-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V5NTqb6vWot7KKYu/nNE44o5ctRR8y9KHtTRr0HTUHbRiOHxjFVJtDazofxp5Z9+ f2CQYCyqCFu1vTu55vlXig== 0001047469-99-005998.txt : 19990217 0001047469-99-005998.hdr.sgml : 19990217 ACCESSION NUMBER: 0001047469-99-005998 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990129 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990216 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONAM REALTY INVESTORS 81 L P CENTRAL INDEX KEY: 0000350023 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 133069026 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-10223 FILM NUMBER: 99540568 BUSINESS ADDRESS: STREET 1: 1764 SAN DIEGO AVE CITY: SAN DIEGO STATE: CA ZIP: 92110 BUSINESS PHONE: 2125263237 MAIL ADDRESS: STREET 1: 3 WORLD FINANCIAL CENTER STREET 2: 29TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10285 FORMER COMPANY: FORMER CONFORMED NAME: HUTTON CONAM REALTY INVESTORS 81 DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: HUTTON CONAM PROPERTIES 81 DATE OF NAME CHANGE: 19810616 8-K 1 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 29, 1999 ----------------- CONAM REALTY INVESTORS 81 L.P. ----------------------------------------------------- (Exact name of registrant as specified in its charter) CALIFORNIA 0-10223 13-3069026 - -------------------------------------------------------------------------------- (State or other (Commission (IRS Employer jurisdiction File Number) Identification No.) of incorporation) 1764 San Diego Avenue, San Diego, California 92110 - -------------------------------------------------------------------------------- (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (619) 297-6771 -------------- - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On January 29, 1999, ConAm Realty Investors 81 L.P. (the "Partnership") completed the sale (the "Sale") of its two remaining properties, Las Colinas Apartments I and II, a 300-unit apartment community located in Scottsdale, Arizona, and Tierra Catalina, a 120-unit apartment community located in Tucson, Arizona (the "Properties"), to DOC Investors, L.L.C., a Delaware limited liability company (the "Purchaser"). The members of the Purchaser are two pension funds which own an aggregate 91% interest in the Purchaser, advised by Lend Lease Real Estate Investments, Inc. ("Lend Lease"), which is unaffiliated with ConAm Property Services, Ltd., the general partner of the Partnership (the "General Partner"), and ConAm DOC Affiliates LLC, an affiliate of the General Partner ("ConAm DOC"), which owns a 9% interest in the Purchaser. As described in the Consent Solicitation Statement defined below, ConAm DOC has the potential to receive up to an additional 18% of the profits of the Purchaser after certain priority returns are paid to the members of the Purchaser. The Purchaser has retained ConAm Management Corporation, an affiliate of the General Partner, to act as the initial property manager for the Properties. As required by the Partnership's Amended and Restated Certificate and Agreement of Limited Partnership (the "Partnership Agreement"), the consent of a majority in interest of the Limited Partners to the Sale was obtained pursuant to a Consent Solicitation Statement dated December 16, 1998 (the "Consent Solicitation Statement"). The sale price of the Properties was $22,250,000 (before selling costs and prorations). The sale price was negotiated between the General Partner, on behalf of the Partnership, and Lend Lease on behalf of the Purchaser. The Partnership received approximately $12,371,000 of cash proceeds from the Sale, net of closing costs of approximately $1,000 and repayment of indebtedness of approximately $9,878,000. All net cash proceeds from the Sale, less any amount the General Partner determines to set aside as a reserve for contingencies, will be distributed to the Limited Partners. The Purchaser purchased the Properties on an "As Is" basis with only limited representations and warranties by the Partnership as to the condition of the Properties or their fitness for any purpose. Any representations made by the Partnership will survive for only a period of six months following the closing date. Although it is not expected, the Partnership could ultimately have some liability to the Purchaser under such representations and warranties. ITEM 5. OTHER EVENTS. By amendment dated January 18, 1999 (the "Amendment"), Section 12 of the Partnership's Partnership Agreement was amended to permit proposed sales of Partnership properties to "affiliates" of the General Partner, if such proposed sales are approved by the Limited Partners. As required by the Partnership Agreement, the consent of a majority in interest of the Limited Partners to the Amendment was obtained pursuant to the Consent Solicitation Statement. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements. Not applicable. (b) Pro Forma Financial Information - Narrative. As a result of the Sale of the Properties by the Partnership, beyond the date of sale there will be no further rental income, property operating expenses, interest expense, or depreciation and amortization expenses in the consolidated financial statements of the Partnership. For the Partnership's fiscal year ended December 31, 1997 (the last fiscal year for which information is available at the date of this Report) such amounts were $3,196,975, $1,520,450, $840,832, and $769,828, respectively. Rental income, property operating expenses, interest expense, and depreciation and amortization expenses were $2,533,468, $1,127,722, $624,129, and $577,331, respectively, for the nine months ended September 30, 1998 in the consolidated financial statements of the Partnership. Also as a result of the Sale of the Properties, there are no further assets and liabilities related to the Properties in the Partnership's consolidated financial statements, which at September 30, 1998 consisted of investments in real estate, less accumulated depreciation, of $10,055,322; restricted cash of $457,429; other assets of $76,278; mortgages payable of $9,749,593; and security deposits of $64,464. Following the Sale, the Partnership's only asset will be cash and cash equivalents; its only liabilities will be distribution payable and accounts payable and accrued expenses; its only income will be interest income; and its only expenses will be general and administrative expenses of winding up and liquidating the Partnership. (c) Exhibits. 4.1 Amendment, dated January 18, 1999 to Partnership Agreement. 10.1 Agreement for Purchase and Sale and Joint Escrow Instructions between RI81 Las Colinas Limited Partnership and DOC Investors, L.L.C. dated January 26, 1999 with respect to Las Colinas Apartments I and II. 10.2 Agreement for Purchase and Sale and Joint Escrow Instructions between Tierra Catalina Limited Partnership and DOC Investors, L.L.C. dated January 26, 1999 with respect to Tierra Catalina. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CONAM PROPERTY SERVICES, LTD., General Partner of ConAm Realty Investors 81 L.P. By: Continental American Development, Inc., General Partner Date: February 12, 1999 By: /s/ Daniel J. Epstein ------------------------------- Daniel J. Epstein Director, President, and Principal Executive Officer Date: February 12, 1999 By: /s/ Robert J. Svatos ------------------------------- Robert J. Svatos Chief Financial Officer EX-4.1 2 EXHIBIT 4.1 AMENDMENT TO AMENDED AND RESTATED CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP OF CONAM REALTY INVESTORS 81 LP This Amendment to Amended and Restated Certificate and Agreement of Limited Partnership of ConAm Realty Investors 81 LP, a California limited partnership formerly known as Hutton/ConAm Realty Investors 81 (the "PARTNERSHIP"), is entered into as of January 18, 1999, and amends the Amended and Restated Certificate and Agreement of Limited Partnership of the Partnership (as amended to date, the "AGREEMENT"), as follows: 1. Section 12.d.(xi) of the Agreement is hereby amended as follows: (xi) Except as provided in Subsection 12f.(vi), permit the Partnership to purchase or lease property in which a General Partner or any Affiliate has an interest or sell any Property to a General Partner or any Affiliate, unless such transaction is specifically approved by Limited Partners owning a majority of the Units outstanding at that time. 2. Except as expressly amended hereby, all other provisions of the Agreement shall remain unchanged and shall continue in full force and effect. 3. The effective date of this Amendment is January 18, 1999. GENERAL PARTNER: ConAm Property Services, Ltd. By: Continental American Development, Inc., its general partner By: /s/ Scott Dupree ------------------------- E. Scott Dupree, Vice President LIMITED PARTNERS: The Limited Partners of the Partnership whose names are recorded in the records of the Partnership by ConAm Property Services, Ltd., their attorney-in-fact By: Continental American Development, Inc. By: /s/ Scott Dupree ------------------------- E. Scott Dupree, Vice President EX-10.1 3 EXHIBIT 10.1 AGREEMENT FOR PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS LAS COLINAS This Agreement for Purchase and Sale and Joint Escrow Instructions (this "Agreement") is entered into as of January 26, 1999, by and between RI81 Las Colinas Limited Partnership, an Arizona limited partnership ("Seller"), and DOC Investors, LLC, a Delaware limited liability company ("Buyer"), who agree and, to the extent applicable, instruct First American Title Insurance Company ("Escrow Holder" or "Title Company," as the context may require), as escrow holder, as follows: 1. This Agreement is made with reference to the following facts: 1.1. Seller owns that certain real property located at 5995 N. 78th Street, Scottsdale, Arizona 85250, commonly known as Las Colinas Apartments and more fully described on EXHIBIT A attached hereto (the "Real Property"), including without limitation all rights, members, easements, alleys, ways, appurtenances, shrubbery, trees, plants and privileges located thereon or appertaining thereto, together with any and all right, title and interest in and to any land lying in the bed or right-of-way of any street, road, alley or avenue, open or proposed, in front of or adjoining the land to the centerline thereof, together with any nonexclusive right to use any and all such land lying within any such roadbed, right-of-way, street, alley or avenue for ingress and egress to and from the land, together with any and all right, title and interest in and to any award made or to be made in lieu thereof, and in and to any unpaid award for damage to the land by reason of change of grade of any street. Along with the Real Property, Buyer intends to purchase from Seller, and Seller intends to sell to Buyer, in accordance with this Agreement, all improvements constructed in, on or under the Real Property including a 300-unit residential apartment complex (collectively, the "Improvements"), all of Seller's tangible personal property located on and used solely in connection with the Real Property or the Improvements, including without limitation the tangible personal property identified on EXHIBIT B attached hereto (the "Personal Property") and all intangible personal property owned by Seller and now, or hereafter, used in connection with the Real Property (the "Intangible Property") including, without limitation, all (i) trade names, (ii) logos, (iii) warranties and guaranties relating to the construction, operation, maintenance, repair and use of the Improvements and the Personal Property, including, without limitation, any and all equipment, HVAC systems, plumbing and roof warranties and all contractors' and subcontractors' warranties (the "Warranties"), (iv) certificates of occupancy (or the local equivalents), permits, licenses, approvals and authorizations issued by any federal, state or municipal government, branch, authority, district, agency, court, tribunal, department, board, commission or other instrumentality ("Governmental Authority"), (v) leases and other occupancy agreements (the "Leases"), and (vi) contracts or other similar arrangements for goods and services (the "Service Contracts"). 1.2. By this Agreement, Buyer and Seller intend to provide for the sale of the Real Property, the Improvements, the Personal Property and the Intangible Property (collectively, the "Property") by Seller to Buyer. 2. PURCHASE AND SALE. Subject to the terms and conditions of this Agreement, Seller agrees to sell the Property to Buyer and Buyer agrees to purchase the Property from Seller. 3. ESCROW. 3.1. OPENING OF ESCROW. Buyer shall immediately cause an escrow (the "Escrow") to be opened at Escrow Holder's office located at 114 East Fifth Street, Santa Ana, California 92701, Attention: Toni Rice- Groetsch for the purpose of facilitating the consummation of this Agreement, by delivering the Deposit (as defined in Section 4.1 below) to Escrow Holder along with a copy of the fully executed original (or executed counterparts) of this Agreement within two (2) business days after executing this Agreement. Escrow Holder shall, immediately upon its receipt of the Deposit and executed Agreement, execute and deliver to Buyer and Seller the Consent and Acceptance of Escrow Holder attached to this Agreement, which Consent and Acceptance of Escrow Holder shall specify the date of such receipt (the "Escrow Opening Date"). This Agreement constitutes instructions to Escrow Holder. Buyer and Seller shall execute such additional mutual instructions as Escrow Holder may reasonably require, provided that such additional instructions shall be consistent with this Agreement. Any inconsistency between any such additional instructions and this Agreement shall be resolved in a manner consistent with this Agreement, and the provisions of this Agreement shall prevail unless Buyer and Seller waive such inconsistent provision in writing by specifically referring to the fact of such inconsistency and their intent to waive it. 3.2. CLOSING DATE. The purchase and sale transaction contemplated hereunder shall close in accordance with Article 8 below (the "Closing") by 10:00 a.m. PST on the later of (i) the satisfaction of the Concurrent Closing Contingency (as defined in Section 36 below) and (ii) the tenth (10th) business day following the receipt of Seller's Consent (as defined in Section 22 below) (the "Closing Date"); provided, however, that if the Closing shall occur on the Closing Date but after 10:00 a.m. PST, the Closing Date shall be deemed to have occurred on the date of recordation of the Deed (hereinafter defined) for purposes of calculating prorations under Article 10 below, and provided further that Buyer shall have the right, exercisable on written notice given to Seller not less than five (5) days prior to the date originally scheduled as the Closing Date, to extend such Closing Date for up to thirty (30) days to accommodate the requirements of Buyer's lender and provided further that in no event shall the Closing Date occur after February 1, 1999, unless the parties otherwise agree in writing. If the Closing does not occur on or before the Closing Date, then Buyer or Seller, if not in default under this Agreement, may at any time thereafter give written notice to Escrow Holder to cancel the Escrow whereupon the Escrow and the subject transaction shall become terminated and Escrow Holder shall distribute all monies and documents in Escrow Holder's possession in accordance with this Agreement and all additional mutual instructions as the parties may provide. Such cancellation of the Escrow shall not prejudice -2- or limit any legal or equitable rights of Buyer or Seller, except as may be limited by Article 12 below. 4. PURCHASE PRICE. The purchase price payable by Buyer for the Property (the "Purchase Price") at the Closing is Fifteen Million Eight Hundred Fifty Thousand and No/100 Dollars ($15,850,000.00), payable as follows: 4.1. DEPOSIT. Within three (3) business days after Buyer's delivery of an executed copy of this Agreement to Escrow Holder, Buyer shall deliver to Escrow Holder immediately available funds in the amount of One Hundred Fifty-Eight Thousand Five Hundred and No/100 Dollars ($158,500.00) (the "Deposit"). Escrow Holder shall promptly deposit the Deposit into a federally-insured interest-bearing account for the benefit of Buyer upon Escrow Holder's receipt of Buyer's United States taxpayer identification number. The Deposit, plus any interest accrued thereon, shall be applicable towards the Purchase Price except as otherwise provided in Section 12 below. 4.2. BALANCE. Not later than one (1) business day prior to the Closing Date, Buyer shall deposit with Escrow Holder cash or other immediately available funds in the amount of the balance of the Purchase Price, plus all other sums required of Buyer under this Agreement to pay Buyer's costs and Buyer's share of prorations. 5. CONDITIONS PRECEDENT. Buyer's obligations under this Agreement are subject to satisfaction or Buyer's written waiver of the following conditions precedent (collectively, "Buyer's Conditions") on or before the expiration of the applicable contingency period provided for below (collectively, the "Contingency Periods"). If the respective Buyer's Condition has not been satisfied or waived in writing, then at Buyer's option, this Agreement and the Escrow shall be deemed terminated and neither Buyer nor Seller shall have any further obligation to the other party under this Agreement (except to the extent of any indemnities under this Agreement with respect to events occurring before such termination, which indemnities shall survive any such termination). If either party terminates the Escrow in accordance with the preceding sentence, Escrow Holder shall, without requiring any further instructions, immediately return the Deposit plus any interest accrued thereon to Buyer. 5.1. DUE DILIGENCE DELIVERIES BY SELLER. Buyer acknowledges that Seller prior to the date of this Agreement has provided to Buyer copies of, or access to, the items identified on EXHIBIT C attached hereto and that such items are the only items that Buyer has requested from Seller for Buyer's examination and review of the Property and all aspects thereof. 5.2. DUE DILIGENCE INVESTIGATION. Buyer acknowledges that it has investigated, reviewed and approved (or has had an adequate opportunity to investigate and review and accordingly approves) the physical, developmental and economic status and feasibility of the Property, including without limitation marketing studies, land use and legal due diligence, engineering studies, soils tests, physical inspections and environmental surveys with respect to the Property. In order to facilitate Buyer's investigation and analysis, Seller -3- has granted and will continue to grant to Buyer the right to enter the Property at any time during normal business hours upon forty-eight (48) hours' prior written notice to Seller, to conduct such inspections, reviews, examinations and tests on the Property as Buyer has deemed necessary or desirable to investigate the physical condition of the Property, as well as access to relevant information relating to the Property within Seller's possession or under Seller's control (but Seller has made and now makes no representation or warranty regarding the accuracy or completeness of such information). Buyer further acknowledges that it is acquiring the Property in its "as-is" condition in accordance with Section 19 below. 5.3. SELLER'S CONSENT. Seller shall have obtained Seller's Consent in accordance with Article 22 below. 5.4. STATUS OF TITLE AND SURVEY. If Buyer intends to obtain extended coverage title insurance in connection with this Agreement, then Buyer shall obtain at its sole cost and expense an as- built survey of the Property complying with 1992 ALTA/ACSM minimum standards (the "Survey"). Buyer acknowledges that Buyer has approved the exceptions to title shown in that certain preliminary title report or owner's title commitment for the Property issued by the Title Company (the "Title Report") and matters shown on the Survey (if any) other than those exceptions or matters identified on EXHIBIT D attached hereto ("Disapproved Title Exceptions"), which Disapproved Title Exceptions Seller shall remove (or cause to be removed) as exceptions to title prior to the Closing. Buyer shall have the continuing right to update the Title Report and the Survey from time to time and to give Seller notice of any additional Disapproved Title Exceptions first arising after the date of the Title Report or the Survey, as the case may be. Within ten (10) business days following receipt of any written notice of such additional Disapproved Title Exceptions from Buyer, Seller shall notify Buyer in writing of which of such additional Disapproved Title Exceptions Seller will agree to cure on or before the Closing Date; provided, however, that Seller shall satisfy and correct, at or before the Closing, any Disapproved Title Exceptions constituting a mortgage, deed of trust or other lien encumbering all or any portion of the Property (other than liens created by Buyer's acts or omissions) or otherwise created by Seller's acts or omissions on or after the date of this Agreement ("Mandatory Cure Items"). In the event Seller elects not to satisfy or cure any such additional Disapproved Title Exceptions of which it is so notified, then, within ten (10) business days following receipt of Seller's election, Buyer shall by written notice to Seller elect one of the following: 5.4.1. To waive such additional Disapproved Title Exceptions and to close the transaction contemplated hereby in accordance with the terms of this Agreement; provided, however, that with respect to any Disapproved Title Exception which is a Mandatory Cure Item, Buyer shall be entitled to satisfy or remove any such Disapproved Title Exception(s) at the Closing and to credit against the Purchase Price the amount required to satisfy or remove such Mandatory Cure Item(s); or -4- 5.4.2. To terminate this Agreement, in which event Buyer shall be entitled to the immediate return of the Deposit and the parties hereto shall have no further rights, duties or obligations under this Agreement, except those rights, duties and obligations that, by the express terms hereof, survive termination of this Agreement. 5.5. OWNER'S POLICY. On or before the Closing, the Title Company must be prepared to issue to Buyer an Owner's Policy of Title Insurance for the Property (the "Title Policy") effective as of the Closing, insuring Buyer in the amount of the Purchase Price that title to the Property is vested in Buyer at the Closing, subject only to (a) standard pre-printed exceptions (other than those preprinted exceptions that can be removed with a customary seller's affidavit), (b) liens for taxes and assessments not yet delinquent, (c) those exceptions to title described in the corresponding Title Report other than the Disapproved Title Exceptions and (d) exceptions created or suffered by Buyer. Buyer may require an extended coverage policy without a generic survey exception only if Buyer can timely provide Title Company with all information necessary in order for the extended coverage policy to be issued on or before the Closing Date. Seller shall not suffer any liability in connection with its failure to remove any title exception; Buyer's sole remedy for Seller's failure to cause the elimination of a Disapproved Title Exception shall be termination of this Agreement. Notwithstanding the foregoing, Seller shall cause the removal of any Mandatory Cure Item at or before the Closing. 5.6. SELLER'S FINANCIAL CONDITION. Seller has not (i) made an assignment for the benefit of creditors, (ii) filed a petition in bankruptcy, (iii) been adjudicated insolvent or bankrupt, (iv) petitioned a court for the appointment of any receiver of or trustee for it or any substantial part of its property, (v) commenced any proceeding relating to Seller under any reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect. There shall not have been commenced and be pending against Seller any proceeding of the nature described in the first sentence of this Section 5.6. No order for relief shall have been entered with respect to Seller under the Federal Bankruptcy Code. 5.7. COVENANTS, REPRESENTATIONS AND WARRANTIES. Seller shall have complied, and at Closing shall then be in compliance, with each and all of its covenants contained in this Agreement in all material respects, and the representations and warranties set forth in Paragraph 7 hereof shall be true, complete and accurate as of the Closing Date in all material respects. 5.8. SELLER'S DELIVERIES. Seller shall have delivered to Buyer, in form and substance in accordance with the requirements herein, all instruments and documents required on Seller's part to effectuate this Agreement and the transactions contemplated hereby. -5- Except for the Buyer's Condition referenced in Section 5.3 above, which is a condition to Buyer's and Seller's obligations under this Agreement, any one or more of the foregoing Buyer's Conditions may be waived by Buyer on or before the Closing Date. 6. BUYER'S DELIVERIES. Provided that all other conditions to Buyer's obligation to consummate the Closing shall have been or shall concurrently be satisfied, Buyer shall deliver to Seller through Escrow Holder, on or before the Closing Date, for disbursement, delivery and recordation, as provided in this Agreement, the following funds, instruments and documents, the delivery of which is material to the consummation of the subject transaction: 6.1. FUNDS. Immediately available funds in the amount required of Buyer under this Agreement including sufficient funds to meet Buyer's obligations under Sections 4.2, 9 and 10. 6.2. AUTHORITY. Evidence in form and substance reasonably satisfactory to Seller and its legal counsel that Buyer is authorized to enter into and consummate the transactions contemplated by this Agreement. 6.3. ASSIGNMENT OF OCCUPANCY AGREEMENTS AND SERVICE CONTRACTS. An executed counterpart of the Assignment referenced in Section 7.5 below. 6.4. CLOSING STATEMENT. The Closing Statement summarizing the prorations and other financial aspects of the transaction. 6.5. OTHER DOCUMENTS. Any documents reasonably required of Buyer by Title Company or Escrow Holder in order to consummate the subject transaction. 7. SELLER'S DELIVERIES. Provided that all other conditions to Seller's obligation to consummate the Closing shall have been or shall concurrently be satisfied, Seller shall deliver to Buyer through Escrow Holder on or before the Closing, for disbursement, delivery and recordation, as provided in this Agreement, the following instruments and documents, the delivery of which is material to the Closing: 7.1. LIMITED WARRANTY DEED. A limited warranty deed (the "Deed") in substantially the form set forth as EXHIBIT E attached hereto, conveying to Buyer good and marketable fee simple title to the Real Estate, together with all rights, members, easements and appurtenances thereto, expressly subject to the title exceptions approved by Buyer as provided in Section 5.4 above. In addition, Seller shall deliver an executed Real Estate Transfer Tax Declaration or local equivalent. 7.2. RELEASE OF EXISTING INDEBTEDNESS. Seller shall cause the Property to be released from all mortgages, deeds of trust, deeds to secure debt, security agreements, filings and statements and other security interests relating to any existing indebtedness that is secured in whole or in part by the Property. -6- 7.3. SELLER'S AFFIDAVIT. A Seller's Affidavit in the form set forth as EXHIBIT F attached hereto and made a part hereof. 7.4. BLANKET BILL OF SALE AND TRANSFER. A blanket bill of sale, transfer and assignment agreement (the "Bill of Sale") in substantially the form set forth as EXHIBIT G attached hereto, assigning to Buyer all of Seller's right, title and interest in and to any and all Personal Property. 7.5. ASSIGNMENT OF LEASES AND SERVICE CONTRACTS. An assignment and assumption of Leases and Service Contracts and other Intangible Property (the "Assignment") in substantially the form set forth as EXHIBIT H attached hereto, assigning to Buyer all of Seller's right, title and interest in and to the Leases and Service Contracts (that Buyer shall have elected or elects to assume) and other Intangible Property with a cross-indemnity between Seller and Buyer, with Seller indemnifying Buyer with respect to any liability arising under the Leases and Service Contracts for the period up to, but not including, the Closing Date, and Buyer indemnifying Seller with respect to any liability arising under the Leases and Service Contracts arising on and after the Closing Date, respectively, and with an express assumption by Buyer of Seller's obligations under the Leases and Service Contracts arising on and after the Closing Date. 7.6. CERTIFIED RENT ROLL. Seller shall deliver to Buyer a certificate, in substantially the form of EXHIBIT I attached hereto, pursuant to which Seller shall certify to Buyer a then current Rent Roll for the Property. 7.7. SELLER'S CERTIFICATE. A certificate addressed to Buyer stating that the representations and warranties set forth in Section 14 are true and correct as of the Closing in all material respects or stating any exceptions thereto. 7.8. CERTIFICATE OF NON-FOREIGN STATUS. A certificate addressed to Buyer made in compliance with Paragraph 1445 of the Internal Revenue Code that Seller is not a foreign person and not subject to withholding requirements. 7.9. CLOSING STATEMENT. The Closing Statement summarizing the prorations and other financial aspects of the transaction contemplated by this Agreement. 7.10. LEASES AND SERVICE CONTRACTS. The original Leases, Service Contracts, Warranties, certificate(s) of occupancy, permits and licenses. 7.11. AUTHORITY. Evidence in form and substance reasonably satisfactory to Buyer and its legal counsel that Seller is authorized to enter into and consummate the transactions contemplated by this Agreement. 7.12. KEYS. Seller shall deliver to Buyer all of the keys in Seller's possession to any door or lock in or on the Property. -7- 7.13. TENANT FILES. The current tenant files, including all correspondence, notices, financial information, sales reports and other information. 7.14. MATERIALS. All materials pertaining to the operation and maintenance of the Property. 7.15. OTHER DOCUMENTS. All other documents reasonably required of Seller by Escrow Holder in order to consummate the subject transaction. 8. CLOSING ESCROW. On the Closing Date, provided that Escrow Holder shall have received all of the documents, instruments and funds required to be delivered by Buyer and Seller in accordance with Articles 6 and 7 above (other than those documents and other items specified in Sections 7.10, 7.12, 7.13 and 7.14 above, which shall be deemed delivered concurrently with delivery of possession of the Property to Buyer), and provided that Title Company is prepared to issue the Title Policy upon the Closing and that all other conditions to the Closing have been satisfied (or waived by the party to this Agreement which benefits from such condition), Escrow Holder shall promptly perform all of the following: 8.1. RECORDING. Cause the Deed to be recorded with the real property records of the county in which the Property is located. 8.2. BUYER'S DELIVERIES. Deliver to Seller all of the items pursuant to Section 6 above. 8.3. SELLER'S DELIVERIES. Deliver to Buyer the Bill of Sale, the Assignment and all of the other items pursuant to Article 7 except as otherwise provided above. 8.4. COSTS AND PRORATIONS. Pay the costs and apply the prorations in accordance with Articles 9 and 10 below. 8.5. ISSUANCE OF TITLE POLICY. Cause the Title Policy to be issued and delivered to Buyer. 8.6. DISBURSEMENT OF PURCHASE PRICE. Disburse to Seller, or in accordance with Seller's instructions (after making appropriate adjustments for costs and prorations as provided in this Agreement), all funds deposited with Escrow Holder by Buyer in payment of the Purchase Price. 9. COSTS. Seller shall pay (a) one-half (1/2) of Escrow Holder's fee, (b) any documentary transfer and stamp taxes payable in connection with the recordation of the Deed and (c) Escrow Holder's customary charges to a seller for document drafting, recording and miscellaneous charges. Buyer shall pay (i) one-half (1/2) of Escrow Holder's fee, (ii) the premiums and other costs for the Title Policy, including without limitation any endorsements relating thereto, (iii) Escrow Holder's customary charges to a buyer for document drafting, recording and miscellaneous charges, and (iv) all costs associated with Buyer's financing of any or all of the -8- Purchase Price, including without limitation any applicable intangible taxes, documentary stamps and recording costs and any fees for any loan, appraisal, title insurance policy or other service. 10. PRORATIONS. The following shall be prorated between Buyer and Seller as of 11:59 p.m. local time of the day immediately preceding the Closing Date, on the basis of the actual number of days elapsed during the month in which the Closing occurs: general and special county and city real property taxes and special assessments (collectively, "Taxes") for the tax period then in effect and insurance premiums (but only if Buyer is assuming Seller's insurance policy or policies). Proration of Taxes shall be based on the most recent official tax bills or notice of valuation available for the fiscal year in which the Closing occurs, with due allowance to be made for the maximum available discount or other exemptions to the extent permissible for said year, and to the extent the tax bills do not accurately reflect the actual Taxes assessed against the Property (or any portion of the Property) and allocable either to the period before the Closing or to the period after the Closing, then Buyer and Seller shall adjust the actual Taxes between Buyer and Seller, outside of Escrow, as soon as reasonably possible following the Closing. In addition to the foregoing apportionments, Seller shall receive all rents and other income accrued, and shall pay all other expenses accrued or incurred, in connection with the ownership or operation of Property before the Closing Date, and Buyer shall receive all rents and other income accruing, and shall pay all other expenses accrued or incurred, in connection with the ownership or operation of Property on or after the Closing Date, all of which rents, other income and expenses shall be prorated as of the Closing. Rents and other income, if any, collected by Buyer after the Closing shall be applied first to any amounts due to Buyer and then, to the extent such rents or other income relate to the period ending on or before the Closing, such rents or other income shall be paid to Seller within ten (10) days after end of the month in which such amounts were collected. Buyer shall incur no obligation to Seller for Buyer's failure to collect such rentals or other income. All security and any other refundable deposits paid by tenants to Seller pursuant to tenant leases shall be delivered by certified funds to Buyer at the Closing or, at Seller's option, credited to Buyer against the cash portion of the Purchase Price at the Closing. Escrow Holder shall not be concerned with any prorations that are to be made after the Closing pursuant to this Agreement. 11. FAILURE OF ESCROW TO CLOSE. If Escrow fails to close by reason of a failure of a Buyer's Condition in accordance with Article 5 above, or because of a default by Seller under this Agreement, Buyer shall be entitled to the immediate return of the Deposit upon delivery of written notice by Buyer to Escrow Holder. If this Agreement or Escrow is terminated, Buyer shall return to Seller, within two (2) business days after the termination of Escrow, all documents and materials provided by Seller or its agents to Buyer or its agents in connection with this Agreement or the Property and all copies thereof. 12. LIQUIDATED DAMAGES. THE PARTIES HAVE DISCUSSED AND NEGOTIATED IN GOOD FAITH THE QUESTION OF THE DAMAGES THAT WOULD BE SUFFERED BY SELLER IF THE CLOSING DOES NOT OCCUR BECAUSE BUYER BREACHES THIS AGREEMENT AND HAVE ENDEAVORED TO REASONABLY ESTIMATE SUCH DAMAGES. THEY AGREE THAT (I) SUCH DAMAGES ARE AND WILL BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, (II) LIQUIDATED -9- DAMAGES IN THE AMOUNT OF THE DEPOSIT (AS IT MAY BE INCREASED FROM TIME TO TIME) ARE AND WOULD BE REASONABLE AS A MEASURE OF SUCH DAMAGES, (III) IN THE EVENT OF SUCH BREACH, SELLER SHALL BE ENTITLED TO RETAIN THE DEPOSIT AS SUCH LIQUIDATED DAMAGES, AND (IV) IN CONSIDERATION OF THE PAYMENT OF SUCH LIQUIDATED DAMAGES, SELLER SHALL BE DEEMED TO HAVE WAIVED ALL OTHER CLAIMS FOR DAMAGES OR RELIEF AT LAW OR IN EQUITY ON ACCOUNT OF THE FAILURE OF THE CLOSING TO OCCUR, EXCEPT FOR: (A) CLAIMS FOR THE RETURN OR OTHER DELIVERY OF DOCUMENTS IN CONNECTION WITH THIS AGREEMENT; (B) ACTIONS TO EXPUNGE A LIS PENDENS OR OTHER CLOUDS ON TITLE CAUSED BY BUYER; (C) CLAIMS ON ACCOUNT OF BUYER'S INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT, AND (D) ATTORNEYS' FEES AND COSTS INCURRED BY SELLER INCIDENT TO CLAUSES (A) THROUGH (C). NOTWITHSTANDING THE FOREGOING, IN THE EVENT BUYER OBJECTS TO, FAILS TO COOPERATE WITH OR OTHERWISE OPPOSES SELLER'S WITHDRAWAL OF THE DEPOSIT OUT OF THE ESCROW, SELLER SHALL HAVE ALL OF THE REMEDIES OTHERWISE AVAILABLE TO SELLER AT LAW OR IN EQUITY. SELLER'S INITIALS BUYER'S INITIALS ------------- ------------- 13. POSSESSION. Seller shall deliver possession of the Property to Buyer on the Closing Date, subject to the rights of tenants. 14. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and warrants to and covenants with Buyer that the following representations and warranties are complete and accurate as of the date of this Agreement and will be complete and accurate as of the Closing Date: 14.1. AUTHORITY. Seller is a limited partnership, duly organized, validly existing and in good standing under the laws of the State of Arizona, and Seller has full right, power and authority to enter into this Agreement and to perform all of the obligations and liabilities of Seller hereunder. This Agreement has been duly and validly authorized, executed and delivered by and on behalf of Seller and, assuming the due authorization, execution and delivery thereof by and on behalf of Buyer, constitutes a valid and binding obligation of Seller enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, reorganization, receivership and other similar laws affecting the rights and remedies of creditors generally and to general equitable principles (whether considered in a proceeding at law or in equity). Neither the execution nor delivery of this Agreement or any other documents executed and delivered, or to be executed and delivered, by Seller in connection with the transactions described herein will violate any provision of Seller's organizational documents or of any agreements, regulations or laws to which Seller is bound. -10- 14.2. NO OTHER AGREEMENTS. To Seller's actual knowledge, other than this Agreement, the Leases, the Service Contracts and the matters identified on EXHIBIT J attached hereto, there are no leases, service contracts, management agreements or other agreements or instruments in force or effect that (a) grant to any person or entity any right, title, interest or benefit in or to all or any part of the Property or (b) any rights relating to the use, maintenance, operation, construction or management of all or any part of the Property. 14.3. NO LITIGATION. Except as set forth in EXHIBIT K attached hereto, Seller has no actual knowledge, nor has Seller received any notice, of any pending litigation or proceeding brought by any person or entity or Governmental Authority against Seller with respect to the Property. 14.4. POSSESSION. To Seller's actual knowledge, except for the tenants in possession of the Property under the Leases, as shown in the Rent Roll, there are no parties in possession of or claiming any possession to any portion of the Property as lessees, tenants at sufferance, licensees, easement holders, trespassers or otherwise. 14.5. NO ASSESSMENTS. Seller has received no notice of any (a) assessments against the Property that are unpaid, whether or not they have become liens, except ad valorem taxes for the current year, or (b) any change in the assessed value or basis for levy of taxes regarding the Property. 14.6. NOTICE OF CONDEMNATION; RIGHT OF WAY MATTERS. Seller has received no notice of any threatened or contemplated action by any Governmental Authority having the power of eminent domain, which might result in any part of the Property being taken by condemnation or conveyed in lieu thereof. Seller shall, promptly upon receiving any such notice, give Buyer written notice thereof. 14.7. VIOLATION OF LAWS. Seller has received no notice that any Governmental Authority has determined that there are any violations of zoning, health, environmental, or other statutes, ordinances, or regulations affecting the Property. In the event Seller receives notice of any such violations prior to Closing affecting the Property, Seller shall promptly notify Buyer thereof. 14.8. NO BANKRUPTCY. Seller is not a party to any voluntary or involuntary proceedings in bankruptcy, reorganization or similar proceedings under the federal bankruptcy laws or under any state laws relating to the protection of debtors, or subject to any general assignment for the benefit of creditors, and to Seller's actual knowledge, no such action has been threatened. 14.9. ZONING. Seller shall, promptly upon receiving any notice of any contemplated or threatened rezoning of the Property, give Buyer written notice thereof. -11- 14.10. SERVICE CONTRACTS. Attached hereto as EXHIBIT L and incorporated herein is a complete and accurate list of all of the Service Contracts and as of the date of this Agreement Seller has delivered to Buyer complete and accurate copies of all such Service Contracts. Seller has received no notice of any default, or claim of default, on the part of any party to any of such Service Contracts, and within five (5) business days following mutual execution of this Agreement, Buyer shall notify Seller of any Service Contract that Buyer wishes to assume and Seller, at its sole cost and expense, shall terminate all other Service Contracts within five (5) days prior to Closing in accordance with (but only to the extent permitted under) the governing terms of the applicable Service Contract. 14.11. LEASES. The copies of the Leases delivered or made available by Seller to Buyer in accordance with Section 7.10 above are complete and accurate, and there are no amendments or modifications thereto not disclosed on the rent roll delivered in accordance with Section 7.6 above or otherwise in writing by Seller to Buyer. Seller hereby covenants and agrees with Buyer that, so long as this Agreement remains in full force and effect, Seller will continue to operate and manage the Property in substantially the same manner as it has been operated and managed in the past. 14.12. AVAILABILITY OF AGREEMENTS. Seller shall make available to Buyer for review at Seller's offices at the Property during normal business hours, and upon reasonable advance notice, full, true, correct and complete copies of all Service Contracts, Leases and all written amendments, modifications, agreements, or understandings relating thereto as are in effect from time to time while this Agreement remains in effect. 14.13. EMPLOYEE LIABILITY. To Seller's actual knowledge, after the Closing Buyer shall not be obligated to continue the employment of any of the employees of Seller or Seller's property manager. To Seller's actual knowledge, all of the employees for the Property are employees of Seller's property manager and not of Seller. 14.14. HAZARDOUS MATERIALS. To Seller's actual knowledge, Seller has not generated, disposed of, released or found any Hazardous Materials (hereinafter defined) on the Property, and Seller has no actual knowledge of the existence of any areas for the generation, storage or disposal of any Hazardous Materials on the Property. Seller has received no notice that any Governmental Authority has determined that there are any violations of Environmental Laws (as hereinafter defined) affecting the Property. In the event Seller receives notice of any such Hazardous Materials on the Property or any such violation affecting the Property prior to the Closing, Seller immediately shall notify Buyer thereof. "Hazardous Materials" means petroleum, including crude oil or any fraction thereof, asbestos, radon gas, polychlorinated biphenyls, and any other substance identified as hazardous in the following, as the same may have been amended: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601, ET SEQ.; the Resource Conservation Act of 1976, 42 U.S.C. Section 6921, ET SEQ.; the Toxic Substances Control Act, 15 U.S.C. Section 2601, ET SEQ.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section 136; the Federal Water Pollution Control Act, 33 U.S.C. Section 1251, ET SEQ.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, ET SEQ.; the -12- Federal Solid Waste Disposal Act, 42 U.S.C. Section 6901, ET SEQ.; the Clean Air Act, 42 U.S.C. Section 7401, ET SEQ.; and any other legislation or ordinance of any Governmental Authority identified by its terms as pertaining to hazardous materials, waste or asbestos ("Environmental Laws"). 14.15. AGREEMENTS AFFECTING THE PROPERTY. Subject to the provisions in Section 14.11 hereof, Seller hereby covenants and agrees with Buyer that, so long as this Agreement remains in full force and effect, Seller will not sell, assign, convey (absolutely or as security), grant a security interest in, or otherwise encumber or dispose of, the Property (or any interest or estate therein) without the prior written consent of the Buyer. Seller has not executed and will execute no exclusive or other brokerage agreements which will survive the Closing Date. Seller shall not enter into Service Contracts from and after the date of this Agreement without the prior written consent of Buyer, which consent may be granted or withheld in Buyer's sole and absolute discretion; provided, however, that Seller hereby covenants and agrees with Buyer that, so long as this Agreement remains in full force and effect, Seller will continue to operate and manage the Property in substantially the same manner as it has been operated and managed in the past. 14.16. MAINTENANCE OF INSURANCE. Seller shall maintain in full force and effect all existing policies of insurance relating to the Property through and including the Closing Date, shall pay all premiums with respect to such insurance on or before the due date therefor and shall not knowingly take any action which would cause such insurance not to remain in full force and effect or fail knowingly to take any action required to maintain such insurance in full force and effect. 14.17. FIXTURES. All fixtures and articles of Personal Property included in and which are part of the sale are now, and at the Closing will be, owned by Seller free and clear of any conditional bills of sale, chattel mortgages, security agreements or financing statements, or other liens of security interest created by Seller, and shall be transferred to Buyer as a part of the transaction. 14.18. SECURITY DEPOSITS. Security deposits shown in the certified rent roll are a full, true and complete list of all of the security deposits for the Property and are now held by Seller and Seller's property manager under the terms of the Leases, and none have been forfeited by any existing tenant. 14.19. NON-FOREIGN STATUS. Seller is not a "foreign person" as that term is defined in the Internal Revenue Code of 1986, as amended, and the regulations promulgated pursuant thereto, and Buyer has no obligation under the Internal Revenue Code Section 1445 to withhold and pay over to the Internal Revenue Service any part of the "amount realized" by Seller in the transaction contemplated hereby (as such term is defined in the regulations issued under Internal Revenue Code Section 1445). 14.20. REPRESENTATIONS, WARRANTIES AND COVENANTS RE-MADE AT CLOSING. The foregoing warranties and representations are true, and the foregoing covenants are in full -13- force and effect and binding on Seller as of the date hereof and shall be in full force and effect and deemed to have been automatically reaffirmed and restated by Seller as of the Closing Date. For purposes of this Section 14, "Seller's actual knowledge" shall mean the knowledge of (i) J. Bradley Forrester, (ii) Ralph Tilley and (iii) Pam Anderson without any duty of investigation or inquiry and "notice" shall mean written notice. The representations and warranties of Seller shall survive the Closing for six (6) months, and any claim made by Buyer against Seller with respect thereto must be asserted within such six-month period. 15. BUYER'S REPRESENTATIONS AND WARRANTIES. The accuracy and completeness of the following constitute a condition to the Closing, and Buyer represents and warrants to Seller that the following is complete and accurate as of the date of this Agreement and shall be complete and accurate as of the Closing, and shall survive the Closing: Buyer is duly organized and validly existing and is (or will at the Closing be) qualified to conduct its business and has the legal power, right and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. All requisite action (corporate, partnership, trust or otherwise) has been taken by Buyer in connection with entering into this Agreement and the consummation of the transactions contemplated by this Agreement. The individual executing this Agreement on behalf of Buyer has the legal power, right and actual authority to bind Buyer to the terms and conditions of this Agreement. This Agreement and all documents required by this Agreement to be executed by Buyer are and are valid, legally binding obligations of and enforceable against Buyer in accordance with their terms. The foregoing warranties and representations are true, and the foregoing covenants are in full force and effect and binding on Buyer as of the date hereof and shall be in full force and effect and deemed to have been automatically reaffirmed and restated by Buyer as of the Closing Date. 16. CONDEMNATION. If all or any material portion of the Property is taken by eminent domain (or is the subject of a pending or contemplated taking which has not been consummated) before the Closing, then (a) Seller, if Seller has actual knowledge thereof, shall notify Buyer of such fact and (b) Buyer shall have the option to terminate this Agreement upon written notice to Escrow Holder and Seller given no later than thirty (30) business days after Seller has given such notice. For purposes of the foregoing sentence, a portion of the Property shall not be deemed material unless the taking thereof diminishes the rentable area of the building or the recreation facilities or restricts access to the Property. If this Agreement is so terminated, then (i) Buyer shall pay all costs associated with the cancellation of the Escrow pursuant to this Section, (ii) neither Buyer nor Seller shall have any further rights or obligations under this Agreement (except to the extent of any indemnities under this Agreement with respect to events occurring before such termination, which indemnities shall survive any such termination), and (iii) Escrow Holder shall, without requiring any further instruction from Seller, immediately return to Buyer the Deposit and all interest accrued thereon. If Buyer does not terminate this Agreement within such thirty-day period, then (A) Buyer shall not thereafter have the right to terminate this Agreement by reason of such taking and (B) Buyer and Seller shall proceed to the Closing in accordance with this Agreement, without modification of the terms of this Agreement, except that (1) the Property will not include the property so taken, (2) the Purchase Price will be reduced -14- by the amount of any awards for such taking awarded to Seller as of the Closing Date, and (3) Seller shall assign and turn over to Buyer, and Buyer shall be entitled to receive and retain, all awards for such taking not yet awarded as of the Closing. 17. DESTRUCTION. If the Property or any portion thereof is damaged by fire or other casualty on or before the Closing Date, Seller immediately shall notify Buyer of such damage. If the estimated cost to repair the damage is less than the greater of (i) $400,000 and (ii) five percent (5%) of the Purchase Price and does not eliminate or materially impair access to the Property, Buyer and Seller shall proceed to the Closing in accordance with the terms of this Agreement, without modification of the terms of this Agreement, in which event Buyer shall be entitled to an assignment of the proceeds of all insurance relating to such fire or other casualty. If the estimated cost to repair the damage equals or exceeds the greater of (i) $400,000 and (ii) five percent (5%) of the Purchase Price, Buyer may elect either (a) to terminate this Agreement and receive the return of the Deposit (minus any escrow or title cancellation fees), in which case neither party shall have any additional rights or obligations under this Agreement, or (b) to proceed to the Closing in accordance with this Agreement, without modification of the terms of this Agreement, in which event Buyer shall be entitled to an assignment of the proceeds of all insurance relating to such fire or other casualty, if any. Such election shall be made by Buyer within thirty (30) business days following Seller's notification to Buyer. Buyer's failure to elect to terminate this Agreement within such thirty-day period shall conclusively be deemed an election to proceed to the Closing. 18. BROKERS. Each party to this Agreement represents and warrants to the other that no real estate or business broker, agent, finder, or other person is responsible for bringing about or negotiating this Agreement and that such party has not dealt with any real estate broker, agent, finder or person relative to this Agreement in any manner. Each party to this Agreement shall defend, indemnify, and hold harmless the other party to this Agreement against all liabilities, damages, losses, costs, expenses, attorneys' fees and claims arising from (a) any breach of such representation by such indemnifying party set forth in the preceding sentence, and (b) any claims that may be made against such indemnified party by any real estate broker, agent, finder or other person alleging to have acted on behalf of or to have dealt with such indemnifying party. 19. NO RELIANCE - AS-IS. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT HERETO, BUYER ACKNOWLEDGES THAT IT IS PURCHASING THE PROPERTY IN RELIANCE SOLELY ON: (I) BUYER'S INSPECTION OF THE REAL PROPERTY, THE PERSONAL PROPERTY AND THE IMPROVEMENTS; (II) BUYER'S INDEPENDENT VERIFICATION OF THE TRUTH OF ANY STATEMENTS CONTAINED IN THE DOCUMENTS MADE AVAILABLE TO BUYER; AND (III) THE OPINIONS AND ADVICE OF CONSULTANTS AND ATTORNEYS ENGAGED BY BUYER CONCERNING THE PROPERTY. BUYER FURTHER ACKNOWLEDGES THAT BEFORE ITS EXECUTION OF THIS AGREEMENT BUYER SHALL HAVE PERFORMED OR WILL HAVE HAD AN OPPORTUNITY TO PERFORM ALL OF ITS DUE DILIGENCE INVESTIGATIONS OF AND WITH RESPECT TO THE PROPERTY AS BUYER DEEMS APPROPRIATE, INCLUDING ENGINEERING STUDIES, SOILS TESTS, ENVIRONMENTAL SURVEYS AND TESTING, PHYSICAL INSPECTIONS, ALTA OR OTHER SURVEYS AND MARKET ANALYSES AS WELL AS BUYER'S EVALUATION OF THE CONDITION AND STATUS OF -15- THE PERSONAL PROPERTY AND IMPROVEMENTS AND THE OPERATION AND FUTURE PROSPECTS OF THE PROPERTY. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT HERETO, AT THE CLOSING, BUYER ACCEPTS THE PROPERTY AND ALL MATTERS RELATING TO THE PROPERTY IN THEIR "AS IS," "WHERE-IS" AND "WITH ALL FAULTS" CONDITION OR STATUS AS OF THE CLOSING DATE, INCLUDING SUCH MATTERS AS: SOILS AND GEOLOGICAL CONDITION, TOPOGRAPHY, AREA AND CONFIGURATION OF THE REAL PROPERTY; THE AGE AND CONDITION OF THE IMPROVEMENTS AND PERSONAL PROPERTY; THE EXISTENCE OF ANY HAZARDOUS OR TOXIC SUBSTANCES OR MATERIALS, CONSTRUCTION DEFECTS OR OTHER MATTERS WHICH WOULD OR COULD NECESSITATE ABATEMENT OR REMEDIATION ACTION BY THE PROPERTY'S OWNER; ANY PHYSICAL OR MECHANICAL DEFECTS IN THE IMPROVEMENTS OR PERSONAL PROPERTY; ANY EASEMENT, LICENSE OR ENCROACHMENT WHICH IS NOT A MATTER OF PUBLIC RECORD, WHETHER OR NOT VISIBLE UPON INSPECTION OF THE PROPERTY; THE ZONING AND OTHER LAND USE REGULATIONS APPLICABLE TO THE PROPERTY; AND ANY OTHER MATTER RELATING TO THE PROPERTY INCLUDING, BUT NOT LIMITED TO, VALUE, TITLE, INCOME, FEASIBILITY, COST, MARKETING AND INVESTMENT RETURN. BUYER ACKNOWLEDGES AND AGREES THAT SELLER IS NOT MAKING ANY EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER WITH RESPECT TO THE PROPERTY. IN PARTICULAR BUT NOT BY WAY OF LIMITATION OF THE FOREGOING, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT HERETO, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, RELATING TO COMPLIANCE OF THE IMPROVEMENTS WITH CURRENT BUILDING CODES, INCLUDING WITHOUT LIMITATION THOSE RELATING TO UPDATED OR REVISED STANDARDS FOR PLUMBING, ELECTRICAL, STRUCTURAL OR SEISMIC MATTERS. BUYER WARRANTS AND REPRESENTS TO SELLER THAT BUYER HAS NOT RELIED ON AND WILL NOT RELY ON, EITHER DIRECTLY OR INDIRECTLY, ANY WARRANTY OR REPRESENTATION OF SELLER NOT EXPLICITLY SET FORTH IN THIS AGREEMENT. 20. INDEMNITY REGARDING INSPECTION. In consideration of Seller's permission to Buyer and its agents to perform investigations and testing on and about the Property prior to the Closing, Buyer shall defend, indemnify and hold harmless Seller and Seller's partners, and their respective officers, employees, agents, contractors, successors, assigns, and affiliates (collectively, the "Indemnitees"), and the Property from all claims, costs, liens, actions and judgments (including attorneys' fees and other defense costs actually incurred by Seller) resulting from Buyer's investigation of the Property or its attempts to obtain any regulatory approvals in connection with the Property, or otherwise caused by Buyer or any of its employees, agents or independent contractors, except for the non-negligent release of Hazardous Materials already on the Property occasioned thereby. Unless and until the Closing occurs, Buyer shall maintain all the information which it obtains in connection with the Property in strict confidence and shall not reveal any of such information to any party other than those parties to which it may otherwise be required to disclose in accordance with applicable law. Buyer shall, at Buyer's sole cost, promptly repair any damage resulting from its activities on the Property and restore the Property to substantially the same condition as before Buyer or any of its agents first entered the Property. If the Closing does not occur on or before the Closing Date for any reason other than a breach of this Agreement by Seller, Buyer shall provide Seller, at Seller's cost, copies of all third-party engineering and environmental reports and materials derived from Buyer's investigation of the -16- Property, concurrently with reimbursement by Seller of Buyer's out-of-pocket costs in procuring such reports and materials. 21. BUYER'S REMEDIES. In the event the transaction contemplated hereby is not consummated as a result of Seller's default hereunder, Buyer's sole and exclusive remedies shall be either (i) to seek from Escrow Holder the return of the Deposit and any other documents and funds then held by Escrow Holder and Seller shall reimburse Buyer for Buyer's reasonable and documented out-of-pocket expenses incurred in connection with the purchase transaction contemplated under this Agreement (but in no event to exceed one-fourth percent (1/4%) of Purchase Price)or (ii) to seek specific performance of Seller's obligations hereunder by delivering the Purchase Price into the Escrow; provided, however, that as conditions precedent to such action for specific performance, [A] no uncured default in the performance of Buyer's obligations under this Agreement shall exist and no event shall have occurred which with the passage of time or with notice, or both, could become such an event of default, and [B] Buyer shall not seek to amend the Purchase Price in such action. 22. SELLER'S PARTNERS' APPROVAL. Notwithstanding anything to the contrary contained in this Agreement, the Closing shall not occur unless and until Seller shall have obtained written approval ("Seller's Consent") from those partners of Seller (or those partners of the partners of Seller, as the case may be) whose approval is legally required before Seller may sell the Property to Buyer hereunder. Seller shall seek such approval immediately after the Escrow Opening Date. If Seller's Consent is not obtained within twenty-one (21) days after the Escrow Opening Date (as such period may be extended by Seller at Seller's sole option for up to an additional forty (40) days), Seller or Buyer may terminate this Agreement by written notice delivered to the other before Seller's Consent is obtained, in which case Buyer shall be entitled to the return of the Deposit and neither Buyer nor Seller shall have any further rights or obligations under this Agreement (except to the extent of any indemnities under this Agreement with respect to events occurring before such termination, which indemnities shall survive any such termination and except that Seller shall reimburse Buyer for Buyer's reasonable and documented out-of-pocket engineering and environmental expenses (but in no event to exceed $3,600)). 23. FURTHER ASSURANCES. Each party to this Agreement shall execute and deliver all instruments and documents and take all actions as may be reasonably required or appropriate to carry out the purposes of this Agreement. 24. COUNTERPARTS AND EXHIBITS. This Agreement may be executed in counterparts, each of which is deemed an original and all of which together constitute one document. All exhibits attached to and referenced in this Agreement are incorporated into this Agreement. 25. TIME OF ESSENCE. Time and strict and punctual performance are of the essence with respect to each provision of this Agreement. 26. ATTORNEY'S FEES. The prevailing party in any litigation, arbitration, mediation, bankruptcy, insolvency or other proceeding ("Proceeding") relating to the enforcement or interpretation of this Agreement may recover from the unsuccessful party all costs, expenses and -17- actual attorney's fees (including expert witness and other consultants' fees and costs) relating to or arising out of (a) the Proceeding (whether or not the Proceeding proceeds to judgment), and (b) any post-judgment or post-award proceeding including, without limitation, one to enforce or collect any judgment or award resulting from the Proceeding. All such judgments and awards shall contain a specific provision for the recovery of all such subsequently incurred costs, expenses and actual attorney's fees. 27. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the state in which the Property is located. Each party hereby authorizes and accepts service of process sufficient for personal jurisdiction in any action against it as contemplated by this paragraph by registered or certified mail, return receipt requested, postage prepaid, to its address for the giving of notices set forth in this Agreement. 28. MODIFICATION. This Agreement may be modified only by a writing executed by the party to this Agreement against whom enforcement of the modification is sought. 29. PRIOR UNDERSTANDINGS. This Agreement and all documents specifically referred to and executed in connection with this Agreement: (a) contain the entire and final agreement of the parties to this Agreement with respect to the subject matter of this Agreement, and (b) supersede all negotiations, stipulations, understandings, agreements, representations and warranties, if any, with respect to such subject matter, which precede or accompany the execution of this Agreement. 30. INTERPRETATION. Whenever the context so requires in this Agreement, all words used in the singular may include the plural (and vice versa) and the word "person" includes a natural person, a corporation, a firm, a partnership, a joint venture, a trust, an estate or any other entity. The terms "includes" and "including" do not imply any limitation. Unless "business day " is specified, the term "day" means a calendar day. The term "business day" means any day other than a Saturday, Sunday or Federal or other holiday in the State in which the Property is located. If the last day for any act falls on a day other than a business day, the time for performance shall be extended to the next business day. No remedy or election under this Agreement is exclusive, but rather, to the extent permitted by applicable law, each such remedy and election is cumulative with all other remedies at law or in equity. The paragraph headings in this Agreement (a) are included only for convenience, (b) do not in any manner modify or limit any of the provisions of this Agreement and (c) may not be used in the interpretation of this Agreement. Each provision of this Agreement is valid and enforceable to the fullest extent permitted by law. If any provision of this Agreement (or the application of such provision to any person or circumstance) is or becomes invalid or unenforceable, the remainder of this Agreement, and the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected by such invalidity or unenforceability. 31. SUCCESSORS-IN-INTEREST AND ASSIGNS. Buyer may not assign its rights under this Agreement to any person or entity without the prior written consent of Seller, which consent may be withheld in Seller's sole and absolute discretion; provided, however, that Buyer may assign -18- such rights to a subsidiary wholly-owned by Buyer upon written notice given to Seller not less than five (5) business days prior to the Closing. No assignment by Buyer of any of its rights or obligations under this Agreement shall relieve Buyer of any of its obligations under this Agreement unless Seller expressly agrees to such release in writing. Subject to the foregoing, this Agreement shall be binding on and shall inure to the benefit of the successors-in-interest and assigns of each party to this Agreement. 32. NOTICES. Each notice and other communication required or permitted to be given under this Agreement ("Notice") must be in writing. Notice is duly given to another party upon: (a) hand delivery to the other party, (b) receipt by the other party when sent by facsimile to the address and number for such party set forth below (provided, however, that the Notice is not effective unless a duplicate copy of the facsimile Notice is promptly given by one of the other methods permitted under this paragraph), (c) three business days after the Notice has been deposited with the United States postal service as first class certified mail, return receipt requested, postage prepaid, and addressed to the party as set forth below, or (d) the next business day after the Notice has been deposited with a reputable overnight delivery service, postage prepaid, addressed to the party as set forth below with next-business-day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery-service-provider. If to Seller: RI81 Las Colinas Limited Partnership c/o Continental American Properties, Ltd. 1764 San Diego Avenue San Diego, California 92110-1906 Attention: Scott Dupree, Esq. Telephone: (619) 297-6771 Telecopy: (619) 294-2451 With a copy to: Hughes Hubbard & Reed LLP 350 South Grand Avenue, Suite 3600 Los Angeles, California 90071-3442 Attention: George A. Furst, Esq. Telephone: (213) 613-2839 Telecopy: (213) 613-2950 -19- If to Buyer: DOC Investors, LLC c/o Lend Lease Real Estate Investments, Inc. 3424 Peachtree Road, N.E., Suite 800 Atlanta, Georgia 30326 Attention: Theodore Klinck Telephone: (404) 848-8744 Telecopy: (404) 848-8930 With a copy to: King & Spalding 191 Peachtree Street Atlanta, Georgia 30303-1763 Attention: William Fryer, Esq. Telephone: (404) 572-4600 Telecopy: (404) 572-5148 If to Escrow Holder: First American Title Insurance Company 114 East Fifth Street Santa Ana, California 92701 Attention: Toni Rice-Groetsch Telephone: (800) 854-3643 Telecopy: (714) 558-4702 Each party shall make a reasonable, good faith effort to ensure that it will accept or receive Notices to it that are given in accordance with this paragraph. A party may change its address for purposes of this paragraph by giving the other party(ies) written notice of a new address in the manner set forth above. 33. WAIVER. Any waiver of a default or provision under this Agreement must be in writing. No such waiver shall constitute a waiver of any other default or provision concerning the same or any other provision of this Agreement. No delay or omission by a party in the exercise of any of its rights or remedies constitutes a waiver of (or otherwise impairs) such right or remedy. A consent to or approval of an act does not waive or render unnecessary the consent to or approval of any other or subsequent act. 34. DRAFTING AMBIGUITIES. Each party to this Agreement and its legal counsel have reviewed and revised this Agreement. The rule of construction that ambiguities are to be resolved against the drafting party or in favor of the party receiving a particular benefit under an -20- agreement shall not be employed in the interpretation of this Agreement or any amendment to this Agreement. 35. THIRD PARTY BENEFICIARIES. Nothing in this Agreement is intended to confer any rights or remedies on any person other than the parties to this Agreement and their respective successors-in-interest and permitted assignees. 36. CONCURRENT CLOSING. Notwithstanding anything to the contrary contained in this Agreement, the Closing shall be subject to and contingent upon, and shall occur concurrently with, the Closing of the purchase transactions for the following properties between Seller (or entities affiliated with Seller) and Buyer (the "Concurrent Closing Contingency"): Autumn Heights, Creekside Oaks, Lakeview Village, Oaktree Village, Ponte Vedra Beach Village I, Ponte Vedra Beach Village II, Rancho Antigua, Shadowood Village, Skyline Village, Tierra Catalina, Village at the Foothills I and Village at the Foothills II & III, provided, however, that in the event this purchase transaction or any of the other purchase transactions enumerated above is terminated as a result of (i) condemnation or (ii) damage or destruction in accordance with the applicable purchase agreement, such purchase transaction(s) shall not be taken into account in determining whether the Concurrent Closing Contingency shall have been satisfied (unless the aggregate number of purchase transactions so terminated is two or more, in which event the Concurrent Closing Contingency shall be deemed not to have been satisfied). In addition, in the event this purchase transaction or any of the other purchase transactions enumerated above does not close as a result of a default by Buyer in the performance of its obligations under this Agreement or any other respective purchase agreement, Seller shall be entitled (but not obligated) to exercise its rights under Section 12 above and the corresponding provisions of each such purchase agreement even though the Concurrent Closing Contingency shall not have been satisfied. 37. EXCLUSIVITY. So long as this Agreement is in effect, Seller shall not solicit, negotiate, offer or accept an offer for the purchase of the Property (or any interest therein) for sale or contract to sell the Property (or any interest therein) to any party other than Buyer or negotiate, solicit or entertain any offers to purchase or sell the Property (or any interest therein). 38. CONFIDENTIALITY. Buyer and Seller agree that all documents and information concerning the Property delivered to Buyer, the subject matter of this Agreement and all negotiations shall remain confidential, and neither party shall disclose any terms of this Agreement without the prior approval of the other party except as may be required by law. Buyer and Seller shall be entitled to disclose such information only to those parties required to know it, including without limitation employees of either of the parties, consultants, attorneys and accountants engaged by either Buyer or Seller, and prospective or existing investors and lenders. This Section 38 shall expire upon the earlier of the termination of this Agreement and the Closing. -21- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. SELLER: RI81 LAS COLINAS LIMITED PARTNERSHIP, an Arizona limited partnership By: ConAm Property Services, Ltd., a California limited partnership, its general partner By: Continental American Development, Inc., a California corporation, its general partner By: /s/ Scott Dupree --------------------------------- Its: Vice President [Signatures Continued On Next Page.] -22- BUYER: DOC Investors, LLC, a Delaware limited liability company By: ConAm DOC Affiliates LLC, a California limited liability company, its administrative member By: Continental American Properties, Ltd., a California limited partnership, its managing member By: DJE Financial Corp., a California corporation, its general partner By: /s/ J. Bradley Forrester ------------------------------- Its Vice President -23- CONSENT AND ACCEPTANCE OF ESCROW HOLDER: The undersigned acknowledges having received an executed original of this Agreement (or counterparts thereof) and the Deposit on January 26, 1999, which date is the "Escrow Opening Date" for purposes of this Agreement. The undersigned hereby consents to and accepts the instructions set forth in the above Agreement for Purchase and Sale and Joint Escrow Instructions. First American Title Insurance Company By: /s/ Richard G. Hines -------------------------------- Its: Vice President -24- INDEX OF EXHIBITS
EXHIBIT SECTION ------- -------- Exhibit A - Legal Description Section 1.1 Exhibit B - Schedule of Personal Property Section 1.1 Exhibit C - Due Diligence Materials Delivered to Buyer Section 5.1 Exhibit D - Disapproved Title Exceptions Section 5.4 Exhibit E - Form of Deed Section 7.1 Exhibit F - Form of Seller's Affidavit Section 7.3 Exhibit G - Bill of Sale Section 7.4 Exhibit H - Form of Assignment Section 7.5 Exhibit I - Form of Certificate for Rent Roll Section 7.6 Exhibit J - Other Agreements and Instruments Section 14.2 Exhibit K - Pending Litigation or Other Proceedings Section 14.3 Exhibit L - Schedule of Service Contracts Section 14.10
EX-10.2 4 EXHIBIT 10.2 AGREEMENT FOR PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS TIERRA CATALINA This Agreement for Purchase and Sale and Joint Escrow Instructions (this "Agreement") is entered into as of January 26, 1999, by and between Tierra Catalina Limited Partnership, an Arizona limited partnership ("Seller"), and DOC Investors, LLC, a Delaware limited liability company ("Buyer"), who agree and, to the extent applicable, instruct First American Title Insurance Company ("Escrow Holder" or "Title Company," as the context may require), as escrow holder, as follows: 1. This Agreement is made with reference to the following facts: 1.1. Seller owns that certain real property located at 6420 North Tierra de las Catalina, Tucson, Arizona 85718, commonly known as Tierra Catalina Apartments and more fully described on EXHIBIT A attached hereto (the "Real Property"), including without limitation all rights, members, easements, alleys, ways, appurtenances, shrubbery, trees, plants and privileges located thereon or appertaining thereto, together with any and all right, title and interest in and to any land lying in the bed or right-of-way of any street, road, alley or avenue, open or proposed, in front of or adjoining the land to the centerline thereof, together with any nonexclusive right to use any and all such land lying within any such roadbed, right-of-way, street, alley or avenue for ingress and egress to and from the land, together with any and all right, title and interest in and to any award made or to be made in lieu thereof, and in and to any unpaid award for damage to the land by reason of change of grade of any street. Along with the Real Property, Buyer intends to purchase from Seller, and Seller intends to sell to Buyer, in accordance with this Agreement, all improvements constructed in, on or under the Real Property including a 120-unit residential apartment complex (collectively, the "Improvements"), all of Seller's tangible personal property located on and used solely in connection with the Real Property or the Improvements, including without limitation the tangible personal property identified on EXHIBIT B attached hereto (the "Personal Property") and all intangible personal property owned by Seller and now, or hereafter, used in connection with the Real Property (the "Intangible Property") including, without limitation, all (i) trade names, (ii) logos, (iii) warranties and guaranties relating to the construction, operation, maintenance, repair and use of the Improvements and the Personal Property, including, without limitation, any and all equipment, HVAC systems, plumbing and roof warranties and all contractors' and subcontractors' warranties (the "Warranties"), (iv) certificates of occupancy (or the local equivalents), permits, licenses, approvals and authorizations issued by any federal, state or municipal government, branch, authority, district, agency, court, tribunal, department, board, commission or other instrumentality ("Governmental Authority"), (v) leases and other occupancy agreements (the "Leases"), and (vi) contracts or other similar arrangements for goods and services (the "Service Contracts"). 1.2. By this Agreement, Buyer and Seller intend to provide for the sale of the Real Property, the Improvements, the Personal Property and the Intangible Property (collectively, the "Property") by Seller to Buyer. 2. PURCHASE AND SALE. Subject to the terms and conditions of this Agreement, Seller agrees to sell the Property to Buyer and Buyer agrees to purchase the Property from Seller. 3. ESCROW. 3.1. OPENING OF ESCROW. Buyer shall immediately cause an escrow (the "Escrow") to be opened at Escrow Holder's office located at 114 East Fifth Street, Santa Ana, California 92701, Attention: Toni Rice- Groetsch for the purpose of facilitating the consummation of this Agreement, by delivering the Deposit (as defined in Section 4.1 below) to Escrow Holder along with a copy of the fully executed original (or executed counterparts) of this Agreement within two (2) business days after executing this Agreement. Escrow Holder shall, immediately upon its receipt of the Deposit and executed Agreement, execute and deliver to Buyer and Seller the Consent and Acceptance of Escrow Holder attached to this Agreement, which Consent and Acceptance of Escrow Holder shall specify the date of such receipt (the "Escrow Opening Date"). This Agreement constitutes instructions to Escrow Holder. Buyer and Seller shall execute such additional mutual instructions as Escrow Holder may reasonably require, provided that such additional instructions shall be consistent with this Agreement. Any inconsistency between any such additional instructions and this Agreement shall be resolved in a manner consistent with this Agreement, and the provisions of this Agreement shall prevail unless Buyer and Seller waive such inconsistent provision in writing by specifically referring to the fact of such inconsistency and their intent to waive it. 3.2. CLOSING DATE. The purchase and sale transaction contemplated hereunder shall close in accordance with Article 8 below (the "Closing") by 10:00 a.m. PST on the later of (i) the satisfaction of the Concurrent Closing Contingency (as defined in Section 36 below) and (ii) the tenth (10th) business day following the receipt of Seller's Consent (as defined in Section 22 below) (the "Closing Date"); provided, however, that if the Closing shall occur on the Closing Date but after 10:00 a.m. PST, the Closing Date shall be deemed to have occurred on the date of recordation of the Deed (hereinafter defined) for purposes of calculating prorations under Article 10 below, and provided further that Buyer shall have the right, exercisable on written notice given to Seller not less than five (5) days prior to the date originally scheduled as the Closing Date, to extend such Closing Date for up to thirty (30) days to accommodate the requirements of Buyer's lender and provided further that in no event shall the Closing Date occur after February 1, 1999, unless the parties otherwise agree in writing. If the Closing does not occur on or before the Closing Date, then Buyer or Seller, if not in default under this Agreement, may at any time thereafter give written notice to Escrow Holder to cancel the Escrow whereupon the Escrow and the subject transaction shall become terminated and Escrow Holder shall distribute all monies and documents in Escrow Holder's possession in accordance with this Agreement and all additional mutual instructions as the parties may provide. Such cancellation of the Escrow shall not prejudice -2- or limit any legal or equitable rights of Buyer or Seller, except as may be limited by Article 12 below. 4. PURCHASE PRICE. The purchase price payable by Buyer for the Property (the "Purchase Price") at the Closing is Six Million Four Hundred Thousand and No/100 Dollars ($6,400,000.00), payable as follows: 4.1. DEPOSIT. Within three (3) business days after Buyer's delivery of an executed copy of this Agreement to Escrow Holder, Buyer shall deliver to Escrow Holder immediately available funds in the amount of One Hundred Thousand and No/100 Dollars ($100,000.00) (the "Deposit"). Escrow Holder shall promptly deposit the Deposit into a federally-insured interest-bearing account for the benefit of Buyer upon Escrow Holder's receipt of Buyer's United States taxpayer identification number. The Deposit, plus any interest accrued thereon, shall be applicable towards the Purchase Price except as otherwise provided in Section 12 below. 4.2. BALANCE. Not later than one (1) business day prior to the Closing Date, Buyer shall deposit with Escrow Holder cash or other immediately available funds in the amount of the balance of the Purchase Price, plus all other sums required of Buyer under this Agreement to pay Buyer's costs and Buyer's share of prorations. 5. CONDITIONS PRECEDENT. Buyer's obligations under this Agreement are subject to satisfaction or Buyer's written waiver of the following conditions precedent (collectively, "Buyer's Conditions") on or before the expiration of the applicable contingency period provided for below (collectively, the "Contingency Periods"). If the respective Buyer's Condition has not been satisfied or waived in writing, then at Buyer's option, this Agreement and the Escrow shall be deemed terminated and neither Buyer nor Seller shall have any further obligation to the other party under this Agreement (except to the extent of any indemnities under this Agreement with respect to events occurring before such termination, which indemnities shall survive any such termination). If either party terminates the Escrow in accordance with the preceding sentence, Escrow Holder shall, without requiring any further instructions, immediately return the Deposit plus any interest accrued thereon to Buyer. 5.1. DUE DILIGENCE DELIVERIES BY SELLER. Buyer acknowledges that Seller prior to the date of this Agreement has provided to Buyer copies of, or access to, the items identified on EXHIBIT C attached hereto and that such items are the only items that Buyer has requested from Seller for Buyer's examination and review of the Property and all aspects thereof. 5.2. DUE DILIGENCE INVESTIGATION. Buyer acknowledges that it has investigated, reviewed and approved (or has had an adequate opportunity to investigate and review and accordingly approves) the physical, developmental and economic status and feasibility of the Property, including without limitation marketing studies, land use and legal due diligence, engineering studies, soils tests, physical inspections and environmental surveys with respect to the Property. In order to facilitate Buyer's investigation and analysis, Seller -3- has granted and will continue to grant to Buyer the right to enter the Property at any time during normal business hours upon forty-eight (48) hours' prior written notice to Seller, to conduct such inspections, reviews, examinations and tests on the Property as Buyer has deemed necessary or desirable to investigate the physical condition of the Property, as well as access to relevant information relating to the Property within Seller's possession or under Seller's control (but Seller has made and now makes no representation or warranty regarding the accuracy or completeness of such information). Buyer further acknowledges that it is acquiring the Property in its "as-is" condition in accordance with Section 19 below. 5.3. SELLER'S CONSENT. Seller shall have obtained Seller's Consent in accordance with Article 22 below. 5.4. STATUS OF TITLE AND SURVEY. If Buyer intends to obtain extended coverage title insurance in connection with this Agreement, then Buyer shall obtain at its sole cost and expense an as- built survey of the Property complying with 1992 ALTA/ACSM minimum standards (the "Survey"). Buyer acknowledges that Buyer has approved the exceptions to title shown in that certain preliminary title report or owner's title commitment for the Property issued by the Title Company (the "Title Report") and matters shown on the Survey (if any) other than those exceptions or matters identified on EXHIBIT D attached hereto ("Disapproved Title Exceptions"), which Disapproved Title Exceptions Seller shall remove (or cause to be removed) as exceptions to title prior to the Closing. Buyer shall have the continuing right to update the Title Report and the Survey from time to time and to give Seller notice of any additional Disapproved Title Exceptions first arising after the date of the Title Report or the Survey, as the case may be. Within ten (10) business days following receipt of any written notice of such additional Disapproved Title Exceptions from Buyer, Seller shall notify Buyer in writing of which of such additional Disapproved Title Exceptions Seller will agree to cure on or before the Closing Date; provided, however, that Seller shall satisfy and correct, at or before the Closing, any Disapproved Title Exceptions constituting a mortgage, deed of trust or other lien encumbering all or any portion of the Property (other than liens created by Buyer's acts or omissions) or otherwise created by Seller's acts or omissions on or after the date of this Agreement ("Mandatory Cure Items"). In the event Seller elects not to satisfy or cure any such additional Disapproved Title Exceptions of which it is so notified, then, within ten (10) business days following receipt of Seller's election, Buyer shall by written notice to Seller elect one of the following: 5.4.1. To waive such additional Disapproved Title Exceptions and to close the transaction contemplated hereby in accordance with the terms of this Agreement; provided, however, that with respect to any Disapproved Title Exception which is a Mandatory Cure Item, Buyer shall be entitled to satisfy or remove any such Disapproved Title Exception(s) at the Closing and to credit against the Purchase Price the amount required to satisfy or remove such Mandatory Cure Item(s); or -4- 5.4.2. To terminate this Agreement, in which event Buyer shall be entitled to the immediate return of the Deposit and the parties hereto shall have no further rights, duties or obligations under this Agreement, except those rights, duties and obligations that, by the express terms hereof, survive termination of this Agreement. 5.5. OWNER'S POLICY. On or before the Closing, the Title Company must be prepared to issue to Buyer an Owner's Policy of Title Insurance for the Property (the "Title Policy") effective as of the Closing, insuring Buyer in the amount of the Purchase Price that title to the Property is vested in Buyer at the Closing, subject only to (a) standard pre-printed exceptions (other than those preprinted exceptions that can be removed with a customary seller's affidavit), (b) liens for taxes and assessments not yet delinquent, (c) those exceptions to title described in the corresponding Title Report other than the Disapproved Title Exceptions and (d) exceptions created or suffered by Buyer. Buyer may require an extended coverage policy without a generic survey exception only if Buyer can timely provide Title Company with all information necessary in order for the extended coverage policy to be issued on or before the Closing Date. Seller shall not suffer any liability in connection with its failure to remove any title exception; Buyer's sole remedy for Seller's failure to cause the elimination of a Disapproved Title Exception shall be termination of this Agreement. Notwithstanding the foregoing, Seller shall cause the removal of any Mandatory Cure Item at or before the Closing. 5.6. SELLER'S FINANCIAL CONDITION. Seller has not (i) made an assignment for the benefit of creditors, (ii) filed a petition in bankruptcy, (iii) been adjudicated insolvent or bankrupt, (iv) petitioned a court for the appointment of any receiver of or trustee for it or any substantial part of its property, (v) commenced any proceeding relating to Seller under any reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect. There shall not have been commenced and be pending against Seller any proceeding of the nature described in the first sentence of this Section 5.6. No order for relief shall have been entered with respect to Seller under the Federal Bankruptcy Code. 5.7. COVENANTS, REPRESENTATIONS AND WARRANTIES. Seller shall have complied, and at Closing shall then be in compliance, with each and all of its covenants contained in this Agreement in all material respects, and the representations and warranties set forth in Paragraph 7 hereof shall be true, complete and accurate as of the Closing Date in all material respects. 5.8. SELLER'S DELIVERIES. Seller shall have delivered to Buyer, in form and substance in accordance with the requirements herein, all instruments and documents required on Seller's part to effectuate this Agreement and the transactions contemplated hereby. -5- Except for the Buyer's Condition referenced in Section 5.3 above, which is a condition to Buyer's and Seller's obligations under this Agreement, any one or more of the foregoing Buyer's Conditions may be waived by Buyer on or before the Closing Date. 6. BUYER'S DELIVERIES. Provided that all other conditions to Buyer's obligation to consummate the Closing shall have been or shall concurrently be satisfied, Buyer shall deliver to Seller through Escrow Holder, on or before the Closing Date, for disbursement, delivery and recordation, as provided in this Agreement, the following funds, instruments and documents, the delivery of which is material to the consummation of the subject transaction: 6.1. FUNDS. Immediately available funds in the amount required of Buyer under this Agreement including sufficient funds to meet Buyer's obligations under Sections 4.2, 9 and 10. 6.2. AUTHORITY. Evidence in form and substance reasonably satisfactory to Seller and its legal counsel that Buyer is authorized to enter into and consummate the transactions contemplated by this Agreement. 6.3. ASSIGNMENT OF OCCUPANCY AGREEMENTS AND SERVICE CONTRACTS. An executed counterpart of the Assignment referenced in Section 7.5 below. 6.4. CLOSING STATEMENT. The Closing Statement summarizing the prorations and other financial aspects of the transaction. 6.5. OTHER DOCUMENTS. Any documents reasonably required of Buyer by Title Company or Escrow Holder in order to consummate the subject transaction. 7. SELLER'S DELIVERIES. Provided that all other conditions to Seller's obligation to consummate the Closing shall have been or shall concurrently be satisfied, Seller shall deliver to Buyer through Escrow Holder on or before the Closing, for disbursement, delivery and recordation, as provided in this Agreement, the following instruments and documents, the delivery of which is material to the Closing: 7.1. LIMITED WARRANTY DEED. A limited warranty deed (the "Deed") in substantially the form set forth as EXHIBIT E attached hereto, conveying to Buyer good and marketable fee simple title to the Real Estate, together with all rights, members, easements and appurtenances thereto, expressly subject to the title exceptions approved by Buyer as provided in Section 5.4 above. In addition, Seller shall deliver an executed Real Estate Transfer Tax Declaration or local equivalent. 7.2. RELEASE OF EXISTING INDEBTEDNESS. Seller shall cause the Property to be released from all mortgages, deeds of trust, deeds to secure debt, security agreements, filings and statements and other security interests relating to any existing indebtedness that is secured in whole or in part by the Property. -6- 7.3. SELLER'S AFFIDAVIT. A Seller's Affidavit in the form set forth as EXHIBIT F attached hereto and made a part hereof. 7.4. BLANKET BILL OF SALE AND TRANSFER. A blanket bill of sale, transfer and assignment agreement (the "Bill of Sale") in substantially the form set forth as EXHIBIT G attached hereto, assigning to Buyer all of Seller's right, title and interest in and to any and all Personal Property. 7.5. ASSIGNMENT OF LEASES AND SERVICE CONTRACTS. An assignment and assumption of Leases and Service Contracts and other Intangible Property (the "Assignment") in substantially the form set forth as EXHIBIT H attached hereto, assigning to Buyer all of Seller's right, title and interest in and to the Leases and Service Contracts (that Buyer shall have elected or elects to assume) and other Intangible Property with a cross-indemnity between Seller and Buyer, with Seller indemnifying Buyer with respect to any liability arising under the Leases and Service Contracts for the period up to, but not including, the Closing Date, and Buyer indemnifying Seller with respect to any liability arising under the Leases and Service Contracts arising on and after the Closing Date, respectively, and with an express assumption by Buyer of Seller's obligations under the Leases and Service Contracts arising on and after the Closing Date. 7.6. CERTIFIED RENT ROLL. Seller shall deliver to Buyer a certificate, in substantially the form of EXHIBIT I attached hereto, pursuant to which Seller shall certify to Buyer a then current Rent Roll for the Property. 7.7. SELLER'S CERTIFICATE. A certificate addressed to Buyer stating that the representations and warranties set forth in Section 14 are true and correct as of the Closing in all material respects or stating any exceptions thereto. 7.8. CERTIFICATE OF NON-FOREIGN STATUS. A certificate addressed to Buyer made in compliance with Paragraph 1445 of the Internal Revenue Code that Seller is not a foreign person and not subject to withholding requirements. 7.9. CLOSING STATEMENT. The Closing Statement summarizing the prorations and other financial aspects of the transaction contemplated by this Agreement. 7.10. LEASES AND SERVICE CONTRACTS. The original Leases, Service Contracts, Warranties, certificate(s) of occupancy, permits and licenses. 7.11. AUTHORITY. Evidence in form and substance reasonably satisfactory to Buyer and its legal counsel that Seller is authorized to enter into and consummate the transactions contemplated by this Agreement. 7.12. KEYS. Seller shall deliver to Buyer all of the keys in Seller's possession to any door or lock in or on the Property. -7- 7.13. TENANT FILES. The current tenant files, including all correspondence, notices, financial information, sales reports and other information. 7.14. MATERIALS. All materials pertaining to the operation and maintenance of the Property. 7.15. OTHER DOCUMENTS. All other documents reasonably required of Seller by Escrow Holder in order to consummate the subject transaction. 8. CLOSING ESCROW. On the Closing Date, provided that Escrow Holder shall have received all of the documents, instruments and funds required to be delivered by Buyer and Seller in accordance with Articles 6 and 7 above (other than those documents and other items specified in Sections 7.10, 7.12, 7.13 and 7.14 above, which shall be deemed delivered concurrently with delivery of possession of the Property to Buyer), and provided that Title Company is prepared to issue the Title Policy upon the Closing and that all other conditions to the Closing have been satisfied (or waived by the party to this Agreement which benefits from such condition), Escrow Holder shall promptly perform all of the following: 8.1. RECORDING. Cause the Deed to be recorded with the real property records of the county in which the Property is located. 8.2. BUYER'S DELIVERIES. Deliver to Seller all of the items pursuant to Section 6 above. 8.3. SELLER'S DELIVERIES. Deliver to Buyer the Bill of Sale, the Assignment and all of the other items pursuant to Article 7 except as otherwise provided above. 8.4. COSTS AND PRORATIONS. Pay the costs and apply the prorations in accordance with Articles 9 and 10 below. 8.5. ISSUANCE OF TITLE POLICY. Cause the Title Policy to be issued and delivered to Buyer. 8.6. DISBURSEMENT OF PURCHASE PRICE. Disburse to Seller, or in accordance with Seller's instructions (after making appropriate adjustments for costs and prorations as provided in this Agreement), all funds deposited with Escrow Holder by Buyer in payment of the Purchase Price. 9. COSTS. Seller shall pay (a) one-half (1/2) of Escrow Holder's fee, (b) any documentary transfer and stamp taxes payable in connection with the recordation of the Deed and (c) Escrow Holder's customary charges to a seller for document drafting, recording and miscellaneous charges. Buyer shall pay (i) one-half (1/2) of Escrow Holder's fee, (ii) the premiums and other costs for the Title Policy, including without limitation any endorsements relating thereto, (iii) Escrow Holder's customary charges to a buyer for document drafting, recording and miscellaneous charges, and (iv) all costs associated with Buyer's financing of any or all of the -8- Purchase Price, including without limitation any applicable intangible taxes, documentary stamps and recording costs and any fees for any loan, appraisal, title insurance policy or other service. 10. PRORATIONS. The following shall be prorated between Buyer and Seller as of 11:59 p.m. local time of the day immediately preceding the Closing Date, on the basis of the actual number of days elapsed during the month in which the Closing occurs: general and special county and city real property taxes and special assessments (collectively, "Taxes") for the tax period then in effect and insurance premiums (but only if Buyer is assuming Seller's insurance policy or policies). Proration of Taxes shall be based on the most recent official tax bills or notice of valuation available for the fiscal year in which the Closing occurs, with due allowance to be made for the maximum available discount or other exemptions to the extent permissible for said year, and to the extent the tax bills do not accurately reflect the actual Taxes assessed against the Property (or any portion of the Property) and allocable either to the period before the Closing or to the period after the Closing, then Buyer and Seller shall adjust the actual Taxes between Buyer and Seller, outside of Escrow, as soon as reasonably possible following the Closing. In addition to the foregoing apportionments, Seller shall receive all rents and other income accrued, and shall pay all other expenses accrued or incurred, in connection with the ownership or operation of Property before the Closing Date, and Buyer shall receive all rents and other income accruing, and shall pay all other expenses accrued or incurred, in connection with the ownership or operation of Property on or after the Closing Date, all of which rents, other income and expenses shall be prorated as of the Closing. Rents and other income, if any, collected by Buyer after the Closing shall be applied first to any amounts due to Buyer and then, to the extent such rents or other income relate to the period ending on or before the Closing, such rents or other income shall be paid to Seller within ten (10) days after end of the month in which such amounts were collected. Buyer shall incur no obligation to Seller for Buyer's failure to collect such rentals or other income. All security and any other refundable deposits paid by tenants to Seller pursuant to tenant leases shall be delivered by certified funds to Buyer at the Closing or, at Seller's option, credited to Buyer against the cash portion of the Purchase Price at the Closing. Escrow Holder shall not be concerned with any prorations that are to be made after the Closing pursuant to this Agreement. 11. FAILURE OF ESCROW TO CLOSE. If Escrow fails to close by reason of a failure of a Buyer's Condition in accordance with Article 5 above, or because of a default by Seller under this Agreement, Buyer shall be entitled to the immediate return of the Deposit upon delivery of written notice by Buyer to Escrow Holder. If this Agreement or Escrow is terminated, Buyer shall return to Seller, within two (2) business days after the termination of Escrow, all documents and materials provided by Seller or its agents to Buyer or its agents in connection with this Agreement or the Property and all copies thereof. 12. LIQUIDATED DAMAGES. THE PARTIES HAVE DISCUSSED AND NEGOTIATED IN GOOD FAITH THE QUESTION OF THE DAMAGES THAT WOULD BE SUFFERED BY SELLER IF THE CLOSING DOES NOT OCCUR BECAUSE BUYER BREACHES THIS AGREEMENT AND HAVE ENDEAVORED TO REASONABLY ESTIMATE SUCH DAMAGES. THEY AGREE THAT (I) SUCH DAMAGES ARE AND WILL BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, (II) LIQUIDATED -9- DAMAGES IN THE AMOUNT OF THE DEPOSIT (AS IT MAY BE INCREASED FROM TIME TO TIME) ARE AND WOULD BE REASONABLE AS A MEASURE OF SUCH DAMAGES, (III) IN THE EVENT OF SUCH BREACH, SELLER SHALL BE ENTITLED TO RETAIN THE DEPOSIT AS SUCH LIQUIDATED DAMAGES, AND (IV) IN CONSIDERATION OF THE PAYMENT OF SUCH LIQUIDATED DAMAGES, SELLER SHALL BE DEEMED TO HAVE WAIVED ALL OTHER CLAIMS FOR DAMAGES OR RELIEF AT LAW OR IN EQUITY ON ACCOUNT OF THE FAILURE OF THE CLOSING TO OCCUR, EXCEPT FOR: (A) CLAIMS FOR THE RETURN OR OTHER DELIVERY OF DOCUMENTS IN CONNECTION WITH THIS AGREEMENT; (B) ACTIONS TO EXPUNGE A LIS PENDENS OR OTHER CLOUDS ON TITLE CAUSED BY BUYER; (C) CLAIMS ON ACCOUNT OF BUYER'S INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT, AND (D) ATTORNEYS' FEES AND COSTS INCURRED BY SELLER INCIDENT TO CLAUSES (A) THROUGH (C). NOTWITHSTANDING THE FOREGOING, IN THE EVENT BUYER OBJECTS TO, FAILS TO COOPERATE WITH OR OTHERWISE OPPOSES SELLER'S WITHDRAWAL OF THE DEPOSIT OUT OF THE ESCROW, SELLER SHALL HAVE ALL OF THE REMEDIES OTHERWISE AVAILABLE TO SELLER AT LAW OR IN EQUITY. SELLER'S INITIALS BUYER'S INITIALS ------------- ------------- 13. POSSESSION. Seller shall deliver possession of the Property to Buyer on the Closing Date, subject to the rights of tenants. 14. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and warrants to and covenants with Buyer that the following representations and warranties are complete and accurate as of the date of this Agreement and will be complete and accurate as of the Closing Date: 14.1. AUTHORITY. Seller is a limited partnership, duly organized, validly existing and in good standing under the laws of the State of Arizona, and Seller has full right, power and authority to enter into this Agreement and to perform all of the obligations and liabilities of Seller hereunder. This Agreement has been duly and validly authorized, executed and delivered by and on behalf of Seller and, assuming the due authorization, execution and delivery thereof by and on behalf of Buyer, constitutes a valid and binding obligation of Seller enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, reorganization, receivership and other similar laws affecting the rights and remedies of creditors generally and to general equitable principles (whether considered in a proceeding at law or in equity). Neither the execution nor delivery of this Agreement or any other documents executed and delivered, or to be executed and delivered, by Seller in connection with the transactions described herein will violate any provision of Seller's organizational documents or of any agreements, regulations or laws to which Seller is bound. -10- 14.2. NO OTHER AGREEMENTS. To Seller's actual knowledge, other than this Agreement, the Leases, the Service Contracts and the matters identified on EXHIBIT J attached hereto, there are no leases, service contracts, management agreements or other agreements or instruments in force or effect that (a) grant to any person or entity any right, title, interest or benefit in or to all or any part of the Property or (b) any rights relating to the use, maintenance, operation, construction or management of all or any part of the Property. 14.3. NO LITIGATION. Except as set forth in EXHIBIT K attached hereto, Seller has no actual knowledge, nor has Seller received any notice, of any pending litigation or proceeding brought by any person or entity or Governmental Authority against Seller with respect to the Property. 14.4. POSSESSION. To Seller's actual knowledge, except for the tenants in possession of the Property under the Leases, as shown in the Rent Roll, there are no parties in possession of or claiming any possession to any portion of the Property as lessees, tenants at sufferance, licensees, easement holders, trespassers or otherwise. 14.5. NO ASSESSMENTS. Seller has received no notice of any (a) assessments against the Property that are unpaid, whether or not they have become liens, except ad valorem taxes for the current year, or (b) any change in the assessed value or basis for levy of taxes regarding the Property. 14.6. NOTICE OF CONDEMNATION; RIGHT OF WAY MATTERS. Seller has received no notice of any threatened or contemplated action by any Governmental Authority having the power of eminent domain, which might result in any part of the Property being taken by condemnation or conveyed in lieu thereof. Seller shall, promptly upon receiving any such notice, give Buyer written notice thereof. 14.7. VIOLATION OF LAWS. Seller has received no notice that any Governmental Authority has determined that there are any violations of zoning, health, environmental, or other statutes, ordinances, or regulations affecting the Property. In the event Seller receives notice of any such violations prior to Closing affecting the Property, Seller shall promptly notify Buyer thereof. 14.8. NO BANKRUPTCY. Seller is not a party to any voluntary or involuntary proceedings in bankruptcy, reorganization or similar proceedings under the federal bankruptcy laws or under any state laws relating to the protection of debtors, or subject to any general assignment for the benefit of creditors, and to Seller's actual knowledge, no such action has been threatened. 14.9. ZONING. Seller shall, promptly upon receiving any notice of any contemplated or threatened rezoning of the Property, give Buyer written notice thereof. -11- 14.10. SERVICE CONTRACTS. Attached hereto as EXHIBIT L and incorporated herein is a complete and accurate list of all of the Service Contracts and as of the date of this Agreement Seller has delivered to Buyer complete and accurate copies of all such Service Contracts. Seller has received no notice of any default, or claim of default, on the part of any party to any of such Service Contracts, and within five (5) business days following mutual execution of this Agreement, Buyer shall notify Seller of any Service Contract that Buyer wishes to assume and Seller, at its sole cost and expense, shall terminate all other Service Contracts within five (5) days prior to Closing in accordance with (but only to the extent permitted under) the governing terms of the applicable Service Contract. 14.11. LEASES. The copies of the Leases delivered or made available by Seller to Buyer in accordance with Section 7.10 above are complete and accurate, and there are no amendments or modifications thereto not disclosed on the rent roll delivered in accordance with Section 7.6 above or otherwise in writing by Seller to Buyer. Seller hereby covenants and agrees with Buyer that, so long as this Agreement remains in full force and effect, Seller will continue to operate and manage the Property in substantially the same manner as it has been operated and managed in the past. 14.12. AVAILABILITY OF AGREEMENTS. Seller shall make available to Buyer for review at Seller's offices at the Property during normal business hours, and upon reasonable advance notice, full, true, correct and complete copies of all Service Contracts, Leases and all written amendments, modifications, agreements, or understandings relating thereto as are in effect from time to time while this Agreement remains in effect. 14.13. EMPLOYEE LIABILITY. To Seller's actual knowledge, after the Closing Buyer shall not be obligated to continue the employment of any of the employees of Seller or Seller's property manager. To Seller's actual knowledge, all of the employees for the Property are employees of Seller's property manager and not of Seller. 14.14. HAZARDOUS MATERIALS. To Seller's actual knowledge, Seller has not generated, disposed of, released or found any Hazardous Materials (hereinafter defined) on the Property, and Seller has no actual knowledge of the existence of any areas for the generation, storage or disposal of any Hazardous Materials on the Property. Seller has received no notice that any Governmental Authority has determined that there are any violations of Environmental Laws (as hereinafter defined) affecting the Property. In the event Seller receives notice of any such Hazardous Materials on the Property or any such violation affecting the Property prior to the Closing, Seller immediately shall notify Buyer thereof. "Hazardous Materials" means petroleum, including crude oil or any fraction thereof, asbestos, radon gas, polychlorinated biphenyls, and any other substance identified as hazardous in the following, as the same may have been amended: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601, ET SEQ.; the Resource Conservation Act of 1976, 42 U.S.C. Section 6921, ET SEQ.; the Toxic Substances Control Act, 15 U.S.C. Section 2601, ET SEQ.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section 136; the Federal Water Pollution Control Act, 33 U.S.C. Section 1251, ET SEQ.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, ET SEQ.; the -12- Federal Solid Waste Disposal Act, 42 U.S.C. Section 6901, ET SEQ.; the Clean Air Act, 42 U.S.C. Section 7401, ET SEQ.; and any other legislation or ordinance of any Governmental Authority identified by its terms as pertaining to hazardous materials, waste or asbestos ("Environmental Laws"). 14.15. AGREEMENTS AFFECTING THE PROPERTY. Subject to the provisions in Section 14.11 hereof, Seller hereby covenants and agrees with Buyer that, so long as this Agreement remains in full force and effect, Seller will not sell, assign, convey (absolutely or as security), grant a security interest in, or otherwise encumber or dispose of, the Property (or any interest or estate therein) without the prior written consent of the Buyer. Seller has not executed and will execute no exclusive or other brokerage agreements which will survive the Closing Date. Seller shall not enter into Service Contracts from and after the date of this Agreement without the prior written consent of Buyer, which consent may be granted or withheld in Buyer's sole and absolute discretion; provided, however, that Seller hereby covenants and agrees with Buyer that, so long as this Agreement remains in full force and effect, Seller will continue to operate and manage the Property in substantially the same manner as it has been operated and managed in the past. 14.16. MAINTENANCE OF INSURANCE. Seller shall maintain in full force and effect all existing policies of insurance relating to the Property through and including the Closing Date, shall pay all premiums with respect to such insurance on or before the due date therefor and shall not knowingly take any action which would cause such insurance not to remain in full force and effect or fail knowingly to take any action required to maintain such insurance in full force and effect. 14.17. FIXTURES. All fixtures and articles of Personal Property included in and which are part of the sale are now, and at the Closing will be, owned by Seller free and clear of any conditional bills of sale, chattel mortgages, security agreements or financing statements, or other liens of security interest created by Seller, and shall be transferred to Buyer as a part of the transaction. 14.18. SECURITY DEPOSITS. Security deposits shown in the certified rent roll are a full, true and complete list of all of the security deposits for the Property and are now held by Seller and Seller's property manager under the terms of the Leases, and none have been forfeited by any existing tenant. 14.19. NON-FOREIGN STATUS. Seller is not a "foreign person" as that term is defined in the Internal Revenue Code of 1986, as amended, and the regulations promulgated pursuant thereto, and Buyer has no obligation under the Internal Revenue Code Section 1445 to withhold and pay over to the Internal Revenue Service any part of the "amount realized" by Seller in the transaction contemplated hereby (as such term is defined in the regulations issued under Internal Revenue Code Section 1445). 14.20. REPRESENTATIONS, WARRANTIES AND COVENANTS RE-MADE AT CLOSING. The foregoing warranties and representations are true, and the foregoing covenants are in full -13- force and effect and binding on Seller as of the date hereof and shall be in full force and effect and deemed to have been automatically reaffirmed and restated by Seller as of the Closing Date. For purposes of this Section 14, "Seller's actual knowledge" shall mean the knowledge of (i) J. Bradley Forrester, (ii) Ralph Tilley and (iii) Pam Anderson without any duty of investigation or inquiry and "notice" shall mean written notice. The representations and warranties of Seller shall survive the Closing for six (6) months, and any claim made by Buyer against Seller with respect thereto must be asserted within such six-month period. 15. BUYER'S REPRESENTATIONS AND WARRANTIES. The accuracy and completeness of the following constitute a condition to the Closing, and Buyer represents and warrants to Seller that the following is complete and accurate as of the date of this Agreement and shall be complete and accurate as of the Closing, and shall survive the Closing: Buyer is duly organized and validly existing and is (or will at the Closing be) qualified to conduct its business and has the legal power, right and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. All requisite action (corporate, partnership, trust or otherwise) has been taken by Buyer in connection with entering into this Agreement and the consummation of the transactions contemplated by this Agreement. The individual executing this Agreement on behalf of Buyer has the legal power, right and actual authority to bind Buyer to the terms and conditions of this Agreement. This Agreement and all documents required by this Agreement to be executed by Buyer are and are valid, legally binding obligations of and enforceable against Buyer in accordance with their terms. The foregoing warranties and representations are true, and the foregoing covenants are in full force and effect and binding on Buyer as of the date hereof and shall be in full force and effect and deemed to have been automatically reaffirmed and restated by Buyer as of the Closing Date. 16. CONDEMNATION. If all or any material portion of the Property is taken by eminent domain (or is the subject of a pending or contemplated taking which has not been consummated) before the Closing, then (a) Seller, if Seller has actual knowledge thereof, shall notify Buyer of such fact and (b) Buyer shall have the option to terminate this Agreement upon written notice to Escrow Holder and Seller given no later than thirty (30) business days after Seller has given such notice. For purposes of the foregoing sentence, a portion of the Property shall not be deemed material unless the taking thereof diminishes the rentable area of the building or the recreation facilities or restricts access to the Property. If this Agreement is so terminated, then (i) Buyer shall pay all costs associated with the cancellation of the Escrow pursuant to this Section, (ii) neither Buyer nor Seller shall have any further rights or obligations under this Agreement (except to the extent of any indemnities under this Agreement with respect to events occurring before such termination, which indemnities shall survive any such termination), and (iii) Escrow Holder shall, without requiring any further instruction from Seller, immediately return to Buyer the Deposit and all interest accrued thereon. If Buyer does not terminate this Agreement within such thirty-day period, then (A) Buyer shall not thereafter have the right to terminate this Agreement by reason of such taking and (B) Buyer and Seller shall proceed to the Closing in accordance with this Agreement, without modification of the terms of this Agreement, except that (1) the Property will not include the property so taken, (2) the Purchase Price will be reduced -14- by the amount of any awards for such taking awarded to Seller as of the Closing Date, and (3) Seller shall assign and turn over to Buyer, and Buyer shall be entitled to receive and retain, all awards for such taking not yet awarded as of the Closing. 17. DESTRUCTION. If the Property or any portion thereof is damaged by fire or other casualty on or before the Closing Date, Seller immediately shall notify Buyer of such damage. If the estimated cost to repair the damage is less than the greater of (i) $400,000 and (ii) five percent (5%) of the Purchase Price and does not eliminate or materially impair access to the Property, Buyer and Seller shall proceed to the Closing in accordance with the terms of this Agreement, without modification of the terms of this Agreement, in which event Buyer shall be entitled to an assignment of the proceeds of all insurance relating to such fire or other casualty. If the estimated cost to repair the damage equals or exceeds the greater of (i) $400,000 and (ii) five percent (5%) of the Purchase Price, Buyer may elect either (a) to terminate this Agreement and receive the return of the Deposit (minus any escrow or title cancellation fees), in which case neither party shall have any additional rights or obligations under this Agreement, or (b) to proceed to the Closing in accordance with this Agreement, without modification of the terms of this Agreement, in which event Buyer shall be entitled to an assignment of the proceeds of all insurance relating to such fire or other casualty, if any. Such election shall be made by Buyer within thirty (30) business days following Seller's notification to Buyer. Buyer's failure to elect to terminate this Agreement within such thirty-day period shall conclusively be deemed an election to proceed to the Closing. 18. BROKERS. Each party to this Agreement represents and warrants to the other that no real estate or business broker, agent, finder, or other person is responsible for bringing about or negotiating this Agreement and that such party has not dealt with any real estate broker, agent, finder or person relative to this Agreement in any manner. Each party to this Agreement shall defend, indemnify, and hold harmless the other party to this Agreement against all liabilities, damages, losses, costs, expenses, attorneys' fees and claims arising from (a) any breach of such representation by such indemnifying party set forth in the preceding sentence, and (b) any claims that may be made against such indemnified party by any real estate broker, agent, finder or other person alleging to have acted on behalf of or to have dealt with such indemnifying party. 19. NO RELIANCE - AS-IS. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT HERETO, BUYER ACKNOWLEDGES THAT IT IS PURCHASING THE PROPERTY IN RELIANCE SOLELY ON: (I) BUYER'S INSPECTION OF THE REAL PROPERTY, THE PERSONAL PROPERTY AND THE IMPROVEMENTS; (II) BUYER'S INDEPENDENT VERIFICATION OF THE TRUTH OF ANY STATEMENTS CONTAINED IN THE DOCUMENTS MADE AVAILABLE TO BUYER; AND (III) THE OPINIONS AND ADVICE OF CONSULTANTS AND ATTORNEYS ENGAGED BY BUYER CONCERNING THE PROPERTY. BUYER FURTHER ACKNOWLEDGES THAT BEFORE ITS EXECUTION OF THIS AGREEMENT BUYER SHALL HAVE PERFORMED OR WILL HAVE HAD AN OPPORTUNITY TO PERFORM ALL OF ITS DUE DILIGENCE INVESTIGATIONS OF AND WITH RESPECT TO THE PROPERTY AS BUYER DEEMS APPROPRIATE, INCLUDING ENGINEERING STUDIES, SOILS TESTS, ENVIRONMENTAL SURVEYS AND TESTING, PHYSICAL INSPECTIONS, ALTA OR OTHER SURVEYS AND MARKET ANALYSES AS WELL AS BUYER'S EVALUATION OF THE CONDITION AND STATUS OF -15- THE PERSONAL PROPERTY AND IMPROVEMENTS AND THE OPERATION AND FUTURE PROSPECTS OF THE PROPERTY. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT HERETO, AT THE CLOSING, BUYER ACCEPTS THE PROPERTY AND ALL MATTERS RELATING TO THE PROPERTY IN THEIR "AS IS," "WHERE-IS" AND "WITH ALL FAULTS" CONDITION OR STATUS AS OF THE CLOSING DATE, INCLUDING SUCH MATTERS AS: SOILS AND GEOLOGICAL CONDITION, TOPOGRAPHY, AREA AND CONFIGURATION OF THE REAL PROPERTY; THE AGE AND CONDITION OF THE IMPROVEMENTS AND PERSONAL PROPERTY; THE EXISTENCE OF ANY HAZARDOUS OR TOXIC SUBSTANCES OR MATERIALS, CONSTRUCTION DEFECTS OR OTHER MATTERS WHICH WOULD OR COULD NECESSITATE ABATEMENT OR REMEDIATION ACTION BY THE PROPERTY'S OWNER; ANY PHYSICAL OR MECHANICAL DEFECTS IN THE IMPROVEMENTS OR PERSONAL PROPERTY; ANY EASEMENT, LICENSE OR ENCROACHMENT WHICH IS NOT A MATTER OF PUBLIC RECORD, WHETHER OR NOT VISIBLE UPON INSPECTION OF THE PROPERTY; THE ZONING AND OTHER LAND USE REGULATIONS APPLICABLE TO THE PROPERTY; AND ANY OTHER MATTER RELATING TO THE PROPERTY INCLUDING, BUT NOT LIMITED TO, VALUE, TITLE, INCOME, FEASIBILITY, COST, MARKETING AND INVESTMENT RETURN. BUYER ACKNOWLEDGES AND AGREES THAT SELLER IS NOT MAKING ANY EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER WITH RESPECT TO THE PROPERTY. IN PARTICULAR BUT NOT BY WAY OF LIMITATION OF THE FOREGOING, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE DOCUMENTS TO BE DELIVERED PURSUANT HERETO, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, RELATING TO COMPLIANCE OF THE IMPROVEMENTS WITH CURRENT BUILDING CODES, INCLUDING WITHOUT LIMITATION THOSE RELATING TO UPDATED OR REVISED STANDARDS FOR PLUMBING, ELECTRICAL, STRUCTURAL OR SEISMIC MATTERS. BUYER WARRANTS AND REPRESENTS TO SELLER THAT BUYER HAS NOT RELIED ON AND WILL NOT RELY ON, EITHER DIRECTLY OR INDIRECTLY, ANY WARRANTY OR REPRESENTATION OF SELLER NOT EXPLICITLY SET FORTH IN THIS AGREEMENT. 20. INDEMNITY REGARDING INSPECTION. In consideration of Seller's permission to Buyer and its agents to perform investigations and testing on and about the Property prior to the Closing, Buyer shall defend, indemnify and hold harmless Seller and Seller's partners, and their respective officers, employees, agents, contractors, successors, assigns, and affiliates (collectively, the "Indemnitees"), and the Property from all claims, costs, liens, actions and judgments (including attorneys' fees and other defense costs actually incurred by Seller) resulting from Buyer's investigation of the Property or its attempts to obtain any regulatory approvals in connection with the Property, or otherwise caused by Buyer or any of its employees, agents or independent contractors, except for the non-negligent release of Hazardous Materials already on the Property occasioned thereby. Unless and until the Closing occurs, Buyer shall maintain all the information which it obtains in connection with the Property in strict confidence and shall not reveal any of such information to any party other than those parties to which it may otherwise be required to disclose in accordance with applicable law. Buyer shall, at Buyer's sole cost, promptly repair any damage resulting from its activities on the Property and restore the Property to substantially the same condition as before Buyer or any of its agents first entered the Property. If the Closing does not occur on or before the Closing Date for any reason other than a breach of this Agreement by Seller, Buyer shall provide Seller, at Seller's cost, copies of all third-party engineering and environmental reports and materials derived from Buyer's investigation of the -16- Property, concurrently with reimbursement by Seller of Buyer's out-of-pocket costs in procuring such reports and materials. 21. BUYER'S REMEDIES. In the event the transaction contemplated hereby is not consummated as a result of Seller's default hereunder, Buyer's sole and exclusive remedies shall be either (i) to seek from Escrow Holder the return of the Deposit and any other documents and funds then held by Escrow Holder and Seller shall reimburse Buyer for Buyer's reasonable and documented out-of-pocket expenses incurred in connection with the purchase transaction contemplated under this Agreement (but in no event to exceed one-fourth percent (1/4%) of Purchase Price)or (ii) to seek specific performance of Seller's obligations hereunder by delivering the Purchase Price into the Escrow; provided, however, that as conditions precedent to such action for specific performance, [A] no uncured default in the performance of Buyer's obligations under this Agreement shall exist and no event shall have occurred which with the passage of time or with notice, or both, could become such an event of default, and [B] Buyer shall not seek to amend the Purchase Price in such action. 22. SELLER'S PARTNERS' APPROVAL. Notwithstanding anything to the contrary contained in this Agreement, the Closing shall not occur unless and until Seller shall have obtained written approval ("Seller's Consent") from those partners of Seller (or those partners of the partners of Seller, as the case may be) whose approval is legally required before Seller may sell the Property to Buyer hereunder. Seller shall seek such approval immediately after the Escrow Opening Date. If Seller's Consent is not obtained within twenty-one (21) days after the Escrow Opening Date (as such period may be extended by Seller at Seller's sole option for up to an additional forty (40) days), Seller or Buyer may terminate this Agreement by written notice delivered to the other before Seller's Consent is obtained, in which case Buyer shall be entitled to the return of the Deposit and neither Buyer nor Seller shall have any further rights or obligations under this Agreement (except to the extent of any indemnities under this Agreement with respect to events occurring before such termination, which indemnities shall survive any such termination and except that Seller shall reimburse Buyer for Buyer's reasonable and documented out-of- pocket engineering and environmental expenses (but in no event to exceed $3,600)). 23. FURTHER ASSURANCES. Each party to this Agreement shall execute and deliver all instruments and documents and take all actions as may be reasonably required or appropriate to carry out the purposes of this Agreement. 24. COUNTERPARTS AND EXHIBITS. This Agreement may be executed in counterparts, each of which is deemed an original and all of which together constitute one document. All exhibits attached to and referenced in this Agreement are incorporated into this Agreement. 25. TIME OF ESSENCE. Time and strict and punctual performance are of the essence with respect to each provision of this Agreement. 26. ATTORNEY'S FEES. The prevailing party in any litigation, arbitration, mediation, bankruptcy, insolvency or other proceeding ("Proceeding") relating to the enforcement or interpretation of this Agreement may recover from the unsuccessful party all costs, expenses and -17- actual attorney's fees (including expert witness and other consultants' fees and costs) relating to or arising out of (a) the Proceeding (whether or not the Proceeding proceeds to judgment), and (b) any post-judgment or post-award proceeding including, without limitation, one to enforce or collect any judgment or award resulting from the Proceeding. All such judgments and awards shall contain a specific provision for the recovery of all such subsequently incurred costs, expenses and actual attorney's fees. 27. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the state in which the Property is located. Each party hereby authorizes and accepts service of process sufficient for personal jurisdiction in any action against it as contemplated by this paragraph by registered or certified mail, return receipt requested, postage prepaid, to its address for the giving of notices set forth in this Agreement. 28. MODIFICATION. This Agreement may be modified only by a writing executed by the party to this Agreement against whom enforcement of the modification is sought. 29. PRIOR UNDERSTANDINGS. This Agreement and all documents specifically referred to and executed in connection with this Agreement: (a) contain the entire and final agreement of the parties to this Agreement with respect to the subject matter of this Agreement, and (b) supersede all negotiations, stipulations, understandings, agreements, representations and warranties, if any, with respect to such subject matter, which precede or accompany the execution of this Agreement. 30. INTERPRETATION. Whenever the context so requires in this Agreement, all words used in the singular may include the plural (and vice versa) and the word "person" includes a natural person, a corporation, a firm, a partnership, a joint venture, a trust, an estate or any other entity. The terms "includes" and "including" do not imply any limitation. Unless "business day " is specified, the term "day" means a calendar day. The term "business day" means any day other than a Saturday, Sunday or Federal or other holiday in the State in which the Property is located. If the last day for any act falls on a day other than a business day, the time for performance shall be extended to the next business day. No remedy or election under this Agreement is exclusive, but rather, to the extent permitted by applicable law, each such remedy and election is cumulative with all other remedies at law or in equity. The paragraph headings in this Agreement (a) are included only for convenience, (b) do not in any manner modify or limit any of the provisions of this Agreement and (c) may not be used in the interpretation of this Agreement. Each provision of this Agreement is valid and enforceable to the fullest extent permitted by law. If any provision of this Agreement (or the application of such provision to any person or circumstance) is or becomes invalid or unenforceable, the remainder of this Agreement, and the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected by such invalidity or unenforceability. 31. SUCCESSORS-IN-INTEREST AND ASSIGNS. Buyer may not assign its rights under this Agreement to any person or entity without the prior written consent of Seller, which consent may be withheld in Seller's sole and absolute discretion; provided, however, that Buyer may assign -18- such rights to a subsidiary wholly-owned by Buyer upon written notice given to Seller not less than five (5) business days prior to the Closing. No assignment by Buyer of any of its rights or obligations under this Agreement shall relieve Buyer of any of its obligations under this Agreement unless Seller expressly agrees to such release in writing. Subject to the foregoing, this Agreement shall be binding on and shall inure to the benefit of the successors-in-interest and assigns of each party to this Agreement. 32. NOTICES. Each notice and other communication required or permitted to be given under this Agreement ("Notice") must be in writing. Notice is duly given to another party upon: (a) hand delivery to the other party, (b) receipt by the other party when sent by facsimile to the address and number for such party set forth below (provided, however, that the Notice is not effective unless a duplicate copy of the facsimile Notice is promptly given by one of the other methods permitted under this paragraph), (c) three business days after the Notice has been deposited with the United States postal service as first class certified mail, return receipt requested, postage prepaid, and addressed to the party as set forth below, or (d) the next business day after the Notice has been deposited with a reputable overnight delivery service, postage prepaid, addressed to the party as set forth below with next-business-day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery-service-provider. If to Seller: Tierra Catalina Limited Partnership c/o Continental American Properties, Ltd. 1764 San Diego Avenue San Diego, California 92110-1906 Attention: Scott Dupree, Esq. Telephone: (619) 297-6771 Telecopy: (619) 294-2451 With a copy to: Hughes Hubbard & Reed LLP 350 South Grand Avenue, Suite 3600 Los Angeles, California 90071-3442 Attention: George A. Furst, Esq. Telephone: (213) 613-2839 Telecopy: (213) 613-2950 -19- If to Buyer: DOC Investors, LLC c/o Lend Lease Real Estate Investments, Inc. 3424 Peachtree Road, N.E., Suite 800 Atlanta, Georgia 30326 Attention: Theodore Klinck Telephone: (404) 848-8744 Telecopy: (404) 848-8930 With a copy to: King & Spalding 191 Peachtree Street Atlanta, Georgia 30303-1763 Attention: William Fryer, Esq. Telephone: (404) 572-4600 Telecopy: (404) 572-5148 If to Escrow Holder: First American Title Insurance Company 114 East Fifth Street Santa Ana, California 92701 Attention: Toni Rice-Groetsch Telephone: (800) 854-3643 Telecopy: (714) 558-4702 Each party shall make a reasonable, good faith effort to ensure that it will accept or receive Notices to it that are given in accordance with this paragraph. A party may change its address for purposes of this paragraph by giving the other party(ies) written notice of a new address in the manner set forth above. 33. WAIVER. Any waiver of a default or provision under this Agreement must be in writing. No such waiver shall constitute a waiver of any other default or provision concerning the same or any other provision of this Agreement. No delay or omission by a party in the exercise of any of its rights or remedies constitutes a waiver of (or otherwise impairs) such right or remedy. A consent to or approval of an act does not waive or render unnecessary the consent to or approval of any other or subsequent act. 34. DRAFTING AMBIGUITIES. Each party to this Agreement and its legal counsel have reviewed and revised this Agreement. The rule of construction that ambiguities are to be resolved against the drafting party or in favor of the party receiving a particular benefit under an agreement shall not be employed in the interpretation of this Agreement or any amendment to this Agreement. -20- 35. THIRD PARTY BENEFICIARIES. Nothing in this Agreement is intended to confer any rights or remedies on any person other than the parties to this Agreement and their respective successors-in-interest and permitted assignees. 36. CONCURRENT CLOSING. Notwithstanding anything to the contrary contained in this Agreement, the Closing shall be subject to and contingent upon, and shall occur concurrently with, the Closing of the purchase transactions for the following properties between Seller (or entities affiliated with Seller) and Buyer (the "Concurrent Closing Contingency"): Autumn Heights, Creekside Oaks, Lakeview Village, Las Colinas, Oaktree Village, Ponte Vedra Beach Village I, Ponte Vedra Beach Village II, Rancho Antigua, Shadowood Village, Skyline Village, Village at the Foothills I, Village at the Foothills II & III; provided, however, that in the event this purchase transaction or any of the other purchase transactions enumerated above is terminated as a result of (i) condemnation or (ii) damage or destruction in accordance with the applicable purchase agreement, such purchase transaction(s) shall not be taken into account in determining whether the Concurrent Closing Contingency shall have been satisfied (unless the aggregate number of purchase transactions so terminated is two or more, in which event the Concurrent Closing Contingency shall be deemed not to have been satisfied). In addition, in the event this purchase transaction or any of the other purchase transactions enumerated above does not close as a result of a default by Buyer in the performance of its obligations under this Agreement or any other respective purchase agreement, Seller shall be entitled (but not obligated) to exercise its rights under Section 12 above and the corresponding provisions of each such purchase agreement even though the Concurrent Closing Contingency shall not have been satisfied. 37. EXCLUSIVITY. So long as this Agreement is in effect, Seller shall not solicit, negotiate, offer or accept an offer for the purchase of the Property (or any interest therein) for sale or contract to sell the Property (or any interest therein) to any party other than Buyer or negotiate, solicit or entertain any offers to purchase or sell the Property (or any interest therein). 38. CONFIDENTIALITY. Buyer and Seller agree that all documents and information concerning the Property delivered to Buyer, the subject matter of this Agreement and all negotiations shall remain confidential, and neither party shall disclose any terms of this Agreement without the prior approval of the other party except as may be required by law. Buyer and Seller shall be entitled to disclose such information only to those parties required to know it, including without limitation employees of either of the parties, consultants, attorneys and accountants engaged by either Buyer or Seller, and prospective or existing investors and lenders. This Section 38 shall expire upon the earlier of the termination of this Agreement and the Closing. -21- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. SELLER: TIERRA CATALINA LIMITED PARTNERSHIP, an Arizona limited partnership By: ConAm Property Services, Ltd., a California limited partnership, its general partner By: Continental American Development, Inc., a California corporation, its general partner By: /s/ Scott Dupree ------------------------------- Its: Vice President [Signatures Continued On Next Page] -22- BUYER: DOC Investors, LLC, a Delaware limited liability company By: ConAm DOC Affiliates LLC, a California limited liability company, its administrative member By: Continental American Properties, Ltd., a California limited partnership, its managing member By: DJE Financial Corp., a California corporation, its general partner By: /s/ J. Bradley Forrester ----------------------------------- Its Vice President -23- CONSENT AND ACCEPTANCE OF ESCROW HOLDER: The undersigned acknowledges having received an executed original of this Agreement (or counterparts thereof) and the Deposit on January 26, 1999, which date is the "Escrow Opening Date" for purposes of this Agreement. The undersigned hereby consents to and accepts the instructions set forth in the above Agreement for Purchase and Sale and Joint Escrow Instructions. First American Title Insurance Company By: /s/ Richard G. Hines -------------------------------- Its: Vice President -24- INDEX OF EXHIBITS
EXHIBIT SECTION ------- -------- Exhibit A - Legal Description Section 1.1 Exhibit B - Schedule of Personal Property Section 1.1 Exhibit C - Due Diligence Materials Delivered to Buyer Section 5.1 Exhibit D - Disapproved Title Exceptions Section 5.4 Exhibit E - Form of Deed Section 7.1 Exhibit F - Form of Seller's Affidavit Section 7.3 Exhibit G - Bill of Sale Section 7.4 Exhibit H - Form of Assignment Section 7.5 Exhibit I - Form of Certificate for Rent Roll Section 7.6 Exhibit J - Other Agreements and Instruments Section 14.2 Exhibit K - Pending Litigation or Other Proceedings Section 14.3 Exhibit L - Schedule of Service Contracts Section 14.10
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