FORM OF
AMENDED AND RESTATED
AGREEMENT OF PURCHASE AND SALE
FOR ACQUISITION TRANSITION
ARTICLE 1. PARTIES
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101. The parties to this Agreement are _______________________________
("Seller"), and __________________________, L.P., or its assigns ("Purchaser").
ARTICLE 2. PROPERTY TO BE PURCHASED
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201. In consideration of Ten Dollars ($10.00) cash in hand paid by
Purchaser to Seller, the receipt and sufficiency of which are hereby
acknowledged, Seller agrees to sell to Purchaser and Purchaser agrees to
purchase from Seller, on the terms and conditions hereinafter set forth, that
certain parcel(s) of land (the "Land") owned by Seller as identified and
particularly described in Exhibit "A", attached hereto and incorporated herein
by this reference, together with the following property: (a) all buildings,
structures and other improvements located on the Land, and all fixtures and
appurtenances thereto, (herein collectively called the "Improvements"); (b) all
appliances and installed equipment owned by Seller, located at, on or in the
Improvements or Land listed in Exhibit "B" attached hereto and incorporated
herein by this reference (herein collectively called the "Equipment"); (c) any
portion of the Land lying in the right-of-way of any alley, passageway, street,
road, highway or avenue, proposed, open, or closed, adjoining all or any part of
the Land and in any and all strips, gores and rights-of-way; (d) all riparian
rights, hereditament, easements and other rights, privileges and immunities
appurtenant to the Land; (e) all leases, rents and profits accruing with respect
to the Land's Improvements and Equipment after the Closing; and (f) all of the
Seller's right, title and interest in all transferable (to the extent, if any,
such rights are transferable) intangible property of every nature whatsoever
pertaining to the Land and Improvements, including without limitation, all the
Service Agreements, licenses, permits, escrow deposits, contract rights,
instruments, claims, chooses in action, building and property names and signs,
property phone numbers, booklets, manuals and transferable utility contracts,
but excluding all cash, bank accounts, utility deposits, and other revenues and
income accruing prior to Closing. All of the foregoing real and personal
property is hereinafter collectively called the "Property".
ARTICLE 3. PURCHASE PRICE
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The Purchase Price for the Property shall be $____________
inclusive of all amounts owed to the existing first lienholder identified in
Exhibit "A", with the cash portion being subject to all prorations and
adjustments provided herein. The cash portion of the Purchase Price shall be
paid as follows:
301. On or prior to the Effective Date, Purchaser shall deposit in cash
or by check, with Taylor, Covington & Smith, P.A., as agents for Mississippi
Valley Title Insurance Company (the "Escrow Agent") the sum of $25,000.00 as
earnest money deposit (the "Earnest Money"). Escrow Agent shall immediately
deposit the Earnest Money in an interest bearing insured account acceptable to
Purchaser. Escrow Agent shall hold and administer the Earnest Money in
accordance with the terms and conditions of this Agreement. At Closing, Escrow
Agent shall pay the Earnest Money to Seller and Purchaser shall receive a credit
for said amount against the cash portion of the Purchase Price. The terms of the
escrow arrangement shall be as described in Exhibit "D" attached hereto.
302. The remainder of the Purchase Price, less the Earnest Money
credited to Purchaser and the balance of the existing secured debt currently
encumbering the Property as of the closing date in an amount not exceeding the
amount set forth in Exhibit "A", shall be paid at Closing by (a) certified check
drawn on a national or state bank, (b) cashier's check issued by a national or
state bank, or (c) bank wire transfer. The Property shall be conveyed to Seller
subject to the existing mortgage described herein on terms acceptable to
Purchaser. Purchaser and Seller agree to execute all documents requested by the
current lienholder of the Property and HUD to evidence a transfer of the
Property subject to such debt. Purchaser and Seller agree to fully cooperate
with HUD and the current lienholder to effectuate transfer of the Property
subject to the existing lien described in Exhibit "A".
ARTICLE 4. CASH ADJUSTMENTS AND CLOSING COSTS
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401. The following items shall be apportioned between Seller and
Purchaser as of 11:59 p.m. on the Closing Date or a date to be agreed upon by
the parties, and the net amount of all such adjustments shall increase or
decrease, as the case may be, the net amount payable by Purchaser to Seller at
Closing pursuant to Section 302 hereof:
401.1 All rent paid, prepaid or collected by Seller with
respect to any leases, rental agreements or occupancy agreements for the
Property (collectively, the "Leases"), including, without limitation, those
items described in Exhibit "C" attached hereto and incorporated herein by this
reference, collected during the month of Closing. All unprorated rents for the
period prior to closing belong to the Seller.
401.2 All real and personal property taxes and other taxes
imposed on the ownership of the Property for the 1999 tax year. If 1999 taxes
are unknown, said tax proration shall be estimated based on the taxes paid for
the year 1998. All special assessments assessed prior to the Closing Date shall
be paid by Seller. If taxes are prorated based on an estimate, and if actual
1999 taxes vary from the estimate, the parties shall re-prorate when the 1999
taxes become known. This re-proration obligation shall survive closing.
401.3 Utility charges, payable by the owner of the Property,
including without limitation, water, sewer, electric, gas, telephone, trash
removal, and garbage removal. To the extent practicable, the parties shall
cooperate in seeking to obtain a transfer to the utility accounts on the Closing
Date, with a full release of Seller. If any utility accounts are not transferred
on the Closing Date, the parties shall cooperate in arranging for said transfer
as soon as practicable after the Closing Date.
401.4 All charges under any and all contracts for goods and
services furnished to the Property. If Purchaser does not choose to assume any
of such contracts, Purchaser shall so inform Seller within fifteen (15) days of
the Effective Date, in which event Seller shall cancel at Closing all contracts
cancelable by their terms prior to Closing, and if not cancelable by their terms
prior to Closing, Seller, at its option, may either (i) work out some mutual
agreement with Purchaser, or (ii) terminate this Agreement. At Closing Seller
and Purchaser shall execute an agreement in which each party indemnifies the
other for any claims arising out of such assumed contracts, which, as to
Seller's indemnity, shall be for the period through the date of Closing and
which, as to Purchaser's indemnity, shall be for the period after Closing.
402. Any item of income or expense required to be apportioned under
this Article that for any reason is not apportioned at Closing shall be
apportioned as soon thereafter as practicable. If any mutual mistake, including
without limitation, any erroneous mathematical calculation, is made in any
apportionment at Closing, Seller and Purchaser shall, promptly, correct said
mistake and make any payment required to produce an accurate apportionment.
These obligations shall survive the Closing.
403. Seller shall pay at Closing all recording costs for any release or
title clearance documents and the State of Mississippi transfer or stamp tax.
Purchaser shall pay the cost of recording the limited warranty deed. Each party
shall be responsible for and shall pay its own attorneys' fees and expenses,
together with any other costs and expenses incurred by a party and not
specifically allocated herein.
404. Seller acknowledges that Section 1445 of the Internal Revenue Code
of 1986, as amended and applicable state laws (the "Codes") may require
Purchaser to withhold a portion of the net proceeds payable to Seller at Closing
unless Seller establishes to the satisfaction of counsel to Purchaser that
withholding is not required under the Codes.
405. At closing, Seller shall transfer and pay to Purchaser in good
funds, or Purchaser shall receive a credit, for all tenant and pet security
deposits or deposits collected by Seller applicable to all Leases described in
Exhibit "C" as revised to take into account move-outs and new leases through
closing.
406. Purchaser shall purchase the balance of any tax and insurance
escrow account or replacement reserve account established with Seller's first in
priority secured lender as of the Closing from Seller provided such balances are
transferred at closing.
407. Seller shall provide, deliver and pay for the preparation and
issuance of an Owner's title insurance commitment insuring the Purchaser for the
full amount of the Purchase Price with no exceptions other than the Permitted
Exceptions and including all endorsements as the Secretary of the United States
Department of Housing and Urban Development may require as a condition of
closing. Purchaser shall pay for the cost of any title insurance premiums.
408. Each party shall be responsible for and pay its own attorney's
fees in connection with this transaction.
409. Purchaser shall pay to HUD the required fee for the processing of
the Application for the Transfer of Physical Assets and all costs and expenses
charged by the holder of the HUD insured loan for processing and granting its
approval or consent to the transfer of the Property and the assumption of its
loan.
ARTICLE 5. CLOSING DATE AND PLACE
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501. Unless extended in accordance with this Agreement, the Closing of
this transaction shall take place on or before ten (10) days from Purchaser's
receipt of the written consents required in Articles 902 and 903 for all of the
entities listed in Exhibit "E", unless waived by Purchaser, and in accordance
with the terms of this Agreement. The Closing date shall be set by the Purchaser
upon no less than five (5) days prior notice to Seller from Purchaser. Closing
shall occur at the offices of Taylor, Covington & Smith, 315 Tombigbee Street,
Jackson, Mississippi 39201 or such other date and place as the parties may
mutually agree.
502. The Purchaser may extend the closing date for an additional thirty
days by depositing additional earnest money in the amount of $25,000.00 with the
Escrow Agent for such extension prior to the Closing Date.
ARTICLE 6. TITLE AND SURVEY
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601. Seller shall convey to Purchaser by limited warranty deed good,
marketable and insurable title to the Property free and clear of all liens,
leases, encumbrances, tenants, encroachments, restrictions, covenants,
assessments, charges, agreements, taxes and easements, except for the Permitted
Title Exceptions determined in accordance with this Section 601. The Permitted
Title Exceptions shall include only the following: (i) 1999 state, county and
municipal ad valorem taxes on the Property which are a lien but not yet due and
payable as of Closing; (ii) the Leases; (iii) easements for the maintenance of
public utilities that serve and benefit the Property, and slope and right-of-way
easements for adjacent public rights-of-way which do not affect the use or value
of the Property; and (iv) the existing lien documents set forth in Exhibit "A"
attached hereto provided that the amount secured thereunder does not exceed the
amount set forth in Article 302; and (v) the exceptions listed in Schedule B of
the Title Insurance Commitment previously furnished Purchaser, except for 1998
property taxes; however Permitted Title Exceptions shall not be deemed to
include any matters occurring after the effective date of the aforesaid Title
Insurance Commitment. Purchaser shall have the right to re-examine title to the
Property on or immediately prior to the day of Closing. If such examination
reveals any new defects or encumbrances, Purchaser may object thereto in writing
on or before the date of Closing, and in such event Seller shall have up to five
(5) days thereafter to cure same or Purchaser may cancel this Agreement and
receive a full return of its Earnest Money. Seller agrees that it shall not
voluntarily encumber title to the Property after the date of final execution
hereof.
602. Seller has previously delivered to Purchaser, at Seller's expense,
a survey of the Property prepared to ALTA\ACSM and HUD standards by a
Mississippi registered land surveyor ("Purchaser's Survey"). At least ten (10)
days prior to Closing, Seller shall furnish to Purchaser, at Seller's expense,
an updated survey of the Property showing new exceptions appearing since the
date of the Title Commitment referenced in Article 601(v).
ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF SELLER
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As a material inducement to Purchaser to enter into this Agreement and
to consummate the transaction provided for herein, Seller hereby represents,
warrants and agrees to Purchaser, as of the Contract Date as to the matters set
forth below. At Closing, Seller shall again represent and warrant said matters.
701. No service agreements or contracts exist as to the Property except
as listed in Exhibit "B-1" attached hereto and incorporated herein by this
reference.
702. (a) Seller owns good, marketable, insurable, indefeasible fee
simple title to the Property, subject only to the Permitted Title Exceptions,
and is in undisputed and peaceful possession of the Property subject to the
Leases; (b) no other Person claims or is entitled to possession of all or any
portion of the Property except for the tenants pursuant to the Leases; and (c)
there are no unpaid or unsatisfied security deeds, mortgages, claims of lien
special assessments or bills for sewerage, water, street improvements, taxes or
similar charges that constitute a lien against the Property or any of the
Improvements, other than the Permitted Title Exceptions and other Encumbrances
that Seller will release or cause to be released from the Property on or before
Closing.
703. There is no litigation (other than eviction proceedings commenced
by Seller in which no counterclaims against Seller have been asserted),
condemnation, zoning or administrative proceeding or real estate tax protest or
proceeding pending or threatened against or affecting (a) Seller, which pertains
to the Property, or (b) all or any part of the Property.
704. Seller has not received any written notice, nor to the best of its
knowledge any oral, or informal notice of (a) any alleged violation of any
private covenant or legal requirement, including without limitation, applicable
zoning laws, building codes, anti-pollution laws, health, safety and fire laws,
sewerage laws, environmental laws or regulations or any covenant, condition or
restriction affecting the Property; (b) any possible widening of any streets
adjoining the Property; (c) any possible condemnation of all or any portion of
the Property; or (d) any possible imposition of any special tax or assessment
against all or any portion of the Property; (e) any lack or deficiency or
surface or subsurface support relating to the Property or any portion thereof;
(f) the need or advisability of special flood or water damage insurance; or (g)
any possible special assessments, increases in tax rates or insurance rates for
all or any portion of the Property.
705. To the best of Seller's knowledge: all utilities facilities,
including, but not limited to, water, sanitary sewer, storm sewer, electricity,
telephone, trash removal, and garbage removal are in good working order and good
repair; all utilities services are available to said utilities facilities and
operating for the benefit of the Property in such a manner and capacities as are
necessary and appropriate for the operation of the Improvements for their
present use at standard rates, without any requirement for the payment of any
tap-on fees or other extraordinary charges.
706. Seller has not received any written notice or to the best of its
knowledge any oral or informal notice of any possible curtailment of any utility
service supplied to the Property.
707. To the best of Seller's knowledge, the Property has all
appurtenant easements that are necessary and appropriate (a) for the
installation, maintenance and use of all necessary and appropriate facilities
for water, sanitary sewer, storm sewer, electricity, gas, telephone services,
trash disposal and garbage disposal and (b) to connect all said facilities to
the appropriate sources of said services.
708. To the best of Seller's knowledge, the Equipment and the
Improvements and all portions thereof, including without limitation, all roofs,
walls, windows, foundations, footings, columns, supports, joists, heating
ventilating and cooling systems, electrical systems, plumbing systems, paving,
and parking facilities, are in good order, repair and operating condition.
Without limiting the generality of the foregoing sentence, to the best of
Seller's knowledge (a) there is no termite or other pest infestation, dry rot or
similar damage with respect to the improvements; (b) all of the improvements are
water tight; (c) there is no subsistence or other soil condition that presently
does or may in the future adversely affect the Property; and (d) Seller has no
knowledge or any defects in the foregoing improvements.
709. To the best of Seller's knowledge, there is legal access to the
Property from public streets, and any and all curb cuts and similar permits or
licenses necessary or appropriate to provide or facilitate such access have been
properly issued and remain in full force and effect.
710. Seller has not used any portion of the Land, and to Seller's
knowledge, no portion of the Land has been used, as a landfill or dump.
711. Seller knows of no underground petroleum tanks on the Property.
Further, to the best of Seller's knowledge, the Property has not been used for
the manufacture, storage, use or disposal of any hazardous, polluting,
radioactive or other dangerous material or substance.
712. Seller has the right, power and authority to enter into this
Agreement, and the right, power and authority to convey the Property in
accordance with the terms, provisions and conditions of this Agreement. The
entry by Seller into this Agreement with Purchaser does not violate any other
agreement relating to the Property regardless of whether Seller is a party
thereto, and Seller is capable of complying with all the terms, provisions and
conditions contained in this Agreement.
713. The only lease agreements, occupancy agreements or other rental
agreements with respect to the Property are the Leases identified in Exhibit
"C", and the rentals, security deposits, terms and other conditions of the
Leases as expressed in the rent roll described in Exhibit "C" attached hereto
are true and accurate, except for any tenant subleases of which Seller has no
knowledge. To the best of its knowledge, Seller is not in default of any of its
obligations contained in the Leases, and except as otherwise disclosed to
Purchaser in writing, no tenant under any Lease is currently in default of its
obligations under its Lease. Seller has not collected any rent due with respect
to the Leases except for the month during which the execution of this Agreement
falls except as shown in Exhibit "C". Seller will make available to Purchaser
for copying and inspection at the Property, copies of all of the Leases, and
Seller represents and warrants that such documents are true, correct and full
copies of each of the Leases and that no other modifications of the Leases
exist, whether written or oral, formal or informal.
714. Each of the Leases is fully assignable by Seller to Purchaser
without approval by any tenant under the Leases.
ARTICLE 8. COVENANTS OF SELLER
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801. Seller hereby covenants and agrees with Purchaser that, from the
Contract Date until Closing, Seller shall: (a) maintain and operate the Property
in substantially the same manner as previously operated by Seller; (b) maintain
the Improvements in their current repair, working order and condition; (c) pay
all expenses incurred in connection with the ownership, maintenance, repair and
operation of the Property as and when they come due; (d) maintain, manage,
insure and operate the Property and all portions thereof in compliance with any
and all legal requirements and private covenants applicable thereto; (e) make
all payments and perform all other obligations of Seller as and when required by
all other encumbrances on the Property and the service agreements; (f) except
due to a lessee's default maintain each of the Leases in full force and effect,
and will not modify, amend, alter any of the Leases or waive any default by any
tenant under each of the Leases; (g) perform each and every obligation of Seller
under the terms of each of the Leases; (h) not collect any prepaid rent under
the Leases for more than one month in advance of the current month.
801(A). Seller hereby covenants and agrees with Purchaser that all
appliances (air conditioners, refrigerators, stoves etc.) in place as of the
Contract Date hereof shall be in operating order and in place on the Property as
of the date of closing and if unoccupied at closing, the apartment shall be in
rent ready condition and if not, then Purchaser shall be entitled to a credit of
$150 per apartment unit for making the apartment unit rent ready, exclusive of
the cost of replacing any non-turnkey damage and missing appliances for which
Purchaser shall be entitled to an additional credit. For the purpose of this
Agreement, "turnkey" shall mean cleaning and repainting the apartments and minor
sheetrock and carpet repairs.
802. Seller hereby covenants and agrees with Purchaser that, from the
Contract Date until Closing, Seller shall not, without the prior written consent
of Purchaser; (a) enter into any new lease affecting the Property not in the
ordinary course of business and under no circumstance shall any lease or renewal
have a lease term of less than six (6) months, nor more than twelve (12) months
or have a rental rate not agreed to by the Purchaser and Seller; (b) terminate,
modify, amend or supplement any of the Service Agreements; (c) place any
Encumbrance on all or any portion of the Property; (d) terminate, modify, alter,
or supplement any appurtenant easement or any of the Permitted Title Exceptions;
(e) engage in any transaction out of the ordinary course of business with
respect to the Property or any portion thereof; (f) transfer, assign, convey or
sell all or any portion of the Property; or (g) enter into encumbrance with
respect to all or any portion of the Property.
803. On the Effective Date, Seller shall make available for inspection
and copying by Purchaser in one location mutually acceptable to the Purchaser
and Seller and if the parties cannot agree, then at the offices of Taylor,
Covington & Smith, P.A., true, correct, complete and legible copies of the
following items which have not been previously delivered to Purchaser, including
without limitation copies of all the following items which have come into
existence on or after August 28, 1998:
803.1 All documents evidencing any and all portions of the
Property that constitute intangible property.
803.2 All insurance policies maintained by Seller with respect
to the Property.
803.3 All existing architectural plans and specifications
pursuant to which the Improvements were constructed.
803.4 Any and all termite inspection reports and guarantees
with respect to all or any portion of the Improvements, if Seller has any such
reports or guaranties.
803.5 Any and all building permits, certificates of occupancy,
zoning certificates, subdivision approvals and other material permits, licenses
and approvals in Seller's possession required by any Government Authority in
connection with the ownership, use, operation or maintenance of the Property.
803.6 All existing engineering studies, test results and
reports with respect to the Land, the Improvements, or both, including without
limitation, those relating to water, sewerage and drainage with respect to the
existing Improvements and any possible future renovation, remodeling or
additional development of the Property and planning, soil, hydrology, and
similar studies relating to the Property.
803.7 Any and all material permits, licenses, reports or other
similar documents in Seller's possession relating to compliance or noncompliance
of the Property or any portion thereof with any and all applicable land use,
zoning, building, fire, health, safety, environmental, subdivision, water
quality air quality and sanitation laws, regulations and other similar types of
control.
803.8 Copies of all 1996, 1997 and 1998 Property Tax bills.
803.9 All of the Leases.
803.10 All of the service agreements referenced in Section
701 hereunder.
803.11 1996, 1997, 1998 and year to date 1999 capital
improvement and deferred maintenance reports and evaluations and operating and
year end operating statements for the Property.
803.12 All correspondence with the United States Department of
Housing and Urban Development, including all physical and management reviews and
inspection reports and replacement reserve draws and statements;
803.13. All loan documents for any indebtedness encumbering
the Property or to be assumed by Purchaser at closing, including all regulatory
agreements.
804. Seller hereby covenants and agrees with Purchaser that, from the
Contract Date until Closing, Seller shall maintain in full force and effect
liability, fire and extended coverage insurance on the Property.
805. Seller hereby covenants and agrees with Purchaser that, from the
Effective Date until Closing, Purchaser and its agents, representatives and
contractors, shall have the right to enter upon the Property at reasonable times
for any lawful purpose, including without limitation, to make investigations,
surveys, tests and studies, provided, however (a) Purchaser shall not interfere
with the normal operation of the Property and the quiet enjoyment of the Tenant,
and (b) Purchaser shall promptly pay for all work performed by order of
Purchaser, its agents, representatives, or contractors with respect to the
Property and shall not cause the creation of any lien with respect to the
Property in favor of any Person, including without limitation, any contractor,
subcontractor, materialmen, mechanic, surveyor, architect or laborer. Purchaser
shall indemnify Seller from all claims, losses or damages as a result of the
activities of Purchaser or its agents or representatives making inspections and
tests on the Property.
806. The debt owed to the first lienholder as identified in Exhibit "A"
shall not exceed the amount set forth in Exhibit "A" as of the Closing Date and
there are not presently and shall be no defaults pursuant to the mortgage
documents identified in Exhibit "A" or otherwise associated with such debt.
ARTICLE 9. CONDITIONS PRECEDENT FOR THE BENEFIT OF PURCHASER
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Notwithstanding any other provision of this Agreement, Purchaser shall
not be obligated to purchase the Property unless and until each and every of the
following conditions precedent shall have been satisfied in full or waived by
Purchaser. The conditions precedent referred to in this Article are:
901. At Closing: (a) Purchaser shall have received all items required
by this Agreement to be delivered by Seller at or prior to Closing; (b) there
shall not exist any default, event of default, or event that with the passage of
time, the giving of notice, or both, would constitute a default or event or
default by Seller under this Agreement; and (c) each and every covenant,
representation and warranty made by Seller in this Agreement shall be true and
correct in all material respects.
902. The Parties acknowledge that the Property is subject to a
mortgage, insured by the United States Department of Housing and Urban
Development's ("HUD") as referred to in Exhibit "A". Purchaser's obligation
under this Agreement to purchase the Property is made expressly subject to the
following:
(1) The Purchaser's receipt of written preliminary approval by HUD of the
application for transfer of physical assets.
(2) HUD issuing a Form 2530 clearance of the Purchaser and all of
Purchaser's principals for whom HUD Form 2530 Clearance is required under HUD's
regulations.
(3) HUD issuing a Form 2530 clearance of CMS Multifamily II Partners and
CMS Diversified Partners, LP, or such other entities as CMS may designate as a
limited partner of the Purchaser, but only to the extent HUD requires such
forms.
(4) HUD agreeing in writing to a transfer of the Property subject to the
existing first lien debt as identified in Exhibit "A" attached hereto on terms
satisfactory to the Purchaser, including that the debt remain non-recourse.
Purchaser shall promptly, but not later than fourteen (14) days from the
Effective Date, submit to HUD all information necessary to obtain the foregoing
approvals and clearance and any approvals required in Section 903. If the
foregoing conditions have not been satisfied within ninety (90) days of the
Effective Date, or waived in writing by Purchaser, then Purchaser shall have the
option of terminating this Agreement and having all Earnest Money returned to
Purchaser immediately and neither party shall have any further rights under this
Agreement. Notwithstanding the foregoing, Purchaser shall have the right to have
this Agreement remain in full force and effect provided that the additional
Earnest Money provided for in Article 502 has been paid in accordance therewith.
If at the conclusion of this thirty (30) day extension period the conditions of
this Article 902 has not been satisfied or waived in writing by Purchaser, then
Purchaser shall have the right to terminate this Agreement and receive a full
refund of its Earnest Money. Seller shall cooperate with Purchaser in obtaining
all necessary consents and approval, including providing such information from
its records and from its accounts and other professionals, and shall execute
such documents and provide such information as may be required by the current
lender or HUD in order to satisfy the requirements and conditions of this
Article 902.
903. This Agreement is expressly conditioned upon preliminary approval
by HUD of the transaction as set forth in Form HUD 92266, Application for
Transfer of Physical Assets, and supporting documents submitted to HUD. No
transfer of any interest in the project under this sale agreement shall be
effective prior to such HUD approval. Purchaser will not take possession of the
project nor assume benefits of project ownership prior to such approval by HUD.
The Purchaser, his heirs, executors, administrators or assigns, shall have no
right upon any breach by Seller hereunder to seek damages, directly or
indirectly, from the FHA Project which is the subject of this transaction,
including from any assets, rents, issues or profits thereof, and Purchaser shall
have no right to effect a lien upon this project or the assets, rents, issues,
or profits thereof.
904. All of Purchaser's rights of termination hereunder are cumulative.
In the event Purchaser terminates this Agreement prior to Closing for any
reason, then Purchaser agrees to return all documents and written information
furnished to Purchaser by Seller, its attorneys and agents and provide Seller
with a sample copy of the HUD Form 92266, Application for Transfer of Physical
Assets, and supporting documents, submitted by Purchaser to the United States
Department of Housing and Urban Development in connection with this transaction
for one of the properties listed on Exhibit "E" with any proprietary or
confidential information redacted. Seller shall also have the right to purchase
and receive an assignment of Purchaser's rights in and to all of the
environmental studies and reports obtained by Purchaser on each of the
Properties listed in Exhibit "E" by reimbursing Purchaser for the amount paid by
it for such reports.
ARTICLE 10. ITEMS TO BE DELIVERED BY SELLER AT CLOSING
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At Closing, Seller shall deliver to Purchaser:
1001. A duly executed limited warranty deed and quitclaim deed, in form
acceptable for recording and acceptable to HUD, conveying the Land and the
Improvements, subject only to the Permitted Title Exceptions.
1002. A duly executed limited warranty bill of sale assigning and
transferring good and marketable title to Purchaser of all the Equipment subject
only to the Permitted Title Exceptions and acceptable to HUD.
1003. A duly executed assignment of all transferable warranties and
guaranties, if any, of which Seller is the beneficiary with respect to any
portion of the Property, to the extent, if any, such warranties and guarantees
are transferable. Seller shall also deliver to Purchaser all originals of the
warranties and guaranties assigned pursuant to this Section, to the extent that
Seller has them in its possession or is able to obtain them prior to Closing.
1004. A duly executed certificate with respect to the Codes stating,
among other things, that Seller is not a foreign corporation or non-resident
alien, as defined in the Codes and regulations issued pursuant thereto.
1005. A duly executed affidavit of title with respect to the Property
in form and substance reasonably satisfactory to Purchaser's Title Company for
the purpose of marking the Title Commitment and issuing the Title Policy with an
Effective Date on the Closing Date without exception for mechanic's or
materialmen's liens, other statutory liens, or the rights of Persons in
possession (except for those persons identified in Exhibit "C") together with
all evidence of corporate or entity authority to deliver the documents required
at the closing and to consummate the transaction contemplated by this Agreement.
1006. Physical possession of all the Property subject to the rights of
those persons identified in "Exhibit "C".
1007. A duly executed Assignment of Leases and Rents transferring all
of Seller's right, title and interest in and to all of the Leases. The form of
the Assignment shall be acceptable to Purchaser and Purchaser's counsel, and
shall contain an indemnification from Seller for all obligations of Seller under
the Leases prior to the Closing Date and an indemnification from Purchaser for
all obligations of Purchaser under the Leases after closing. The Assignment
shall also contain a provision requiring Seller to turn over to Purchaser any
rents collected under the Leases after the date of Closing.
1008. A standard wood infestation\termite inspection report from a
company acceptable to Purchaser and properly licensed in the State of
Mississippi dated as of a date after the Effective Date stating that the
improvements on the Property are free of active termite infestation. At the
option of the Purchaser, Seller may be relieved of this obligation and Purchaser
shall receive a credit for the Seller's cost of such report.
1009. Such documents as Purchaser and Purchaser's counsel shall deem
necessary to verify that all contractors and suppliers relating to the
construction of the Improvements have no lien rights against the Property.
10010. The originals of all items to be transferred to Purchaser prior
to Closing in Seller's possession (e.g. tenant leases).
10011. Such other instruments, documents, certificates, affidavits,
closing statements or agreements reasonably requested by Purchaser's counsel,
HUD and the current mortgage holder.
10012. A cancellation of all service, maintenance, management and other
goods and services contracts or services, including those identified in Exhibit
"B-1", except to the extent specifically assumed by Purchaser as contemplated by
Article 401.4 or for which Seller has advised Purchaser in writing it will or
cannot cancel by written notice within twenty one (21) days from the Contract
Date.
ARTICLE 11. ITEMS TO BE DELIVERED BY PURCHASER AT CLOSING
---------------------------------------------------------
At Closing, Purchaser shall deliver to Seller the funds required to be
paid pursuant to Section 302 and any other documents required of Purchaser by
this Agreement and any assignment of Purchaser's rights under this Agreement.
ARTICLE 12. DAMAGE, DESTRUCTION OR CONDEMNATION
-----------------------------------------------
1201. If prior to Closing there shall occur any damage or destruction
to the Improvements by fire or other casualty, Seller shall give prompt written
notice thereof to Purchaser and Purchaser shall have the option, in its sole
judgment and discretion, (a) to receive an assignment at Closing of all
insurance proceeds payable to Seller as a result of such damage or destruction,
other than any proceeds representing loss of rental income prior to the closing
which shall belong to Seller; or (b) to terminate this Agreement. If Purchaser
elects to terminate this Agreement, Purchaser shall give written notice thereof
to Seller and to Brokers within thirty (30) days after Purchaser shall have
received written notice of such damage or destruction. If Purchaser does not
give such notice within such time period, then Purchaser shall be conclusively
deemed to have elected to proceed with the Closing, subject to receipt of the
insurance proceeds described above, and shall not have any further right to
terminate this Agreement as a result of such damage or destruction. All payments
from loss of rent insurance for rent due or as prorated through the Closing Date
shall belong to the Seller.
1202. If, prior to Closing, there shall occur any Condemnation of the
Property, Seller shall give prompt written notice thereof to Purchaser, and
Purchaser shall have the option, in its sole judgment and discretion, either (a)
to terminate this Agreement by giving written notice of termination within
thirty (30) days after Purchaser shall have received written notice of such
Condemnation; or (b) to complete the transaction provided for in this Agreement,
in which event all Condemnation proceeds collected by Seller prior to Closing if
any shall be credited against the Purchase Price and, at Closing, Seller shall
assign to Purchaser any and all condemnation proceeds that have not been paid at
that time. If Purchaser does not give such notice within such time period, then
Purchaser shall be deemed to have conclusively elected to proceed with the
Closing, subject to the receipt of assignment of condemnation proceeds as
provided above, and shall have no further right to terminate this Agreement as a
result of such condemnation.
1203. Seller shall be obligated to perform up to $25,000 of remedial
work to repair any termite damage and eradicate any termite infestation
discovered during the Inspection Period through closing which work shall be
completed prior to the Closing Date. If the cost of such work will exceed
$25,000, then Seller may either elect to perform such work and complete it prior
to the Closing Date, or it may terminate this Agreement upon written notice to
Purchaser delivered not later than ten (10) days after receipt of the termite
report, but in no event later than ten (10) days prior to the Closing Date,
whereupon this Agreement shall terminate and Purchaser shall be entitled to the
immediate return of all of its Earnest Money. If Seller fails to give written
notice to the Purchaser, then it shall be deemed to have elected to make the
repairs and proceed with the sale. If at the Closing Date, the repairs have not
been completed then Seller shall escrow the unpaid cost of the required work
with a title company designated by Purchaser until such time as the work has
been completed in accordance with the terms of this Agreement.
ARTICLE 13. RESERVED
--------------------
ARTICLE 14. REMEDIES ON DEFAULT
-------------------------------
1401. If Purchaser shall default in its performance of this Agreement,
and such default shall continue uncured for more than fifteen (15) days after
Purchaser shall have received written notice from Seller of said default, then,
in such event, Seller shall have the option to terminate this Agreement by
giving written notice of termination to Purchaser and Escrow Agent whereupon
Escrow Agent shall pay to Seller all the Earnest Money being held by Escrow
Agent, as liquidated damages, which shall be the sole remedy of Seller against
Purchaser under this Agreement, Seller hereby expressly waiving any right to
specific performance and to damages in excess of said liquidated amount. Seller
and Purchaser hereby agree that if Purchaser should default under this
Agreement, the amount of damages to Seller would be difficult, if not
impossible, to determine, and such liquidated damages are just, fair and
reasonable.
1402. If Seller shall be in default in respect in its performance of
this Agreement, and said default shall remain uncured for more than ten (10)
days after Seller shall have received written notice thereof, then, in such
event, Purchaser shall have the right to either: (A) seek specific performance;
or (B) to terminate this Agreement, receive a complete return of all Earnest
Money and receive liquidated damages of $25,000.00, Purchaser hereby expressly
waiving any right to damages in excess of said liquidated amount. Seller and
Purchaser hereby agree that if Seller should default under this Agreement, the
amount of damages to Purchaser would be difficult, if not impossible, to
determine, and such liquidated damages are just, fair and reasonable
1403. If at closing, any entity listed in Exhibit "E" fails or refuses
to close the sale of their property as listed in Exhibit "E" to Purchaser
simultaneously with the closing of the Property, then Purchaser may terminate
this Agreement at closing without notice and receive a full and complete return
of all Earnest Money. If, at closing, any entity purchasing one of the apartment
complexes listed in Exhibit "E" breaches its contract for sale and fails or
refuses to close the purchase of such complex, then Seller may terminate this
Agreement at Closing without notice and retain all Earnest Money as liquidated
damages, notwithstanding any provision of this Contract to the contrary.
ARTICLE 15. RESERVED
--------------------
ARTICLE 16. OTHER TERMS AND CONDITIONS
--------------------------------------
1601. Time is of the essence of each and every provision in this
Agreement.
1602. All representations, warranties, covenants, indemnities,
agreements and obligations of Seller under this agreement shall survive the
Closing for a period of twelve (12) months.
1603. This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective representatives, heirs, successors and
assigns.
1604. Any notice, or other communication (a "Notice") to be given to
any party with respect to this Agreement may be given either by the party or its
counsel and shall be deemed to have been properly sent and given when delivered
by hand to the specific named individual or when sent by certified mail, return
receipt requested or by same-day or overnight receipted courier service. If
delivered by hand, a Notice shall be deemed to have been sent, given and
received when actually received by the addressee. If sent by certified mail, a
Notice shall be deemed to have been sent and given when properly deposited with
the United States Postal Service with the proper address and postage paid
therewith, and shall be deemed to have been received on the date of delivery or
first date of refusal of delivery as shown by the return receipt. The addresses
to which Notices shall be sent are:
If to Seller: Heritage Properties
16 Northtown Drive, Suite 200
Jackson, Mississippi 39211
Attn: James Carney
With a copy to: Bobby Covington, Esq.
Taylor, Covington & Smith
315 Tombigbee Street
Jackson, Mississippi 39201
If to Purchaser: Vinings Holdings, Inc.
3111 Paces Mill Road
Suite A-200
Atlanta, Georgia 30339
Attn: Peter Anzo
With a copy to: Schreeder, Wheeler & Flint, LLP
Attention: John A. Christy, Esq.
1600 Candler Building
127 Peachtree Street, N.E.
Atlanta, Georgia 30303-1845
Each party shall have the right to change the address to which Notices to it are
to be sent by giving written notice of said change to the other parties as
provided in this Section.
1605. This Agreement constitutes the sole and entire agreement between
the parties hereto, and no modification, alteration, or amendment of this
Agreement shall be binding unless signed by the party against whom such
modification, alteration, or amendment is sought to be enforced. No
representation, warranty, covenant, inducement or obligation not included in
this Agreement shall be binding upon either party hereto.
1606. This Agreement shall be governed by and construed in accordance
with the laws of the state of Mississippi. If all or any portion of any
provision of this Agreement shall be declared invalid or unenforceable under
applicable law, then the performance of such portion shall be excused to the
extent of such invalidity or unenforceability, but the remainder of this
Agreement shall remain in full force and effect; provided, however, that if the
excused performance of such unenforceable provision shall materially adversely
affect the interest of either party, the party so affected shall have the right
to terminate this Agreement by written notice thereof to the other party and
Broker, whereupon this Agreement shall become null and void, except for those
indemnities that are specified in this Agreement to survive the termination of
this Agreement prior to Closing.
1607. Whenever in this Agreement there is any reference to any article,
section, or exhibit, unless the context shall clearly indicate otherwise, such
reference shall be interpreted to refer to an article, section, or exhibit in or
to this Agreement. Each exhibit referred to in this Agreement in the same manner
as if it were restated verbatim herein. The titles and captions of the articles
and sections of this Agreement are included for ease of reference only, are not
intended to represent the full scope of the matters included or excluded from
such provisions, and shall not be used to interpret this agreement or to
construe the intent of the parties.
1608. This Agreement may be executed in multiple counterparts, each of
which shall be an original and all of which together shall constitute one and
the same Agreement. It shall not be necessary that each party executes each
counterpart, or that any one counterpart be executed by more than one party, so
long as each party executes at least one counterpart.
1609. The parties acknowledge that each party and its counsel have
participated in the negotiation and preparation of this Agreement. This
Agreement shall be construed without regard to any presumption or other rule
requiring construction against the party causing the Agreement to be drafted. If
any provision of this Agreement requires that action be taken on or before a
particular date that falls on a day that is not a Business Day, the time for the
taking of such action shall automatically be postponed until the next following
Business Day.
1610. All words and phrases used in this Agreement, including, without
limitation, all defined words and phrases, regardless of the number or gender in
which used, shall be deemed to include any other number or gender as may be
reasonably required by the context. If Seller is designated in this Agreement to
be more than one Person, then, in such event, each Person so designated shall be
jointly and severally liable for all duties, obligations and liabilities of
Seller.
1611. This Agreement may be assigned by Purchaser to an affiliate of
Purchaser or an entity organized by Purchaser without Seller's consent, provided
that the assignee, as a condition of said assignment, shall assume all of the
obligations of Purchaser pursuant to this Agreement and that such assignment
shall not release Purchaser from its obligations hereunder.
1612. If any act required by this Agreement must be taken on a
Saturday, Sunday or legal holiday in the States of Georgia or Mississippi, then
the time period for taking or performing such action shall be extended until the
next business day.
1613. The Purchaser shall reimburse the Seller for up to $5,000.00 of
documented costs for the purchase of new computers by Seller after September 30,
1998, for use at the Property and which is included in the personalty to be
conveyed at closing to Purchaser.
1614. Purchaser's obligation to purchase the Property is expressly
contingent on its having simultaneously purchased and closed the acquisition of
the adjoining property owned by Bradford Place Apartments II, L.P., identified
in Exhibit "E" attached hereto. If Purchaser does not close the acquisition of
the property owned by Bradford Place Apartments II, L.P. simultaneously with the
closing of the Property, then it may terminate and cancel this Agreement and
receive a full return of its Earnest Money.
1615. If Purchaser elects to terminate this Agreement on or prior to
Closing, then Purchaser shall reimburse Seller for all of its direct
out-of-pocket expenses paid to third parties in connection with providing all
due diligence and other materials pursuant to this Agreement, provided, however,
that the sum paid hereunder shall when aggregated with any sums paid pursuant to
the Agreements for Sale and Purchase of the properties identified in Exhibit "E"
shall not exceed $50,000.00.
ARTICLE 17. OFFER AND ACCEPTANCE
--------------------------------
1701. Purchaser's execution of this Agreement is intended as a
continuing offer by purchaser to purchase the property from Seller, in
accordance with the terms hereof, until 5:00 P.M. on the seventh (7th) day after
Purchaser executes and dates this Agreement. If Seller does not accept this
offer by delivering to Escrow Agent an unaltered, executed copy of this
agreement by that time, then this offer shall be deemed to have been revoked and
withdrawn by Purchaser prior to Seller's acceptance.
1702. This Agreement shall be retroactive to June 25, 1998; however,
the Effective Date of this Agreement is the date on which the last party to this
Agreement executes it and all parties listed on Exhibit "E" have executed and
delivered agreements in a form acceptable to Seller for the sale of the
properties listed on Exhibit "E" to Seller.
1703. The Contract Date is the date on which the Purchaser executes it.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as on dates indicated by their signatures.
Signed, sealed and delivered SELLING ENTITY
on the 17th day of February,
1999 in the presence of:
By:/s/ James P. Carney
-----------------------------
/s/ Brenda O. Perry
- --------------------- Title: General Partner
Witness Date: February 17, 1999
/s/ Beatrice Lee Ratcliffe [SEAL]
- ------------------------------
Notary Public
Signed, sealed and delivered PURCHASER:
on the 15th day of February,
1999 in the presence of: _______________________, L.P.
By:Vinings Holdings, Inc.
Its sole General Partner
By:/s/ Stephanie A. Reed
------------------------------
Stephanie Reed
/s/ Amanda A. Davis
- --------------------------
Amanda A. Davis Title: Vice President
Witness Date: February 17, 1999
/s/ Cynthia M. Samuels
- ---------------------------
Cynthia M. Samuels
Notary Public
[SEAL]
As to Article 301 only, Taylor, Covington & Smith, P.A. joins in this
Agreement.
Taylor, Covington & Smith, P.A.
/s/ Brenda O. Perry /s/ Bobby A. Covington
- ---------------------- -------------------------
Brenda O. Perry By: Bobby A. Covington
Witness Its: Shareholder
Date: February 17, 1999
/s/ Beatrice Lee Ratcliffe
- -------------------------
Beatrice Lee Ratcliffe
Notary Public
[SEAL]
Exhibit "A"- Property Description and First Lien Debt
Exhibit "B"- List of Equipment and Personal Property Exhibit
"B-1"-List of Service Contracts Exhibit
"C"- Rent Roll Exhibit
"D"- Escrow Conditions Exhibit
"E"- Other Properties
VININGS INVESTMENT PROPERTIES TRUST
FORM OF AMENDED AND RESTATED AGREEMENT OF PURCHASE AND SALE
SCHEDULE OF MATERIAL DIFFERENCES
FOR ALL PROPERTIES
------------------
- --------------------------------------------------------------------------------------------------------------------------------
Purchase
Property Seller Purchaser Price
- --------------------------------------------------------------------------------------------------------------------------------
Bradford Place Apartments Crystal Ridge Apartments, L.P. Bradford Place I, L.P. $5,650,363
Bradford Place II Apartments Bradford Place Apartments II, L.P. Bradford Place II, L.P. 5,700,377
Cambridge Apartments Cambridge Apartments Partnership Cambridge Apartments, L.P. 5,823,555
Cottonwood Apartments Cottonwood Apartments, LLC Cottonwood, L.P. 4,962,120
Delta Bluff Apartments Delta Bluff Apartments, LLC Delta Bluff, L.P. 7,228,973
Foxgate Apartments Foxgate Apartments and Racquet Club, LLC Foxgate, L.P. 7,622,024
Hampton House Apartments Hampton House Apartments, LLC Hampton House, L.P. 5,930,980
Heritage Place Apartments Heritage Place Apartments, LLC Heritage Place, L.P. 3,339,382
The Landings Apartments The Landings Apartments, L.L.C. The Landings I, L.P. 6,321,935
Northwood Place Apartments Northwood Place Apartments Partnership Northwood Place, L.P. 5,808,026
River Pointe Apartments River Pointe Apartments, LLC River Pointe, L.P. 7,228,973
Riverchase Apartments Riverchase Apartments, L.P. Riverchase I, L.P. 3,270,926
Riverchase II Apartments Riverchase Apartments II, L.P. Riverchase II, L.P. 6,164,447
Riverchase III Apartments Riverchase Apartments III, L.P. Riverchase III, L.P. 5,091,991
Southwind Apartments Southwind Apartments Partnership Southwind I, L.P. 3,192,856
Southwind II Apartments Southwind Apartments II, L.P. Southwind II Apartments, L.P. 5,418,153
Trace Ridge Apartments Trace Ridge Apartments, L.L.C. Trace Ridge, L.P. 5,544,918
- --------------------------------------------------------------------------------------------------------------------------------