CONTRACT OF SALE (Oakridge)
THIS CONTRACT, made as of May 17, 1996, by and between Hutton/GSH
American Storage Properties (Oakridge), L.P., a Florida limited partnership
("Seller"), and Public Storage, Inc., a California corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller desires to sell and Buyer desires to purchase all
of Seller's right, title and interest in the real property listed on Exhibit
A attached hereto and made a part hereof, the improvements and any fixtures
and personalty, presently existing and located thereon and therein and the
items set forth on Exhibit A (the "Property"), all upon the terms and
subject to the conditions hereinafter set forth;
WHEREAS, as of the date hereof, Buyer and Seller have
simultaneously entered into a Contract of Sale (Virginia) (the "Virginia
Contract") in respect of seven self-service storage facilities located in
Virginia (the "Virginia Properties") and a Contract of Sale (Fern Park) (the
"Fern Park Contract") in respect of one self- service storage facility
located in Florida (the "Fern Park Property"); and
WHEREAS, following such sale, Seller intends to liquidate and
distribute its net assets (including the proceeds of such sale) to its
partners.
NOW, THEREFORE, in consideration of the foregoing, the sum of
$1.00 by each party in hand paid to the other, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto, intending to be legally bound, do hereby mutually agree
as follows:
1. Agreement to Purchase and Sell. Subject to the terms and
conditions hereinafter set forth, Seller agrees to sell to Buyer and Buyer
agrees to purchase from Seller, free and clear of all liens, claims,
encumbrances and other charges, except the Permitted Exceptions (as
hereinafter defined), all of Seller's right, title and interest in and to the
Property.
2. Purchase Price. The purchase price ("Purchase Price") for
the Property, which Buyer agrees to pay, is the sum of $3,090,000, payable as
follows:
(a) $250,000, as the downpayment (the "Downpayment"), upon
the execution of this Contract by wire transfer of immediately available
funds to the account of Escrow Agent (as hereinafter defined), to be held by
the Escrow Agent in accordance with this Section 2 and subject to Section 24.
(b) The remainder of the Purchase Price at Closing (as
hereinafter defined), by wire transfer of immediately available funds to
Seller's account pursuant to Seller's instructions.
The Title Insurer (as hereinafter defined) shall act as escrow
agent (the "Escrow Agent") and shall hold the Downpayment in accordance with
the provisions of the escrow agreement annexed hereto as Exhibit B and made a
part hereof (the "Escrow Agreement"), which Escrow Agreement is being
executed simultaneously with this Contract.
Any interest earned on the Downpayment shall accrue to the benefit
of Buyer.
3. Evidence of Title. (a) Seller shall convey to Buyer at
Closing (as hereinafter defined) good and valid marketable fee simple title
to the Property, subject to any covenants, conditions, rights of way,
restrictions, easements and other matters affecting title, which do not
materially impair the use or the value of the Property (collectively, the
"Permitted Exceptions"; provided, however, that Permitted Exceptions shall
expressly exclude any Unpermitted Exceptions (as hereinafter defined)).
(a) Buyer shall obtain and promptly deliver to Seller within 30
days after the date hereof (i) commitments for ALTA policies of owners title
insurance or the equivalent thereof in the applicable jurisdiction (the
"Title Commitments") issued by Chicago Title Insurance Company (the "Title
Insurer") showing fee simple title to the Property as vested in Seller and
to be vested in Buyer, subject to the Permitted Exceptions and any standard
"preprinted" exceptions set forth in the Title Commitments and (ii) updated
surveys prepared by licensed land surveyors according to ALTA standards (or
the equivalent thereof in the applicable jurisdiction) showing the
boundaries of the Property, the location of any easements, rights-of-way,
improvements and encroach ments thereon and certifying the number of acres
(to the nearest one thousandth acre) comprising the Property (the "Surveys").
(b) As used herein, the term "Unpermitted Exception" shall
mean with respect to the Property (provided the same is not caused
by the actions of Buyer):
(A) Any building encroachment or sign en croachment (i) on
real estate not owned by Seller, (ii) on a setback line, or (iii) in
violation of a binding easement burdening the Property, in each
case which materially impairs the use or value of the Property;
(B) Any defect in the Seller's chain of title which would
prevent Seller from being able to convey title to the Property in
fee simple at Closing under the laws of the state in which the
Property is located, unless the Title Insurer is willing to issue a
policy of title insurance which contains affirmative coverage for
claims arising solely out of such defect;
(C) Any easement which burdens the Property such that
access or use is compromised, in each case which materially impairs
the use, access or value of the Property;
(D) Any lack of access or easements necessary to
operate the Property as a self-storage facility in the manner which such
Property has been operated by Seller prior to Closing, in each case
which materially impairs the use, access or value of the Property;
(E) Any liens for the payment of money other than
real estate taxes, association assessments, special district
taxes and related charges not yet due and payable; and
(G) (i) the failure to be in material conformance with
the then applicable local zoning codes, (ii) if the Property is not
in conformance with the then applicable local zoning codes, the
failure of the Property to have the status equivalent to a "non-
conforming use" and (iii) the existence of a permanent and final
order by the applicable local jurisdiction which materially impairs the
use or value of the Property.
4. Inspections. (a) Buyer may conduct the due diligence
investigation described below until the 30th day following the date hereof
(the "Investigation Period").
(a) Prior to the termination of the Investigation
Period, Buyer or Buyer's attorney may deliver to Seller a notice (a
"Defect Notice") setting forth a reasonable description of any Title
Defects, including any Unpermitted Exceptions, Structural Defects (as
hereinafter defined), Environmental Defects (as hereinafter defined)
or Sales Package Defects (as hereinafter defined) (collectively
"Material Defects") that it has discovered with respect to the Property.
Such description shall include copies of any reports, studies, audits,
searches and similar documentation relating to the Material Defects
discovered in connection with Buyer's investigation and Buyer's estimate of
the cost to cure any such described Material Defects.
Within 10 days of receiving such a Defect Notice, Seller
shall deliver a notice to Buyer with respect to each affected Property
(i) disputing such Material Defects, (ii) stating that some or all of the
Material Defects have been, or agreeing prior to the Closing that they
will be, cured or (iii) agreeing to grant the Buyer a credit against the
Purchase Price equal to the cost to cure such Material Defects. Notwith
standing clause (a) above or anything in the Contract to the contrary,
Seller shall not be obligated to grant Buyer a credit against the
Purchase Price to cure Material Defects (other than Environmental Defects)
with respect to the Property in excess of $500,000, subject to Section 24.
If the cost to correct any Environmental Defect exceeds 10% of the value of
the Property as set forth in Exhibit C attached hereto and made a part
hereof, Seller shall have the option to remove such affected Property
from the transaction contemplated hereby, in each case the Purchase Price
shall be reduced in accordance with Exhibit C.
If Buyer has alleged any Material Defects which Seller has
disputed or the cost to cure such Material Defects is in dispute, the
parties shall endeavor in good faith to resolve such dispute. If they do
not resolve such dispute within 10 days, the matter in dispute shall be
submitted to binding arbitration by the American Arbitration Association
(the "Association") (or any suc cessor organization) (provided that, in the
event of a dispute as to an Environmental Defect, the arbitration shall
be performed by a reputable arbitrator with at least 10 years experience
in environmental matters). All arbitration shall be finally determined in
New York City and shall be governed (except as provided above) in accor dance
with the Rules for Commercial Arbitration of the Association (or any
successor thereto) and the judgment or the award rendered may be entered in
any court having jurisdiction. Each party shall pay 50% of the fees and
expenses of the Association. The Closing Date shall be adjourned with
respect to the Property pending resolution of the matter in dispute.
Notwithstanding anything herein to the contrary, Seller shall have
the right to adjourn the Closing Date for a reasonable period as shall be
necessary to cure any Material Defect.
Notwithstanding anything herein to the contrary, the
discovery of any defects or Material Defects shall not give rise to any
right of Buyer to (i) terminate this Contract or remove the Property from
the transaction contemplated hereby or (ii) except for the cost of
curing Environmental Defects, obtain credit against the Purchase Price
in excess of $500,000 to cure Material Defects, subject to Section 24.
(b) Seller shall make available to Buyer any Phase I
environmental site assessments and Phase II environmental assessments
of the Property, if any, previously performed for Seller. Buyer
may obtain additional Phase I environmental site assessments of the
Property and otherwise inspect the Property to conduct its due diligence
review thereof.
Buyer shall conduct all environmental due diligence in a commercially
reasonable manner, and shall use reasonable efforts to minimize any
interference with or impairment of the regular conduct of the Seller's
business. If Buyer's environmental due diligence indicates a potential
material environmental liability, Buyer may conduct a Phase II
environmental assessment (the Phase I environmental site assessment and
Phase II environmental assessments, if any, shall be collectively referred to
as the"Environmental Reports") on the Property, provided (i) Buyer has provided
Seller with a copy of the Phase I environmental site assessment describing
such condition, (ii) Buyer has provided Seller with a copy of the scope of
work proposed for such Phase II environmental assessment, (iii)
Seller consented to such additional Phase II environmental assessment,
which consent shall not be unreasonably withheld or delayed, and (iv) Seller
has agreed to a reasonable extension of the Inspection Period following the
receipt of any Phase I environmental site assessment which recommends a Phase
II environmental assessment be performed on the Property in order for
Buyer to perform further environmental due diligence with respect to the
Property.
(c) Seller shall make available to Buyer upon Buyer's reasonable
request no later than 10 days following the date of full execution of this
Contract, to the extent in the possession or control of Seller and
relating to the Property, a copy of the current Form 10-K of Seller on file
with the Securities and Exchange Commission including all exhibits thereto,
copies of the Service Contracts (as hereinafter defined), the most recent
rent rolls available to the managing general partner of Seller, and
copies of insurance policies and all other information and records
pertaining to the Property within Seller's possession or control. Buyer
acknowledges that all non-public information contained in such documents is
confidential. Buyer shall have the right, at its sole cost and expense,
to conduct its own audit of the Property. Buyer agrees not to disclose such
information to any person except to Buyer's officers, employee, agents
and contractors for purposes of conducting this transaction, and Buyer
shall require any such person receiving such information to protect the
confidentiality thereof, except to the extent such information is a
matter of public record or becomes a matter of public record through no
fault or action of Buyer or Buyer's officers, employee, agents or
contractors.
(d) Buyer shall have the right to contact existing
commercial tenants which lease in excess of 1,000 sq. ft from Seller, as
selected by Buyer; provided that, Seller shall have the right to participate
in and/or monitor any discussions or correspondence between Buyer and
such selected existing tenants.
(e) Within five days of the execution of this Contract, Seller shall
provide Buyer with copies of all of Seller's yellow page advertisements and
contracts with respect to the Property.
(f) Other than with respect to the documents made available
by Seller pursuant to Section 4 (d) and other than as specified in Section 12,
all of the foregoing studies, audits and investigations by or on behalf
of Buyer, including, without limitation, Phase II environmental assessments,
shall be at Buyer's sole cost, expense and risk, and Buyer shall restore
the Property to the condition existing prior to the performance of any such
studies, audits and investigations. Prior to commencing any such
studies, audits and investigations, Buyer shall furnish to Seller a
certificate of insurance evidencing comprehensive general public
liability insurance insuring the person or entity performing such studies,
audits and investigations and listing Seller and the general partners of
Seller as additional insureds thereunder.
(g) The term "Structural Defects" shall mean material structural
flaws to foundations, load bearing walls or roof support systems
affecting the Property, set forth in a report certified by an engineer licensed
in the applicable jurisdiction, but excluding any flaws which are common or
usual in similar assets of like age assuming reasonable repair and maintenance
has been performed to the foundations, load bearing walls or roof support
systems. Such report shall state the aggregate cost to cure all material
structural flaws with respect to the Property.
(h) The term "Title Defects" shall mean any matter, objected to
by Buyer, encumbering the Property other than the Permitted Exceptions (the
"Title Defects").
(i) The term "Environmental Defect" shall mean "Hazardous
Materials" (hereinafter defined) located in, on or under the Property in
violation of any Environmental Laws (hereinafter defined).
(j) The term "Sales Package Defects" shall mean
misstatements in the income and expense statements and rent roll
previously delivered by Seller to Buyer and actually relied upon by Buyer in
good faith, in each case other than misstatements which do not in the
aggregate have a material adverse effect on the Property.
(k) In order to establish an Environmental Defect, Buyer
shall be required to deliver to Seller on or prior to 10 days after the
earlier of (i) Buyer's receipt of the Environmental Reports or (ii) the end
of the Inspection Period, as to each Property, written notice reasonably
detailing any Environmental Defect. Buyer and Seller shall make reasonable
efforts to agree as to the existence of and the cost to cure any
Environmental Defect. If Buyer and Seller do not agree on the foregoing
within 15 days after Seller's receipt of Buyer's notice described above, then
the parties shall submit the matter to binding arbitration in accordance with
the terms hereof.
(l) As used herein, "Environmental Laws" means all federal,
state and local statutes, codes, regulations, rules, ordinances, orders,
standards, permits, licenses, policies and requirements (including consent
decrees, judicial decisions and administrative orders) relating to the
protection, preservation, remediation or conservation of the environment
or worker health or safety, all as amended or reauthorized, or as
hereafter amended or reauthorized, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U. S. C. Section 9601 et seq., the Resource Conservation
and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section 6901 et seq., the
Emergency Planning and Community Right-to- Know Act ("Right-to-Know Act"), 42
U. S. C. Section 11001 et seq., the Clean Air Act ("CAA), 42 U.S.C. Section
7401 et seq., the Federal Water Pollution Control Act ("Clean Water Act"),
33 U.S.C. Section 1251 et seq., the Toxic Substances Control Act ("TSCA"),
15 U.S.C. Section 2601 et seq., the Safe Drinking Water Act ("Safe
Drinking Water Act"), 42 U.S.C. Section 300f et seq., the Atomic Energy Act
("AEA"), 42 U.S.C. Section 2011 et seq., the Occupational Safety and
Health Act ("OSHA"), 29 U.S.C. Section 651 et seq., and the Hazardous
Materials Transportation Act (the "Transportation Act"), 49 U.S.C. Section
1802 et seq. As used herein, "Hazardous Materials" means: (1) "hazardous
substances," as defined by CERCLA; (2) "hazardous wastes," as defined by
RCRA; (3) any radioactive material including, without limitation, any
source, special nuclear or by-product material, as defined by AEA; (4)
friable asbestos; (5) polychlorinated biphenyls; and (6) any other
material, substance or waste regulated under any Environmental Laws.
5. Condition of the Property. Subject only to Seller's
covenants, representations and warranties in this Contract, Buyer shall
purchase the Property in its "AS IS" condition at the Closing Date,
subject to all latent and patent defects (whether physical, financial or
legal, including title defects), based solely on Buyer's own inspection,
analysis and evaluation of the Property and not in reliance on any
records or other information obtained from Seller or on Seller's behalf.
Subject to Section 4(k), Buyer acknowledges that it is not relying on any
statement or representation (other than any representations,
warranties, covenants and indemnifi cations contained in this Contract)
that has been made or that in the future may be made by Seller or any
of Seller's employees, agents, attorneys or representatives concerning
the condition of the Property (whether relating to physical
conditions, operation performance, title, or legal matters). Without
limiting the forego ing, any information disclosed in writing to Buyer
in connection with any investigations, inspections, tests or analyses
performed prior to Closing, shall be deemed not violative of any warranty
or representation of Seller, if Buyer proceeds to Closing hereunder.
6. Closing. Upon the terms and subject to the conditions
of this Contract, the transfer of title and possession of the Property (the
"Closing") shall be held at the offices of Skadden, Arps, Slate, Meagher &
Flom, 919 Third Avenue, New York, New York 10022 at 10:00 a.m., local time,
on the date which is two business days after Seller has received the
Partnership Consent (as hereinafter defined) or such other date as the
parties shall agree. The date on which the Closing occurs is herein
called the "Closing Date".
7. Conditions to Seller's and Buyer's Obligation to Close. The
obligations of Seller and Buyer to close under this Contract are subject to
the fulfillment, prior to or at Closing, of each of the following:
(a) Seller shall have obtained consents to the sale of the
Property (the "Partnership Consent") by limited partners holding a majority
in interest of the units of limited partnership interests.
(b) There shall not be in effect any statute, regulation,
order, decree or judgment of any governmental entity having jurisdiction
which renders illegal or enjoins or prevents in any material respect the sale
of the Property to Buyer.
(c) The closings of the transactions contemplated by the
Virginia Contract and the Fern Park Contract shall have occurred, unless
either closing shall have been adjourned by Seller or any of the Virginia
Properties or the Fern Park Property shall have been removed by Seller, in
each case, in accordance with the terms thereof.
8. Conditions to Seller' s Obligation to Close. The
obligations of Seller to close under this Contract are subject to the
fulfillment, prior to or at Closing, of each of the following:
(a) The representations and warranties of Buyer shall have
been true and correct in all material respects when made and shall be true
and correct in all material respects as of the Closing Date, as if made at
and as of such date except as otherwise expressly provided herein.
(b) On and as of the Closing Date, Buyer shall have
performed and complied with, in all material respects, all agreements and
covenants required by this Contract to be performed or complied with prior to
or on the Closing Date.
9. Conditions to Buyer's Obligation to Close. The obligations of
Buyer to close under this Contract are subject to the fulfillment, prior to
or at Closing, of each of the following:
(a) The representations and warranties of Seller shall have
been true and correct in all material respects when made and shall be true
and correct in all material respects as of the Closing Date, as if made at
and as of such date except as otherwise expressly provided herein, in each
case other than failures to be true and correct which do not in the aggregate
have a material adverse effect on the Property.
(b) On and as of the Closing Date, Seller shall have
performed and complied with, in all material respects, all agreements and
covenants required by this Contract to be performed or complied with prior to
or on the Closing Date, other than failures to perform and comply which do
not in the aggregate have a material adverse effect on the Property.
10. Deliveries.
(a) Seller's Deliveries. Upon the terms and subject to the
conditions of this Contract, on the Closing Date (except as expressly
provided otherwise), Seller shall convey the Property and its related
interests to Buyer by delivery of the following documents in form and
substance reasonably acceptable to both parties:
(i) quit claim deed in recordable form (provided, however that
Seller shall deliver to Buyer a special warranty deed if the Title Insurer is
unwilling to issue a policy of title insurance which is customary in the
applicable jurisdiction containing no exceptions from coverage solely out of
the delivery by Seller of a quit claim deed);
(ii) non-recourse bill of sale for the Property conveying any
fixtures and personalty owned by Seller without covenants;
(iii) non-recourse assignment of Seller's interest, as lessor, in
any leases of space at the Property (the "Leases") and security deposits for
the Property;
(iv) non-recourse assignment, to the extent assignable, of
Seller's rights under any service or maintenance contracts (including, without
limitation, yellow pages, landscaping, security and refuse removal contracts)
relating to the Property (the "Service Contracts");
(v) non-recourse assignment, to the extent assignable, of any
licenses, permits and unexpired warranties and guarantees, if any, pertaining
to the Property;
(vi) certificates and resolutions as reasonably requested by Buyer
demonstrating the authority of the persons executing documents at Closing;
(vii) non-foreign affidavit;
(viii) originals, and/or copies, of the Leases in Seller's
possession (which deliveries may be made at the Property) and a copy of
Seller's standard form of lease for the Property;
(ix) all documents and instruments reasonably required by the
Title Insurer to issue the title policies;
(x) possession of the Property to Buyer;
(xi) evidence of the termination of the management agreement,
if any, for the Property;
(xii) a form of notice to the tenants of the Property of the
transfer of title and assumption by Buyer of the landlord's obligations
under the Leases and the obligation to refund the security deposits;
(xiii) an updated rent roll for the Property;
(xiv) all permits (including, without limitation, certificates of
occupancy, building permits, variances and conditional use permits), licenses
(including, without limitation, business licenses) and approvals that Seller
has in its possession relating to the Property;
(xv) an inventory of all personalty owned by Seller located in or
on the Property;
(xvi) copies of current real property tax bills and utility
statements; and
(xvii) a certificate of each of the general partners of Seller
to the effect that all of the representations and warranties of Seller are
true and correct at Closing, in each case other than failures to be true and
correct which do not in the aggregate have a material adverse effect on the
Property.
Seller shall make reasonable efforts to obtain (i) a reliance
letter for the benefit of Buyer from the environmental engineer or other
person having performed any Phase I environmental site assessments or Phase
II environmental assessments on behalf of the Seller and (ii) at least
five days prior to the Closing Date, all documents required by any
applicable telephone company, including supersedure papers, to transfer
Seller's telephone number, telephone listing and yellow page
advertisements to Buyer (in each case, only to the extent transferable);
provided, however, in each case, no such transfer shall be effective until
immediately after the Closing. (b) Buyer's Deliveries. Upon the terms
and subject to the conditions of this Contract, on the Closing Date,
Buyer shall deliver the following:
(i) assumption of the Leases, security deposits and the
Service Contracts;
(ii) certificates and resolutions as reasonably requested by
Seller demonstrating the authority of the persons executing documents at
Closing;
(iii) a certificate of an officer of Buyer to the effect
that all of the representations and warranties of Buyer are true and correct
in all material respects at Closing;
(iv) indemnification agreement with respect to Buyer's and
its representatives' inspection of the Property during the Inspection Period;
and
(v) balance of the Purchase Price by wire transfer.
11. Proration Items. The following shall be apportioned and
adjusted between the parties as of midnight of the day preceding the Closing
Date ("Adjustment Date"):
(a) Real estate and other taxes, assessments and charges, and
other municipal and state charges, license and permit fees, water and sewer
rents and charges, if any, on the basis of the fiscal period for which
assessed or charged;
(b) Water, electric, gas, steam and other utility charges for
service furnished to the Property;
(c) Fuel, if any, and all taxes thereon, on the basis of a
reading taken as close as possible to the Adjustment Date;
(d) Base rents and any other rental payments (including, without
limitation, any prepaid rent, percentage rent, escalation charges for real
estate taxes and operating expenses, cost-of-living adjustments and parking
rents) (the "Rents") paid or payable under the terms of any Lease for the
month of closing;
(e) Any amounts paid or payable under Service Contracts
being assigned to Buyer;
(f) All costs associated with telephone directory listings
and any other prepaid advertising; and
(g) Any other customary adjustments made in connection with the
sale of similar buildings.
Seller will not assign to Buyer any of the hazard insurance
policies affecting the Property then in force. There will therefore be no
proration of insurance costs at Closing. Except as may be otherwise
provided herein, all other expenses which are attributable to the period
prior to the Closing Date shall be the obligation of Seller and those which
are attributable to the period from and after the Closing Date shall be the
obligation of Buyer.
For purposes of the foregoing apportionments and adjustments,
the following procedures shall govern:
(i) If the Closing Date shall occur before the real
estate tax rate is fixed, the apportionment of such taxes shall be
made upon the basis of the tax rate for the immediately preceding year,
applied to the latest assessed valuation;
(ii) If there are water meters on the Property,
Seller shall furnish meter readings to a date not more than thirty
days prior to the Adjustment Date; and the unfixed meter charges for the
intervening time to the Adjustment Date shall be apportioned on
the basis of such meter readings, and any such meter charges for the
period subsequent to the Adjustment Date shall be paid by Buyer;
(iii) The apportionment of utility charges shall
be made upon the basis of charges shown on the latest available bills
for such utilities. The charges shown on such available bills for
periods prior to the Adjustment Date shall be paid by Seller, and for
the period from the date of each such last available utility bill
to the Adjustment Date an apportionment shall be made based on the amount
charged for the period covered by such last available bill;
(iv) All taxes, water and sewer charges and
assessments for public improvements which are liens upon the Property as
of the Closing Date, will be allowed to Buyer as a credit against the
Purchase Price, subject to apportionment as herein provided, and the
existence of any such lien shall not constitute an objection to title;
(v) If any tenants are required to pay Rents which are
collected by Buyer within sixty (60) days after the Closing Date and
which are attributable in whole or in part to any period prior to the
Closing Date, Buyer shall promptly pay to Seller, Seller's
proportionate share thereof;
(vi) If any tenants are required to pay Rents which are
collected by Seller within sixty (60) days after the Closing Date and which
are attributable in whole or in part to any period after the Closing
Date, Seller shall promptly pay to Buyer, Buyer's proportionate share
thereof;
(vii) If any tenant is in arrears in the payment of
Rents on the Closing Date, Rents received from such tenant after the
Closing Date shall be applied in the following order of priority: (a)
first to any months preceding the month in which the Closing occurred; (b)
then to the month in which the Closing occurred; and (c) then to any
months following the month in which the Closing occurred. If Rents or
any portion thereof are received by Seller or Buyer during the period
which is sixty (60) days after the Closing Date and are payable to the
other party by reason of this allocation, the appropriate sum shall
be promptly paid to the other party. The obligations of Buyer and Seller
pursuant to this Section 11(vii) and the two immediately preceding
Sections shall survive the Closing for a period of ninety(90) days after the
Closing Date, during which period Buyer and Seller shall agree on a
reconciliation of the prorations described herein.
Except as expressly provided, the provisions of this Section 11
shall survive the Closing.
12. Surveys, Transfer Taxes and Other Costs. Subject to
Section 24, Buyer and Seller shall each pay for one-half of (a) the cost
of obtaining any Title Commitments, Surveys and Phase I environmental site
assessments obtained by Buyer in connection with the Closing hereunder
and reports regarding structural Defects and (b) transfer taxes,
documentary stamp taxes, recording charges and other taxes or charges
imposed by any governmental entity in connection with the transfer of the
Property; provided, however, if the aggregate amount set forth in clauses
(a) and (b) exceeds $200,000, Seller shall pay the amount in excess of
$200,000 and if the aggregate amount exceeds $400,000, then, Buyer and
Seller shall each pay for one-half of all remaining costs in excess of
$400,000. Buyer shall deliver to the Title Insurer at Closing certified
checks or wire transfers of immediately available funds in the respective
amounts of each premium for any title insurance, made payable as re quested
or required by the Title Insurer. Other than as expressly provided herein,
each of the parties shall pay for any and all costs which it may incur in
connection with the transactions contemplated herein. The provisions of this
Section 12 shall survive the Closing.
13. Representations and Warranties of Seller. As an inducement
for Buyer to purchase the Property from Seller, Seller represents
and warrants to Buyer the following:
(a) Title to Real Estate. Seller has good, valid,
marketable and insurable title to the Property together with the
improvements situated thereon subject to the Permitted Exceptions.
(b) Organization and Authority.
(i) Seller is duly organized and validly
existing under the laws of the State of Florida, has full
partnership power and authority to carry on its business as it is now
being conducted and shall have, upon receipt of the Partnership
Consent, full partnership power and authority to consummate the
transaction.
(ii) Seller has the requisite partnership
power and authority to execute, deliver and perform this Contract.
The execution, delivery and performance of this Contract and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary partnership action on the part of Seller
(subject to obtaining the Partnership Consent). This Contract is
a valid and binding obligation of Seller, enforceable against Seller
in accordance with its terms.
(iii) Neither the execution and delivery of this
Contract nor the consummation of the transactions contemplated hereby in
the manner herein provided nor the fulfillment of or compliance with the
terms and conditions hereof shall:
(A) contravene any material provision of
the Seller's Agreement of Limited Partnership; or
(B) violate, be in conflict with, constitute a
default under, cause the acceleration of any payments pursuant to, or
otherwise impair the good standing, validity, or effectiveness of any
agreement, contract, indenture, lease, or mortgage, or subject any
properties or assets of Seller to any indenture, mortgage, contract,
commitment, or agreement other than this Contract to which Seller is a
party or by which Seller is bound, which in the aggregate would have a
material adverse effect on the Property and/or Seller's ability to perform
all of its obligations hereunder.
(c) Pending Actions. No litigation actions are pending or,
to Seller's knowledge, threatened against the Property or Seller which would
materially adversely affect either the Property or the Seller or which
challenge the execution, delivery or performance of this Contract.
(d) Rent Roll. The final rent roll to be delivered by
Seller with respect to the Leases promptly after execution of this Contract
will be true, accurate and complete; said rent roll additionally will
reflect all rent concessions and security deposits and all leasing
commissions and referral fees due or owed.
(e) Service Contracts. The schedule of Service Contracts
delivered by Seller is true, correct and complete in all material respects
and Seller has no knowledge of any defaults under any such contracts.
14. Representations and Warranties of Buyer. As an inducement for
Seller to sell the Property to Buyer, Buyer represents to Seller the
following:
(a) Organization and Authority.
(i) Buyer is a corporation duly organized and validly
existing under the laws of the State of Delaware and has full corporate
power and authority to carry on its business as it is now being conducted.
(ii) Buyer has the requisite corporate power and
authority to execute, deliver and perform this Contract. The execution,
delivery and performance of this Contract and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Buyer. This Contract is a valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
(iii) Neither the execution and delivery of this Contract
nor the consummation of the transactions contemplated hereby in the manner
herein provided nor the fulfillment of or compliance with the terms and
conditions hereof shall:
(A) contravene any material provision of the
Certificate of Incorporation or Bylaws of Buyer; or
(B) violate, be in conflict with, constitute a
default under, cause the acceleration of any payments pursuant to, or
otherwise impair the good standing, validity, or effectiveness of any
agreement, contract, indenture, lease, or mortgage, or subject any
properties or assets of Buyer to any indenture, mortgage, contract,
commitment, or agreement to which Buyer is a party or by which Buyer is
bound which, in the aggregate, would have a material adverse effect on
Buyer's ability to perform all of its obligations hereunder.
(b) Adequate Funds. Buyer has adequate funds or available
credit resources to pay the Purchase Price at the Closing as provided
hereunder.
15. Default and Damages.
(a) Buyer's Remedies. If Buyer shall elect to proceed with
the performance of this Contract notwithstanding the failure to be
satisfied of any conditions to Closing, Buyer shall be deemed to have
waived the requirement that those conditions which Seller is unable
to perform be satisfied. Not withstanding anything contained herein, in no
event shall Seller, its officers, directors, partners, agents and
representatives have any personal liability under this Contract whatsoever
except with respect to those provisions of this Contract which expressly
survive the Closing, and Buyer's sole recourse for Seller's failure to
consummate the Closing in accordance with the terms of this Contract shall be
to receive a refund of the Downpayment with all accrued interest thereon upon
termination of this Contract or, if appropriate, to sue for specific
performance hereunder.
In the event Seller fails to consummate the Closing in accordance with
the terms of this Contract, Buyer may terminate this Contract and shall
receive a "Termination Fee" in the amount of $750,000, which Termination Fee
shall be in addition to the return of the Downpayment plus all accrued
interest thereon plus Buyer's out of pocket costs and expenses relating to
the purchase of the Property (including, without, limitation, reasonable
attorneys' fees and expenses) to be paid by Seller on demand.
Notwithstanding the foregoing, in the event Seller fails to consummate the
Closing for failure to obtain the Partnership Consent, so long as the general
partners of Seller have recommended and continue to recommend to the limited
partners of Seller the sale of the Property to Buyer, the Termination Fee
shall consist solely of all of Buyer's out-of-pocket costs and expenses
relating to the purchase of the Property (including, without, limitation,
reasonable attorneys' fees and expenses). Buyer's sole recourse for Seller's
failure to consummate the Closing in accordance with the terms of this
Contract shall be the receipt of the Termination Fee, as set forth above,
upon termination of this Contract, together with the return of the
Downpayment plus all accrued interest thereon, or, if appropriate, to sue for
specific performance hereunder.
(a) Seller's Remedies. If Buyer shall be unable or unwilling to
consummate the Closing hereunder in violation of the terms hereof, Seller
shall have the right (i) to terminate this Contract and retain the
Downpayment, plus Seller's out of pocket costs and expenses relating to the
sale of the Properties (including, without, limitation, reasonable attorneys'
fees and expenses) to be paid by Buyer on demand, as liquidated and agreed
upon damages, whereupon this Contract shall be and become null and void, and
neither Seller nor Buyer nor any of their respective Representatives shall
have any further rights or obligations hereunder or (ii) to pursue such
rights and remedies as Seller may have at law or in equity, including,
without limitation, the right to sue for specific performance hereunder.
16. Brokers. Seller and Buyer hereby represent that each has not dealt
with any advisor, broker or finder in connection with this Contract. Seller
and Buyer shall indemnify and hold each other harmless from and against all
losses, costs, damages, expenses and liabilities including, without
limitation, reasonable attorneys' fees, resulting from any claims that may be
made for a commission fee or other compensation by reason of this Contract by
any broker, finder, advisor or person with whom such party has dealt in
connection herewith. The provisions of this Section 16 shall survive the
Closing.
17. Indemnification of Seller. Buyer agrees to indemnify and hold
harmless Seller, its general and limited partners, attorneys, accountants,
agents and employees and their heirs, successors and assigns, from and
against any claims or demands for any expense, obligation, loss, cost, damage
or injury arising out of the Buyer's inspection of the Property prior to or
on the Closing Date. The provisions of this Section 17 shall survive the
Closing.
18. Survival of Representations, Warranties and Indemnifications.
Except as otherwise expressly set forth in this Contract, none of the
representations, warranties and indemnifications contained in this
Contract shall survive the Closing.
19. Conduct of Business. During the period from the date hereof to the
Closing Date, except as (a) Buyer shall otherwise agree or (b) necessary in
connection with the transactions contemplated herein, Seller shall operate
the Property in the ordinary and usual course, consistent with past practice.
20. Reasonable Efforts; Public Announcements. Each party hereto
will use all reasonable efforts to perform all acts required to consummate the
transactions contemplated hereby as promptly as practicable. Such acts shall
include, without limitation, the provision of any information to and
submission of any filing with any governmental entity having jurisdiction.
The foregoing notwithstanding, except as may be required to comply with the
requirements of any applicable laws and the rules and regulations of each
stock exchange upon which the securities of either of the parties is listed,
no press release or similar public announcement or communication shall, if
prior to the Closing, be made or caused to be made concerning the execution
or performance of this Contract, unless the parties shall have consulted in
advance with respect thereto. Seller shall provide Buyer with reasonable
access to the Property and all information in its possession relating to the
Partnership. Buyer shall keep such information confidential, subject to the
terms and conditions of the Confidentiality Agreement dated April 4, 1996, by
and between the parties (the "Confidentiality Agreement").
21. Partnership Consent. As soon as practicable after the date
hereof but no later than fifteen (15) days after the execution of this
Contract, Seller shall prepare and file solicitation materials relating to
the transaction contemplated hereby which materials shall take a vote of its
limited partners to consider such matters. Seller shall, subject to the
fiduciary duties of its general partner, make reasonable efforts to secure
the Partnership Consent as promptly as practicable. Buyer will supply Seller
with such information and reasonable assistance as Seller may request in
connection therewith.
22. Casualty/Condemnation to the Property. (a) If, prior to
the Closing Date, any of the Property is damaged due to a casualty (a
"Casualty") and the cost of repairing such damage, in accordance with
Seller's insurance claims, is less than three percent of the Purchase Price,
then Seller shall repair such Casualty prior to the Closing Date or assign to
Buyer the proceeds of Seller's policy of casualty insurance. If the cost of
repairing a Casualty to any Property, in accordance with Seller's insurance
claims, equals or exceeds three percent of the Purchase Price, then Seller
shall have the option to either (i) repair the Casualty to the Property prior
to Closing or (ii) remove the Property from the transaction and terminate this
Agreement.
Notwithstanding anything herein to the contrary, Seller shall have the
right to adjourn the Closing Date for such reasonable period as shall be
necessary to repair any such Casualty. If Seller elects to remove such
Property from the transaction, then Buyer shall have the option, within ten
days written notice of Seller's election, to accept such Property with an
assignment of the applicable insurance proceeds due to Seller.
(a) If, prior to the Closing Date, all or any portion of the Property is
condemned or taken by eminent domain, then this Contract shall nevertheless
remain in full force and effect without any abatement of the Purchase
Price. In such event, Seller shall convey the Property to Buyer at the
Closing in its then condition, and Buyer shall be entitled to receive all
net or condemnation awards otherwise payable to Seller as a result of
such loss or damage and, in full satisfaction of any claims by Buyer against
Seller, Seller shall assign to Buyer, without recourse or warranty of
any nature whatsoever, all of Seller's right, title and interest in and to
any claims Seller may have to any condemnation awards, as well as all
rights or pending claims of Seller with respect to such condemnation or
taking of the Property, and Seller shall pay to Buyer all payments
theretofore made by such condemning authorities as a result of such loss
after deducting therefrom the costs of collection thereof.
(b) Notwithstanding anything contained herein to the contrary, if
Seller delivers notice of condemnation or eminent domain proceedings which
are initiated or threatened between the date of this Contract and the
Closing Date, Buyer shall have the right to participate in any and all
settlement discussions and other conferences relating thereto.
23. Termination. Notwithstanding anything contained herein,
this Contract may be terminated as follows:
(a) By Seller in accordance with Sections 15(b) and 22(a) hereof.
(b) By Seller or Buyer, if a court of competent jurisdiction issues a
binding and final order permanently preventing the sale of the Property to
Buyer.
(c) By Seller or Buyer, if the partners of Seller vote against the
Partnership Consent.
(d) By Seller or Buyer, if the Closing does not occur on or before
November 17, 1996, provided that the party seeking to terminate is not in
material breach of this Contract.
In the event this Contract is terminated pursu ant to any of
the foregoing provisions, this Contract shall thereupon become null and
void and neither Seller nor Buyer nor any of their respective
representatives shall have any further rights or obligations hereunder.
24. Virginia Contract and Fern Park Contract. This Contract is
being signed contemporaneously with and conditioned upon each of the Virginia
Contract and the Fern Park Contract; accordingly (i) if the Downpayment is
payable to Buyer or Seller pursuant to the terms of this Contract and/or
either of the Virginia Contract and the Fern Park Contract, the
aggregate amount of the Downpayment paid to such party shall be
$2,000,000, (ii) the aggregate limitation on the amount of credit that
Buyer shall be entitled to against the Purchase Price to cure Material
Defects (other than Environmental Defects) pursuant to this Contract and/or
either of the Virginia Contract and the Fern Park Contract shall be $500,000,
(iii) the amounts set forth in Section 12 of this Contract and/or either
of the Virginia Contract and the Fern Park Contract shall be on an
aggregate basis for this Contract, the Virginia Contract and the Fern Park
Contract and (iv) if the Termination Fee is payable to Buyer pursuant to
this Contract and/or either of the Virginia Contract and the Fern Park
Contract, the aggregate amount of the Termination Fee paid to Buyer shall
be $750,000 in addition to thereturn of the Downpayment plus all accrued
interest thereon plus Buyer's out of pocket costs and expenses relating to the
purchase of the Property (including, without, limitation, reasonable attorneys'
fees and expenses).
25. Notices. Any notice which may be required or may be desired
to be given pursuant to this Contract shall be in writing and shall be
deemed delivered and effective upon actual receipt at the following
addresses or such other addresses as the parties may notify each other by
similar notice:
If to Seller, to:
American Storage Properties, L.P.
3 World Financial Center
New York, New York 10285 Attn: Paul L. Abbott
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Attn: Patrick J. Foye, Esq.
If to Buyer, to:
Public Storage, Inc.
701 Western Avenue, Suite 200
Glendale, CA 91201-2397
Attn: Harvey Lenkin
With a copy to:
Hogan & Hartson, LLP
Columbia Square
555 Thirteenth Street, NW
Washington, D.C., 20004-1109
Attn: David B.H. Martin, Esq.
26. General. (a) Interpretation of Words. A masculine pronoun
wherever used herein shall be construed to include the feminine or neuter
where appropriate. The singular form wherever used herein shall be construed
to include the plural where appropriate.
(a) Assignment; Successors and Assigns; Third Party Beneficiaries. (i)
Neither of the parties hereto may assign its respective rights under this
Contract without the consent of the other party.
(i) Except as otherwise provided hereby, the provi sions of this Contract
shall be binding upon and inure to the benefit of the parties hereto and
their respective legal representatives and successors in interest.
(ii) This Contract is not intended, nor shall it be construed, to confer
upon any party except the parties hereto and their heirs, successors and
permitted assigns any rights or remedies under or by reason of this
Contract.
(b) Time of the Essence. Time shall be of the essence with respect to the
performance of all of the obligations hereunder.
(c) Entire Contract. Subject to the terms and conditions of the
Confidentiality Agreement, this Contract represents the entire
understanding between the parties with respect to the subject matter hereof,
super seding all prior or contemporaneous understandings or communications
of any kind, whether written or oral. This Contract may only be modified
by a written agreement signed by both parties hereto.
(d) Captions. The headings of the paragraphs herein are for convenience
only; they form no part of this Contr act and shall not affect its
interpretation.
(e) Governing Law. The provisions of this Contract shall be governed by
and construed in accordance with the laws of the State of New York applicable
to agreements entered into and to be performed wholly therein.
(f) Counterparts. This Contract may be executed in several counterparts,
each of which shall be deemed an original. Such counterparts constitute
but one and the same instrument, which may be sufficiently evidenced by
one counterpart.
(g) Further Assurances. Each of the parties hereto shall, at the request
of the other party, execute, acknowledge and deliver any further instruments,
and take such further actions, as the requesting party may reasonably
request, to carry out effectively the intent of this Contract.
IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the
day and year first above written.
HUTTON/GSH AMERICAN STORAGE PROPERTIES (OAKRIDGE), L.P.
By: American Storage Properties, L.P.,
its general partner
By: Storage Services,Inc.,
its general partner
By: s/Paul L. Abbot/
----------------
Name: Paul L. Abbot
Title: President
By: Goodman Segar Hogan/American
Storage Properties Associates,
L.P., its general partner
By: s/Mark P. Mikuta/
-----------------
Name: Mark P. Mikuta
Title: President
PUBLIC STORAGE, INC.
By: s/Harvey Lenkin/
----------------
Name: Harvey Lenkin
Title: President
EXHIBIT A
*Property
Name Location
- ---- --------
E. Oakridge Road 235 E. Oakridge Road
Orlando, FL
*The Property includes:
(A) All buildings and improvements located on the Property;
(B) All rights-of-way, alleys, waters, privileges, easements,
covenants and appurtenances which are on or benefit the Property;
(C) All right, title and interest of Seller in and to any land lying
in the bed of any public or private street, road, avenue, alley or
highway, opened, closed or proposed, in front of or adjoining the
Property to the center line thereof;
(D) All right, title and interest of Seller to any unpaid award to which
Seller may be entitled (1) due to the taking, subsequent to the Inspection
Period, by condemnation or eminent domain of any right, title or interest
of Seller in the Property and (2) for any damage, subsequent to the
Inspection Period, to the Property due to the change of grade of any street
or highway;
(E) All right, title and interest of Seller to any assignable licenses,
permits, contracts, leases, sales agreements, construction agreements,
maintenance agreements, service agreements with respect to the Property.
(F) All Leases and any security deposits with respect to the Property in
which Seller holds an interest as a landlord for the use and occupancy of
all or any part of the Property; and
(G) All engineering reports, surveys and architectural plans, if any.
EXHIBIT B
ESCROW AGREEMENT
Agreement made this 17 day of May, 1996 by and among Public Storage,
Inc. ("Purchaser"), American Storage Properties (Oakridge), L.P. ("Seller"),
and Chicago Title Company, as escrow agent ("Escrow Agent").
1. The Parties hereto agree that the sum of $250,000 (the "Escrow
Amount"), to be held pursuant to a Contract of Sale between Seller and
Purchaser of even date herewith (the "Contract"), shall be held in escrow by
the Escrow Agent upon the terms and conditions set forth herein.
2. (a) The Escrow Agent shall deliver the Escrow Amount then in its
possession in accordance with Paragraph 3 hereof to Seller (i) upon the
Closing, as that term is used in and in accordance with the Contract or (ii)
in the event that Seller makes a written demand therefor stating that
Purchaser has failed to perform Purchaser's obligations under the Contract.
(b) Escrow Agent shall return the Escrow Amount then in its
possession and any interest earned thereon in accordance with Paragraph
3 hereof to Purchaser in the event that Purchaser makes a written
demand therefor stating (i) that Seller has failed to perform Seller's
obligations under the Contract or (ii) that Purchaser is otherwise en
titled to the return of the Escrow Amount in accordance with the terms
of the Contract.
(c) In the event that Escrow Agent intends to release the Escrow
Amount in accordance with Paragraph 3 hereof to either party pursuant
to Paragraph 2(a)(ii) or 2(b) hereof, then Escrow Agent shall give to
the other party not less than ten days prior written notice of such
fact and, if Escrow Agent actually receives written notice during such
ten day period that such other party objects to the release, then
Escrow Agent shall not release the Escrow Amount and any such dispute
shall be resolved as provided herein.
(d) In the event that a dispute shall arise as to the disposition
of the Escrow Amount or any other funds held hereunder in escrow,
Escrow Agent shall have the right, at its option, to either hold the
same or deposit the same with a court of competent jurisdiction pending
decision of such court, and Escrow Agent shall be entitled to rely
upon the decision of such court.
(e) Escrow Agent may commingle the Escrow Amount with other
funds held in its "trustees account."
(f) Escrow Agent shall hold the Escrow Amount in a savings bank
account or a liquid assets account bearing interest at such rate as
may from time to time be paid or invest the Escrow Amount in U.S.
Treasury Bills or other securities guaranteed by the Government of the
United States of America. The rate of interest or yield need not be
the maximum available and deposits, withdrawals, purchases and sales
shall be made in the sole discretion of Escrow Agent, which shall have
no liability whatsoever therefor except for its gross negligence or
willful misconduct. Discounts earned shall be deemed interest for the
purposes hereof.
(g) Escrow Agent shall have no liability whatsoever arising out
of or in connection with its activity as Escrow Agent except for its
gross negligence or willful misconduct. Seller and Purchaser jointly
and severally agree to indemnify and hold harmless Escrow Agent from
and against any and all loss, cost, claim, cause of action, damage,
liability and expense (including attorneys' fees and court costs)
which may be incurred by reason of its acting as Escrow Agent.
(h) Escrow Agent shall be entitled to rely upon any judgment,
certification, demand or other writing delivered to it hereunder
without being required to determine the authenticity or the
correctness of any fact stated therein, the propriety or validity
thereof, or the jurisdiction of a court issuing any such judgment.
Escrow Agent may act in reliance upon (i) any instrument or signature
believed to be genuine and duly authorized, and (ii) advice of counsel
in reference to any matter or matters connected herewith.
(i) Any notice, demand or other communication to Escrow Agent
hereunder shall be in writing and delivered in person or sent by
certified mail, return receipt requested, postage prepaid, addressed
to Escrow Agent as follows:
Chicago Title Company
388 Market Street, Suite 1300
San Fancisco, CA 94111
Attention: Ms. Michelle Viguie
The same shall be deemed given on the date delivered, if delivered in
person, or on the third business day following the date of mailing the same,
if mailed.
(3) The interest, if any, earned on the Escrow Amount shall be
for the account of Purchaser.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of the day and year first above written.
HUTTON/GSH AMERICAN STORAGE PROPERTIES
(OAKRIDGE), L.P.
By: American Storage Properties,L.P.,
its general partner
By: Storage Services, Inc.,
its general partner
By: s/Paul L. Abbott/
-----------------
Name: Paul L. Abbott
Title: President
By: Goodman Segar Hogan/American
Storage Properties
Associates, L.P.,
its general partner
By: s/Mark P. Mikuta
----------------
Name: Mark P. Mikuta
Title: President
PUBLIC STORAGE, INC.
By: s/Harvey Lenkin/
----------------
Name: Harvey Lenkin
Title: President
CHICAGO TITLE COMPANY, as Escrow Agent
By:_____________________________
Name:
Title:
EXHIBIT C
Allocations of Property Value
Property Purchase Price
- -------- --------------
E. Oakridge Road $ 3,090,000