Exhibit 10.6
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (this "AGREEMENT") is entered into by
and between FAIRFIELD PINEHURST PARK, LTD, a Texas limited partnership
("SELLER") and ACC OP ACQUISITIONS LLC, a Delaware limited liability company
("PURCHASER").
In consideration of the mutual covenants set forth herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. SALE AND PURCHASE. Seller shall sell, convey, and assign to Purchaser,
and Purchaser shall purchase and accept from Seller, for the Purchase
Price (hereinafter defined) and on and subject to the terms and
conditions herein set forth, the following:
a. the tracts or parcels of land described on EXHIBIT "A", together
with all rights, titles, easements and interests appurtenant
thereto, including all of Seller's right, title, and interest in
and to adjacent streets, alleys, rights-of-way, and any adjacent
strips and gores of real estate (the "LAND"); all improvements
located on the Land, including, without limitation, 396-unit,
1044-bedroom apartment property, located at 3527 SW 20th Avenue,
in Gainesville, Florida, which are commonly known as "The
Exchange at Gainesville" (the "IMPROVEMENTS"); and all rights,
titles, easements and interests appurtenant to the Land and
Improvements;
b. all tangible personal property and fixtures of any kind owned by
Seller and attached to or used in connection with the ownership,
maintenance, use, leasing, service, or operation of the Land or
Improvements, including without limitation those items described
on EXHIBIT "B" (the "PERSONALTY");
c. all of the landlord's interest in and to: (i) all leases,
franchises, licenses, occupancy agreements, or other agreements
demising space in, providing for the use or occupancy of, or
otherwise similarly affecting or relating to, the Improvements
or Land (collectively, the "LEASES" and, individually, a
"LEASE"), a current schedule of which is set forth on SCHEDULE 1
attached hereto and made a part hereof (the "RENT ROLL"); (ii)
all rents prepaid for any period subsequent to the Closing Date
(defined below); and (iii) all security deposits and other
deposits ("DEPOSITS"), made by tenants (collectively, the
"TENANTS" and, individually, a "Tenant") holding under the
Leases (the term Leases as used herein shall not include tenant
leases which have been terminated prior to Closing, and the term
Deposits as used herein shall not include any deposits under
such terminated tenant leases); and
d. all of the owner's right, title and interest in and to, and
obligations under, all of the following, to the extent
assignable, affecting the Land, Improvements, Personalty, Leases
and/or Deposits: (i) the maintenance, service, or utility
contracts described on EXHIBIT "C" (the "SERVICE CONTRACTS");
provided that to the extent a Service Contract is not
assignable: [a] if Purchaser desires to accept
an assignment of such Service Contract, Seller will seek and use
its reasonable efforts to obtain approval of such assignment
from the vendor; and [b] if Purchaser does not desire to accept
an assignment of such Service Contract, or the vendor denies the
assignment, or if the Service Contract applies to numerous
properties (in addition to the Property), then [A] Seller shall
send written notice of termination to the vendor thereunder at
Closing; and [B] Purchaser shall be responsible for payment and
performance of all obligations arising under such Service
Contract during the remaining term of such Service Contract
following Closing (not to exceed thirty [30] days), (ii)
warranties, guaranties, bonds, and indemnities of, and claims
against architects, subcontractors and suppliers and others
("WARRANTIES"), other than any such Warranties by, from or
against FF Development L.P. ("CONTRACTOR"), which constitutes a
part of the Excluded Property (hereinafter defined) and shall
not be assigned or conveyed to Purchaser [provided, that the
foregoing shall not limit any rights of Purchaser against
Contractor under the Agreement Regarding Construction
(hereinafter defined)], (iii) licenses, permits, or similar
documents ("LICENSES"), (iv) plans, drawings, specifications,
surveys, engineering reports, and other technical information
("PLANS AND SPECIFICATIONS"), and (v) except for items
constituting or relating to Excluded Property, all other
property (real, personal, or mixed), owned or held by Seller
that relates to the design, construction, ownership, use,
leasing, maintenance, service, or operation of the Land,
Improvements, Personalty, Leases, Deposits, Service Contracts,
Licenses, or Plans and Specifications.
The items listed in this Section 1 are herein collectively called the
"PROPERTY". Notwithstanding any provision contained in this Agreement to
the contrary, the term "Property" shall not include, and Seller shall
not assign or convey to Purchaser at Closing, the following (the
"EXCLUDED PROPERTY"): (a) any insurance contracts or policies owned or
held by Seller in connection with the Property; (b) the existing
management contract in connection with the Property, which management
contract shall be terminated at or prior to Closing at no cost to
Purchaser; (c) the computer software program used by Seller and/or
Seller's property manager in connection with the Property; (d) any and
all deposits (other than Deposits), cash (except to the extent
attributable to prepaid rents under the Leases) and other accounts owned
or held by Seller; (e) the construction contract between Seller and
Contractor, or an affiliate thereof (the "CONSTRUCTION CONTRACT"), or
any construction warranties or guaranties provided by Contractor or any
affiliate to the Seller in connection with the construction of the
Improvements, all of which shall be released and terminated prior to
Closing; provided, that at Closing, Seller, Purchaser and Contractor
shall enter into an Agreement Regarding Construction (herein so called)
in the form set forth on EXHIBIT "D" attached hereto; (f) any contracts,
agreements or information pertaining to the cost of acquiring or
developing the Property; (g) the name "The Exchange at Gainesville",
"The Exchange" or any derivative thereof, or any literature, advertising
or promotional materials, signs, or other materials reflecting the name
"The Exchange at Gainesville", "The Exchange" or any derivative thereof;
or (h) the internet website maintained by Seller in connection with the
Property (the "Website"). During the five (5) day period following the
Closing, Seller shall be entitled to enter on to the Property solely for
the purpose of removing the Excluded Property
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therefrom. Seller shall repair any damage to the Property arising in
connection with any entry thereon by Seller and such obligation of
Seller shall survive the Closing.
2. EARNEST MONEY. On or before that date which is three (3) business days
after execution of this Agreement by Purchaser and Seller, Purchaser
shall deliver to First American Title Company, 25400 U.S. Highway 19N,
Suite 135, Clearwater, Florida 33763, (800) 331-2591; Attn: Bud Ellis
("TITLE COMPANY"), by check or wire transfer of immediately available
funds, a deposit in the amount of $200,000.00 (the "INITIAL EARNEST
MONEY") which the Title Company shall immediately deposit for collection
in an interest-bearing, federally insured account. On or prior to the
date of expiration of the Inspection Period, if this Agreement has not
theretofore been terminated, Purchaser shall deposit additional earnest
money with the Title Company in the amount of $200,000.00 (the
"ADDITIONAL EARNEST MONEY"). The Initial Earnest Money and the
Additional Earnest Money are collectively referred to herein as the
"EARNEST MONEY". In the event Purchaser shall fail to deliver any
portion of the Earnest Money as and when required hereunder, or if any
Earnest Money check is not honored when presented by the Title Company,
Purchaser shall be deemed to be in material default of its obligations
hereunder, thereby entitling Seller to terminate this Agreement in
accordance with the terms and provisions hereof prior to such time as
Purchaser deposits such Earnest Money. In the event this Agreement is
closed, the Earnest Money shall be applied to the Purchase Price at
Closing. In the event this Contract is not closed, then the Title
Company shall disburse the remainder of the Earnest Money in the manner
provided for elsewhere herein. Upon execution of this Agreement, if
required by the Title Company, Seller and Purchaser shall execute and
deliver to the Title Company the Title Company's escrow agreement for
the deposit of funds in form and substance reasonably acceptable to
Seller and Purchaser.
3. PURCHASE PRICE. The price for which Seller shall sell, convey, and
assign the Property to Purchaser, and which Purchaser shall pay to
Seller for the Property, is FORTY-SEVEN MILLION FIVE HUNDRED THOUSAND
AND NO/100 DOLLARS ($47,500,000.00) (the "PURCHASE PRICE"). The Purchase
Price, subject to other adjustments and prorations provided herein,
shall be paid by Purchaser to Seller on the Closing Date by wire
transfer of immediately available funds. At the Closing, the Title
Company shall deliver the Earnest Money to Seller and Purchaser shall
receive a credit against the Purchase Price in the amount of the Earnest
Money so delivered to Seller.
4. DELIVERY OF INFORMATION.
a. DUE DILIGENCE MATERIALS. Seller has previously delivered to
Purchaser or made available to Purchaser at the Land or at
Seller's offices, the information identified on SCHEDULE 2, to
the extent in the possession or control of Seller, but not
including any of the Excluded Property.
b. TITLE COMMITMENT. Within ten (10) days following the Effective
Date, Seller, at its expense, shall deliver or cause the Title
Company to deliver to Purchaser a commitment for Title Insurance
(the "TITLE COMMITMENT") from the Title Company setting forth
the status of the title of the Land and Improvements and
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showing all liens, claims, encumbrances, easements,
rights-of-way, encroachments, reservations, restrictions, and
all other matters of record affecting the Land or Improvements,
together with true, complete, and legible copies of all
documents referred to in the Title Commitment (the "TITLE
COMMITMENT DOCUMENTS").
c. SURVEY. Seller has previously delivered to Purchaser a copy of
the most recent survey of the Land (the "SURVEY") in Seller's
possession. Purchaser shall be entitled to cause the Survey to
be updated (the "UPDATED SURVEY"), at Purchaser's sole cost and
expense, the cost for which Purchaser shall cause to be paid in
full within thirty (30) days following receipt of an invoice
therefor. Purchaser shall cause the Updated Survey to be
certified to Seller and the Title Company and will deliver a
copy thereof to Seller within three (3) business days after
receipt, but in any event not less than three (3) business days
prior to Closing. Purchaser shall indemnify and hold Seller
harmless from and against any and all liens, costs, expenses and
liabilities incurred by Seller or the Property as a result of
Purchaser's failure to pay the cost of updating the Survey.
Purchaser's obligation to pay the cost of updating the Survey
and Purchaser's indemnity of Seller with respect thereto shall
survive the termination or Closing of this Agreement and shall
not be subject to any limitation on Seller's remedies under this
Agreement.
d. UCC SEARCHES. On or before that date which is three (3) business
days after the date hereof, the Title Company, at Seller's
expense, shall deliver to Purchaser current searches of all
Uniform Commercial Code financing statements filed with the
Secretary of State of Texas and the Secretary of State of
Florida and the County Clerk of Alachua County, Florida, against
Seller reflecting all effective financing statements then of
record relating to the Property or any part thereof ("UCC
SEARCHES").
The documents described in this Section 4 are herein collectively called
the "DOCUMENTS", and the information contained in the Documents is
herein collectively called the "INFORMATION".
5. RIGHT OF INSPECTION; INSPECTION PERIOD; CONDITION OF PROPERTY.
a. RIGHT OF INSPECTION. From the Effective Date to the Closing
Date, upon 36 hours notice to Seller or inspectors and, if
Seller desires, while accompanied by a representative of Seller,
Purchaser and/or its representatives or inspectors may inspect,
at reasonable hours, the Property, all books, records, leases,
contracts, accounting and management reports and other documents
or data pertaining to the ownership, operation, or maintenance
of the Property; provided, however, Seller shall not be required
to provide Purchaser access to and Purchaser shall not be
entitled to review any of the Excluded Property or any internal
partnership or organizational information or materials of
Seller, any memoranda or correspondence from Seller to any of
the partners in Seller or Seller's lender, or
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any other proprietary or confidential information. Purchaser
shall be entitled to examine the Property's physical condition,
and shall have the right to enter vacant apartments and upon
reasonable notice and subject to the rights of the Tenants under
the Leases, Purchaser shall have the right to enter leased
areas; provided, however, that in conducting its inspection,
Purchaser shall not unreasonably interfere with the business and
operations of the Tenants or of Seller. Purchaser and any of its
agents or consultants who desire to enter on to the Property
shall have in effect and maintain commercial general liability
insurance naming Seller and FF Properties L.P. as additional
insureds, with limits not less than $1,000,000, for personal
injury, including bodily injury and death, and property damage.
Prior to any entry on the Property, Purchaser shall deliver to
Seller a certificate of insurance evidencing such coverage, and
further evidencing that such coverage may only be terminated or
modified upon thirty (30) days prior written notice to Seller.
All inspection fees, appraisal fees, engineering fees and other
expenses of any kind incurred by Purchaser relating to the
inspection of the Property will be solely Purchaser's expense.
Purchaser shall give Seller reasonable notice prior to making
any inspection. Purchaser agrees to protect, defend, indemnify
and hold harmless Seller, FF Properties L.P., and their
respective partners, shareholders, affiliates, officers,
employees, trustees and beneficiaries and Seller's tenants,
contractors, agents and employees, from and against any and all
injuries, losses, liens, claims, judgments, liabilities, costs,
expenses or damages (including, without limitation, reasonable
attorneys' fees and court costs) sustained by or threatened
against any of them which result from or arise out of injury or
death to persons, damage or destruction to property, or
mechanic's or materialmen's liens as a result of any inspections
by Purchaser or its representatives pursuant to this Agreement.
Purchaser agrees to repair and/or restore any damage to the
Property resulting from any such inspection by Purchaser. If
Purchaser terminates the Agreement for any reason whatsoever,
then Purchaser shall deliver to Seller all reports, studies,
data, and other information acquired by Purchaser or its
representatives from Seller or its representatives in connection
with inspections of the Property. The right of access granted
hereby shall in no way be construed as giving Purchaser
possession of or any legal or equitable title to the Property
prior to the Closing. Purchaser's obligations under this Section
5 shall survive the termination of this Agreement and shall not
be subject to any limitations on remedies set forth in this
Agreement.
b. INSPECTION PERIOD. If for any reason, or no reason, Purchaser,
in its sole discretion, does not elect to acquire the Property,
then Purchaser may terminate this Agreement by delivering to
Seller written notice of termination at any time during the
period from the date hereof until and, including March 14, 2005
(the "INSPECTION PERIOD"), and the Initial Deposit previously
deposited by Purchaser with Title Company shall be immediately
returned by Title Company to Purchaser, whereupon this Agreement
shall automatically be terminated and, except for obligations of
Purchaser which survive termination of this Agreement, neither
Seller nor Purchaser shall thereafter have any further
obligations or liabilities to the other hereunder.
Notwithstanding anything set forth herein to the
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contrary, in the event that Purchaser does not affirmatively
elect, by written notice to Seller thereof prior to the
expiration of the Inspection Period, to waive its right to
terminate this Agreement pursuant to this Section 5.b.,
Purchaser shall be deemed to have terminated this Agreement
pursuant to this Section 5.b. as of the expiration of the
Inspection Period and the Earnest Money previously deposited by
Purchaser with Title Company shall be immediately returned by
Title Company to Purchaser, whereupon this Agreement shall
automatically be terminated and, except for obligations of
Purchaser which survive termination of this Agreement, neither
Seller nor Purchaser shall thereafter have any further
obligations or liabilities to the other hereunder.
c. CONDITION OF PROPERTY. Purchaser acknowledges that Purchaser
will have independently and personally inspected the Property
and that Purchaser has entered into this Agreement based upon
its ability to make such examination and inspection.
NOTWITHSTANDING ANY PROVISION CONTAINED IN THIS AGREEMENT TO THE
CONTRARY, PURCHASER ACKNOWLEDGES THAT PURCHASER IS PURCHASING
THE PROPERTY IN "AS-IS, WHERE-IS" CONDITION "WITH ALL FAULTS" AS
OF THE CLOSING AND SPECIFICALLY AND EXPRESSLY WITHOUT ANY
WARRANTIES, REPRESENTATIONS OR GUARANTEES, EITHER EXPRESS OR
IMPLIED EXCEPT AS STATED IN THIS AGREEMENT AND/OR IN ANY
DOCUMENT EXECUTED BY SELLER AT THE CLOSING, AS TO (I) THE
PROPERTY'S CONDITION, FITNESS FOR ANY PARTICULAR PURPOSES, OR
MERCHANTABILITY, (II) THE STRUCTURAL INTEGRITY OF THE
IMPROVEMENTS, (III) THE ACCURACY OR COMPLETENESS OF ANY OF THE
INFORMATION, DATA, MATERIALS OR CONCLUSIONS CONTAINED IN ANY
INFORMATION PROVIDED PURCHASER, OR (IV) ANY OTHER WARRANTY OF
ANY KIND, NATURE, OR TYPE WHATSOEVER FROM SELLER OR ANY OTHER
PARTY ON BEHALF OF SELLER. PURCHASER SHALL, AT ITS SOLE COST AND
EXPENSE, CONDUCT AND RELY UPON ITS OWN INDEPENDENT INVESTIGATION
IN THE EVALUATION OF THE PROPERTY.
6. TITLE. Purchaser may, at any time prior to the expiration of five (5)
business days following receipt by Purchaser of the Title Commitment,
Title Commitment Documents and Updated Survey, but no later than March
9, 2005 (the "TITLE REVIEW PERIOD"), object in writing to any liens,
encumbrances, and other matters reflected by the Title Commitment and/or
Survey. All such matters to which Purchaser so objects shall be
"NON-PERMITTED ENCUMBRANCES"; if no such objection notice is given
during the Title Review Period with respect to a matter reflected by the
Survey, Updated Survey and/or Title Commitment, such matter(s) reflected
by the Survey, Updated Survey and/or Title Commitment shall be
"PERMITTED ENCUMBRANCES". Purchaser may not object to any matter
reflected on the Updated Survey after the expiration of the Title Review
Period and if the Updated Survey is not obtained until after the
expiration of the Title Review Period, all matters shown on the Updated
Survey shall be Permitted Encumbrances for purposes hereof. Seller may,
but shall not be obligated to (except as otherwise set forth
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herein), at its cost, cure or otherwise remove all Non-Permitted
Encumbrances and give Purchaser written notice thereof within two (2)
days after the Title Review Period expires (the "CURE PERIOD");
provided, however, Seller shall not be required (except as otherwise set
forth herein) to attempt to cure any of such objections or to incur any
expenses in connection therewith. If Seller does not timely cause all of
the Non-Permitted Encumbrances to be removed or cured and timely written
notice thereof to be given to Purchaser, then Purchaser may either (a)
terminate this Agreement by delivering written notice to Seller on or
prior to the expiration of the Inspection Period, or (b) by failing to
terminate this Agreement by written notice delivered to Seller on or
prior to such date, Purchaser shall be deemed to have waived all of
Purchaser's uncured Non-Permitted Exceptions and to have elected to
purchase the Property subject to such uncured Non-Permitted Encumbrances
and such uncured Non-Permitted Encumbrances shall thereafter be
Permitted Encumbrances. Notwithstanding anything set forth herein to the
contrary, Seller shall, at Seller's sole cost and expense, satisfy and
release, in fact and of record, any and all liens, mortgages, deeds of
trust, mechanics' liens, judgment liens and security interests covering
or affecting the Property, or any portion thereof, to the extent created
during the period of ownership of the Property by Seller or any of its
affiliates, and no such matters shall be Permitted Encumbrances
hereunder. Notwithstanding the foregoing, Seller shall be required to
spend up to $25,000.00 to cure Non-Permitted Encumbrances which are not
otherwise required to be cured by Seller hereunder, subject to the
following: (a) such Non-Permitted Encumbrance must be susceptible of
being cured, and (b) Seller shall not be required to relocate or obtain
the release of any easements affecting the Property, or to cause any
utilities installed within such easements to be placed underground.
7. REPRESENTATIONS, WARRANTIES, AND COVENANTS; CONDITION OF PROPERTY.
a. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller hereby
represents and warrants to Purchaser that:
i. GOOD STANDING. Seller is a limited partnership duly
organized, validly existing and in good standing in the
state of its organization and duly qualified to do
business and in good standing in the state where the
Property is located with the power to hold and convey
the Property.
ii. DUE AUTHORITY. Seller has all requisite power and
authority to execute and deliver this Agreement and to
carry out its obligation hereunder and the transactions
contemplated hereby. This Agreement has been, and the
documents contemplated hereby will be, duly executed and
delivered by Seller and constitute the Seller's legal,
valid and binding obligations enforceable against Seller
in accordance with its terms. Neither this Agreement nor
the consummation by Seller of the sale of the Property
is in violation of or in conflict with nor does it
constitute a default under any term or provision of the
organizational documents of Seller, or any of the terms
of any agreement or instrument to which Seller is or may
be bound.
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iii. COLLECTIVE BARGAINING AGREEMENTS AND BENEFIT PLANS. No
collective bargaining agreements between Seller and any
labor organization apply to the operation and/or
management of the Property. No pension, retirement,
profit-sharing or similar plan or fund, ERISA qualified
or otherwise, has been established by Seller in
connection with the Property and no liabilities for
pension or retirement payments exist in connection
therewith.
iv. BANKRUPTCY, ETC. No bankruptcy, insolvency,
rearrangement or similar action involving the Property,
whether voluntary or involuntary, is pending or, to
Seller's knowledge, threatened, and Seller has never:
[a] filed a voluntary petition in bankruptcy;
[b] been adjudicated a bankrupt or insolvent or
filed a petition or action seeking any
reorganization, arrangement, recapitalization,
readjustment, liquidation, dissolution or
similar relief under any Federal bankruptcy act
or any other laws;
[c] sought or acquiesced in the appointment of any
trustee, receiver or liquidator of all or any
substantial part of its or his properties, the
Property, personal property or any portion
thereof, or
[d] made an assignment for the benefit of creditors
or admitted in writing its or his inability to
pay its or his debts generally as the same
become due.
Seller is not anticipating or contemplating any of the
actions set forth in [a] through [d] of this subsection.
v. LITIGATION. Except as set forth on SCHEDULE 3, there is
no pending or, to Seller's knowledge, threatened,
judicial, municipal or administrative proceedings with
respect to, or in any manner affecting the Property or
in which Seller is or will be a party by reason of
Seller's ownership of the Property or any portion
thereof.
vi. CONDEMNATION/TAXES. Except as set forth in the Title
Commitment and/or the Due Diligence Materials, Seller
has not received any written notices of any condemnation
actions, special assessments or increases in the rate of
taxes or other governmental impositions of any nature
which are pending or threatened with respect to the
Property or any portion thereof.
vii LIENS. Except as set forth in the Title Commitment
and/or the Due Diligence Materials, to the actual
knowledge of Seller, there are no liens or security
interests against the Land, the Improvements or against
any other portion of the Property, nor are there any
actions pending which would result in the creation of
any lien for any Improvements, and Seller shall not
create or voluntarily permit to be created any liens,
easements or other conditions affecting any portion of
the Property without the prior
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written consent of Purchaser. At the Closing, there will
be no unpaid bills or claims in connection with any
construction or repair of the Improvements or other work
performed or material purchased by Seller in connection
with the Improvements.
viii MANAGEMENT AGREEMENT. Seller shall cause any management
agreement affecting the Property prior to the Closing
Date to be terminated as of the Closing. As of the
Closing, there will not be any service, supply or
maintenance agreements with respect to the Property or
any portion thereof except for the Service Contracts
which will be assumed by Purchaser hereunder. All
persons who are currently employed by Seller in
connection with the management, operation or maintenance
of the Property, unless otherwise agreed by Purchaser in
writing or employed pursuant to a service, supply or
maintenance agreement assumed by Purchaser at Closing,
shall be terminated by Seller at or prior to Closing and
Seller shall indemnify and hold Purchaser harmless of
and from any and all claims by such employees. The lease
of any employees of Seller or Seller's affiliates (a
"Seller Employee Lease") who currently lease residential
space within the Property shall terminate not at
Closing, but on the last day of the first full month
after Closing), unless such Seller Employee Lease
provides for payment of rent at the current market rate
for the Property, or the employee agrees to pay rent at
the current market rate for the Property. Seller has
heretofore delivered to Purchaser copies of all Seller
Employee Leases pursuant to Section 4.a. hereof.
ix TITLE. Without expanding the special warranty of title
to be provided by Seller to Purchaser under the Deed
(hereinafter defined), Seller is the owner of good and
indefeasible fee simple title to the Property, subject,
to the actual knowledge of Seller, only to matters of
record which should be set forth in the Title
Commitment.
x. TAXES. To Seller's actual knowledge, Seller has paid all
taxes, charges and assessments (special or otherwise)
required to be paid to any taxing authority which are
currently due and could in any way now or hereafter
constitute a lien against the Property or any part
thereof (except for taxes and assessments for the
current year). Seller has not received any written
notice from any taxing authority or governmental agency
asserting that Seller has failed to file or has
improperly filed any tax return or report required to be
filed by it, or that it has not paid all taxes, charges
or assessments now owing by it (except current taxes and
assessments not yet delinquent) which could in any way
now or hereafter constitute a lien against the Property
or any part thereof; and to the actual knowledge of
Seller, no action or proceeding is now pending by a
governmental agency or authority for the assessment or
collection of such taxes, charges or assessments against
Seller. Except as set forth in the Title Commitment
and/or the Due Diligence Materials, to the actual
knowledge of Seller, the
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Property is not the subject of any taxes, assessments,
fees of any type or kind relating to the imposition of
any roadway, utility or other district created or
assessed by the State of Florida, or any governmental
agency or subdivision thereof, including the
municipality in which the Property is located.
xi. SCHEDULES. With regard to Seller's schedules (including
cash flow reports and financial data, operating
expenses, property facts, mortgage information and lease
characteristics) and other due diligence information
relating to the Property which have been or are to be
furnished to Purchaser, Seller has not intentionally
misrepresented the information shown thereby, and, to
Seller's actual knowledge, there are no materially
misleading or inaccurate items or information shown
thereby or contained therein.
xii. INSURANCE. Seller has not received any written notices
from any insurance company of any defects or
inadequacies in the Property or any part thereof which
would materially and adversely affect the insurability
of the Property or the premiums for the insurance
thereof.
xiii. LEASES. The Leases to which Purchaser has access are
true and correct, are in full force and effect and
constitute all of the leases affecting the Property,
and, other than as contained within the Leases: [a] no
Tenants are or shall be entitled to any rebates,
allowances, rent concessions or free rent for any period
subsequent to the Closing without the prior written
consent of Purchaser; [b] all obligations and items of
an inducement nature to be performed by the landlord
under the Leases have been fully performed and no
commitments have been made to any tenant for repairs or
improvements other than a general landlord requirement
for normal maintenance in the future; [c] no rents due
under any of said leases have been assigned,
hypothecated or encumbered (except pursuant to the liens
and security interests reflected in the Title
Commitment); [d] except as set forth on the Rent Roll,
to Seller's actual knowledge, neither Seller nor any
Tenant, is currently in default under any Lease; [e] no
Tenant has any purchase option, right of first refusal,
or other interest (other than its leasehold tenancy for
a specified term as stated in its lease); [f] there are
no pending claims asserted by any tenants for offsets
against rent or any other claims (whether monetary or
otherwise) made against Seller as landlord under the
Leases; and [g] except as set forth on the Rent Roll,
there are no fees or commissions payable to any person
or entity in regard to the Leases.
xiv. LICENSES. To Seller's actual knowledge, all Licenses
necessary for the operation and occupancy of the
Property, including, but not limited to, all building
and use permits and a certificate of occupancy, have
been obtained.
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xv. VIOLATIONS. Seller has not received any written notice
of any violation of any ordinance, regulation, law or
statute pertaining to the Property or any portion
thereof. Seller has not received written notice that the
Property or Seller are the subject of any pending or
threatened investigation or inquiry by any federal,
state, local or other governmental authority or any
board of fire underwriters (or other body exercising
similar functions), or are subject to any remedial
obligations under any applicable state or federal laws
pertaining to health or the environment ("APPLICABLE
ENVIRONMENTAL LAWS"), including, without limitation, the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, the Resource
Conservation and Recovery Act of 1987, as amended.
Seller has not received written notice that Seller or
the Property are in violation of Applicable
Environmental Laws.
xvi. SERVICE CONTRACTS. To the actual knowledge of Seller,
Seller is not in default under any Service Contracts.
xvii. SELLER REPRESENTATIVES. The individuals referenced in
the immediately following paragraph are the
representatives of Seller in charge of the operation,
maintenance and management of the Property and are the
representatives of Seller most likely to have knowledge
relative to the matters addressed in this Section 7.a.
When any representation or warranty of Seller is made "to
Seller's knowledge" or the like, such representation or warranty
is made to the actual knowledge of Wanda Norrick (the regional
supervisor for FF Properties L.P.), Rita Wilson (the Vice
President for FF Properties L.P.), Glenn Jones (the chief
financial officer for FF Properties, Inc., as Manager of
Fairfield Financial LLC, as Manager of FF Pinehurst Park, LLC,
the General Partner in Seller), and/or Brent Ball (the person
responsible for managing disposition of the Property) without
investigation or inquiry, with the understanding and agreement
that such person shall have no liability under or in connection
with this Agreement. The representations and warranties of
Seller set forth above are made as of the Effective Date and,
unless otherwise modified by Seller in accordance with the
following sentence, as of the Closing Date; provided, that
Seller makes no representation that there will not be a change
in any of the matters referred to therein between the date
hereof and the Closing Date. Seller shall notify Purchaser of
any fact, event or circumstance which would cause any of
Seller's representations or warranties to be untrue or incorrect
in any material respect on or before that date which is two (2)
business days after Seller learns of such fact, event or
circumstance. In the event Purchaser discovers a material breach
of or untruth, inaccuracy, or failure in any representation or
warranty of Seller (hereinafter collectively referred to as a
"BREACH") and such Breach is discovered after the Effective Date
but before Closing, Purchaser, as Purchaser's sole and exclusive
remedy, shall be entitled to terminate this Agreement by written
notice delivered to Seller on or prior to the
Page 11
Closing Date (unless Seller agrees in Seller's sole discretion
to cure such Breach and/or indemnify Purchaser for all losses
and expenses pertaining to such Breach pursuant to an agreement
in form and substance reasonably acceptable to Purchaser),
failing which Purchaser shall be deemed to have waived such
Breach and any corresponding right to terminate this Agreement
pursuant to this Section and elected to purchase the Property in
accordance with the provisions of this Agreement. If Purchaser
terminates this Agreement pursuant to the preceding sentence,
the Earnest Money shall be refunded to Purchaser. Purchaser
shall not be entitled to maintain any claim or action against
Seller in connection with any Breach which was discovered by
Purchaser on or prior to the Closing Date. Any claim, action or
proceeding filed by Purchaser against Seller with respect to all
such Breaches (and Seller's liability in connection therewith):
(i) shall be invalid unless such claims, actions or proceedings,
in the aggregate, exceed the sum of $100,000.00, and in no event
shall Seller be liable or responsible for any indirect or
consequential damages, including without limitation, lost
profits; and (ii) shall not exceed $700,000.00 in the aggregate
with respect to any Breach which is the subject of a lawsuit
filed against Seller within twenty four (24) months following
the Closing Date and shall not exceed $1,000.00 in the aggregate
with respect to any Breach which is the subject of a lawsuit
filed against Seller more than twenty four (24) months following
the Closing Date. If Purchaser commences a claim, action or
proceeding against Seller with respect to all such Breaches and
the actual damages incurred by Purchaser in connection with such
Breaches is equal to or less than $100,000.00 in the aggregate
or Seller is determined to have no liability in connection
therewith, Purchaser shall pay to Seller all costs and expenses,
including without limitation, attorneys fees, incurred by Seller
in connection with such claim, action or proceeding. The
provisions of this paragraph shall survive the Closing.
b. PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser hereby
represents and warrants to Seller that:
i. GOOD STANDING. Purchaser is a limited liability company
duly organized, validly existing and in good standing in
the state of its organization.
ii. DUE AUTHORITY. Purchaser has all requisite power and
authority to execute and deliver this Agreement and to
carry out its obligation hereunder and the transactions
contemplated hereby. This Agreement has been, and the
documents contemplated hereby will be, duly executed and
delivered by Purchaser and constitute the Purchaser's
legal, valid and binding obligation enforceable against
Purchaser in accordance with its terms. The consummation
by Purchaser of the purchase of the Property is not in
violation of or in conflict with nor does it constitute
a default under any term or provision of the
organization documents of Purchaser, or any of the terms
of any agreement or instrument to which Purchaser is or
may be bound, or of any provision of any
Page 12
applicable law, ordinance, rule or regulation of any
governmental authority or of any provision of any
applicable order, judgment or decree of any court,
arbitrator or governmental authority.
iii. BANKRUPTCY, ETC. No bankruptcy, insolvency,
rearrangement or similar action involving the Property,
whether voluntary or involuntary, is pending or, to
Purchaser's knowledge, threatened, and Purchaser has
never:
[a] filed a voluntary petition in bankruptcy;
[b] been adjudicated a bankrupt or insolvent or
filed a petition or action seeking any
reorganization, arrangement, recapitalization,
readjustment, liquidation, dissolution or
similar relief under any Federal bankruptcy act
or any other laws;
[c] sought or acquiesced in the appointment of a
trustee, receiver or liquidator of all or any
substantial part of its or his properties,
personal property or any portion thereof, or
[d] made an assignment for the benefit of creditors
or admitted in writing its or his inability to
pay its or his debts generally as the same
become due.
Purchaser is not anticipating or contemplating any of
the actions set forth in [a] through [d] of this
subsection.
c. COVENANTS OF SELLER AND PURCHASER.
i. OPERATION OF THE PROPERTY. Seller shall prior to the
Closing continue to operate the Property in
substantially the same manner as the Property was
operated by Seller prior to and on the Effective Date,
and Seller shall maintain the Property in substantially
the same condition as the Property is in on the
Effective Date, normal wear and tear and damage by fire
or casualty excepted.
ii. LEASING. From the date hereof until the Closing, Seller
shall not, without the prior written consent of
Purchaser:
[a] enter into any lease for commercial space;
[b] enter into any residential lease except at
market rates (as set forth on EXHIBIT "E"
attached hereto), for a term not to extend
beyond August 15, 2006 and not shorter than six
(6) months, and using a form other than the
standard lease form used by Seller;
[c] accept any advance payment for more than thirty
(30) days of any rent under any Lease; or
[d] except as provided in the Lease, waive, reduce
or forgive any rent required to be paid under
any Lease after the Closing Date.
Page 13
iii. SERVICE AGREEMENTS. Without Purchaser's prior written
consent, Seller agrees not to enter into any Service
Contracts prior to the Closing which shall survive the
Closing unless same are terminable upon thirty (30) days
prior written notice without penalty or termination
charge.
iv. INSURANCE POLICIES. Seller shall, at its own expense,
keep and maintain in full force and effect through the
Closing, a policy or policies of all risk and general
liability insurance covering the Property, from time to
time on the Property, against loss or damage by fire,
vandalism, malicious mischief, lightning, windstorm,
water, accidents, contingent liability and other
insurable perils, and rent loss insurance in amounts not
less than those in force as of the date hereof.
v. LICENSES. At all times from the date of this Agreement
to the Closing, Seller shall cause to be maintained in
force all Licenses.
vi. LEASES. Prior to Closing, but not thereafter, Seller
shall keep and perform all of the obligations to be
performed by the landlord under the Leases, including
without limitation any maintenance of the Property to be
performed by the landlord under such Leases, all
substantially in the same manner as such obligations
were performed prior to the date hereof. Seller agrees
to continue its existing efforts to retain the existing
tenants and to secure new tenants for the Property, at
rentals and upon terms and conditions as are set forth
on EXHIBIT "E" attached hereto, or such other rentals,
terms and conditions as are reasonably approved by
Purchaser, such approval not to be unreasonably withheld
or delayed.
vii. NOTICES. Prior to Closing, but not thereafter, Seller
shall (a) give notice to Purchaser immediately upon (i)
Seller's receipt of any notice from any governmental
authority of a violation of any Applicable Laws or
acquiring knowledge of the receipt of any such notice by
any Tenant of any portion of the Property and (ii)
acquiring knowledge of the presence of any hazardous
substances on the Property in a condition that is
resulting or could reasonably be expected to result in
any adverse environmental impact, with a full
description thereof and (b) promptly comply with all
Applicable Environmental Laws requiring notice, removal,
treatment, or disposal of such hazardous substances to
the extent that Seller has actual knowledge thereof.
viii. LEASING STATUS. Prior to Closing, but not thereafter,
Seller shall provide Purchaser on a weekly basis with
copies of the weekly lease status reports prepared by
Seller with respect to the Property, together with any
updated Rent Roll (which Rent Roll shall be updated on a
monthly basis).
ix. PROHIBITION AGAINST CONDOMINIUM CONVERSION. Purchaser
represents and warrants to Seller that Purchaser is
purchasing the Property as an
Page 14
apartment rental project and agrees not to convert the
Property or permit the Property to be converted to a
condominium use or fractional ownership for a period
expiring on the earlier of (A) the expiration of any
applicable statute of limitations relative to any
liability of Seller or its affiliates to future
purchasers of condominium units and (B) that date which
is seven (7) years after the Closing Date, except in
strict compliance with the Condominium Conversion
Agreement (hereinafter defined). Purchaser acknowledges
that Seller is relying on the foregoing representation
as partial consideration for Seller's execution of this
Agreement and conveyance of the Property to Purchaser.
On the Closing Date, Seller and Purchaser will execute
and deliver a Condominium Conversion Agreement (herein
so called) in the form set forth on EXHIBIT "J" which
will be recorded against the Property at the Closing.
x. WEBSITE. Following the Closing, and thereafter until
August 31, 2005, Seller will cause the Website to
automatically redirect to Purchaser's website (as
designated by Purchaser) any inquiries relative to the
Property, and any actual cost or expense associated
therewith shall be borne by Purchaser. The terms and
provisions of this Section 7.c.x shall survive the
Closing.
xi. AUDIT. For a period of one (1) year following the
Closing, Seller will permit Purchaser's auditors,
without cost or charge (except that Purchaser shall be
responsible for reimbursing Seller for all costs and
expenses incurred by Seller in connection therewith),
and subject to Seller's receipt of a confidentiality
agreement executed by such auditors, to have access to
Seller's books and records relative to the Property, but
not the Excluded Property (which books and records shall
be accompanied by Seller's letter to Purchaser's
auditors in the form set forth on EXHIBIT "K" attached
hereto, which letter may not be relied on by Purchaser
for any reason or purpose) for the purpose of
examination of such books and records in order to
prepare audited financial statements at Purchaser's cost
and expense, which audit shall be performed at no cost
to Seller. The terms and provisions of this Section
7.c.xi shall survive the Closing.
8. CLOSING. The closing (the "CLOSING") of the sale of the Property by
Seller to Purchaser shall occur on or before March 29, 2005 (the
"CLOSING DATE"), and same shall be coordinated through the offices of
the Title Company (although neither party shall be obligated to be
present at the Closing as long as all items required to be delivered by
such party at closing are timely delivered to the Title Company on or
prior to the Closing Date). At the Closing the following shall occur
prior to 12:00 noon, Central Standard Time, on the Closing Date:
a. SELLER TO DELIVER. Seller, at its expense, shall deliver or
cause to be delivered to Purchaser the following:
Page 15
i. A Special Warranty Deed (the "DEED") in the form of
EXHIBIT "F", fully executed and acknowledged by Seller,
conveying to Purchaser the Land and Improvements,
subject only to the Permitted Encumbrances;
ii. A Bill of Sale and Assignment (the "BILL OF SALE") in
the form of EXHIBIT "G", fully executed and acknowledged
by Seller, assigning, conveying, and transferring all of
the Property other than the Land and Improvements, to
Purchaser, subject only to the Permitted Encumbrances;
iii. Such affidavits as may be reasonably required by the
Title Company, including, without limitation, mechanics'
liens, parties in possession and gap affidavits;
iv. A current certificate reflecting that since the date of
the UCC Searches, no Uniform Commercial Code filings,
chattel mortgages, assignments, pledges, or other
encumbrances have been filed in the offices of the
Secretary of State of the State of Texas, the State of
Florida or the County Clerk of Alachua County with
reference to the Property;
v. Evidence reasonably satisfactory to the Title Company
that the persons executing and delivering the closing
documents on behalf of Seller have full right, power and
authority to do so;
vi. A Certificate in the form of EXHIBIT "H" meeting the
requirements of Section 1445 of the Internal Revenue
Code of 1986, executed and sworn to by Seller;
vii. A current tenant Rent Roll, certified by Seller to be
true, correct and complete to Seller's knowledge in all
material respects, dated no earlier than ten (10) days
prior to the Closing Date;
vii. Originals (or copies if originals are not available) of
all Leases, including all guaranties thereof and
amendments thereto and all consents or waivers with
respect thereto that modify or supplement the provisions
thereof in any respect, and all correspondence files
related thereto;
viii. A notice to Tenants in the form set forth on EXHIBIT "I"
attached hereto (the "TENANT NOTICE LETTER");
ix Possession of the Property;
x. The Condominium Conversion Agreement, duly executed by
Seller; and
xi. the Agreement Regarding Construction, duly executed by
Seller.
b. PURCHASER TO DELIVER. Purchaser, at its expense, shall deliver
or cause to be delivered to Seller the following:
i. Funds available for immediate value in Seller's
accounts, in the amount of the Purchase Price as
specified in Section 3, less credits, prorations and
deductions as herein set forth;
ii. Evidence satisfactory to Title Company that the person
executing the closing documents on behalf of Purchaser
(to the extent applicable) has full right, power, and
authority to do so; and
iii. The Bill of Sale, Tenant Notice Letter, Restrictive
Covenant Agreement and Condominium Conversion Agreement
duly executed by Purchaser.
Page 16
c. EXPENSES OF CLOSING. Seller shall pay the base ALTA owner's
title insurance premium, subject to any available credit, if
any. Purchaser shall pay for all title endorsements, and any
deletions, exceptions or other upgraded policy provisions.
Purchaser shall pay for all transfer and mortgage taxes.
Purchaser shall pay any recording and documentary stamp taxes
applicable to the purchase of the Property and any financing
obtained by Purchaser in connection with the purchase of the
Property. Except as otherwise provided herein, Purchaser and
Seller shall share equally any escrow and closing charges.
Purchaser and Seller shall respectively pay such other costs in
connection with the Closing as is customary in the State of
Florida.
d. PRORATIONS. The following shall be apportioned between Seller
and Purchaser as of 12:00 midnight of the evening prior to the
Closing Date (the "APPORTIONMENT DATE"):
i. all rent and other amounts under or pursuant to the
Leases (collectively, "RENTS") with respect to the month
in which the Closing occurs (whether collected or not),
with any delinquent Rents as of the Closing Date to be
apportioned in accordance with Section 8.e. hereof;
ii. real estate taxes, assessments, vault charges and taxes,
and any other governmental taxes and charges levied or
assessed against the Property (collectively, "PROPERTY
TAXES"), on the basis of the respective periods for
which each is assessed or imposed, to be apportioned in
accordance with Section 8.f. hereof;
iii. water rates and charges, sewer rents and taxes, if any,
based on meter readings to be apportioned in accordance
with Section 8.g. hereof;
iv. charges for electricity, steam, gas and any other
utilities (collectively, "Utilities") made by the
utility companies servicing the Property to be
apportioned in accordance with Section 8.h. hereof, and
transferable utility deposits, if any, shall be
transferred to Purchaser, and all such transferable
utility deposits shall be reimbursed by Purchaser to
Seller;
v. fuel, if any, as estimated by Seller's supplier, at
current cost, together with any sales taxes payable in
connection therewith, if any. A letter from Seller's
fuel supplier shall be conclusive evidence as to the
quantity of fuel on hand and the current cost therefor;
vi. any other charges or payments to be paid pursuant to any
Service Contract or Lease with respect to the Property
to be apportioned on the basis of the period for which
the same is payable; and
vii All Deposits shall be delivered to Purchaser at the
Closing or credited to the Purchase Price.
e. RENTS. Rents which are past due on the Closing Date
(collectively, "TENANT RECEIVABLES") shall be apportioned on the
basis of the period for which the same is payable and if, as and
when collected, as follows:
Page 17
i. During the period ending one (1) year after Closing,
Purchaser shall deliver to Seller any and all Tenant
Receivables to the extent subsequently collected by
Purchaser. Purchaser shall apply rent and other income
received after Closing as follows: first, to payment of
the rent and reimbursements then due for periods
following the Closing Date; this amount shall be
retained by Purchaser; second, to reasonable collection
costs; this amount shall be delivered to Purchaser;
third, to Tenant Receivables arising prior to Closing,
this amount shall be delivered to Seller if, as and when
collected by Purchaser; provided, however, Seller shall
have the right to pursue against former (but not
current) Tenants the collection of Tenant Receivables
which accrued prior to Closing at any time for a period
of one (1) year after Closing without prejudice to
Seller's rights or Purchaser's obligations hereunder.
For purposes of assuring compliance with the provisions
of this Agreement, Seller shall, during all periods of
any continuing obligation of Seller to Purchaser, have
access to Purchaser's relevant records and accounts
relative to Tenant Receivables upon reasonable written
notice. Any Tenant Receivables received by Purchaser to
which Seller is entitled shall be held in trust for
Seller on account of said Tenant Receivables payable to
Seller, and Purchaser shall remit to Seller any such
sums received by Purchaser to which Seller is entitled
at least once every calendar month following the Closing
Date. Seller expressly agrees that if Seller receives
any amounts after the Closing Date which are
attributable, in whole or in part, to any period after
the Closing Date, Seller shall remit to Purchaser that
portion of the moneys so received by Seller to which
Purchaser is entitled within ten (10) business days
after receipt thereof.
ii. Any prepaid Rents attributable to periods following the
Closing Date shall be retained by Seller and the amount
thereof shall be credited to Purchaser at Closing.
f. PROPERTY TAXES. Property Taxes shall be apportioned on the basis
of the fiscal period for which assessed. If the Apportionment
Date shall occur either before an assessment is made or a tax
rate is fixed for the tax period in which the Closing Date
occurs, the apportionment of such Property Taxes based thereon
shall be made at the Apportionment Date by applying the most
current tax rate to the latest assessed valuation. Purchaser
shall provide to Seller written evidence of such assessment
and/or tax rate for the current year within ten (10) days of
Purchaser's receipt of same. The apportionment thereof shall be
recalculated and Seller or Purchaser, as the case may be, shall
promptly make an appropriate payment to the other based on such
recalculation within said ten (10) day period, provided,
however, if either Seller or Purchaser does not notify the other
party of any required adjustments pursuant to this Section 8.f.
on or prior to the Termination Date, such party shall have no
further right to seek or require payment by the other party of
any other sums under this Section 8.f.
Page 18
g. WATER CHARGES. If there are water meters on the Premises, the
unfixed water rates and charges, sewer rents and taxes covered
by meters, if any, shall be apportioned (i) on the basis of an
actual reading done on or immediately prior to the Apportionment
Date, or (ii) if such reading has not been made, on the basis of
the last available reading. If the apportionment is not based on
an actual current reading, then Purchaser shall within thirty
(30) days from Closing have an actual reading done and deliver
the written results of same to Seller. Upon the receipt of such
subsequent actual reading by Seller, the apportionment shall be
readjusted and Seller or Purchaser, as the case may be, shall
deliver within three (3) business days thereof to the other the
amount determined to be due upon such readjustment.
h. UTILITIES. Utilities shall be apportioned on the basis of actual
current readings or, if it is not commercially reasonable for
Seller to obtain such readings prior to Closing, then on the
basis of the most recent bills that are available. If any
apportionment is not based on an actual current reading then,
Purchaser shall within thirty (30) days from Closing have an
actual reading done and deliver the written results of same to
Seller. Upon the receipt of such subsequent actual reading by
Seller, the apportionment shall be readjusted and Seller or
Purchaser, as the case may be, shall promptly deliver to the
other the amount determined to be due upon such readjustment.
i. CLOSING ADJUSTMENTS. If the computation of the aforementioned
apportionments shows that a net amount is owed by Seller to
Purchaser, such amount shall be credited against the Purchase
Price payable by Purchaser on the Closing Date. If such
computation shows that a net amount is owed by Purchaser to
Seller, such amount shall be paid to Seller by Purchaser on the
Closing Date.
j. POST CLOSING ADJUSTMENTS. The provisions of Sections 8.e.
through 8.h. shall survive the Closing, provided that notice of
any claim for adjustment hereunder must be provided to the other
party prior to the earlier to occur of (x) ninety (90) days
after Purchaser delivers to Seller a detailed adjustment
reconciliation (taking into account Tenant Receivables and all
other apportioned items as provided in this Section 8) and (y)
the expiration of six (6) months following the Closing Date (the
"TERMINATION DATE").
k. RESPONSIBILITY FOR EXPENSES. Seller shall pay all costs and
liabilities relating to the Property that are attributable to
the period prior to the Closing Date. Purchaser shall pay all
costs and liabilities relating to the Property that are
attributable to the period from and after the Closing Date. The
provisions of this Section 8.k. shall survive the Closing.
l. POSSESSION. At the Closing, Seller shall deliver to Purchaser
possession of the Property free and clear of all tenancies of
every kind and parties in possession, except for the Tenants
under the Leases, with all parts of the Property (including
without limitation the Leases, Improvements and Personalty) in
substantially the same condition as on the date hereof, normal
wear and damage by fire or casualty only excepted.
Page 19
9. COMMISSIONS. Purchaser and Seller each warrant and represent to the
other that it has not dealt or negotiated with any broker in connection
with this transaction other than CB Richard Ellis whose commission shall
be paid by Seller pursuant to a separate written agreement between
Seller and such broker. If Closing and funding do not occur for any
reason, no commission shall be earned, due or payable. Each party hereby
agrees to indemnify and hold the other party hereto harmless from and
against any and all claims, demands, causes of action, loss, costs and
expenses (including reasonable attorneys' fees and disbursements, as
incurred) or other liability arising from or pertaining to any brokerage
commissions, fees, or other compensation, which may be due to any
brokers or persons claiming a commission as a result of an agreement
with such party in connection with this transaction.
10. DESTRUCTION, DAMAGE, OR TAKING BEFORE CLOSING. If, before Closing, all
or any material part of the Land, Improvements or Personalty are
destroyed or damaged, or become subject to condemnation or eminent
domain proceedings or threat thereof, then Seller shall promptly notify
Purchaser thereof. Purchaser may elect to proceed with the Closing
(subject to the other provisions of this Agreement) by delivering notice
thereof to Seller within ten (10) business days of receipt of Seller's
notice respecting the damage, destruction, or taking, but Purchaser
shall be entitled to all insurance proceeds or condemnation awards
payable as a result of such damage or taking and Seller shall assign to
Purchaser at Closing Seller's rights to such proceeds or awards. If,
within ten (10) business days of receipt of Seller's notice respecting
the damage, destruction, or taking, Purchaser notifies Seller of its
intent to terminate this Agreement, this Agreement shall terminate, the
Earnest Money shall be immediately returned to Purchaser and, except for
obligations of Seller and Purchaser which survive termination of this
Agreement, the parties shall have no further obligations hereunder. For
the purposes of this Section 10, damage or a taking shall be considered
to be "material" if the value of the portion of the Land, Improvements,
or Personalty damaged or taken exceed $500,000 in value, or, in the case
of a taking, if any portion of the Land (or the access thereto),
Improvements, or Personalty is taken or threatened to be taken.
Page 20
11. TERMINATION AND REMEDIES.
a. If Purchaser fails to consummate the purchase of the Property
pursuant to this Agreement for any reason other than timely
termination hereof pursuant to a right granted to Purchaser in
Sections 5.b., 6, 7.a., 10, 11.c. or 12.n., then Seller, as its
sole and exclusive remedy, may terminate this Agreement by
notifying Purchaser thereof, in which event Title Company shall
deliver the Earnest Money theretofore deposited by Purchaser
with Title Company hereunder to Seller as liquidated damages,
whereupon, except for obligations of Purchaser which survive
termination of this Agreement, neither Purchaser nor Seller
shall have any further rights or obligations hereunder. The
provision for payment of liquidated damages has been included
because, in the event of a breach by Purchaser, the actual
damages to be incurred by Seller can reasonably be expected to
approximate the amount of liquidated damages called for herein
and because the actual amount of such damages would be difficult
if not impossible to measure accurately. Nothing contained in
this Section 11.a. shall limit Seller's remedies with respect to
any obligation of Purchaser which survives the Closing or
termination of this Agreement.
b. If Purchaser terminates this Agreement pursuant to Sections
5.b., 6, 7.a., 10, 11.c. or 12.n., then the Title Company shall
return the Earnest Money to Purchaser, whereupon neither party
hereto shall have any further rights or obligations hereunder,
except for those which survive the termination of this
Agreement.
c. If Seller fails to consummate the sale of the Property pursuant
to this Agreement for any reason other than Purchaser's failure
to perform its obligations hereunder in all material respects or
termination hereof by Purchaser in accordance with Section
11.b., or any of Seller's representations or warranties herein
are untrue, incorrect and inaccurate in any material respect, or
Seller breaches any material covenant of Seller hereunder, then
Purchaser may, as its exclusive remedies therefor: (i) terminate
this Agreement by notifying Seller thereof, in which case Title
Company shall deliver the Earnest Money to Purchaser and neither
party hereto shall have any further rights or obligations
hereunder, except for those which survive the termination of
this Agreement; or (ii) enforce specific performance of the
obligations of Seller hereunder, and all expenses, including
reasonable attorneys' fees and litigation costs, incurred in
enforcing its rights and remedies hereunder. In no event shall
Purchaser have the right to pursue or be entitled to recover any
damages from Seller in connection with any breach of this
Agreement by Seller, all of which are hereby expressly waived by
Purchaser. Nothing contained in this Section 11.c. shall limit
Purchaser's remedies with respect to any obligation of Seller
which survives the Closing or termination of this Agreement.
Page 21
12. MISCELLANEOUS.
a. NOTICES. All notices provided or permitted to be given under
this Agreement must be in writing and may be served by
depositing same in the United States mail, addressed to the
party to be notified, postage prepaid and registered or
certified with return receipt requested; by delivering the same
to such party by recognized delivery service; by nationally
recognized overnight delivery service or by facsimile copy
transmission. Notice given in accordance herewith shall be
effective upon delivery to the address of the addressee. For
purposes of notice, the addresses of the parties shall be as
follows:
If to Seller: Fairfield Pinehurst Park, Ltd.
2045 North Highway 360
Suite 250
Grand Prairie, Texas 75050
Attn: Glenn D. Jones
Telephone No: (817) 816-9400
Facsimile No: (817) 640-9499
Email: SHILL@FAIRFIELDRESIDENTIAL.COM
with a copy to: David M. Tatum
Geary, Porter & Donovan, P.C.
16475 Dallas Parkway, Suite 500
Addison, Texas 75001
Telephone No: (972) 349-2207
Facsimile No: (972) 931-9208
Email: DTATUM@GPD.COM
If to Purchaser: ACC OP Acquisitions LLC
805 Las Cimas Parkway
Suite 400
Austin, Texas 78746
Attn: William Talbot and Brian Winger
Telephone No: (512) 732-1013
Facsimile No: (512) 732-2450
Email: TALBOT@STUDENTHOUSING.COM
winger@studenthousing.com
with a copy to: Glast, Phillips & Murray, P.C.
2200 One Galleria Tower
13355 Noel Road
Dallas, Texas 75240
Attn: R. Craig Warner
Telephone No: (972) 419-8300
Facsimile No: (972) 419-8329
Email: CWARNER@GPM-LAW.COM
Page 22
If to Title Company: First American Title Insurance Company
25400 U.S. Highway 19N, Suite 135
Clearwater, FL 33763
Attn: Bud Ellis
Telephone No: (800) 331-2591
Facsimile No: (727) 791-7240
Email: BTELLIS@FIRSTAM.COM
Either party hereto may change its address for notice by giving
three days prior written notice thereof to the other party.
Notices may be given by the above-named counsel to a party.
Email addresses are included for informational purposes only,
and any required notices must be delivered by one of the methods
of delivery described above.
b. ASSIGNS, BENEFICIARIES. Except as hereinafter specified, this
Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, legal
representatives, successors and assigns. This Agreement is for
the sole benefit of Seller and Purchaser, and no third party is
intended to be a beneficiary of this Agreement. Purchaser shall
not have the right to transfer or assign its rights under this
Agreement to any other party without the express written consent
of Seller to be withheld or granted in Seller's sole discretion,
except as set forth in the immediately following sentence.
Notwithstanding the foregoing, Purchaser shall have the right to
assign this Agreement and the rights of Purchaser hereunder to
any affiliate of Purchaser without the consent of Seller. For
purposes of this Agreement, the term "affiliate" means any
entity which is controlled by, under common control with or
controls Purchaser and/or any owner, member or parent of
Purchaser. In the event of any such assignment, Purchaser shall
promptly furnish to Seller an executed copy of the assignment in
which the assignee assumes all of the rights and obligations of
Purchaser hereunder. No consent given by Seller to any transfer
or assignment of Purchaser's rights or obligations hereunder
shall be construed as a consent to any other transfer or
assignment of Purchaser's rights or obligations hereunder which
arise following the date of such assignment. No transfer or
assignment in violation of the provisions hereof shall be valid
or enforceable.
c. LIMITATION ON LIABILITY. The obligations and liabilities of
Seller or Purchaser under this Agreement and any document
executed in connection with or pursuant to the terms of this
Agreement shall not constitute personal obligations of the
officers, directors, employees, agents, trustees, partners,
members, representatives, stockholders or other principals or
representatives of Seller or Purchaser. Notwithstanding any
provision to the contrary contained in this Agreement or any
document executed in connection with or pursuant to the terms of
this Agreement, Seller's liability, if any, arising in
connection with this Agreement or with the Property shall be
limited to Seller's interest in the Property.
Page 23
d. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Florida.
e. ENTIRE AGREEMENT. This Agreement is the entire agreement between
Seller and Purchaser concerning the sale of the Property, and no
modification hereof or subsequent agreement relative to the
subject matter hereof shall be binding on either party unless
reduced to writing and signed by the party to be bound. All
Exhibits attached hereto are incorporated herein by this
reference for all purposes.
f. RULE OF CONSTRUCTION; NO WAIVER. Purchaser and Seller
acknowledge that each party has reviewed this Agreement and that
the rule of construction to the effect that any ambiguities are
to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments
hereto. No provision of this Agreement shall be deemed to have
been waived by either party unless the waiver is in writing and
signed by that party. No custom or practice which may evolve
between the Purchaser and Seller during the term of this
Agreement shall be deemed or construed to waive or lessen the
right of either of the parties hereto to insist upon strict
compliance of the terms of this Agreement.
g. CONFIDENTIALITY. Purchaser recognizes, understands and agrees
that pursuant to this Agreement it will receive from Seller
certain information regarding Seller and the ownership and
operation of the Property, including, without limitation,
certain of the information to be provided to Purchaser pursuant
to Section 4 hereof which is designated by Seller as being
"confidential information" (the "Confidential Information").
Purchaser agrees that, unless required pursuant to a subpoena
properly issued by a court of competent jurisdiction, it shall
not, prior to Closing, voluntarily disclose any such
Confidential Information to any third party or parties, except
to agents, employees, independent contractors, inspectors,
attorneys, accountants, consultants and brokers advising or
assisting Purchaser with the transaction contemplated hereby,
potential or actual investors, potential and actual lenders of
all or a portion of the Purchase Price and as otherwise
expressly allowed pursuant to the terms and provisions of this
Agreement. The provisions of this Section 12.g. shall not
survive Closing (but shall survive a termination) of this
Agreement. Notwithstanding the foregoing, (a) nothing in this
Section will preclude Purchaser from making any disclosures
required or permitted by law or regulation or necessary or
proper in conjunction with the filing of any tax return or other
document required to be filed with any federal, state or local
governmental body, authority or agency, including without
limitation any filing to comply with applicable Securities and
Exchange Commission disclosure obligations and (b) Seller
acknowledges that Purchaser may (i) file a Current Report on
Form 8-K with the Securities and Exchange Commission to disclose
this Agreement and the transactions contemplated hereby, and
(ii) in conjunction with the filing of such Form 8-K, issue a
press release relative to this Agreement.
Page 24
h. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, and all such executed counterparts shall
constitute the same agreement. It shall be necessary to account
for only one (1) such counterpart executed by each party hereto
in proving the existence, validity or content of this Agreement.
A facsimile copy of a signature of a party to this Agreement
shall be sufficient to bind such party.
i. SEVERABILITY. If any provision of this Agreement is determined
by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Agreement shall nonetheless
remain in full force and effect.
j. SECTION HEADINGS. Section headings contained in this Agreement
are for convenience only and shall not be considered in
interpreting or construing this Agreement.
k. WORDS. Within this Agreement, words of any gender shall be held
and construed to include any other gender, and words in the
singular number shall be held and construed to include the
plural, unless the context otherwise requires.
l. BACK UP CONTRACTS. Seller shall not, during the pendency of this
Agreement, market the Property or negotiate or enter into back
up contracts for the sale of the Property.
m. EFFECTIVE DATE. The "Effective Date" or any other reference to
the date of this Agreement shall mean the date on which this
Agreement is last signed by Seller and Purchaser, as indicated
by their signatures below. If the last party to execute this
Agreement fails to complete the date of execution below that
party's signature, the Effective Date shall be the date this
fully executed Agreement is delivered to the Title Company.
n. CONDITIONS. The following shall be conditions precedent to
Purchaser's obligations hereunder:
(i) The condition of the Property shall not have materially
changed following the expiration of the Inspection
Period (except to the extent any such change is due to
the actions of Purchaser or damage to or taking of the
Property as described in Section 10 hereof).
If any of the conditions precedent set forth in this Section
12.n. shall fail to be satisfied (or expressly waived by
Purchaser in writing) prior to the Closing Date, Purchaser may,
at its option, in writing, either (i) cause this Agreement to be
terminated by providing written notice to Seller, whereupon the
Earnest Money shall be immediately returned to Purchaser and,
thereafter, neither Seller nor Purchaser shall have any further
duties or obligations hereunder other than those matters which
expressly survive the termination of this Agreement or (ii)
waive the same and proceed to Closing.
Page 25
o. FLORIDA DISCLOSURE. Florida law requires the following
disclosure to be given to the purchaser of property in this
state. Seller has made no independent inspection of the Land to
determine the presence of conditions, which may result in radon
gas; however, Seller is not aware of any such condition. Certain
building methods and materials have been proven to reduce the
possibility of radon gas entering the building:
"RADON GAS: Radon is a naturally occurring radioactive
gas that, when it has accumulated in a building in
sufficient quantities, may present health risks to
persons who are exposed over time. Levels of radon that
exceed federal and state guidelines have been found in
buildings in Florida. Additional information regarding
radon and radon testing may be obtained from your county
public health unit."
Page 26
IN WITNESS WHEREOF, that parties hereto have duly executed this
Agreement as of the date set forth beneath their signature below.
SELLER:
FAIRFIELD PINEHURST PARK, LTD., a Texas limited
partnership
By: FF Pinehurst Park, LLC, a Texas limited
liability company, General Partner
By: Fairfield Financial LLC, a Delaware
limited liability company, Manager
By: FF Properties, Inc., a
Delaware corporation, Manager
By: /s/ Glenn D. Jones
-----------------------
Glenn D. Jones,
Vice President
Seller's Tax ID No. 75-2885171
-----------------------
Date: 2-25-05
Page 27
PURCHASER:
ACC OP ACQUISITIONS LLC,
a Delaware limited liability company
By: /s/ William C. Bayless
---------------------------------------------
Name: William C. Bayless
-------------------------------------------
Title: President
------------------------------------------
TIN: 20-2216306
------------------
Date: February 25, 2005
-----------------
Page 28
The undersigned Title Company acknowledges receipt of a fully executed
copy of this Agreement this 28th day of February, 2005, and agrees to comply
with the provisions of this Agreement, including the provisions hereof governing
disposition of the Earnest Money.
FIRST AMERICAN TITLE INSURANCE COMPANY
By: /s/ John D. Menkel
---------------------------------------------
Name: John D. Menkel
-------------------------------------------
Title: Escrow Officer
------------------------------------------
Page 29
SCHEDULE OF EXHIBITS
--------------------
Exhibit A - Description of Land
B - Description of Personalty
C - List of Service Contracts
D - Agreement Regarding Construction
E - Proforma Rental Rates
F - Form of Special Warranty Deed
G - Form of Bill of Sale and Assignment
H - Form of FIRPTA Certificate
[OR ESCROW AGREEMENT TO PAY WITHHOLDING]
I - Form of Tenant Notice Letter
J - Form Condominium Conversion Agreement
K - Letter to Purchaser's Auditors
Schedule 1 - Rent Roll
2 - Due Diligence Materials
3 - Litigation
Page 30