver or cause to be delivered to Purchaser, or, in the case of the items
covered by clauses (e), (f), and (j) below, to be available to Purchaser at the
Property (a) a Special Warranty Deed, in the form attached hereto as Exhibit D,
proper for recording, conveying Seller's interest in the Real Property to
Purchaser, subject, however, to (i) exceptions as reported in the Title
Commitment (defined in Section 6.5 below, (ii) any and all easements, rights of
way, encumbrances, liens, covenants, restrictions, or other matters of record,
(iii) any and all matters shown on the Survey (as defined in Section 6.4
hereof), (iii) taxes not yet due and payable, (iv) the rights of lessees and
licensees of space in the
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Improvements at the time of Closing (to the extent shown on the Rent Roll
delivered at Closing or as otherwise provided under this Agreement), and (v) any
encumbrances created or permitted by the terms of this Agreement, except in each
case for title or survey matters which Purchaser objects to in writing prior to
the expiration of the Feasibility Period and which Seller expressly agrees in
writing to cure prior to Closing (collectively, the "PERMITTED EXCEPTIONS"); (b)
a bill of sale (the "BILL OF SALE") in the form attached hereto as Exhibit E,
dated as of the date of Closing conveying to Purchaser any and all Personal
Property and the Service Contracts; (c) an assignment of Leases (the "Assignment
of Leases and Security Deposits") in the form attached hereto as Exhibit F,
dated the date of Closing, assigning all of the landlord's right, title and
interest in and to all of the Leases; (d) Tenant Notification Agreements (the
"TENANT NOTICES"), dated the date of the Closing, executed by Seller, and
complying with applicable statutes in order to relieve Seller of liability for
tenant security deposits (provided the security deposits are paid to Purchaser),
notifying the tenants that the Property has been sold to Purchaser and directing
the tenants to pay rentals to Purchaser (or Purchaser's designated agent); (e)
the originals of all Leases, (f) to the extent in the possession or control of
Seller or Seller's property management company, (i) as-built plans and
specifications, surveys, site plans, engineering plans and studies, utility
plans, development plans and marketing artwork, (ii) the originals of all
guaranties and warranties relating to the Property, (iii) the originals of all
governmental licenses and permits relating to the Property, including, without
limitation, a currently effective certificate of occupancy, (iv) the originals
of all books and records of the Property, (v) all Service Contracts, and (vi)
all maintenance records; (g) an indemnification agreement (the "INDEMNIFICATION
AGREEMENT") in the form attached as Exhibit G, dated the date of Closing; (h) an
affidavit that
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Seller is not a "foreign person" in the form attached as Exhibit H; (i) a
duplicate key for all locks in the Improvements; (j) the Release Agreement; and
(k) a termite inspection report reasonably satisfactory to Purchaser dated not
more than sixty (60) days prior to the Closing Date.
In addition, if required by the Title Company, Seller shall deliver to
the Title Company a reasonable Seller's affidavit, negotiated in good faith
between Seller and the Title Company, as to matters concerning title to the
Property which can only be reasonably ascertained by the Title Company from
Seller and which are actually known to Seller "to the best of Seller's
knowledge", as that term is described in Section 10.3 hereof.
Purchaser acknowledges and agrees that, except for objections which
Seller expressly agrees to cure in accordance with Section 6.4 or in Section 6.5
hereof, Seller is under no obligation under the terms of this Agreement to clear
from title any easements, rights of way, encumbrances, liens, covenants,
restrictions, or any other matters of record or to cure any Survey objections of
Purchaser, or to create any encumbrances on, or for the benefit of, the
Property. If Seller does not deliver title at Closing pursuant to the deed in
form provided in clause 4.2(a) above and such failure is not a result of (i)
Seller's acquiescence in the placement of or failure to remove a monetary lien
(other than those pertaining to the Bond Financing or those caused by the acts
of Purchaser or its agents), or (ii) Seller's failure to pay real estate taxes
due and payable, such failure shall not constitute a breach of or default by
Seller hereunder, and notwithstanding any other provision of this Agreement,
Purchaser's sole and exclusive remedy shall be (i) to terminate this Agreement
and receive a prompt return of the Deposit, in which case neither party
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shall have any further obligations pursuant to this Agreement except for the
Surviving Covenants, or (ii) to accept conveyance by Seller of such title as it
delivers without reduction of the Purchase Price.
4.3 Purchaser's Performance. At the Closing, Purchaser will cause the
Purchase Price, plus or minus prorations, less the unpaid principal balance of
the Bonds, to be delivered to Seller, will execute and deliver the
Indemnification Agreement, the Assignment of Leases, the Bill of Sale, the
Release Agreement, and any other documentation as is required pursuant to
Section 4.4 hereof to evidence Purchaser's assumption of all the obligations of
the Seller under the Bond Documents (as defined in Section 4.4.1 hereof).
4.4 Bond-Related Documentation; Special Condition to Purchaser's
Obligations; Release of Seller from Bond Obligations.
4.4.1 Bond-Related Documentation. Acquisition, construction
and development of the Project was financed initially by a loan to
Seller's predecessor-in-interest (the "ORIGINAL BOND FINANCING") of the
proceeds received from the sale of those certain Tulsa County
Multi-Family Housing Revenue Bonds (Credit Enhanced Projects), Series
1985A in the original principal amount of $12,775,000 (the "ORIGINAL
BONDS") issued by the Tulsa County Home Finance Authority (the
"ISSUER"). The obligations represented by the Issuer's Original Bonds
were refunded by the Multi-Family Housing Revenue Bonds, Taxable Series
1993A (Waterford Project) in the original principal amount of
$11,355,000
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(the "Tax Exempt Bonds") and the Issuer's Multi-Family Housing Revenue
Bonds, Taxable Series 1993B (Waterford Project) in the original
principal amount of $400,000 (the "Taxable Bonds") (the Tax Exempt
Bonds and the Taxable Bonds are hereinafter referred to as the
"Bonds"). The current refunded bond financing (the "Bond Financing") is
evidenced by (i) a Promissory Note (Series 1993A Bonds) dated December
1, 1993 in the original principal amount of $11,355,000 from Seller to
Issuer, and (ii) a Promissory Note (Series 1993B Bonds) dated December
1, 1993 in the original principal amount of $400,000 from Seller to
Issuer which was repaid in full on December 1, 1998, (collectively, the
"Notes"), and (iii) a Loan Agreement dated as of December 1, 1993 by
and between Seller and Issuer (the "LOAN AGREEMENT"). Issuer and Bank
of Oklahoma, National Association, as trustee (the "TRUSTEE") executed
that certain Trust Indenture dated as of December 1, 1993 (the
"INDENTURE") for the purpose of authorizing and securing the Bonds,
prescribing the terms thereof and the conditions, terms, trusts, and
provisions upon which the Bonds were delivered and the proceeds thereof
expended and held. The Loan Agreement, the Indenture, that certain
Escrow Trust Agreement dated as of December 1, 1993 by and among
Issuer, Trustee and Seller, the Tax Regulatory Agreement dated as of
December 1, 1993 by and among Issuer, Trustee and Seller, and any and
all other documents and agreements evidencing, securing or otherwise
executed and delivered in connection with the Bond Financing set forth
on Exhibit N hereto are hereinafter collectively referred to herein as
the "BOND DOCUMENTS".
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4.4.2 Special Condition to Purchaser's Obligations. It shall
be a condition of Purchaser's obligations hereunder that it acquire the
Property subject to the Bond Financing. Purchaser, at its sole cost and
expense, will use its good faith efforts to obtain all necessary
consents, approvals and agreements required under the Bond Documents to
its purchase of the Property or its purchase of the Partnership
Interests (as hereinafter defined) subject to the Bond Financing, to
assume the Existing Credit Enhancement Liability (as hereinafter
defined) or obtain and provide satisfactory substitute credit
enhancement for the Bonds and to release Seller from the Existing
Credit Enhancement Liability in accordance with the Indenture
("ALTERNATE SECURITY") and to otherwise satisfy the conditions of this
Section 4.4.2 and Section 4.4.3. As used herein, "Existing Credit
Enhancement Liability" shall mean (i) the Policy of Indemnity issued by
AXA Reinsurance UK Plc ("AXA") on December 1, 1993 to the Trustee, as
insured (the "Policy"), (ii) the Reimbursement Agreement dated as of
December 1, 1993 by and between Seller and AXA, and (iii) the Mortgage,
Security Agreement, Assignment of Rents and Leases, Fixture Filing and
Financing Statement dated as of December 1, 1993 from Seller as
"Mortgagor" to Issuer and AXA, each as "Co-Mortgagee". Seller agrees to
cooperate with Purchaser to effect the obtaining of any such consents,
provided that Seller shall not be obligated to consent to (i) expend
funds, (ii) consent to, agree to or cause any amendment or agreement
with respect to the Bonds or the Bond Financing which will be effective
prior to the Closing or upon a failure to close for any reason
whatsoever, (iii) make or give any irrevocable notices or elections
with respect to the Bonds, the Bond Documents or the Bond Financing
which would be effective prior to the Closing which, in
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Seller's sole opinion, in any case, could result in any additional
liability, monetary obligation, or expense of Seller under the Bonds,
whether or not the Closing occurs, except as may be expressly provided
herein.
Purchaser shall have until the end of the Feasibility Period
(defined in Section 6.3 below) to obtain all required assurances,
consents, approvals and agreements, including those of or with the
Issuer, the trustee, bond counsel, AXA, or the provider of any
Alternate Security (which shall be unconditioned except for those
conditions which can only be satisfied at and as of the Closing)
necessary for Purchaser to (a) acquire the Property or the Partnership
Interests subject to the Bond Financing, and (b) satisfy the conditions
of Sections 4.4.2 and 4.4.3 of this Agreement (collectively, the "BOND
FINANCING APPROVALS"); provided, however, that if Purchaser is unable
to obtain the Bond Financing Approvals prior to the end of the
Feasibility Period, through no fault of Purchaser, Purchaser may
request from Seller an extension of the time period to obtain the Bond
Financing Approvals until March 29, 1999 (such period being hereinafter
referred to as the "EXTENDED BOND FINANCING APPROVAL PERIOD"), which
request must be in writing. The delivery of the request for the
Extended Bond Financing Approval Period shall constitute Purchaser's
agreement and acknowledgment of approval as to all other aspects of the
Property and of the Bond Financing and Bond Documents (with the sole
exception of being able to obtain the Bond Financing Approvals) and
shall constitute Purchaser's election not to terminate this Agreement
for any reason other than its failure to obtain the Bond Financing
Approvals prior to the expiration of the Extended Bond
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Financing Approval Period, subject to Purchaser's rights to terminate
the Agreement as set forth in Section 3.2, Section 4.2, in the last
sentence of this Section 4.4.2, Article 7 and as otherwise expressly
set forth in this Agreement. In the event that, after good faith and
diligent efforts throughout the Extended Bond Financing Approval
Period, Purchaser is still unable to obtain the Bond Financing
Approvals, either Purchaser or Seller may terminate this Agreement for
such reason and have the Deposit returned, after which neither party
shall have any further rights or duties hereunder except for the
Surviving Covenants.
The parties agree that it shall be a condition of Purchaser's
obligations hereunder that, on or prior to the Closing Date, bond
counsel retained by Purchaser shall have issued its opinion to the
effect that the transfer of the Property to Purchaser, or the
assumption of the Partnership Interests by Purchaser, and the execution
of the documents in connection therewith will not cause interest on the
Bonds to be includable in the gross income of the recipients thereof
for federal income tax purposes.
4.4.3 Release of Seller from Bond Obligations and from
Existing Credit Enhancement Liability. It is a condition to Seller's
obligations hereunder that Seller and its partners be fully and
unconditionally released at Closing for all periods from and after the
Closing Date from all obligations with regard to the Existing Credit
Enhancement Liability with respect to the Bonds, the Bond Documents,
the Issuer, the Trustee, and all other parties or circumstances with
respect to the Bond Financing, which releases shall be
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evidenced by the Release Agreement and a corresponding release of
Seller and its partners from all Developer/Owner obligations under the
Bond Documents for all periods from and after the Closing Date.
4.4.4 Fees and Costs. Purchaser hereby agrees to pay all
costs, expenses, and fees due to any third party (other than Seller's
outside counsel and Seller's bond counsel) in connection with
Purchaser's efforts to satisfy the conditions to Closing contained in
Sections 4.4.2 and 4.4.3 above. Notwithstanding any provision to the
contrary herein, Purchaser's obligations under this Section 4.4.4 shall
survive the expiration or termination of this Agreement, and shall
survive Closing.
4.4.5 No Covenants. Notwithstanding anything in this Agreement
to the contrary, the approvals, consents and releases of the
obligations of Purchaser and Seller relating to the Bonds as referred
to in Sections 4.4.2 and 4.4.3 hereof are only conditions precedent to
the Closing of the transaction contemplated hereby, and neither
Purchaser nor Seller covenant that such approvals, consents or releases
can or will be obtained. Failure to obtain such approvals, consents or
releases shall not constitute a breach by either party of this
Agreement, the sole and exclusive remedy of either party for such
failure being termination of this Agreement, subject to the Surviving
Covenants, and return to Purchaser of the Deposit.
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4.5 Evidence of Authority; Miscellaneous. Both parties will deliver to
the Title Company and each other such evidence or documents as may reasonably be
required by the Title Company or either party hereto evidencing the power and
authority of Seller and Purchaser and the due authority of, and execution and
delivery by, any person or persons who are executing any of the documents
required hereunder in connection with the sale of the Property. Both parties
will execute and deliver such other documents as are reasonably required to
effect the intent of this Agreement.
4.6 Assignment and Assumption of Partnership Interests in Seller. In
lieu of purchasing the Property as set forth herein, at Closing, Purchaser may
elect to purchase one hundred percent (100%) of the partnership interests in
Seller (the "Partnership Interests") pursuant to the Assignment and Assumption
of Partnership Interests attached hereto as Exhibit O. If Purchaser elects to
purchase the Partnership Interests, as a condition precedent to Closing, Seller
shall deliver to Purchaser evidence that Seller's partners have consented to the
assignment and assumption by Purchaser of the Partnership Interests.
Article V
Prorations of Rents, Taxes, Etc.
All revenues, taxes and other expenses of the Property shall be
prorated at Closing as of 12:01 a.m. on the Closing Date. Real estate taxes for
the year of Closing shall be prorated as of the date of Closing either using
actual tax figures or, if actual figures are not available, then using
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 17
as a basis for said proration the most recent assessed value of the Real
Property multiplied by the current tax rate, with a subsequent cash adjustment
to be made between Purchaser and Seller outside escrow when actual tax figures
are available, but in no event later than the date which is 120 days after the
Closing Date (the "Final Settlement Date). Personal property taxes, annual
permit or inspection fees, sewer charges, and other expenses normal to the
operation and maintenance of the Property shall also be prorated as of the date
of Closing, either using actual figures or, if actual figures are not available,
then using good faith estimates, with a subsequent cash adjustment to be made
between Purchaser and Seller outside closing when actual figures are available,
but in no event later than the Final Settlement Date. Rents and other income
that have been collected for the month of the Closing will be prorated at the
Closing, effective as of 12:01 a.m. on the Closing Date. Interest on the Bonds
shall be prorated as of the Closing and an appropriate adjustment shall be made.
Seller shall receive a credit for all funds in (i) the debt service reserve
escrow account with regard to the Bonds, and (ii) the cash collateral escrow
account with regard to the Bonds. With regard to rents that are delinquent as of
the date of the Closing, (i) no proration will be made at the Closing, (ii)
Purchaser will make a good faith effort after the Closing to collect the rents
in the usual course of Purchaser's operation of the Property, and (iii)
Purchaser will apply all rents collected first to the rents owed to Purchaser
for periods after the Closing, and the excess amount, if any, collected by
Purchaser within 120 days after Closing shall be applied to the delinquent rent
owed to Seller. It is agreed, however, that Purchaser will not be obligated to
institute any lawsuit or other collection procedures to collect delinquent
rents. Rents collected by Purchaser within 120 days after the Closing Date, to
which Seller is entitled, shall be promptly paid to Seller. As of the Closing
Date, Purchaser shall be
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 18
entitled to a credit for any tenant deposits under the Leases, together with
interest thereon to the extent any interest is required by law or otherwise to
be paid to such tenants. Final readings on all gas, water and electric meters
shall be made as of the Closing Date, if possible. If final readings are not
possible, gas, water and electricity charges will be prorated based on the most
recent period for which costs are available. Any deposits made by Seller with
utility companies shall be returned to Seller. Purchaser shall be responsible
for making all arrangements for the continuation of utility services. After the
Closing, Purchaser will assume full responsibility for all security deposits and
advance rental deposits of current tenants of the Real Property currently held
by Seller, which items will be itemized by Seller and transferred and paid over
to Purchaser at the Closing.
All items (including taxes) that are not subject to an exact
determination shall be estimated by the parties. When any item so estimated is,
after the Closing capable of exact determination, but in no event later than the
Final Settlement Date, the party in possession of the facts necessary to make
the determination shall send the other party a detailed report on the exact
determination so made and the parties shall adjust the prior estimate within
thirty (30) days after both parties have received said reports.
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Article VI
Purchaser Inspections and Contingencies
6.1 Document Inspection. Purchaser acknowledges that Seller has
delivered , to the extent in the possession of Seller for review by Purchaser,
the items or materials listed on Exhibit I attached hereto and made a part
hereof, other than the Title Commitment (as hereinafter defined), the Supporting
Documents (as hereinafter defined), and the Survey (as hereinafter defined) (
such items except for the Title Commitment, the Supporting Documents, and the
Survey are hereinafter referred to collectively as the "DUE DILIGENCE
MATERIALS"). In the event Seller obtains after the Effective Date any additional
items or materials which are included within the categories contained in Exhibit
I, copies of such items or materials shall be promptly delivered to Purchaser.
Purchaser agrees that if for any reason the Closing is not consummated,
Purchaser will immediately return to Seller any and all materials furnished to
Purchaser pursuant to this Section 6.1 or otherwise obtained by Purchaser with
respect to the Property.
Purchaser acknowledges and agrees that Seller's having delivered or
made available to Purchaser the foregoing items in accordance with this Section
6.1 constitutes a good faith undertaking only, and does not constitute a
representation or warranty on the part of Seller with respect to any of the
foregoing or with respect to the accuracy of the materials furnished to
Purchaser.
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 20
6.2 Physical Inspection. In addition to Seller's having made available
to Purchaser the Due Diligence Materials, Purchaser acknowledges that Seller has
made the Property available to Purchaser and Purchaser has conducted, or will
during the Feasibility Period conduct, at Purchaser's risk, a Phase I
environmental audit (the "Environmental Audit") of the Property. The
Environmental Audit shall be conducted at a reasonable times so as not to
interfere with the business of tenants at the Real Property. Seller shall have
the right to designate a representative to accompany Purchaser's employees,
agents, and independent contractors on any such Environmental Audit.
Purchaser hereby agrees to pay, protect, defend, indemnify and save
Seller harmless against all liabilities, obligations, claims (including
mechanic's lien claims), damages, penalties, causes of action, judgments, costs
and expenses (including, without limitation, reasonable attorneys' fees and
expenses) imposed upon, incurred by or asserted against Seller involving either
bodily injury or property damage in connection with or arising out of the entry
upon the Real Property, either prior to or after execution and delivery of this
Agreement and caused by Purchaser's employees, agents or independent contractors
and the actions of such persons on the Real Property. In the event any part of
the Property is or has been damaged or excavated by Purchaser, its employees,
agents or independent contractors, Purchaser agrees in the event its purchase
hereunder is not consummated, to make such additional payments to Seller as may
be reasonably required to return the Property to its condition immediately prior
to such damage or excavation or, at Seller's option, to cause such work to be
done. Notwithstanding any provision
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 21
to the contrary herein, Purchaser's obligations under this subparagraph shall
survive the expiration or termination of this Agreement, and shall survive
Closing.
6.3 Feasibility Period. Purchaser shall have the period from February
22, 1999 until 5:00 p.m. E.S.T. on March 8, 1999 (the "FEASIBILITY PERIOD") to
conduct its inspection of the Due Diligence Materials. On or before the last day
of the Feasibility Period, Purchaser may, in its sole discretion without
obligation to specify which aspect of its inspection was unsatisfactory,
terminate this Agreement by delivering a written notice to Seller so providing.
Upon receipt of such notice, this Agreement shall terminate and Seller shall
instruct the Title Company to return the Deposit to Purchaser, and neither party
shall have any obligation to the other, except for the Surviving Covenants. If
Purchaser fails to deliver such notice of termination on or before the last day
of the Feasibility Period, (a) Purchaser shall be deemed to have approved the
Due Diligence Materials, (b) this Agreement shall remain in full force and
effect, and (c) the Deposit shall become non-refundable, subject only to
Purchaser's right to terminate this Agreement as provided in this Agreement.
6.4 Survey Contingency. Purchaser shall have until 5:00 p.m.E.S.T. on
the later of (i) the last day of the Feasibility Period, or (ii) ten (10) days
after receipt of the Survey to terminate this Agreement due to any objection to
the Survey (as defined on Exhibit I) or any information reflected thereon. The
Survey and all information reflected thereon shall be deemed approved in all
respects if Seller has not received written notice of Purchaser's termination
before such date. If Purchaser does terminate this Agreement in writing
delivered prior to the expiration of the
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 22
Feasibility Period, Seller shall instruct the Title Company to return the
Deposit to Purchaser, and neither party shall have any further obligations
hereunder, except for the Surviving Covenants.
6.5 Title Contingency. It shall be a condition to Purchaser's
obligation to close hereunder that the Title Company issue at Closing an ALTA
Form B (1970) Owner's Title Insurance Policy (or an equivalent form for
Oklahoma) (or a marked-up commitment therefor) insuring fee simple title to the
Real Property in Purchaser in the amount of the Purchase Price subject only to
the Permitted Exceptions (the "TITLE POLICY"), containing an extended coverage
endorsement over the so-called general or standard exceptions which are a part
of the printed form of the policy (unless the same are deleted), an endorsement
deleting any creditors' rights exceptions or exclusions (if any appear in the
form of policy to be issued), an owner's comprehensive endorsement, an ACTA Form
3.1 zoning endorsement, an ACTA Form 9 comprehensive endorsement, an ACTA Form
8.1 environmental endorsement, a survey/location endorsement, an access (to
publicly dedicated street) endorsement, a contiguity (if more than one parcel)
endorsement, and a tax parcel endorsement (collectively, the "Title
Endorsements"). Accordingly, Purchaser has obtained, or shall, during the
Feasibility Period, obtain a commitment for the Title Policy (the "TITLE
COMMITMENT"), issued by the Title Company in the amount of the Purchase Price,
together with copies of all items and documents referred to in the Title
Commitment (the "SUPPORTING DOCUMENTATION").
Purchaser shall have until 5:00 p.m. E.S.T. on the later of (i) the
last day of the Feasibility Period, or (ii) ten (10) days after receipt of the
Title Commitment to terminate this Agreement
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 23
due to any objections to the Title Commitment or any information reflected
thereon. The Title Commitment, the Supporting Documentation and all information
reflected thereon shall be deemed approved in all respects if Seller has not
received written notice of Purchaser's termination of this Agreement before such
date. Notwithstanding the foregoing, provided that Purchaser notifies Seller
specifically in writing on or before the last day of the Feasibility Period as
to the existence of any Removable Liens (defined below), Seller shall cause the
Title Company to remove (with proceeds of the Purchase Price, unless otherwise
provided by Seller) from the Owner's Title Policy all monetary liens and
encumbrances affecting the Property, other than liens associated with the Bond
Financing and liens for current taxes not yet due and payable ("REMOVABLE
LIENS"). If Purchaser does terminate this Agreement in writing delivered prior
to the expiration of the Feasibility Period, then Seller shall instruct the
Title Company to return the Deposit to Purchaser, and neither party shall have
any further obligations hereunder, except for the Surviving Covenants.
Article VII
Loss due to Casualty or Condemnation
7.1 Loss due to Condemnation. In the event of a condemnation of all or
a Substantial Portion (hereinafter defined) of the Real Property which
condemnation shall or would render a Substantial Portion of the Real Property
untenantable, or if any portion of the building or
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 24
substantial parking area is taken, or if the existing access to the Property is
materially altered or restricted in any way, Purchaser may, upon written notice
to Seller given within ten (10) Business Days (as hereinafter defined) of
receipt of notice of such event, terminate this Agreement, in which event Seller
shall instruct the Title Company to return the Deposit to Purchaser, this
Agreement shall terminate and neither party shall have any rights or obligations
hereunder, except for the Surviving Covenants. In the event that Purchaser
elects not to terminate, or if the condemnation affects less than a Substantial
Portion or does not affect the building or substantial parking area, then this
Agreement shall remain in full force and effect, and Seller shall be entitled to
all monies received or collected by reason of such condemnation prior to
Closing. In such event, the transaction hereby contemplated shall close in
accordance with the terms and conditions of this Agreement except that there
will be an abatement of the Purchase Price equal to the amount of the net
proceeds (less costs and attorneys fees), which are received by Seller by reason
of such condemnation prior to Closing. If the condemnation proceeding shall not
have been concluded and no condemnation proceeds have been paid to or for the
benefit of Seller prior to the Closing, then there shall be no abatement of the
Purchase Price and Seller shall assign any interest it has in the pending award
to Purchaser. For purposes of this Section 7.1, a Substantial Portion shall mean
a condemnation of in excess of $100,000 in value of the Real Property.
7.2 Loss due to Casualty. In the event of Substantial Loss or Damage
(hereinafter defined) to the Real Property by fire or other casualty (not
resulting from acts of Purchaser or its agents), Purchaser may, upon written
notice to Seller given within ten (10) Business Days of receipt of notice of
such event, terminate this Agreement in which event Seller shall instruct the
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 25
Title Company to return the Deposit to Purchaser and this Agreement shall
terminate and neither party shall have any rights or obligations hereunder,
except for the Surviving Covenants. In the event that Purchaser elects not to
terminate, or if the casualty results in less than Substantial Loss or Damage,
then this Agreement shall remain in full force and effect and Seller shall be
entitled to all insurance proceeds received or collected by reason of such
damage or loss, whereupon the transaction hereby contemplated shall close in
accordance with the terms and conditions of this Agreement except that there
will be abatement of the Purchase Price equal to the amount of the net proceeds
plus all deductible amounts under any applicable casualty insurance of Seller
less costs and attorney's fees, which are received by Seller as a result of such
damage or loss, provided that such abatement will be reduced by the amount
expended by Seller in accordance with Article VIII hereof for restoration or
preservation of the Property following the casualty. Alternatively, Purchaser
may, in its discretion, have Seller repair or replace the damaged Property, and
there shall be no abatement of the Purchase Price in such case. However,
Purchaser shall not be entitled to require Seller to effect repair or
replacement unless the loss is entirely covered by insurance (except for any
applicable deductible), Seller is not restricted from using such proceeds for
repairs or restoration by the terms of any existing mortgage or the Bond
Documents, and the repair or replacement will take no more than three (3) months
to complete. For purposes of this Section 7.2, "SUBSTANTIAL LOSS OR DAMAGE"
shall mean loss or damage, the cost for repair of which exceeds $100,000.
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 26
Article VIII
Seller's Operation and Maintenance of the Property Prior to Closing
Between the Effective Date of this Agreement and the earlier of (i) the
Closing Date, or (ii) the termination of this Agreement, Seller shall maintain
the Property in good repair, reasonable wear and tear excepted, shall perform
all work required to be done under the terms of any lease or agreement relating
to the Property, and shall timely make all repairs, maintenance and replacements
of equipment or improvements, the same as though Seller were retaining the
Property; except that in the event of a fire or other casualty, damage or loss,
Seller shall have no duty to repair said damage, except as set forth in Section
7.2 above. However, Seller may repair any such damage with Purchaser's prior,
written approval and may, without Purchaser's approval, repair damage where such
repair is necessary in Seller's reasonable opinion to preserve and protect the
health and safety of tenants of the Property or to preserve the Property from
imminent risk of further damage or if required to do so by Seller's insurance
carrier. Any such emergency repairs shall be reported to Purchaser within 48
hours of their completion. During the period prior to Closing and after the last
day of the Feasibility Period, Seller shall not lease any portion of the Real
Property except in the ordinary course of business.
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 27
Article IX
Broker
Purchaser and Seller represent to each other that they have dealt with
no agent or broker who in any way has participated in the sale of the Property,
except for Case & Associates Properties, Inc. ("Case") and CB Richard Ellis
("CB") (collectively, the "BROKERS"). The brokerage fee of one-half percent
(.5%) of the Purchase Price owed to Case and the brokerage fees of one and
one-quarter percent (1.25%) owed to CB will be paid by Seller at Closing. Each
party will indemnify the other for any and all brokerage fees and commissions of
any brokers based on dealings with them other than as provided above.
Article X
Representations and Warranties
10.1 Limitations on Representations and Warranties. Purchaser hereby
agrees and acknowledges that, except as set forth in Section 10.2 below, neither
Seller nor any agent, attorney, employee or representative of Seller has made
any representation whatsoever regarding the subject matter of this sale, or any
part thereof, including (without limiting the generality of the foregoing)
representations as to the physical nature or condition of the Property or the
capabilities thereof, and that Purchaser, in executing, delivering and/or
performing this Agreement, does not rely upon any statement and/or information
to whomever made or given, directly or indirectly, orally or in writing, by any
individual, firm or corporation. Purchaser agrees to take the Real
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 28
Property and the Personal Property "as is," as of the Effective Date,
reasonable wear and tear excepted. EXCEPT AND ONLY TO THE EXTENT AS MAY BE
EXPRESSLY PROVIDED IN THIS AGREEMENT, SELLER MAKES NO REPRESENTATIONS OR
WARRANTIES AS TO THE PHYSICAL CONDITION OF THE PROPERTY OR THE SUITABILITY
THEREOF FOR ANY PURPOSE FOR WHICH PURCHASER MAY DESIRE TO USE IT. SELLER HEREBY
EXPRESSLY DISCLAIMS ANY WARRANTIES OF MERCHANTABILITY AND/OR FITNESS FOR A
PARTICULAR PURPOSE AND ANY OTHER WARRANTIES OR REPRESENTATIONS AS TO THE
PHYSICAL CONDITION OF THE PROPERTY. PURCHASER, BY ACCEPTANCE OF THE DEED, AGREES
THAT IT HAS INSPECTED THE PROPERTY AND ACCEPTS SAME "AS-IS" AND "WITH ALL
FAULTS" AND THIS PROVISION SHALL SURVIVE CLOSING AND DELIVERY OF THE DEED.
Purchaser understands that Seller makes no representation and warranty
with regard to any financial statements and data, including, without limitation,
gross rental income, operating expenses and cash flow statements relating to the
Property as all such financial data and statements have been prepared by the
property manager, Case and Associates, which is an affiliate of Purchaser.
10.2 Representations and Warranties of Seller. Seller makes the
following representations and warranties and agrees that Purchaser's obligations
under this Agreement are
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 29
conditioned upon the truth and accuracy of such representations and warranties,
both as of this date and as of the Closing Date:
Except as may be disclosed in the Due Diligence Materials,
(a) To the best of Seller's knowledge, Seller has received no
notice of any existing, pending or threatened litigation,
administrative proceeding or condemnation or sale in lieu thereof, with
respect to any portion of the Real Property, except as noted on Exhibit
J attached hereto.
(b) To the best of Seller's knowledge, Seller has received no
notice from any governmental authority pertaining to the Real Property.
(c) Except for those tenants and licensees in possession of
the Real Property under written Leases as shown in the Rent Roll (as
the same may be updated before Closing), to the best of Seller's
knowledge, there are no parties in possession of, or, to the best of
Seller's knowledge, claiming any possession to, any portion of the Real
Property as lessees, tenants at sufferance, licensees, trespassers or
otherwise.
(d) Seller has delivered to Purchaser a true, complete and
correct copy of Seller's partnership agreement.
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 30
(e) There are no attachments or executions affecting the
Property, general assignments for the benefit of creditors, or
voluntary or involuntary proceedings in bankruptcy, pending or, to the
best of Seller's knowledge, threatened against Seller.
(f) Except as otherwise disclosed in the Environmental Audit
and except for normal and customary use of Hazardous Materials (as
hereinafter defined) in the use and operation of the Property in the
ordinary course of business, during the period of Seller's ownership of
the Property, (i) Seller has not itself, and to the best of Seller's
knowledge, no prior owner or current or prior tenant or other occupant
of all or any part of the Property at any time has, used Hazardous
Materials on, from, or affecting the Property in any manner that
violates any Environmental Laws (as hereinafter defined), and (ii) to
the best of Seller's knowledge, no Hazardous Materials have been
disposed of in, on or under the Property. "HAZARDOUS MATERIALS" shall
mean and include those elements, materials, compounds, mixtures, wastes
or substances which are contained in any list of hazardous substances
adopted by the United States Environmental Protection Agency (the
"EPA") or any list of toxic pollutants designated by Congress or the
EPA or which are defined as hazardous, toxic, pollutant, infectious,
flammable or radioactive by any of the Environmental Laws and, whether
or not included in such lists, shall be deemed to include all products
or substances containing lead, petroleum, asbestos, and polychlorinated
biphenyls.
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"ENVIRONMENTAL LAWS" shall mean and include any Federal, State,
or local statute, law, ordinance, code, rule, regulation, order, or
decree regulating or relating to protection of human health or the
environment, or regulating or imposing liability or standards of
conduct concerning the use, storage, treatment, transportation,
manufacture, refinement, handling, production or disposal of any
hazardous, toxic, or dangerous waste, substance, element, compound,
mixture or material, as now or at any time hereafter in effect
including, without limitation, the Federal Comprehensive Environmental
Response, Compensation and Liability Act, as amended, 42 U.S.C.
ss.ss.9601 et seq., the Superfund Amendments and Reauthorization Act,
42 U.S.C. ss.ss.9601 et. seq., the Federal Oil Pollution Act of 1990,
ss.ss.2701, et. seq., the Federal Toxic Substances Control Act, 15
U.S.C. ss.ss.2601 et. seq., the Federal Resource Conservation and
Recovery Act as amended, 42 U.S.C. ss.ss.6901 et. seq., the Federal
Hazardous Materials Transportation Act, 49 U.S.C. ss.ss.1801 et. seq.,
the Federal Clean Air Act 42 U.S.C. ss.7401 et. seq., the Federal
Water Pollution Control Act, 33 U.S.C. ss.1251 et. seq., the River and
Harbors Act of 1899, 33 U.S.C. ss.ss.401 et. seq., all rules and
regulations of the EPA, or any other state or federal department,
board, or agency, or any other agency or governmental board or entity
having jurisdiction over the Security, as any of the foregoing have
been, or are hereafter amended.
(g) Seller has all requisite partnership power and authority
to enter into this Agreement and convey the Property or the Partnership
Interests, as applicable, to Purchaser and to execute and deliver all
agreements and documents in connection
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 32
therewith as are contemplated by this Agreement in accordance with and
subject to the terms and conditions of this Agreement. Neither the
delivery of this Agreement nor its performance by Seller, subject to
obtaining the Bond Consents, will conflict with or result in the breach
of any contract, agreement, law, rule, regulation, judgment or lien to
which Seller is a party or by which Seller is bound.
(h) This Agreement and its performance by Seller have been
duly authorized by all necessary partnership action under Seller's
partnership agreement.
10.3 Seller's Knowledge. Whenever the term "to the best of Seller's
knowledge" is used in this Agreement or in any representations and warranties
given to Purchaser at Closing, such knowledge shall be the actual knowledge of
John D. Carey (the "Key Personnel") who is President of CIGNA Realty Resources,
Inc. - Fifth, the sole general partner of Connecticut General Realty Investors
III Limited Partnership ("CGRI III"), the managing partner of Seller, after
review of the files of Seller (to the extent within the possession or control of
CGRI III), and inquiry of Seller's property manager. Seller shall have no duty
to conduct any further inquiry in making any such representations and
warranties, and no knowledge of any other person shall be imputed to Seller or
to the Key Personnel.
10.4 Representations and Warranties of Purchaser. Purchaser makes
the following representations and warranties and agrees that Seller's
obligations under this Agreement are
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 33
conditioned upon the truth and accuracy of such representations and warranties,
both as of this date and as of the Closing Date:
(a) Purchaser has all requisite power and authority to enter
into this Agreement and purchase the Property or the Partnership
Interests, as applicable, from Seller and to execute and deliver all
agreements and documents in connection therewith as are contemplated by
this Agreement in accordance with and subject to the terms and
conditions of this Agreement. Neither the execution and delivery of
this Agreement nor its performance by Purchaser will conflict with or
result in the breach of any contract, agreement, law, rule or
regulation to which Purchaser is a party or by which Purchaser is
bound; and
(b) This Agreement has been duly authorized by all necessary
action on the part of Purchaser.
10.5 Survival. All representations and warranties contained in Section
10.2 will survive the Closing of this transaction (but only as to the status of
facts as they exist as of the Closing, it being understood that Seller makes no
representations or warranties which would apply to changes or other matters
occurring after the Closing), but shall expire on the date one (1) year from the
date of Closing, and no action on such representations and warranties may be
commenced after such expiration.
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 34
Article XI
Liability of Seller
Except for any liability of Seller under the provisions of Article X,
neither Seller, nor any partner of Seller, nor any independent property manager
which Seller has hired to manage the Property shall, by entering into this
Agreement, become liable for any costs or expenses incurred by Purchaser
subsequent to the date of Closing, (a) for any labor performed on, or materials
furnished to, the Real Property on or after the Closing Date, or (b) for any
leasing commissions or other fees or commissions due for renewals or extensions
of existing leases or otherwise renewed or extended after the Closing Date
(unless the existence of such commissions or fees was not disclosed to Purchaser
in this Agreement or in the Due Diligence Materials or otherwise, (c) for
compliance with any laws, requirements or regulations of, or taxes, assessments
or other charges thereafter due to, any governmental authority and related to
events first occurring on or after the Closing Date, or (d) under the Bond
Documents and relating to obligations thereunder related to periods on and after
the Closing Date, or (e) for any other charges or expenses whatsoever pertaining
to the Property or to the ownership, title, possession, use, or occupancy of the
Property, whether or not such costs and expenses were incurred pursuant to
obligations of Purchaser under this Agreement (including, without limitation,
any costs of compliance with presently-existing and future environmental laws,
any environmental remediation costs, and any costs of, or awards of damages for,
damage to the environment, to natural resources, or to any third party), it
being the intent of this Agreement\, as between Purchaser and Seller, to shift
all such liability to Purchaser for liabilities which arise from or relate to an
event first occurring from
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 35
and after the Closing Date, except for any liability of Seller under the
provisions of Article X hereof, and Purchaser hereby agrees to defend, indemnify
and hold Seller and its property manager harmless from any such liability for
costs and expenses. The provisions of this Article XI shall survive Closing.
Except as may be specifically limited herein, nothing contained in this Article
XI is in any way intended to limit any rights of the parties hereto to pursue
any remedies as may exist at law or in equity against any unrelated third
parties with respect to the liabilities covered by this Article XI.
Article XII
Assignment
This Agreement is solely for the benefit of Seller and Purchaser and
there are no third-party beneficiaries hereof. Neither this Agreement nor any
interest hereunder shall be assigned or transferred by Seller or Purchaser,
except as expressly provided herein. Notwithstanding the foregoing to the
contrary, Purchaser shall have the right to assign all of its rights and
interests in this Agreement at or prior to Closing to an entity which has an
affiliate of Purchaser as its general partner or managing member, as applicable
(the "Permitted Assignee"). Any such permitted assignment shall be effectuated
only by Purchaser signing and causing the Permitted Assignee to sign and deliver
to Seller at or prior to the Closing Date, an assignment, assumption and
amendment agreement in the form attached hereto as Exhibit K. In the event that
this Agreement shall be assigned by Purchaser in accordance with this Article
XII, all of the exhibits and attachments attached hereto shall be deemed revised
to reference the Permitted Assignee as the
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 36
transferee of the Property and such documents shall be executed by such
Permitted Assignee for the purposes of Closing as if Permitted Assignee had been
originally contemplated thereby. Any assignment of this Agreement in violation
of the foregoing provisions shall be null and void.
As used herein, an entity shall be deemed to be an "affiliate" of
Purchaser if such entity is either controlled by, under common control with or
controls Purchaser.
As used herein, the term "control" and "controlled by" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity whether through the
ownership of voting securities, by contract, or otherwise.
Article XIII
Notices
All notices hereunder or required by law shall be sent via United
States Mail, postage prepaid, certified or registered mail, return receipt
requested, via facsimile transmission (with a copy sent by United States Mail),
or via any nationally recognized commercial overnight carrier with provisions
for receipt, addressed to the parties hereto at their respective addresses set
forth below or as they have theretofore specified by written notice delivered in
accordance herewith:
PURCHASER: Case Ventures, Inc.
4200 East Skelly Drive
Suite 800
Tulsa, OK 74135-3237
Attn: Mike D. Case
Facsimile: 918.492.4446
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 37
with a copy to: Riggs, Abney, Neal, Turpen, Orbison & Lewis, P.C.
Frisco Building
502 West Sixth Street
Tulsa, OK 74119-1010
Attn: Gary Neal, Esq.
Facsimile: 918.587.2150
SELLER: Waterford Partnership
c/o CIGNA Investments, Inc.
900 Cottage Grove Road
Hartford, CT 06152-2311
Attn: Real Estate Investment Department
Asset Management, S-311
Mr. John D. Carey
Facsimile: (860) 726-6327
with a copy to: CIGNA Corporation
900 Cottage Grove Road
Hartford, CT 06152-2215
Attn: Investment Law, S-215A
Andrea F. Levy, Esq.
Facsimile: (860) 726-8446
Delivery will be deemed complete upon actual receipt or refusal to accept
delivery.
Article XIV
Expenses
Seller shall pay its own attorney's fees (including, without
limitation, the fees of its bond counsel). Seller shall also pay (i) the title
insurance premiums for the Title Policy (including the cost for extended
coverage, ALTA or otherwise), (ii) the costs of the Survey, (iii) the brokerage
fees described in Article IX hereof, and (iv) the costs of the termite
certificate described in
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 38
Section 4.2. Purchaser shall pay (i) all recording costs, (ii) all fees, costs,
and expenses incurred by Purchaser in the conduct and completion of its due
diligence review, and with respect to the Bonds, the Bond Financing, and any
consents, amendments, opinions or other documentation required in connection
with the satisfaction by Purchaser of the conditions of Sections 4.4.2 and 4.4.3
hereof and its covenants hereunder, including without limitation, the fees of
the Issuer, the Trustee, and their respective counsel (but not Seller's
counsel), (iii) the cost of the Title Endorsements, (iv) any applicable sales
tax on the transfer of personal property, (v) all revenue stamps and filing
fees, and (vi) any other costs customarily paid by purchasers in Tulsa,
Oklahoma. The cost of all closing escrow fees shall be divided equally between
Seller and Purchaser.
Article XV
Miscellaneous
15.1 Successors and Assigns. All the terms and conditions of this
Agreement are hereby made binding upon the executors, heirs, administrators,
successors and permitted assigns of both parties hereto.
15.2 Gender. Words of any gender used in this Agreement shall be held
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise.
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 39
15.3 Captions. The captions in this Agreement are inserted only for the
purpose of convenient reference and in no way define, limit or prescribe the
scope or intent of this Agreement or any part hereof.
15.4 Construction. No provision of this Agreement shall be construed by
any Court or other judicial authority against any party hereto by reason of such
party's being deemed to have drafted or structured such provisions.
15.5 Entire Agreement. This Agreement constitutes the entire contract
between the parties hereto and there are no other oral or written promises,
conditions, representations, understandings or terms of any kind as conditions
or inducements to the execution hereof and none have been relied upon by either
party. This agreement supersedes any and all communications, writings and
agreements between Purchaser and Seller with respect to the Property, including
without limitation, that certain Letter Agreement dated February 9, 1999 and
executed by Purchaser on February 11, 1999, as the same may have been amended in
writing from time to time which shall be of no further force and effect after
the Effective Date.
15.6 Recording. The parties agree that this Agreement shall not be
recorded. If Purchaser causes this Agreement or any notice or memorandum thereof
to be recorded, this Agreement shall be null and void at the option of the
Seller.
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 40
15.7 No Continuance. Purchaser acknowledges that there shall be no
assignment, transfer or continuance of any of Seller's insurance coverage or of
the property management contract.
15.8 Time of Essence. Time is of the essence in this transaction.
15.9 Counterparts. This Agreement may be executed in any number of
identical counterparts, any or all of which may contain the signatures of fewer
than all of the parties but all of which shall be taken together as a single
instrument.
15.10 Governing Law. This Agreement shall be construed, and the rights
and obligations of Seller and Purchaser hereunder, shall be determined in
accordance with the laws of the State of Oklahoma.
15.11 Acceptance of Offer. This Agreement constitutes Seller's offer to
sell to Purchaser on the terms set forth herein and must be accepted by
Purchaser by signing three (3) copies hereof and forwarding all three (3) copies
to the Title Company along with the Deposit in accordance with Article II hereof
no later than 5:00 p.m. EST on March 9, 1999. If Purchaser has not accepted this
Agreement by such date, then this Agreement and the offer represented hereby
shall automatically be revoked and shall be of no further force or effect.
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 41
15.12 Confidentiality. Except to the extent disclosure is required by
law, Purchaser and Seller agree that all documents and information concerning
the Property delivered to Purchaser, the subject matter of this Agreement, the
result of Purchaser's inspection and all negotiations will remain confidential.
Purchaser and Seller will disclose such information only to those parties
required to know it, including, without limitation, employees of either of the
parties, consultants and attorneys engaged by either of the parties, and
prospective or existing investors and lenders.
15.13 Surviving Covenants. Notwithstanding any provisions hereof to the
contrary, the provisions of Section 4.4.4 hereof, the second paragraph of
Section 6.2 hereof, the provisions of Article IX hereof, the provisions of
Section 15.12 (Confidentiality) hereof and any other provision which expressly
states by its terms that it shall survive Closing or the termination or
expiration of this Agreement (collectively, the "SURVIVING COVENANTS") shall
survive the Closing and any termination or expiration of this Agreement. In
addition, the provisions of Article X shall survive the Closing to the extent
provided herein.
15.14 Real Estate Reporting Person. Seller and Purchaser hereby
designate Title Company as the Real Estate Reporting Person for purposes of
Section 6045 of the Internal Revenue Code, and Title Company, by its execution
below, hereby accepts such appointment.
15.15 Independent Contract Consideration. Purchaser tenders to Seller
and Seller acknowledges receipt of the sum of One Hundred Dollars ($100.00) as
independent and non-refundable contract consideration (the "INDEPENDENT
CONSIDERATION") for any options granted in
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 42
this Agreement. The Independent Consideration is in addition to any other
deposits made under this Agreement; provided, if this Agreement closes,
Purchaser will receive a credit against the Purchase Price in the amount of the
Independent Consideration.
15.16 Exclusive Period. Seller agrees that from the Effective Date of
this Agreement until the Closing or any earlier termination of this Agreement
for any reason, Seller shall not offer the Property (or any interest therein)
for sale or lease to any other party or negotiate, solicit or entertain any
offers to purchase or lease the Property (or any interest therein).
15.17 Approval. Seller's obligation to perform its duties hereunder is
contingent upon approval by all required boards and committees in accordance
with standard policies and procedures of Seller. Seller will seek such approvals
during the period commencing on the Effective Date hereof to and including March
16, 1999, and will notify Purchaser promptly of the decision of such boards and
committees. If the transaction is not approved, then Seller may terminate this
Agreement by giving notice thereof to Purchaser, whereupon the Deposit shall be
returned to Purchaser, and neither party shall have any further rights or duties
hereunder except for the Surviving Covenants.
15.18 Business Day(s). As used in this Agreement, the term "Business
Day(s)" shall mean any day other than a Saturday or Sunday or day that
commercial banks are closed for business in the State of Oklahoma or the State
of Connecticut.
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EXECUTED BY PURCHASER this 8th day of March, 1999.
PURCHASER:
CASE VENTURES, INC., an Oklahoma corporation
By: /s/ Ben Abney
Name: Ben Abney
Its: Vice President
EXECUTED BY SELLER this _____ day of March, 1999.
SELLER:
WATERFORD PARTNERSHIP, a Connecticut general
partnership
By: Connecticut General Realty Investors III Limited
Partnership, a Connecticut limited partnership, its
managing general partner
By: CIGNA Realty Resources, Inc. - Fifth, a
Delaware corporation, its sole general
partner
By: /s/ John D. Carey
John D. Carey
President
Receipt of original copies of this Agreement executed by Seller and Purchaser is
acknowledged this 8th day of March, 1999.
TITLE COMPANY:
FRISCO TITLE CORPORATION
By: /s/ M. Jean Little
Name: M. Jean Little
Title: Executive Vice President
AFL\WATERFRD\P&SIGMOID.005 (3-5-99) Page 45