EXHIBIT 10.37
CONTRIBUTION AGREEMENT
(Real Estate located in Pulaski County, Arkansas and Viaticals)
For good and valuable consideration, the receipt and sufficiency
of which are acknowledged, this Contribution Agreement (this
"Agreement") is made effective on the date indicated hereinbelow that
the last party executed this Agreement (the "Effective Date"), between
Capitol Development of Arkansas, Inc., an Arkansas corporation
("CDA"), and Trade Partners, Inc., a Michigan corporation ("Trade
Partners").
PREMISES:
A. Trade Partners is in the business of acquiring, holding and
transferring life insurance policies on persons with limited life
expectancies, referred to as viatical settlement contracts.
B. CDA owns several large tracts of land in Maumelle, Pulaski
County, Arkansas, referred to herein as the Maumelle Tracts.
C. Trade Partners and CDA desire to form a new limited liability
company pursuant to Arkansas law and having the name, TradeArk
Properties, LLC ("TradeArk"). Trade Partners and CDA shall be the
initial members of TradeArk and shall capitalize TradeArk by Trade
Partners contributing certain viatical settlement contracts described
herein and CDA contributing the Maumelle Tracts subject to certain
secured debt of CDA which will be paid by TradeArk.
WITNESSETH:
1. Conveyance of Maumelle Tracts. CDA agrees to contribute to
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TradeArk marketable fee simple title to the following described real
property and improvements, together with all easements, improvements
and appurtenant rights (hereafter collectively called the "Maumelle
Tracts");
1.1 Pine Ridge Tract. That approximately 192 acre tract of land
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described on Exhibit 1.1, affixed hereto and by this reference made a
part hereof (hereinafter referred to as the "Pine Ridge Tract");
1.2 Rector Mountain Tract. That approximately 19 acre tract of
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land described on Exhibit 1.2, affixed hereto and by this reference
made a part hereof (hereinafter referred to as the "Rector Mountain
Tract");
1.3 Tract D. That approximately 40 acre tract of land described on
Exhibit 1.3, affixed hereto and by this reference made a part hereof
(hereinafter referred to as the "Tract D Tract"); and
1.4 Tract E. That approximately 6 acre tract of land described on
Exhibit 1.4, affixed hereto and by this reference made a part hereof
(hereinafter referred to as the "Tract E Tract").
CDA and Trade Partners agree that the value of the Maumelle Tracts is
agreed to be Eight Million Three Hundred Thousand Dollars
($8,300,000.00) (the "Agreed Land Value"). TradeArk shall assume at
Closing debt of CDA associated with the Maumelle Tracts in the exact
amount of Three Million Eight Hundred Thousand Dollars ($3,800,000.00)
(the "Maumelle Assumed Debt"), which shall be identified by CDA at
Closing. Some of the Maumelle Assumed Debt is secured by mortgages
(the "Assumed Mortgages") on certain parcels of the Maumelle Tracts.
2. Conveyance of Viatical Settlement Contracts. Trade Partners
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agrees to contribute to TradeArk on the terms hereafter stated, the
Viatical Settlement Contracts for life insurance policies on
individuals with a limited life expectancy (the "Viatical Settlement
Contracts," "VSC's" or "Policies") which are described on Exhibit 2,
affixed hereto and by this reference made a part hereof. CDA and Trade
Partners agree that the value of the Viatical Settlement Contracts is
agreed to be Eight Million Three Hundred Thousand Dollars
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($8,300,000.00) (the "Agreed Viaticals Value").
3. Title, Survey And Environmental Assessment.
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3.1 Title Commitment. On or before 5:00 o'clock p.m., central
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daylight savings time on the 5/th/ day after the Effective Date, CDA
will provide to the Trade Partners a preliminary binder for issuance
of an ALTA owner's title insurance policy (the "Title Commitment")
reflecting TradeArk as the proposed insured, in the amount equal to
the Agreed Land Value, issued by Beach Abstract & Guaranty Company, as
agent for Chicago Title Insurance Company, showing fee simple title to
the Maumelle Tracts to be in CDA, together with copies of all
documents listed therein as exceptions to title. The Title Commitment
shall include endorsements for zoning, non-imputation for any matters
known to CDA as exception to the matters known to insured and
undisclosed exception, contiguity (where applicable), access, tax
parcel number, and survey, and the Commitment shall be without the
"standard exceptions" that may be removed upon receipt of an owner's
affidavit
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and a survey certified to the rifle company. Trade Partners shall be
allowed ten (10) business days after receipt of all of the surveys
described below, the Title Commitment, and all exceptions to title
referenced in the Title Commitment to notify CDA in writing of any
objections to CDA's title to the Maumelle Tracts. Title objections may
also include any objections arising out of Trade Partners' review of
the surveys described below. Said objections shall be in writing or be
deemed waived. Objections may be determined by Trade Partners in the
sole discretion of Trade Partners. Any exception to title disclosed in
the Title Commitment and not objected to by Trade Partners and the
Assumed Mortgages shall be deemed a "Permitted Exception". Upon
receipt of any written objections, CDA shall promptly undertake to
correct the defects in title objected to by Trade Partners. If CDA is
unable to correct such defects within five (5) days after Trade
Partners' receipt of any written objections to rifle, Trade Partners
will have the option to waive such defect or terminate this Agreement,
in which event neither party shall have any further rights or
obligations hereunder. If the rifle binder discloses judgments,
bankruptcies or other exceptions against other persons having names
the same as or similar to that of CDA, CDA, on request, shall deliver
to Trade Partners and the title company affidavits showing that such
judgments, bankruptcies or other exceptions are not against CDA. CDA
shall also deliver any affidavits and documentary evidence required by
the title company to eliminate all exceptions other than the Permitted
Exceptions appearing in the title binder.
3.2 Title Policy. On the Closing Date, CDA shall, at CDA's sole
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cost and expense, provide TradeArk with an owner's policy of title
insurance on the parcels of the Maumelle Tracts then being conveyed
pursuant to the Title Commitment.
3.3 Survey. On or before 5:00 o'clock p.m. central daylight
savings time on the 15/th/ day after the Effective Date, CDA shall
deliver to Trade Partners current ALTA-ACSM surveys of the Maumelle
Tracts certified to TradeArk and the title company, with the signature
and seal of a Registered Land Surveyor for the State of Arkansas
showing all easements affecting the land, the relation of the land to
public thoroughfares for access purposes, the location of all
buildings, and improvements and legal description compatible with
Exhibits 1.1, 1.2, 1.3 and 1.4, and sufficient to convey title to the
Maumelle Tracts.
3.4 Environmental Assessments. Prior to execution of this
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Agreement, CDA has, at CDA's sole cost and expense, delivered to Trade
Partners new or updated Phase I environmental site assessments for the
Maumelle Tracts prepared by an environmental consultant, which are
reasonably acceptable to Trade Partners.
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4. Representations and Warranties of CDA. To induce Trade
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Partners to enter into this Agreement, CDA makes the following
representations and warranties, each of which is material and relied
upon by Trade Partners:
4.1 Authorization. CDA is an Arkansas corporation which is (i)
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duly organized, validly existing and in good standing under the laws
of the State of Arkansas, (ii) has the power and authority to
contribute and convey the Maumelle Tracts; and (iii) prior to the
Closing, shall have taken all actions required for the consummation of
the transactions contemplated by this Agreement, or any other document
delivered or to be delivered in connection with this Agreement;
4.2 Title. CDA is the sole owner of good, fee simple,
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unencumbered, marketable title to all of the real property to be
contribute to TradeArk under this Agreement, subject only to the liens
and encumbrances expressly stated in the Title Commitment, and those
to be satisfied at or prior to Closing.
4.3 No Contract Violations. The performance of the obligations of
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CDA under this Agreement will not violate any contract, document,
order, or judgment applicable to CDA.
4.4 No Litigation. There are no claims, litigation, or
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proceedings, pending, or, to the best of CDA's knowledge after due
inquiry, threatened against the Maumelle Tracts.
4.5. No Transfer. CDA will not transfer, lease or otherwise
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encumber the Maumelle Tracts prior to Closing.
4.6. No Improvements. No improvements, repairs or other
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construction has occurred on the Maumelle Tracts within 120 days prior
to the effective date of this Agreement.
4.7. No Leases or Contracts. There are no written or oral leases
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or occupancy agreements for any space on the Maumelle Tracts. There
are no contracts or other agreements (other than as set forth in the
Title Commitment) that could be binding on the Maumelle Tracts, except
for a development agreement which CDA has entered with The Hathaway
Group for the development of an office building on approximately five
(5) acres of the Tract D Tract.
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4.8. No Law Violations. There are not now outstanding, with
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respect to the Maumelle Tracts, any notices of any uncorrected
violations of any laws, statutes, ordinances, roles or regulations.
4.9. No Condemnation. No condemnation proceedings or eminent
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domain proceedings are now pending or, to the best of Seller's
knowledge, after due inquiry, contemplated against the Maumelle
Tracts.
4.10. No Assessments. No improvements have been installed or, to
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the best of CDA's knowledge, after due inquiry, are contemplated which
could give rise to a special assessments against the Maumelle Tracts.
4.11. Utility Availability. To the best of CDA's knowledge, after
due inquiry, all water, sewer, gas, electricity, oil, telephone, cable
and other utilities required for the development of the Maumelle
Tracts, either enter the Maumelle Tracts through adjoining public
streets, or if they pass through adjoining private land, do so in
accordance with legal, valid and enforceable permanent public or
private easements which will inure to the benefit of Trade Partners.
4.12. Environmental Compliance. For purposes of this paragraph,
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Hazardous Material shall mean asbestos, asbestos-containing materials,
polychlorinated biphenyls (PCBs), petroleum products and any other
hazardous, dangerous or toxic materials, wastes and substances which
are defined, determined or identified as such in any federal, state or
local laws, roles, regulations, ordinances, orders, codes or statutes,
in each case as amended including, without limitation, the Resource
Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), Safe
Drinking water Act (42 U.S.C. (S) 3000(f) et seq.), Toxic Substances
Control Act (15 U.S.C. (S) 2601 et seq.,), Clean Air Act (42 U.S.C.
(S) 7401 et seq.), Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. (S) 9601 et seq.) and any law, statute,
regulation, role or ordinance of the State in which the Premises is
located and any other governmental entity with jurisdiction over the
Premises or any part thereof, concerning such hazardous, special or
toxic materials, wastes or substances or any judicial or
administrative interpretation of such laws, rules or regulations (all
of the foregoing being herein collectively called "Environmental
Laws"). Except as disclosed on Exhibit 4.12 attached hereto, to the
best knowledge of CDA'
(1) The Maumelle Tracts are and at all times have been in
compliance with all Environmental Laws;
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(2) No notice, demand, claim or other communication has been
given to or served on CDA or on previous owners of the Maumelle
Tracts from any entity, governmental body or individual claiming
any violation of any of the Environmental Laws or demanding
payment, contribution, indemnification, remedial action, removal
action or any other action or inaction with respect to any actual
or alleged environmental damage or injury to persons, property or
natural resources, and no basis for any of the foregoing exists;
(3) No underground storage tanks are or ever were located on
the Maumelle Tracts;
(4) The soil, surface water and ground water of, under on or
around the Maumelle Tracts are free from any Hazardous Material;
(5) The Maumelle Tracts have never been used for or in
connection with the manufacture, refinement, treatment, storage,
generation, transport or hauling of any Hazardous Material in
excess of levels permitted by applicable Environmental Laws or
the disposal of any such material;
(6) No asbestos or asbestos-containing materials have been
installed, used or incorporated into or disposed of on the
Maumelle Tracts;
(7) No PCBs are or ever have been located on, in or used in
connection with the Maumelle Tracts; and
(8) No investigation, administrative order, administrative
order by consent, consent order, agreement, litigation, or
settlement is proposed or in existence or threatened or
anticipated, with respect to or arising from the presence of any
Hazardous Material or the transport of Hazardous Material with
respect to the Maumelle Tracts.
4.13 Subdivisions. The preliminary plat approved for the Pine
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Ridge Tract is in compliance with applicable laws and ordinances. CDA
is not aware of any legal or other matters that could interfere with
the construction of street improvements in the subdivisions or the
sale of lots in the subdivisions. CDA is not aware of any legal or
other impediments
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to the development of the other residentially-zoned Maumelle Tracts as
residential subdivisions.
5. Right of Termination by Trade Partners. Without limiting any
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of the fights of Trade Partners provided for elsewhere in this
Agreement, it is agreed that the obligation of Trade Partners to close
under this Agreement is conditioned upon the accuracy of all of CDA
warranties and representations and the due compliance by CDA with all
of its agreements set forth in this Agreement. If on the Closing Date,
Trade Partners determines that any of CDA representations or
warranties is untrue in any material respect, or if CDA has not
complied in all material respects with any of CDA agreements,
covenants or obligations in this Agreement, then Trade Partners may
elect to terminate this Agreement by notice given to the CDA, in which
event neither CDA nor Trade Partners shall have any further fights or
obligations hereunder. CDA's representations and warranties shall not
merge with the contract and shall survive the Closing of this
Agreement.
6. Indemnity For CDA's Breach. In the event the transaction set forth
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in this Agreement is consummated, CDA agrees to indemnify Trade
Partners and hold Trade Partners harmless and defend Trade Partners
from and against any and all loss, cost, claims, liabilities, damages
and expenses, including, without limitation, reasonable attorneys'
fees, arising as the result of a breach of any material
representations, warranties, covenants, agreements or obligations of
the Seller set forth in this Agreement. CDA's covenants pursuant to
this Section 6 shall not merge with the contract and shall survive the
Closing of this Agreement.
7. Representations and Warranties of Trade Partners. To induce CDA
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to enter into this Agreement, Trade Partners makes the following
representations and warranties, each of which is material and relied
upon by CDA:
7.1 Authorization. Trade Partners is a corporation which (i) is
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duly organized, validly existing and in good standing under the laws
of the State of Michigan, (ii) has the power and authority to
contribute and convey the Viatical Settlement Contracts; and (iii)
prior to the Closing, shall have taken all actions required for the
consummation of the transactions contemplated by this Agreement, or
any other document delivered or to be delivered in connection with
this Agreement;
7.2 Ownership of Viaticals. On the Closing Date, Trade Partners
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will be the owner of all beneficial interests in the Viatical
Settlement Contracts and shall furnish to
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CDA evidence, representations and warranties of such ownership at
Closing, whereupon all such beneficial interests shall be conveyed to
TradeArk in such a manner as is satisfactory to both Trade Partners
and CDA.
7.3 Payment of Premiums for Policies. Trade Partners hereby
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represents and warrants to CDA that at Closing all past premiums due
on the Policies have been fully and timely paid and Trade Partners
hereby covenants and agrees with CDA that all premiums on the Policies
shall be fully and timely paid in the future at Trade Partner's
expense.
8. Right of Termination by CDA. Without limiting any of the
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fights of the CDA provided for elsewhere in this Agreement, it is
agreed that the obligation of the CDA to close under this Agreement is
conditioned upon the accuracy of all of the Trade Partners' material
warranties and representations and the due compliance by the Trade
Partners with all of its agreements set forth in this Agreement. If on
the Closing Date, the CDA determines that any of Trade Partners'
representations or warranties is untrue and in any material respect,
or if Trade Partners has not complied in all material respects with
any of the Trade Partners' material agreements, covenants or
obligations in this Agreement, then CDA may elect to terminate this
Agreement by notice given to Trade Partners, in which event neither
CDA nor Trade Partners shall have any further rights or obligations
hereunder. Trade Partners' representations and warranties shall not
merge with the contract and shall survive the Closing of this
Agreement.
9. Indemnity For Trade Partners' Breach. In the event the
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transaction set forth in this Agreement is consummated, Trade Partners
agrees to indemnify CDA and hold CDA harmless and defend CDA from and
against any and all loss, cost, claims, liabilities, damages and
expenses, including, without limitation, reasonable attorneys' fees,
arising as the result of a breach of any material representations,
warranties, covenants, agreements or obligations of Trade Partners set
forth in this Agreement. Trade Partners' covenants pursuant to this
Section 9 shall not merge with the contract and shall survive the
Closing of this Agreement.
10. Tax Prorations. The following items shall be apportioned as of
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11'59 p.m. on the day immediately preceding the Closing Date: real
estate taxes, including general taxes and special improvement district
charges, due and payable prior to and accrued with regard to the year
in which the Closing occurs; the general real estate taxes for the
year of Closing so prorated (billed in arrears in the year following
the year of Closing) will be deemed to be equal to the amount of the
general real estate taxes assessed for the year immediately
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preceding the year in which the Closing occurs, and the proration
shall be based on that AMOUNT.
11. Closing and Closing Documents.
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11.1 Closing and Closing Date. The closing (the "Closing") of the
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transactions contemplated hereby shall, subject to the provisions of
this Agreement, occur effective March 31, 1999, unless CDA and Trade
Partners agree to an earlier date, provided that all documents to
effect the closing transfer shall be completed and delivered in
escrow, pursuant to terms acceptable to both CDA and Trade Partners,
for final delivery upon completion of all closing matters on or before
April 30, 1999. At the Closing, CDA shall transfer to TradeArk title
to the Maumelle Tracts, subject to the Assumed Mortgages and Trade
Partners shall transfer to TradeArk those Viatical Settlement
Contracts referred to in Section 2.
11.2 CDA's Closing Obligations. On the Closing Date, CDA shall
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deliver and perform the following items:
(a) To TradeArk, the general warranty deeds (the "Deeds") in
recordable form which is marked Exhibit 11.2(a) and affixed
hereto, conveying the Maumelle Tracts to TradeArk then being
conveyed free and clear of all liens and encumbrances except the
Permitted Encumbrances;
(b) To TradeArk, an affidavit in a form acceptable to the
title insurance company certifying that the Maumelle Tracts then
being conveyed arc free from claims for mechanic's, materialman's
and laborer's liens;
(c) To Trade Partners, appropriate resolutions from the
directors and shareholders (if required) of CDA authorizing the
transactions contemplated hereby and the execution and delivery
of all of the documents executed in connection with this
Agreement, and an opinion of legal counsel for CDA confirming due
authorization;
(d) To Trade Partners, a certificate of CDA dated as of the
Closing Date certifying that all of CDA's representations and
warranties set forth in this Agreement remain true as of the
Closing Date, or if not,
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specifying the respect in which such representation or warranty
is no longer true,
(e) CDA shall satisfy each requirement of the Title
Commitment as to the parcels of the Maumelle Tracts then being
conveyed;
(f) To TradeArk, the policy of title insurance issued
pursuant to the Title Commitment; and
(g) Such other documents as may be reasonably required by
Trade Partners or TradeArk to effectuate the conveyance of the
Maumelle Tracts.
11.3 Trade Partners' Closing Obligations. On the Closing
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Date, Trade Partners shall deliver and perform the
following items'
(a) To TradeArk, those documents necessary to transfer to
TradeArk Trade Partners' ownership of the units in the Trust
applicable to the Viatical Settlement Contracts described on
Exhibit 2. The Trust shall include provisions acceptable to CDA
and Trade Partners to ensure that (i) the trustee of the Trust
has no discretion as to its actions but follows only the
directives of TradeArk or its assignees, and (ii) the policies
are not subject to the claims of any creditors of the Trust
(other than creditors of TradeArk).
(b) To TradeArk and CDA, a third-party mortality profile
issued by American Viatical Services of each person with a
limited life expectancy who is insured by the Policies whose
benefits are conveyed pursuant to the Funding Agreement, which
report must have been issued within six (6) months prior to the
date of Closing;
(c) To TradeArk and CDA, copies of the Policies;
(d) To CDA, satisfactory collateral or assurances as CDA and
Trade Partners shall reasonably approve, securing or assuring the
obligations of Trade Partners to pay premiums due on the
Policies; and
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(e) An agreement between Trade Partners, TradeArk and CDA,
in form reasonably acceptable to Trade Partners and CDA,
obligating Trade Partners to arrange for the payment of the
premiums of the Viatical Settlement Contracts, the tracking of
the viators, the filing of a claim for payment of death benefits,
and the payment of the death benefits to TradeArk.
(f) Funding for a loan to TradeArk in an amount necessary to
satisfy in full the Maumelle Assumed Debt and cause TradeArk to
satisfy the Assumed Debt in full at Closing.
12. Costs, Brokers and Termination.
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12.1 CDA Costs. CDA will pay the following costs' CDA's
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attorneys' fees, the cost of the surveys and the environmental
assessments all abstracting costs, costs incurred in issuing the Title
Commitment (including any search charges and service fee and the title
insurance policy issued pursuant to the Commitment), one-half of the
revenue stamps, and filing fees due with respect to the recording of
any mortgage satisfactions or releases of any liens.
12.2 Trade Partners' Costs. Trade Partners will pay the following
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costs' Trade Partners' attorneys' fees, costs incurred in connection
with Trade Partners' due diligence investigation, any premium on any
mortgagee's policy of title insurance insuring Trade Partners' lender,
one-half of the revenue stamps and the fees for recording the Deeds.
12.3 Brokers; Indemnity. Each of Trade Partners and CDA represent
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and warrants to the other that neither it nor its agents, officers or
employees, have entered into any agreement, engaged, used the services
of or otherwise dealt with any broker or real estate agent in
connection with this transaction, provided, however, (i) CDA has
entered into an agreement with Commercial Mortgage Underwriters, Inc.,
a California corporation, pursuant to which CDA is obligated to pay a
broker's fee to Commercial Mortgage Underwriters, Inc., and (ii)
Christine Zmudka, a principal of Trade Partners, is a real estate
broker, doing business as "Resource Realty Exchange Group," licensed
under the law of the State of Michigan. CDA and Trade Partners agree
to indemnify and hold each other harmless and defend each other from
and against any claim, loss, damage and liability, including without
limitation reasonable attorneys' fees resulting from the claims of any
broker or real estate agent if there is a breach of the foregoing
warranty and representation
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by the party against whom indemnification is sought. The provisions of
this Section shall survive the Closing hereunder.
13. Condemnation. If, prior to the Closing Date, all or any
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portions of the Maumelle Tracts are taken by eminent domain (or is the
subject of a pending or contemplated taking which has not been
consummated, CDA shall notify the Trade Partners of such fact and
Trade Partners shall have the option (which option shall be set forth
in a notice from Trade Partners to CDA given not later than five (5)
business days after receipt of CDA's notice):
(a) To terminate this Agreement, in which event neither
party shall have any further rights or obligations
hereunder; or
(b) Acquiesce in the conveyance to TradeArk of title to
the Maumelle Tracts (other than the portion so taken)
without any abatement of the Agreed Land Value, in which
event CDA shall assign and mm over to TradeArk at the
Closing, and TradeArk shall be entitled to receive and keep,
all amounts awarded or to be awarded as the result of the
taking.
If Trade Partners does not select one of the options within the
time indicated, Trade Partners shall be deemed to have elected
subsection 13(b) hereof
14. Conditions to Obligations of Trade Partners. The obligations
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of Trade Partners under this Agreement shall be subject to the
following conditions, any of which may be waived by Trade Partners'
14.1 Representations and Warranties Tree at Closing. Trade
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Partners shall not have discovered any material error, misstatement or
omission in the representations and warranties made by the CDA in
Section 4 hereof; the respective representations and warranties made
by the CDA herein shall be deemed to have been made again at and as of
the time of the applicable Closing and shall then be tree in all
material respects; CDA shall have performed and complied in all
material respects with all covenants, agreements and conditions
required by this Agreement to be performed or complied with by them at
or prior to the applicable Closing Date; and Trade Partners shall have
received a certificate, dated as of the Closing Date and providing to
the effect set forth in this Section 14.1.
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14.2 Consents. CDA shall have obtained and delivered to Trade Partners
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written consents or approvals of all persons or entities whose consent or
approval is required to consummate the transactions contemplated herein.
14.3 Delivery, of Closing Documents. CDA shall have delivered to Trade
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Partners and TradeArk each of the closing documents listed and set forth herein,
together with any additional documents which Trade Partners may reasonably
request in writing to effect the transactions contemplated herein.
14.4 Financing. TradeArk shall have received a binding financing commitment
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on terms and conditions acceptable to Trade Partners for the transactions
contemplated by this Agreement on or before the Final Closing.
14.5 "Due Diligence" Period. Trade Partners shall be entitled to make any
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inspections, investigations, testing or other analysis of all or any portion of.
the Maumelle Tracts. CDA expressly authorizes Trade Partners to enter onto the
Maumelle Tracts for the purposes of the foregoing investigations. Trade Partners
shall have until 5:00 p.m.E.S.T., on the tenth day after the Effective Date (the
"Due Diligence Period") to undertake the foregoing investigations; however, if
the tenth day is not a business day, the Due Diligence Period shall be extended
until 5'00 p.m.E.S.T, of the first business day following the tenth day. CDA
shall have the right to undertake its due diligence with regard to the Viatical
Settlement Contracts during the Due Diligence Period. If Trade Partners
determines, in its sole discretion, that it is not satisfied with the Maumelle
Tracts or if CDA determines, in its sole discretion, that it is not satisfied
with the Viatical Settlement Contracts, the dissatisfied party may, by written
notice to the other sent prior to the expiration of the Due Diligence Period,
terminate this Agreement, and thereafter, neither party shall have any
obligations under this Agreement.
15. Conditions to Obligations of CDA. The obligations of CDA under this
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Agreement, shall be subject to the following conditions, any of which may be
waived by CDA:
15.1 Representations and Warranties True at Closing. CDA shall not have
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discovered any material error, misstatement or omission in the representations
and warranties made by the Trade Partners in Section 7 hereof, the respective
representations and warranties made by the Trade Partners herein shall be deemed
to have been made again at and as of the time of the applicable Closing and
shall then be true in all material respects; Trade Parmers shall have performed
and complied in all material respects with all covenants, agreements
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and conditions required by this Agreement to be performed or complied
with by them at or prior to the applicable Closing; and CDA shall have
received a certificate, dated as of the applicable Closing Date and
providing to the effect set forth in this Section 15.1.
15.2 Consents. Trade Partners shall have obtained and delivered to
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CDA written consents or approvals of all persons or entities whose
consent or approval is required to consummate the transactions
contemplated herein.
15.3 Delivery of Closing Documents. Trade Partners shall have
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delivered to CDA and TradeArk each of the closing documents listed and
set forth herein, together with any additional documents which CDA may
reasonably request in writing to effect the transactions contemplated
herein.
15.4 Financing. TradeArk shall have received a binding financing
commitment on terms and conditions acceptable to CDA for the
transactions contemplated by this Agreement on or before the Final
Closing
16. TradeArk Organization; Operating Agreement. The obligations
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of CDA and Trade Partners, under this Agreement, shall be subject to
CDA and Trade Partners organizing TradeArk prior to Closing as a
manager managed limited liability company under the laws of the state
of Arkansas and prior to Closing entering into an operating agreement
(the "Operating Agreement") for TradeArk. Among other provisions, the
Operating Agreement shall provide' (i) that CDA shall have an initial
capital account in TradeArk in the mount of Four Million Five Hundred
Thousand Dollars ($4,500,000.00) and shall have a 35.16% interest in
TradeArk upon contribution of the Maumelle Tracts and the assumption
by TradeArk of the Maumelle Assumed Debt; (ii) that Trade Partners
shall have an initial capital account in TradeArk in the amount of
Eight Million Three Hundred Thousand Dollars ($8,300,000.00) and shall
have a 64.84% interest in TradeArk upon contribution of the Viatical
Settlement Contracts to TradeArk; (iii) that the day-to-day
development activities of TradeArk shall be managed by a manager
selected by a majority of the member interests in TradeArk; (iv) that,
without unanimous approval of all the members of TradeArk, neither the
Manager nor any Member shall amend the Operating Agreement, sell any
assets to a party related to or controlled by any Member or the
Manager, enter into any employment agreement with any person or
contract with any company related to, controlled by or owning any
interest in any member of TradeArk, sell any asset for less than the
minimum sale price of said assets established by the members of
TradeArk from time to time.
14
17. Miscellaneous.
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17.1 Notices.
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(a) All notices, demands or requests made pursuant to,
under or by virtue of this Agreement must be in writing and
mailed to the party to which the notice, demand or request is
being made by postage, prepaid, certified or registered mail,
remm receipt requested, as follows:
TO CDA: Michael G. Todd
Capitol Communities Corporation
25550 Hawthorne Boulevard, Suite 207
Torrence, CA 90505
Telecopier: (310)375-3941
WITH A COPY TO: G. Robert Hardin
Hardin & Grace, P.A.
410 West Third Street, Suite 200
Little Rock, AR 72201
Telecopier: (501) 376-6337
TO TRADE
PARTNERS: Trade Partners, Inc.
Suite 570, Grand Plaza Place
220 Lyons Court, NW
Grand Rapids, MI 49503
Atto: Thomas J. Smith, President
Telecopier: (616) 456-9390
WITH A COPY TO: Jonathan W. Anderson
Varnum, Riddering, Schmidt & Howlett, LLP
Bridgewater Place
P.O. Box 352
Grand Rapids, MI 49501-0352
Telecopier: (616) 336-7000
15
(b) Any such notice, demand or request shall be deemed to
have been rendered or given on the date of mailing.
(c) Notice of any address change shall be given in accordance
with the provisions of this Section.
17.2 Entire Agreement. This Agreement and the Exhibits attached
----------------
hereto contain all of the terms agreed upon between the parties with
respect to the subject matter hereof and supersedes any and all prior
written understandings. All provisions of this Agreement shall survive
closing.
17.3 Amendments. This Agreement may not be changed, modified or
----------
terminated except by an instrument executed by the parties hereto.
17.4 Waiver. No waiver by either party of any failure or refusal
------
of the other party to comply with any of its obligations shall be
deemed a waiver of any other or subsequent failure or refusal so to
comply.
17.5 Successors and Assigns. This Agreement shall be binding upon
----------------------
and shall insure to the benefit of the parties hereto and their
respective successors and assigns. Trade Partners may assign its
interest in this Agreement.
17.6 Section Headings. The headings of the various Sections of
----------------
this Agreement have been inserted only for the purposes of
convenience, and are not part of this Agreement and shall not be
deemed in any manner to modify, explain, qualify or restrict any of
the provisions of this Agreement.
17.7 Governing Law. This Agreement shall be governed by and in
-------------
accordance with the laws of the State of Arkansas applicable to
contracts made and to be performed wholly within that State.
17.8 Counterparts. This Agreement may be executed in counterparts
------------
as if each party executed one document.
17.9 Exhibit List. The following exhibits are attached to this
------------
Agreement and incorporated by reference:
16
Exhibit 1.1 - Pine Ridge Tract
Exhibit 1.2 - Rector Mountain Tract
Exhibit 1.3 - Tract D Tract
Exhibit 1.4 - Tract E Tract
Exhibit 2 - Description of the Viatical Settlement
Contracts.
Exhibit 4.12 - Environmental Matters Known to CDA.
Exhibit 11.2(a) - Form of Warranty Deed
IN WITNESS WHEREOF, the parties have executed this Agreement on
the dates indicated hereinbelow.
CAPITOL DEVELOPMENT OF ARKANSAS, INC.
DATE OF EXECUTION
3/29/99 By: /s/ Michael G. Todd
President
TRADE PARTNERS, INC.
DATE OF EXECUTION:
By: /s/ Thomas J. Smith
3/29/99 President