Goodman, Frank/42-800 Washington 06ORIGINAL
PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS
by and between
FRANK R. GOODMAN AND ASSOCIATES,
a California limited partnership
"Seller"
and
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
"Buyer"
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TABLE OF CONTENTS
Page
ARTICLE 1
AGREEMENT TO PURCHASE..........................................................................1
1.1
The Property..........................................................................................................1
1.2
Purchase Price.......................................................................................................2
1.3
Payment of Purchase Price....................................................................................2
ARTICLE2
ESCROW..............................................................................................................3
2.1
Closing..................................................................................................................
3
2.2
Escrow Instructions...............................................................................................3
2.3
Conveyance of Title..............................................................................................3
2.4
Additional Closing Obligations of Seller .........................................
2.5
Closing Obligations of Buyer...............................................................................3
2.6
Delivery of Documents by Escrow Holder...........................................................3
2.7
Recordation...........................................................................................................
3
ARTICLE 3
INSPECTIONS AND REVIEW...........................................................................3
3.1
Due Diligence Items.............................................................................................3
3.2
Environmental/Physical Property Condition Due Diligence ................................
3
3.3
Financial/Operational Condition Due Diligence Period; New
Indebtedness; Buyer's Equity...............................................................................
3
3.4
Preliminary Title Report .......................................................................................
3
3.5
Survey...................................................................................................................
3
3.6
Pest Control Report ...............................................................................................3
3.7
USDA Matters......................................................................................................3
3.8
Buyer Affordability Covenant Condition.............................................................
3
3.9
Books and Records...............................................................................................3
ARTICLE 4 CONDITIONS TO AGREEMENT...................................................................... 3
4.1 Buyer's Conditions Precedent...............................................................................3
4.2 Seller's Condition Precedent.................................................................................3
4.3 Satisfaction of Conditions.....................................................................................3
4.4 Waiver...................................................................................................................3
4.5 Termination...........................................................................................................3
4.6 Condition of Property...........................................................................................3
ARTICLE 5 PRORATIONS, CLOSING COSTS, POSSESSION AND DEPOSITS..............3
5.1 Proration of Taxes................................................................................................. 3
5.2 Rents, Other Income and Operating Expenses ..................................................... 3
5.3 Laundry Lease.......................................................................................................3
5.4 Deposits.................................................................................................................3
5.5 Utilities..................................................................................................................3
5.6 Maintenance Contracts..........................................................................................3
5.7 Insurance............................................................................................................... 3
5.8 Impounds; Working Capital Accounts; Capital Reserve Accounts......................3
5.9 Possession............................................................................................................. 3
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5.10 Closing Costs........................................................................................................3
5.11 Closing Statement................................................................................................. 3
5.12 Breach by Seller or Buyer.....................................................................................3
5.13 LIQUIDATED DAMAGES.................................................................................3
ARTICLE 6 REPRESENTATIONS AND WARRANTIES.....................................................3
6.1 Warranties and Representations by Seller............................................................ 3
6.2 Representations of Authority................................................................................ 3
6.3 Covenants of Seller...............................................................................................3
ARTICLE 7 DAMAGE, DESTRUCTION AND CONDEMNATION....................................3
7.1 Risk of Physical Loss............................................................................................3
7.2 Condemnation by Unrelated Governmental Entity...............................................3
7.3 Eminent Domain Authority...................................................................................3
ARTICLE 8 ANNEXATION OF REAL PROPERTY INTO CITY........................................3
ARTICLE 9 MISCELLANEOUS.............................................................................................3
9.1 Attorneys' Fees..................................................................................................... 3
9.2 Notices.................................................................................................................. 3
9.3 Entire Agreement; Interpretation.......................................................................... 3
9.4 Successors.............................................................................................................. 3
9.5 Assignment...........................................................................................................3
9.6 Choice of Laws.....................................................................................................3
9.7 Headings...............................................................................................................3
9.8 Survival.................................................................................................................3
9.9 Time......................................................................................................................3
9.10 Counterparts..........................................................................................................3
9.11 Brokerage Commissions....................................................................................... 3
9.12 Information Report ................................................................................................3
9.13 Nonliability of Buyer Officials.............................................................................3
9.14 Buyer's Delegation of Authority..........................................................................3
9.15 Incorporation......................................................................................................... 3
EXHIBITS
A Legal Description of Real Property
B List of Personal Property
C Grant Deed
D Warranty Bill of Sale
E Assignment of Leases
F Non -Foreign Affidavit
G Assignment of Contracts, Permits, Intangible Personal Property, Warranties and
Guaranties
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PaEe
H Schedule of All Labor, Service, Employment, Supply, Maintenance, and Brokerage
Leasing Contracts
I Certificate of Seller Regarding Representations and Warranties
J Notice to Tenants
K Lead -Based Paint Disclosure and Acknowledgment
L Pending or Threatened Claims, Allegations or Lawsuits
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PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS
This PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS
("Agreement") is made as of this & t% day of , 2006 ("Effective Date"), by and
between FRANK R. GOODMAN & ASSOCIAT��California limited partnership (the
"Seller"), and LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and
politic (the "Buyer").
RECITALS
A. Seller is the owner of that certain real property (the "Real Property") located at
42-800 Washington Street, in unincorporated territory in the County of Riverside, State of
California, legally described on Exhibit "A", which Real Property is improved with an
apartment complex commonly known as the Washington Street Apartments consisting of
73 apartment units.
B. Subject to the terms and conditions in this Agreement, Buyer intends to apply for
and process the annexation of the Property into the City of La Quinta.
C. Buyer wishes to purchase and Seller wishes to sell the Real Property and any
improvements and appurtenances owned by Seller, including, as applicable, the buildings,
parking areas, improvements and fixtures, roads, streets, parking areas, curbs, sidewalks,
landscaping, recreation facilities, sewers and other utilities now or hereafter located thereon (the
"Improvements"), on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
undertakings set forth herein, Buyer and Seller hereby agree as follows:
ARTICLE 1
AGREEMENT TO PURCHASE
1.1 The Property. Subject to all of the terms, conditions and provisions of this
Agreement, and for the consideration herein set forth, Seller hereby agrees to sell and Buyer
hereby agrees to buy the following, to the extent owned by and in the possession or control of
Seller:
(a) Seller's fee estate in and to the Real Property, together with the
Improvements, including all right, title and interest of the Seller in and to any land lying
in the bed of any existing or proposed highway, street, road, avenue or alley abutting or
adjoining the Real Property and all right, title and interests of the Seller in and to any
strips or gores of land adjoining the Real Property, including the right to any unpaid
award for damage by reason of any condemnation proceedings or change of grade of any
highway, street, road or avenue, and all tenements, hereditaments and appurtenances
thereto.
(b) All furniture, personal property, machinery, apparatus and equipment
owned by Seller and currently used in the operation, repair and maintenance of the
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Improvements located upon the Real Property. The furniture, personal property,
machinery, apparatus and equipment to be conveyed (the "Personal Property") are listed
in the inventory attached as Exhibit `B";
(c) All signs, logos, trade names, trademarks or styles relating to the Real
Property owned by Seller (specifically including the name "Washington Street
Apartments") and all other intangible property owned or hereafter to be acquired by
Seller in connection with the Real Property, Improvements and Personal Property
including, but not limited to, licenses, use, occupancy and operating permits, brochures,
manuals, lists of prospective tenants, advertising materials and assignable telephone
numbers), warranties and guaranties in effect, all plans, specifications, including, without
limitation, all working drawings and "as -built" drawings, approvals, reports and studies
("Intangible Personal Property");
(d) All labor, service, supply, property management, insurance, brokerage
leasing and maintenance contracts relating to the Improvements or the Real Property
which are to be assumed by Buyer pursuant to Section 3.1(a) below ("Contracts"); and
(e) All leases of the Real Property or the Improvements disclosed in the
Certified Rent Roll (as hereinafter defined) ("Tenant Leases") and all lease deposits,
prepaid rentals and whatever rights of any kind or nature related thereto.
The Real Property, Improvements, Personal Property, Intangible Personal Property, Contracts,
Tenant Leases and all other property described in Sections (a) through (e) above are hereinafter
collectively referred to as the "Property."
1.2 Purchase Price. The purchase price which Seller agrees to accept and Buyer
agrees to pay for the Property is SIX MILLION ONE HUNDRED TWENTY THOUSAND
DOLLARS ($6,120,000), which includes the amount of the Existing Indebtedness as defined in
Section 1.3(b) ("Purchase Price").
1.3 Payment of Purchase Price.
(a) De osit.
(i) Within three (3) business days following the execution of this
Agreement and opening of the Escrow, Buyer shall deposit into Escrow (as
hereinafter defined) the sum of FIFTY THOUSAND DOLLARS ($50,000) (the
"Deposit"). Immediately upon deposit thereof by Buyer, the Deposit shall be
deposited by Escrow Holder (as hereinafter defined) in an interest -bearing
account with interest thereon to accrue for the benefit of Buyer.
(ii) If Buyer elects (or is deemed to have elected) to terminate this
Agreement on or before the end of the last to expire of the due diligence periods
described in Sections 3.2, 3.3, 3.4, 3.7, and 3.8, then Buyer shall be entitled to a
full refund of the Deposit along with all interest earned thereon, less the "Release
Amount" (as defined below) that has actually been released to Seller. Thirty (30)
days after the opening of the Escrow, Buyer agrees and hereby instructs Escrow
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Holder to release to Seller the sum of TEN THOUSAND DOLLARS
($10,000.00) from the Deposit (the "Release Amount"), which Release Amount
shall be nonrefundable, subject to Seller's performance of its obligations
hereunder and such other provisions of this Agreement as expressly provide for a
return of the Release Amount to Buyer.
(iii) The term "Deposit" shall hereafter be deemed to refer to,
collectively, the Deposit and all interest earned thereon. Except as provided by
Article 8 (relating to payments to extend the Agreement resulting from
annexation), upon the Close of Escrow, the Deposit (including the Release
Amount) shall be applied as a credit to the Purchase Price. In the event of any of
Buyer's conditions precedent to close described in Section 4.1 are not satisfied or
waived by Buyer during the times and in such manner as provided therein or
should Seller default in its obligations hereunder, then the Deposit shall be
returned to Buyer, less the portion of Escrow Holder's reasonable escrow
cancellation fees, if any, allocable to Buyer.
(b) Assumption of Existing Indebtedness. Buyer shall have the right to
assume, on terms and conditions acceptable to Buyer in its sole and absolute discretion,
the outstanding indebtedness ("Existing Indebtedness") represented by (i) that certain
Promissory Note dated , executed by Seller, as maker, in favor of
the United States of America, acting through the Farmer's Home Administration, United
States Department of Agriculture ("USDA"), as holder, in the original principal amount
of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000) ("USDA
Note"), which USDA Note is secured by that certain Deed of Trust dated November 18,
1980, executed by Seller, as trustor, in favor of USDA, as beneficiary, recorded
November 21, 1980, as Instrument No. 218151, in the Official Records of Riverside
County, California ("USDA 2nd Deed of Trust"); and/or (ii) that certain
dated , executed by Seller, as
maker, in favor of Provident Savings Bank ("Provident"), as holder, in the original
principal amount of ONE MILLION SIX HUNDRED NINETY-SIX THOUSAND
DOLLARS ($1,696,000) ("Provident Note"), which Provident Note is secured by that
certain Deed of Trust dated July 19, 2001, executed by Seller, as Trustor, in favor of
Provident, as beneficiary, recorded August 3, 2001, as Instrument No. 3387200, in the
Official Records of Riverside County, California ("Provident 1" Deed of Trust"). The
USDA has subordinated the USDA 2nd Deed of Trust to the Provident 1 St Deed of Trust.
Seller represents and warrants that the portion of the Existing Indebtedness currently
outstanding under the USDA Note is approximately EIGHT HUNDRED TWENTY-
TWO THOUSAND SIX HUNDRED TWENTY-TWO DOLLARS ($822,622); and the
portion of the Existing Indebtedness currently outstanding under the Provident Note is
ONE MILLION SIX HUNDRED SEVENTEEN THOUSAND FIVE HUNDRED
DOLLARS ($1,617,500).
Anything in this Section 1.3(b) to the contrary notwithstanding, if Buyer elects
(with lender approval) to assume the Provident I" Deed of Trust, Buyer shall pay any and
all assumption fees and/or similar charges in connection therewith, and if Buyer elects to
pay off and/or refinance the Provident 1st Deed of Trust, Buyer shall pay any and all
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prepayment penalties and/or similar fees and/or charges in connection therewith. If
Buyer elects (with lender approval) to assume the USDA 2nd Deed of Trust, Buyer shall
pay any and all assumption fees and/or similar charges incurred in connection therewith.
If Buyer endeavors to obtain a replacement of the USDA 2°d Deed of trust, Buyer shall
have full responsibility in that regard and shall pay any and all costs in connection
therewith.
(c) Balance of Purchase Price. The Purchase Price, less the sum of (i) the
Deposit and (ii) the amount of the Existing Indebtedness assumed by Buyer pursuant to
subparagraph (b) above, shall be deposited by Buyer with Escrow Holder, at least one (1)
business day before the Closing Date.
ARTICLE 2
ESCROW
2.1 Closing. Closing of the sale of the Property shall take place through an escrow
("Escrow") to be established with Four Seasons Escrow ("Escrow Holder") at its office located
at 47350 Washington Street, Suite 101, La Quinta, California 92253, Attention: Malia Monroe,
Telephone No.: (760) 564-4044, Facsimile No.: (760) . The "Closing Date" shall be
on or before the date that is one hundred eighty (180) days after "Opening of Escrow" date (as
defined in the next sentence). Escrow shall be deemed open upon delivery of a fully executed
copy of this Agreement to Escrow Holder ("Opening of Escrow"). Escrow Holder shall
immediately notify Buyer and Seller of the date of Opening of Escrow and the Escrow Number.
The terms "Close of Escrow" and "Closing" shall mean the date the Grant Deed (hereafter
defined) is filed for record in the Official Records of Riverside County, California.
2.2 Escrow Instructions. Articles 1, 2, 3, 4, 5 and 8 also constitute escrow
instructions to Escrow Holder. Additionally, Buyer and Seller agree to execute any form of
escrow instructions as the Escrow Holder customarily requires as escrow holder in real property
escrows administered by it. In the event of a conflict between any such additional terms and
provisions of this Agreement, this Agreement shall supersede and be controlling. Upon any
termination of this Agreement or cancellation of the Escrow, Escrow Holder shall forthwith
return all monies and documents, less only Escrow Holder's reasonable cancellation fees and
expenses, as set forth herein. Except as otherwise provided herein, the termination of Escrow
and this Agreement and/or the return of deposited funds or documents shall not constitute a
waiver, release or discharge of any breach or default that has occurred in the performance of
either party's obligations, agreements, covenants, representations or warranties contained herein,
including payment of liquidated damages pursuant to Section 5.13 if payable under that section.
2.3 Conveyance of Title. On or before 12:00 noon on the business day preceding the
Closing Date, Seller shall deliver to Escrow Holder a Grant Deed ("Grant Deed") in the form of
attached Exhibit "C", which Grant Deed shall convey all of Seller's interest in fee title to the
Real Property and Improvements to Buyer. Escrow Holder shall be instructed to record such
Grant Deed in the Official Records of Riverside County, California, if and when Escrow Holder
holds the instruments and funds accruing to Buyer and Seller as set forth herein and can obtain
for Buyer an ALTA owner's extended coverage policy of title insurance ("Title Policy") issued
by Old Republic Title Company ("Title Company") with liability in an amount equal to the
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Purchase Price (i.e., the sum of $6,120,000 (plus the amount of the New Indebtedness, and the
amount of the Buyer Equity [see Section 3.3], if any), together with such endorsements to the
policy as may be reasonably requested by Buyer, showing the Real Property vested in Buyer
(or Buyer's assignee or nominee) free and clear of options, rights of first refusal or other
purchase rights, lis pendens and monetary liens and/or encumbrances and subject only to:
(a) Non -delinquent real property taxes;
(b) The USDA 2nd Deed of Trust (or such replacement deed of trust from
USDA) subordinated to the deed of trust securing the New Indebtedness (if applicable);
(c) The Provident 1st Deed of trust, unless paid off per the last paragraph of
Section 1.3(b).
(d) Non -monetary title exceptions approved by Buyer pursuant to Section[s]
3.4 and 3.5 below; and
(e) Title exceptions, if any, resulting from documents being recorded or
delivered through Escrow.
2.4 Additional Closing Obligations of Seller. On or before 12:00 noon on the
business day preceding the Closing Date (unless indicated otherwise), Seller shall deliver to
Escrow Holder (unless indicated to be delivered directly to Buyer) copies of the following
documents and other items:
(a) Two (2) duplicate original copies of a Warranty Bill of Sale conveying the
Personal Property to Buyer (`Bill of Sale") in the form attached as Exhibit "D", duly
executed by Seller;
(b) Two (2) duplicate originals of an Assignment of Tenant Leases assigning
the Tenant Leases, security deposits and other rights by Seller to Buyer (the "Assignment
of Tenant Leases") in the form attached as Exhibit "E", duly executed by Seller;
(c) All of the original Tenant Leases including any amendments,
modifications, letter agreements and correspondence relating thereto (to be delivered to
Buyer at the Property at the Close of Escrow);
(d) A Rent Roll (as hereinafter defined) certified by Seller as true and correct
("Certified Rent Roll"), dated no earlier than three (3) days prior to the Closing Date;
(e) A Certificate of Non -Foreign Status (the "Non -Foreign Affidavit")
executed by Seller in the form attached as Exhibit "F" and a California Franchise Tax
Board Form 590-RE executed by Seller;
(f) Originals, if available, and copies if originals are unavailable, of all
Contracts which Buyer elects to assume pursuant to Section 3.1(a) hereof (to be delivered
to Buyer at the Property at the Close of Escrow);
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(g) Originals or, if unavailable, copies of all Intangible Personal Property
which Seller has in its possession and/or control (to be delivered to Buyer at the Property
at the Close of Escrow);
(h) Two (2) duplicate originals of an assignment to Buyer of Seller's right,
title and interest in and to (i) all Contracts which Buyer has elected to assume pursuant to
Section 3.1(a) below; and (ii) all Intangible Personal Property, which assignment shall be
in the form attached as Exhibit "G" ("Assignment of Contracts"), duly executed by
Seller;
(i) All soils, seismic, geologic, drainage, toxic waste and environmental
reports, surveys, "as -built" plans and specifications, working drawings, grading plans,
elevations and similar information with respect to the Real Property heretofore obtained
by Seller which Seller has in its possession and/or control to the extent that originals of
such items have not been delivered previously by Seller to Buyer pursuant to Section 3.1
below (to be delivered to Buyer at the Property at the Close of Escrow);
6) The Certificate regarding Representations and Warranties described in
Section 6.1(b), duly executed by Seller in the form attached as Exhibit "I" hereto;
(k) Two (2) duplicate originals of a notice to the tenants under the Tenant
Leases of the transfer of title and assumption by Buyer of the landlord's obligations under
the Tenant Leases in the form attached as Exhibit "J" hereto ("Notice to Tenants");
(1) Two (2) duplicate originals of the Closing Statement described in Section
5.11, prepared by Escrow Holder and duly executed by Seller;
(m) All keys to the Improvements which Seller or Seller's agents have in their
possession, which keys shall include all "master" keys and apartment unit keys in the
possession of Seller or its agents or representative, which keys shall be properly tagged
for identification (to be delivered to Buyer at the Property upon Close of Escrow);
(n) A report to be ordered and obtained by Escrow Holder prepared by Title
Company or a search firm approved by Buyer of all UCC liens filed in the California
Secretary of State's Office against the Property, Seller and the general partners of Seller
to be delivered to Buyer at least five (5) days prior to the Closing Date;
(o) Evidence of the existence, organization and authority of Seller and of the
authority of persons executing documents on behalf of Seller, reasonably satisfactory to
Seller's legal counsel, Escrow Holder, and Title Company;
(p) Any other documents, instruments, funds and records required to be
delivered to Buyer under the terms of this Agreement which have not been previously
delivered; and
(q) Originals of all Existing Loan Documents (as defined in Section 3.1(o)), to
the extent Seller has such originals.
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2.5 Closing Obligations of Buyer. On or before 12:00 noon on the business day
preceding the Closing Date, Buyer shall deliver to Escrow Holder copies of the following
documents and other items:
(a) Two (2) duplicate originals of the Assignment of Tenant Leases (Exhibit
"E"), duly executed by Buyer;
(b) Two (2) duplicate originals of the Assignment of Contracts (Exhibit "G"),
duly executed by Buyer;
(c) Two (2) duplicate originals of the Closing Statement, prepared by Escrow
Holder and duly executed by Buyer;
(d) One (1) certified copy of the Resolution of Buyer's governing board
authorizing Buyer to enter into this Agreement and the authority of persons executing
documents on behalf of Buyer, reasonably satisfactory to Seller, the Escrow Holder and
the Title Company; and
(e) Any other documents, instruments or funds required to be delivered by
Buyer under the terms of this Agreement or are otherwise required by Escrow Holder or
Title Company in order to close Escrow which have not previously been delivered.
2.6 Delivery of Documents by Escrow Holder. On the Close of Escrow, Escrow
Holder shall deliver to Buyer (with copies to Seller as applicable) all of the items listed in
Section 2.4 above which were delivered by Seller to Escrow, except that Escrow Holder shall be
instructed to record the original Grant Deed in the Official Records of Riverside County,
California upon Close of Escrow and to deliver a conformed copy of the Grant Deed to Buyer
after recordation thereof and Escrow Holder shall only deliver to Buyer one duplicate original of
the documents submitted as duplicate originals. Escrow Holder shall deliver the cash portion of
the Purchase Price in the amount determined by Escrow Holder, less costs, expenses and
prorations chargeable to Seller hereunder, to Seller by wire transfer as provided in written
instructions to be furnished to Escrow Holder by Seller prior to the Close of Escrow, together
with one duplicate original of all of the items listed in Section 2.4 and Section 2.5 above
submitted as duplicate originals on the Close of Escrow and a conformed copy of the Grant
Deed.
2.7 Recordation. At the Close of Escrow, the following documents and instruments
shall be recorded in the following order: (a) reconveyance of the USDA 2nd Deed of Trust if a
replacement deed of trust is to be recorded or if Buyer elects (with lender approval) to pay off the
USDA 2nd Deed of Trust at the Closing; (b) reconveyance of the Provident Is' Deed of Trust if a
replacement deed of trust is to be recorded or if Buyer elects (with lender approval) to pay off the
Provident Is' Deed of Trust at the Closing; (c) the Grant Deed; (d) the deed(s) of trust securing
the New Indebtedness (if any); (e) deed of trust securing a new USDA deed of trust, if such be
entered into by Buyer; (f) subordination agreement between Buyer and USDA providing for the
subordination of the USDA Deed of Trust, or any replacement USDA deed of trust, to the deed
of trust securing the New Indebtedness; (g) assignment agreement, if any, by and between Buyer
and USDA; and (h) such other instruments as directed by Buyer.
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ARTICLE 3
INSPECTIONS AND REVIEW
3.1 Due Diligence Items. Within five (5) business days after the execution of this
Agreement, Seller shall deliver true, correct and complete copies or originals of the following
documents and items (collectively, "Due Diligence Items") to Buyer:
(a) All Contracts, which Contracts are listed on Exhibit "H" attached hereto,
and any and all amendments thereto, provided that such Contracts shall affect the
Property following the Close of Escrow, and all leases, which leases are listed on Exhibit
"E" attached hereto and any and all amendments thereto, provided that such leases shall
affect the Property following the Close of Escrow. Buyer shall, not later than the later of
(i) ninety (90) days after full and complete delivery of all of the Contracts and Tenant
Leases to Buyer, or (ii) thirty (30) days prior to the Close of Escrow, advise Seller in
writing of the Contracts listed on Exhibit "H" and the leases listed on Exhibit "B" which
Buyer elects to assume.
(b) All certificates of occupancy, licenses, and permits pertaining to the
Property in the possession of Seller or Seller's agents or representatives.
(c) Seller's standard form of lease ("Form Lease") used for the Property.
(d) A current rent roll of the Property ("Rent Roll"), in the form of an
estoppel, identifying and listing in detail by tenant or vacant area, as applicable, (i) tenant
name, square footage, monthly rent, deposits, all concessions (financial and other), lease
term, defaults (financial or otherwise), and lease obligations of Seller, if any; and (ii) to
the extent Seller is not legally prohibited from providing, all legal matters relating to the
Tenant Leases. The Rent Roll shall be in one or more reports in the form customarily
used by Seller; provided such reports contain all of the information described above.
During the pendency of Escrow, Seller shall provide Buyer an updated Rent Roll on or
before the fifteenth (15th) day of each month.
(e) Copies of all asbestos, lead -based paint, soils, seismic, geologic, drainage,
toxic waste, engineering, environmental and similar type reports and surveys (including,
but not limited to, any Phase I or Phase II Environmental Site Assessments), ALTA
surveys, building grading plans, drawings (including "as -built" plans and specifications),
schematics, blueprints and working drawings for the Property or any major capital
improvements thereto, zoning ordinances, conditional use permits and correspondence
relating thereto, business licenses, and CC&Rs within Seller's possession or control.
(f) A report ("Pest Control Report") dated not earlier than sixty (60) days
prior to the date of this Agreement from a licensed pest control operator approved by
Buyer stating that such operator has inspected the Improvements for evidence of termites,
dryrot, fungi and other wood destroying pests and organisms. If no infestation or
infection by wood destroying pests or organisms is found, the Pest Control Report shall
include a written "Certification" as provided in California Business and Professions Code
Section 8519(a) that on the date of inspection "no evidence of active infestation or
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infection was found." Notwithstanding anything herein to the contrary, Seller shall have
twenty (20) days after execution of this Agreement to deliver the Pest Control Report to
Buyer.
(g) Copies of the operating, income, expense and capital expenditure records
for the Property for calendar years 2002, 2003, 2004, 2005, and the latest available for
calendar year 2006, including statements of current working capital accounts and capital
reserve (i.e., capital replacement reserve accounts).
(h) Notices of violations, including, but not limited to, zoning ordinances,
building codes, fire codes, CC&Rs or other agreements affecting the Property to the
extent in the possession and control of Seller.
(i) Disclosure of any legal matters affecting the Property or the collection of
rents or deposits to the extent in the possession and control of Seller.
0) A schedule of rental rates and occupancy percentages by year covering the
calendar years 2005 and 2006 to date.
(k) An aging of accounts receivable and current staffing schedules.
(1) A lead -based paint disclosure and acknowledgement in the form attached
hereto as Exhibit "K".
(m) A copy of real property tax and assessment bills for the Property for the
2005-06 fiscal years.
(n) Copies of all current insurance policies and premiums, and the same
covering for the preceding two (2) calendar years.
(o) Copies of the USDA Note, the USDA Deed of Trust, the Provident Note,
the Provident Deed of Trust, and all other documents creating, evidencing, securing or
otherwise relating to the Existing Indebtedness and all amendments, modifications,
renewals and extensions thereof ("Existing Loan Documents").
(p) To the extent Seller can reasonably obtain same Estoppel certificates from
each Tenant certifying to the monthly amount of rent paid by such Tenant to Seller the
"Estoppel Certificates"), to be provided to Buyer within thirty (30) days after the
execution of this Agreement.
3.2 Environmental/Physical Property Condition Due Diligence. For a period of
ninety (90) days, which may be extended by Buyer for an additional period of thirty (30) days if
Buyer determines that a "Phase II" environmental assessment is necessary, after the Opening of
Escrow (the "Environmental/Physical Property Condition Due Diligence Period"), Buyer
shall have the right to examine, inspect and investigate the Property and, at Buyer's sole and
absolute discretion, to determine whether the physical and environmental condition of the
Property is acceptable to Buyer. Seller shall permit Buyer, its engineers, analysts, contractors,
lenders and agents to conduct physical inspections of the Property, including the structural,
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electrical and mechanical aspects of the Improvements, the interiors of all buildings, supports,
site work, foundations, soil, subsurface soils, drainage, seismic and other geological and
topographical matters, location of asbestos, toxic substances, hazardous materials or wastes, if
any, and any other investigations as Buyer deems prudent with respect to the physical condition
of the Property. Such investigations may be made by Buyer and/or its agents during any normal
business hours. Buyer shall also have the right to investigate all matters relating to the zoning,
use and compliance with other applicable laws which relate to the use and occupancy of the
Property. Seller shall reasonably cooperate to assist Buyer in completing such inspections and
special investigations. Such physical inspections and investigations of the Property shall be
conducted only upon no less than twenty-four (24) hours' notice to Seller and shall be conducted
at such times and in such a manner as to minimize any disruption to tenants upon the Property.
Seller shall have the right, but not the obligation, to accompany Buyer during such investigations
and/or inspections but shall not interfere therewith. Buyer shall repair any and all damage to the
Property or to any tenants' property caused by such inspections or investigations in a timely
manner and shall indemnify and defend the Seller from and against any liability arising from
Buyer's physical inspection hereunder. Buyer shall notify Seller and Escrow Holder in writing
("Buyer's Environmental/Physical Property Condition Due Diligence Notice") on or before
the expiration of the Environmental/Physical Property Condition Due Diligence Period of
Buyer's approval or disapproval of the Due Diligence Items provided under Section 3.1 above,
the condition of the Property, and Buyer's investigations with respect thereto. Buyer's failure to
deliver Buyer's Environmental/Physical Property Condition Due Diligence Notice on or before
the expiration of the Environmental/Physical Property Condition Due Diligence Period shall be
conclusively deemed Buyer's disapproval thereof.
3.3 Financial/Operational Condition Due Diligence Period,• New Indebtedness•
Buyer's Equity. For a period of ninety (90) days after the Opening of Escrow ("Buyer's
Financial/Operational Condition Due Diligence Period"), Buyer shall have the right to
determine, in its sole and absolute discretion and at no cost to Seller, the financial and
operational feasibility of the affordable rental development on the Property. Such Due Diligence
Items shall include but not be limited to (a) Buyer's review of the Rent Roll, Tenant Leases,
Contracts, the copies of the financial, operational, contractual, and legal records and disclosures
to be provided by Seller under Section 3.1; (b) review of arrangements with the County of
Riverside Housing Authority including Section 8 support; (c) the possibility of securing new
financing for the Agency's acquisition, operations, working capital, reserves, and related matters,
with such financing (subject to lender approval) to be in superior position to the Existing
Indebtedness (the "New Indebtedness"); and (d) the amount, if any, Buyer determines will be
necessary to invest in the Property as equity ("Buyer's Equity"). Buyer shall notify Seller and
Escrow Holder in writing of Buyer's approval or disapproval of such Due Diligence Items
("Buyer's Financial/Operational Condition Due Diligence Notice"). Buyer's failure to
deliver Buyer's Financial/Operational Condition Due Diligence Notice on or before the
expiration of Buyer's Financial/Operational Condition Due Diligence Period shall be
conclusively deemed to be Buyer's disapproval thereof.
3.4 Preliminary Title Report. Within five (5) days following the Opening of Escrow,
or as soon thereafter as feasible, Escrow Holder shall deliver to Buyer a preliminary title report
or title commitment for an ALTA extended coverage policy of title insurance issued by Title
Company dated not earlier than the date of Opening of Escrow, describing the state of title of the
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Property, together with copies of all exceptions specified therein and with all easements plotted
in color (collectively, the "Preliminary Title Report"). Within ninety (90) days after receipt of
the Preliminary Title Report or within one hundred twenty (120) days after Opening of Escrow if
Buyer elects to obtain a survey (see Section 3.5) ("Title Due Diligence Period"), Buyer shall
notify Seller in writing ("Buyer's Title Objection Notice") of any objections Buyer may have to
title exceptions contained in the Preliminary Title Report (and/or survey if applicable). Seller
shall have a period of ten (10) days after receipt of Buyer's Title Objection Notice in which to
deliver written notice to Buyer ("Seller's Title Notice") of Seller's election to either (i) agree to
remove the objectionable items prior to the Close of Escrow, or (ii) decline to remove any such
title exceptions and terminate the Escrow and this Agreement; provided, however, that with the
exception of the Existing Indebtedness, Seller shall be required to remove all monetary liens and
encumbrances created by or as a result of Seller's activities, suffered by Seller or assumed by
Seller. Other than the Existing Indebtedness, Seller shall be responsible for all yield
maintenance, prepayment penalties and/or any other similar fees and charges required by any
lender to remove existing financing encumbrances and Seller shall have no right to decline to
remove same pursuant to the foregoing. If Seller notifies Buyer of its election to terminate
Escrow rather than remove the objectionable items, Buyer shall have the right, by written notice
delivered to Seller within five (5) days after Buyer's receipt of Seller's Title Notice, to agree to
accept the Property subject to the objectionable items, in which event Seller's election to
terminate the Escrow shall be of no effect, and Buyer shall take title at the Close of Escrow
subject to such objectionable items. Upon the issuance of any amendment or supplement to the
Preliminary Title Report which adds additional exceptions (including, but not limited to, adding
additional exceptions for matters shown on the Survey [as hereinafter defined]), the foregoing
right of review and approval shall also apply to said amendment or supplement (provided that the
period for Buyer to review such amendment or supplement shall be the later of the expiration of
the Title Due Diligence Period or ten (10) days from receipt of the amendment or supplement)
and Escrow shall be deemed extended by the amount of time necessary to allow such review and
approval in the time and manner set forth above; provided, however, that in no event shall the
Close of Escrow be extended as a result of such delay for more than thirty (30) days.
3.5 Survey. Buyer may obtain a survey of the Property, at Buyer's cost, prepared by
a land surveyor duly licensed by the State of California and in compliance with ALTA/ACSM
standards ("Survey") or an update to an existing Survey prepared for or on behalf of Seller, in a
form acceptable to the Title Company for the deletion of the standard survey exception in the
Title Policy relating to boundaries, without the addition of further exceptions unless the same are
acceptable to Buyer in its sole and absolute discretion. Buyer shall have until the end of the Title
Due Diligence Period to examine the Survey and to notify Seller in writing of any objections
Buyer has to the Survey ("Buyer's Survey Objection Notice"). Seller shall have a period of ten
(10) days after receipt of Buyer's Survey Objection Notice in which to deliver written notice to
Buyer ("Seller's Survey Notice") of Seller's election to either (1) agree to remove the
objectionable items prior to the Close of Escrow or (2) decline to remove such items and
terminate the Escrow and this Agreement. If Seller notifies Buyer of its intention to not remove
the objectionable items and terminate the Escrow and this Agreement, Buyer shall have the right,
by written notice delivered to Seller within five (5) days after Buyer's receipt of Seller's Survey
Notice, to agree to accept the Property subject to the objectionable items, in which event, Seller's
election to terminate the Escrow shall be of no effect, and Buyer shall accept the Property on the
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Close of Escrow subject to such objectionable items. Prior to the Closing, the Survey shall be
recertified to Buyer, Title Company, and Buyer's lender(s) of the New Indebtedness (if any).
3.6 Pest Control Report. Buyer shall have until the expiration of the Environ-
mental/Physical Property Condition Due Diligence Period to approve the Pest Control Report. In
the event the Pest Control Report indicates that corrective work should be performed, Buyer
shall notify Seller in writing of the nature and extent of corrective work required by Buyer
("Pest -Control Notice"). Seller shall have ten (10) days after receipt of Buyer's Pest -Control
Notice in which to deliver written notice to Buyer ("Seller's Pest Notice") of Seller's election to
either (i) agree to make necessary modifications or repairs as required by Buyer, or (ii) terminate
this Agreement by giving written notice thereof to Escrow Holder and Buyer unless the cost of
performing the corrective work is TEN THOUSAND DOLLARS ($10,000.00) or less, in which
event Seller shall perform the corrective work. If the cost of performing the corrective work
exceeds TEN THOUSAND DOLLARS ($10,000), and Seller notifies Buyer of its election to
terminate this Agreement rather than repair or modify the disapproved items, Buyer shall have
the right by written notice delivered to Seller within three (3) days after Buyer's receipt of
Seller's notice to terminate this Agreement, to agree to accept the Property subject to the
disapproved items, in which event Seller's election to terminate the Agreement shall be of no
effect. The failure of Buyer to deliver the Pest -Control Notice to Seller in a timely manner shall
be conclusively deemed to be Buyer's disapproval of the Pest Control Report.
3.7 USDA Matters. For a period of ninety (90) days after the date Buyer obtains from
Seller copies of the Existing Loan Documents ("USDA Condition Due Diligence Period"),
Buyer shall have the right, at no cost to Seller, to retain a certified inspector (the "Compliance
Inspector") for purposes of performing a capital needs assessment of the property to determine
if the property is in compliance with all of USDA's requirements pertaining to the Seller's
operation of the Property, as required under the Existing Loan Documents (collectively, the
"USDA Requirements"). In the event the Compliance Inspector determines that the Property is
not currently compliant with all of the USDA Requirements, Buyer shall notify Seller in writing
of the nature and extent of the corrective work required ("USDA Compliance Notice"). Seller
shall have ten (10) days after receipt of Buyer's USDA Compliance Notice in which to deliver
written notice to Buyer ("Seller's USDA Response Notice") of Seller's election to either (i)
agree to make necessary corrections and modifications as determined necessary by the
Compliance Inspector, or (ii) terminate this Agreement and the Escrow by giving written notice
thereof to Escrow Holder and Buyer. If Seller notifies Buyer of its election to terminate this
Agreement and the Escrow rather than make the necessary corrections, Buyer shall have the right
by written notice delivered to Seller within three (3) days after Buyer's receipt of Seller's USDA
Notice Response to terminate this Agreement and the Escrow, to agree to accept the Property
subject to the non -compliant items, in which event Seller's election to terminate this Agreement
and the Escrow shall be of no effect. The failure of Buyer to deliver the USDA Compliance
Notice to Seller in a timely manner shall be conclusively deemed to be Buyer's disapproval of
the Property's compliance with the USDA Requirements.
During the USDA Condition Due Diligence Period, Buyer shall also have the right, at no
cost to Seller, to review, and to negotiate an assignment and assumption of, the Existing
Indebtedness and the USDA Requirements with the USDA and/or with Provident, and other
terms and conditions, all as acceptable to Buyer in Buyer's sole and absolute discretion
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(collectively, the "USDA Assumption Agreements"). Such other terms and conditions may
include modification of the existing affordability restrictions, additional financing from USDA,
modification of the terms of the Existing Indebtedness and USDA Restrictions, and
subordination of the Existing Indebtedness to the New Indebtedness (if any). In the event Buyer
is unable to negotiate the USDA Assumption Agreements on terms acceptable to Buyer in
Buyer's sole and absolute discretion, Buyer shall deliver written notice to Seller terminating this
Agreement. If Buyer negotiates the USDA Assumption Agreements, on terms satisfactory to
Buyer, in Buyer's sole and absolute discretion, the USDA Condition Due Diligence Period shall
be extended for an additional thirty (30) days to allow Buyer's governing board and the USDA to
effect approval of the USDA Assumption Agreements prior to the Closing Date.
The foregoing notwithstanding, Buyer's contacts with USDA shall constitute negotiations
only and any modifications or proposed modifications shall be in no way binding upon Seller
unless and until Close of Escrow occurs in the manner provided herein, and be at no cost or
liability to Seller (and Buyer shall defend, indemnify and hold Seller free and harmless with
respect to same).
3.8 Buyer Affordability Covenant Condition. For a period of ninety (90) days after
the date Buyer receives the Estoppel Certificates from Seller ("Buyer's Affordability Covenant
Condition Due Diligence Period"), Buyer may review the Estoppel Certificates for purposes of
determining the Property's compliance with the affordability covenants Buyer intends to record
against the Real Property at Close of Escrow ("Buyer's Affordability Covenants"). Buyer shall
notify Seller and Escrow Holder in writing of Buyer's satisfaction of such Due Diligence Items
("Buyer's Affordability Covenant Condition Due Diligence Notice"). Buyer's failure to
deliver Buyer's Affordability Covenant Condition Due Diligence Notice on or before the
expiration of Buyer's Affordability Covenant Due Diligence Period shall be conclusively
deemed to be Buyer's dissatisfaction thereof.
3.9 Books and Records. For a period of ninety (90) days after opening of Escrow,
Buyer shall be afforded full opportunity by Seller to examine all books and records which relate
to the Property for calendar years 2005 and 2006 to -date in the possession of Seller and/or
Seller's agents or employees, including the reasonable right to make copies of such books and
records. Such right shall extend to all operating books of account, copies of all Tenant Leases
and all amendments thereto, rental applications and any other agreements, correspondence or
other documents relating to the Tenant Leases, tenant files, rent rolls, operating statements,
budgets, accounting support for bills, inventories of Personal Property, service contracts,
management contracts, maintenance contracts, warranties, general ledgers, journals, vendor files,
bank statements, invoices, operating manuals, maintenance records (including replacements of
carpeting and appliances), utility bills, marketing data (including brochures), historical
occupancy reports, traffic reports of tenant activities, rental histories, leasing floor plans and any
summaries of such items. The foregoing notwithstanding, Seller shall have no obligation to
provide information relating to tenants which Seller is legally prohibited from providing.
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ARTICLE 4
CONDITIONS TO AGREEMENT
4.1 Buyer's Conditions Precedent. Buyer's obligation to purchase the Property shall
be conditioned upon the fulfillment of the following conditions precedent, all of which shall be
satisfied or waived in writing in Buyer's sole and absolute discretion pursuant to Section 4.4
below prior to the Close of Escrow except as indicated otherwise:
(a) The due performance by Seller of each and every undertaking and
agreement to be performed by Seller hereunder, and the truth of each representation and
warranty made in this Agreement.
(b) Buyer's approval of the contents of all Due Diligence Items set forth in
Section 3.1.
(c) Buyer's approval of the physical and environmental condition of the
Property pursuant to Section 3.2.
(d) Buyer's approval of the financial and operational feasibility of the
affordable rental development on the Property pursuant to Section 3.3.
(e) Buyer's approval of the Preliminary Title Report and the Survey (if
applicable) within the time periods specified in Sections 3.4 and 3.5.
(f) Buyer's approval of the contents of the Pest Control Report as provided in
Section 3.6.
(g) Buyer's determination that the Property is compliant with all of the USDA
Restrictions and Buyer's negotiation of the USDA Assumption Agreements, iri a form
satisfactory to Buyer, pursuant to Section 3.7.
(h) Buyer's determination that the Property qualifies with the Buyer's
Affordability Covenants pursuant to Section 3.8.
(i) Buyer's approval of any notice of change in representation or warranty
given by Seller pursuant to Subsection 6.1(b) hereof and of the Certificate regarding
Representations and Warranties to be given by Seller at the Closing pursuant to
Subsection 6.1(b) hereof, on or before the Closing Date.
0) Title Company has committed to issue the Title Policy in the form
described in Section 2.3.
(k) There shall not have occurred at any time on or before the Closing Date
the making by Seller of any general assignment for the benefit of creditors, or the filing
against Seller of a petition to have Seller adjudged a bankrupt or a petition for
reorganization or arrangement under any law relating to bankruptcy, or the appointment
of a trustee or receiver to take possession of substantially all of the interest of Seller in
the Property, or the attachment, execution or judicial seizure of substantially all the assets
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of Seller or the interests of Seller in the Property or any legal proceeding in which Seller
is adjudicated as being, or stipulates to being, insolvent or unable to pay its debts as they
come due.
(1) Pursuant to Article 8 hereof, the Real Property shall, concurrently with the
Closing, be annexed into the City of La Quinta (or such annexation shall be imminent as
determined by Buyer in Buyer's sole discretion) and no judicial challenges shall have
been presented or filed against the Local Agency Formation Commission or the City of
La Quinta's actions in connection with said annexation. Buyer shall use reasonable
commercial efforts to expeditiously and in good faith satisfy this condition.
(m) Buyer shall have entered into with the Testa Family Limited Partnership
("Testa"), the fee owner of that certain real property located to the south of the Real
Property and identified as APN 609-040-065 (the "Testa Property"), an agreement to
purchase from Testa the Testa Property (the "Testa Agreement"), and the closing under
the Testa Agreement shall have occurred or shall occur concurrently with the Closing
hereunder. Buyer shall use reasonable commercial efforts to expeditiously and in good
faith satisfy this condition.
4.2 Seller's Condition Precedent. Seller's obligation to convey the Property to Buyer
shall be conditioned upon the satisfaction or written waiver in writing, in whole or in part, by
Seller of the following condition precedent:
(a) The due performance by Buyer of each and every undertaking and
agreement to be performed by Buyer hereunder.
4.3 Satisfaction of Conditions. Where satisfaction of any of the foregoing conditions
requires action by Buyer or Seller, each party shall use its diligent best efforts, in good faith, and
at its own cost, to satisfy such condition. Where satisfaction of any of the foregoing conditions
requires the approval of a party, such approval shall be in such party's sole and absolute
discretion.
4.4 Waiver. Buyer may at any time or times, at its election, waive any of the
conditions set forth in Section 4.1 above to its obligations hereunder, but any such waiver shall
be effective only if contained in a writing signed by Buyer and delivered to Seller. Seller may at
any time or times, at its election, waive the condition set forth in Section 4.2 above to its
obligations hereunder, but any such waiver shall be effective only if contained in a writing
signed by Seller and delivered to Buyer.
4.5 Termination. In the event each of the conditions set forth in Section 4.1 is not
fulfilled within the time provided in Section 4.1 or waived by Buyer pursuant to Section 4.4,
Buyer may, at its option, terminate this Agreement and the Escrow opened hereunder, thereby
releasing the parties from further obligations hereunder, and (i) all documents delivered by Buyer
to Seller or Escrow Holder shall be returned to Buyer, (ii) all documents delivered by Seller to
Buyer or Escrow Holder and all documents created by or for Buyer during the due diligence
periods herein returned to Seller, and (iii) the Deposit and all accrued and unpaid interest
thereon, and all other funds deposited by or on behalf of Buyer, less Buyer's share of Escrow
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cancellation charges, shall be returned to Buyer. In the event that the condition set forth in
Section 4.2 is not fulfilled or waived prior to the Closing Date, Seller may, at its option,
terminate this Agreement and the Escrow opened hereunder, thereby releasing the parties from
further obligations hereunder, and (a) all documents delivered by Seller to Buyer or Escrow
Holder shall be returned immediately to Seller, and (b) the Deposit and accrued and unpaid
interest thereon, less any Release Amount which has actually been released to Seller, and all
other funds deposited by or on behalf of Buyer, less the portion of Escrow Holder's reasonable
escrow cancellation fee (if any) allocable to Buyer, shall be returned to Buyer. Nothing in this
Section 4.5 shall be construed as releasing any party from liability for any default of its
obligations hereunder or breach of its representations and warranties under this Agreement
occurring prior to the termination of this Agreement and/or the Escrow to be opened hereunder,
including payment of Liquidated Damages pursuant to Section 5.13.
4.6 Condition of Property. Except to the extent otherwise specifically provided
herein, including, without limitation, as set forth in Article 6 hereof, Buyer acknowledges,
agrees, represents. and warrants that (i) prior to expiration of the due diligence periods referenced
herein, Buyer, its agents, employees and/or consultants will have made a full and complete
physical inspection and investigation of the Property and all aspects thereof, including, without
limitation, all laws, ordinances, regulations, entitlements and appurtenances applicable thereto;
(ii) if Buyer proceeds to Close of Escrow, Buyer shall be relying on such inspection and
investigation by Buyer, and Buyer's own independent evaluation of same, and Buyer shall accept
the Property in the condition that existed on the Effective Date of this Agreement, subject to all
laws, statutes, ordinances, regulations, entitlements and appurtenances applicable thereto; (iii)
Seller has made no warranty, representation, guarantee or covenant, oral or written, with respect
to the Property, its condition or its suitability for Buyer's purposes or any other purposes; and
(iv) if Buyer proceeds to Close of Escrow, Buyer shall be purchasing the Property "AS -IS" and
"WITH ALL FAULTS".
ARTICLE 5
PRORATIONS, CLOSING COSTS POSSESSION AND DEPOSITS
5.1 Proration of Taxes. Real and personal property taxes for the Property shall be
prorated by the parties to the Closing Date on the basis of a three hundred sixty-five (365) day
year; provided, however, that notwithstanding the foregoing, Seller is responsible for payment
through Escrow of all such taxes through June 30 of the current fiscal year whether or not the
same shall be due prior to the Close of Escrow. Buyer shall, at Closing and through Escrow,
reimburse Seller for the portion of such real and personal property taxes pro -rated for the period
from Closing Date to June 30 of the current fiscal year. All tax prorations shall be based upon
the latest available tax statement. If the tax statements for the fiscal tax year during which
Escrow closes do not become available until after the Close of Escrow, then the rates and
assessed values of the previous year, with known changes, shall be used, and the parties shall re -
prorate said taxes outside of Escrow following the Close of Escrow when such tax statements
become available. Seller shall be responsible for and shall pay or reimburse Buyer upon demand
for any real or personal property taxes payable following the Close of Escrow applicable to any
period of time prior to the Close of Escrow as a result of any change in the tax assessment by
reason of reassessment, changes in use of the Property, changes in ownership, errors by the
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Assessor or otherwise. Any special assessment affecting the Property shall be prorated as of
Close of Escrow and thereafter assumed by Buyer.
5.2 Rents Other Income and Operating Expenses. Prepaid Contracts assumed by
Buyer, rents (exclusive of Delinquent Rents (as hereinafter defined)), rent concessions, all
revenues under all space leases, coin -operated laundry machines, licenses, security agreements
and all other fees and miscellaneous income arising out of the operation of the Property shall be
prorated as of the Close of Escrow. If, as of the Close of Escrow, any rent is in arrears
("Delinquent Rent") for the calendar month in which the Closing occurs but not for prior
periods, then the first rent collected by Buyer shall be deemed to be attributable to the calendar
month in which the Closing occurred and it shall be prorated between Buyer and Seller as of the
Close of Escrow. If Delinquent Rent is in arrears for a period prior to the calendar month in
which the Closing occurs, then rents collected by Buyer shall first be applied to current rent and
then to Delinquent Rent. Buyer shall deliver to Seller its pro rata share of Delinquent Rent
within ten (10) days of Buyer's receipt of that Delinquent Rent. Buyer covenants and agrees that
after the Closing, it will use reasonable efforts to attempt to collect and deliver to Seller all rights
and other payments that were due and payable under the Tenant Leases prior to the Closing.
Actual and reasonable third -party costs incurred in collecting rents owed to Seller shall be
deducted from rents payable to Seller (on a pro rata basis to the extent such costs are also
incurred to collect rents payable to Buyer). After the Closing, Seller shall not pursue any tenant
for Delinquent Rent. This Section shall survive the Closing and delivery and recording of the
Grant Deed.
5.3 Laundry Lease. Seller represents and warrants to Buyer that there is no laundry
lease applicable to the Property. Seller shall be entitled to collect all the coins in the laundry
machines on the Property up to the Close of Escrow, and Buyer shall be entitled to the all coins
in the laundry machines and all proceeds from the operation of such laundry facilities after the
Close of Escrow.
5.4 Deposits. All security deposits and other tenant deposits and prepaid rents shall
be credited to Buyer at the Closing.
5.5 Utilities. Seller shall use its reasonable best efforts to have utility meters read as
of the date that Escrow closes and shall be responsible for all utility services to the Property until
the Close of Escrow. In the event Seller is unable to have the utility meters read as of the Close
of Escrow, Buyer and Seller shall jointly prepare and deposit an estimated utility statement based
upon the average daily usage over the six (6) month period preceding the Close of Escrow and
Escrow Holder shall initially prorate utilities based upon such estimated utility statements and
the parties shall subsequently prorate utilities based upon the actual utility usage upon receipt of
such utility statements.
5.6 Maintenance Contracts. Seller shall be responsible for payment of all
maintenance services, such as janitorial services, landscape services, guard services, and similar
services to the Close of Escrow, and shall maintain all plumbing, heating, electrical and other
systems on the Property in good working order until the Close of Escrow. Buyer shall be
responsible for such services thereafter and for any such contracts which it elects to assume. All
contracts for such services shall be terminated by the Close of Escrow unless assumed by Buyer.
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Buyer will advise Seller of Buyer's decisions in this regard as expeditiously as possible after
Opening of Escrow.
5.7 Insurance. Seller shall cause its policies of insurance for the Property (other than
those elected to be assumed by Buyer pursuant to Subsection 3.1(a) above) to be terminated
effective immediately after the Close of Escrow and Buyer shall be responsible for obtaining its
own insurance.
5.8 Impounds• Working Capital Accounts-, Capital Reserve Accounts. Seller shall be
entitled, at Closing, to all amounts held in lender impound accounts for taxes, insurance, and
similar items, and shall further be entitled to all monies held in accounts for working capital and
for capital reserves. Seller shall provide copies of records of such accounts to Buyer pursuant to
Section 3.1. Buyer acknowledges that Buyer will have to replace amounts in such accounts.
5.9 Possession. Subject to the rights of tenants in possession, Buyer shall be entitled
to possession of the Property on the Close of Escrow.
5.10 Closing Costs.
(a) Seller shall pay (i) the cost for the cost of a CLTA Title Policy; (ii) the
cost for all endorsements reasonably requested by Buyer to remove disapproved items
shown on the Preliminary Title Report or Survey pursuant to Sections 3.4 and 3.5 above,
(iii) any documentary or other transfer taxes payable on account of the conveyance of the
Property, and (iv) one-half (1/2) of the escrow fees charged by Escrow Holder in
connection with the closing of this transaction.
(b) Buyer shall pay (i) the cost for requested endorsements to the extent such
endorsements are unrelated to removal of any disapproved items shown on the
Preliminary Title Report or Survey which are disapproved by Buyer pursuant to Sections
3.4 and 3.5 above, (ii) the cost of recording any deeds, (iii) one-half (1/2) of the escrow
fees charged by Escrow Holder in connection with the closing of this transaction, (iv) any
costs associated with any New Indebtedness, and (v) any costs associated with an ALTA
Title Policy.
(c) Any other expenses or closing costs in connection with this transaction
shall be apportioned in the manner customary in Riverside County, California.
5.11 Closing Statement. No later than three (3) business days prior to the Closing
Date, Escrow Holder shall prepare for approval by Buyer and Seller a closing statement
("Closing Statement") on Escrow Holder's standard form indicating, among other things,
Escrow Holder's estimate of all Closing costs and prorations made pursuant to this Agreement.
Buyer and Seller shall assist Escrow Holder in determining the amount of all prorations.
5.12 Breach by Seller or Buffer. In the event that Seller breaches its obligations under
this Agreement and as a result of such breach Buyer terminates this Agreement, the Deposit,
including any Release Amounts that have been actually released to Seller, shall be immediately
returned to Buyer and Buyer shall have all rights and remedies for such breach available at law
or in equity. Seller and Buyer hereby acknowledge and agree that the Property, given its
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location, entitlements, density, size, condition, access, proximity to other amenities and other
factors, is unique, and, therefore, each of the parties shall be entitled to the remedy of specific
performance in the event of a breach by the other party. Buyer shall have the right to record a lis
pendens against the Real Property in connection with an action by Buyer to specifically enforce
this Agreement; provided, however, that nothing herein shall preclude Seller from seeking to
expunge such lis pendens pursuant to applicable judicial procedures.
5.13 LIQUIDATED DAMAGES. IN THE EVENT THAT BUYER BREACHES
ITS OBLIGATIONS UNDER THIS AGREEMENT, THE DAMAGES THAT SELLER
WILL INCUR BY REASON THEREOF ARE AND WILL BE IMPRACTICAL AND
EXTREMELY DIFFICULT TO ESTABLISH. BUYER AND SELLER, IN A
REASONABLE EFFORT TO ASCERTAIN WHAT SELLER'S DAMAGES WOULD BE
IN THE EVENT OF SUCH A DEFAULT BY BUYER, HAVE AGREED THAT SUCH
DAMAGES SHALL BE IN AN AMOUNT EQUAL TO THE AMOUNT OF THE
DEPOSIT (EXCLUDING INTEREST EARNED THEREON) AND THAT SUCH
DEPOSIT (EXCLUDING INTEREST EARNED THEREON) SHALL BE DELIVERED
TO SELLER UPON SUCH DEFAULT BY BUYER, WITHOUT THE NECESSITY OF
AN INSTRUCTION BY BUYER, AND RETAINED BY SELLER AS LIQUIDATED
DAMAGES, WHICH DAMAGES SHALL BE SELLER'S SOLE AND EXCLUSIVE
REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH DEFAULT
BY BUYER. WITHOUT LIMITING THE FOREGOING PROVISIONS OF THIS
PARAGRAPH, SELLER WAIVES ANY AND ALL RIGHTS WHICH SELLER
OTHERWISE WOULD HAVE HAD UNDER CALIFORNIA CIVIL CODE SECTION
3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. SELLER AND BUYER
ACKNOWLEDGE AND AGREE THAT THEY HAVE READ AND UNDERSTAND THE
PROVISIONS OF THIS PARAGRAPH AND BY THEIR INITIALS AGREE TO BE
BOUND BY ITS TERMS.
Buyer's Initials
Seller's Initials
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1 Warranties and Representations by Seller.
(a) Seller hereby makes the following representations and warranties, which
are based upon and limited to the current actual knowledge of Michael Sollenberger, with
no further duty of inquiry or investigation, and acknowledges that the execution of this
Agreement by Buyer has been made and the acquisition by Buyer of the Property will
have been made in material reliance by Buyer on such representations and warranties
(which shall survive and be effective only for a period of 12 months after the Closing):
(i) Warranties True. Each and every undertaking and obligation of
the Seller under this Agreement shall be performed by the Seller timely when due;
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and that all representations and warranties of the Seller under this Agreement and
its exhibits shall be true at the Closing as though they were made at the time of
Closing.
(ii) Title. Seller is now, and at all times between the date hereof and
Closing, inclusive, will be, the owner (either of record or beneficially) of (and
Buyer will acquire hereunder) the entire right, title and interest in and to the
Property to effectively vest in the Buyer good and marketable fee simple title to
the Property, in the title condition acceptable to Buyer in Buyer's sole discretion
pursuant to the terms of Section 3.4.
(iii) No Infringement. The use by Buyer of any name, trademark,
trade style or trade name assigned to Buyer hereunder will not infringe upon any
copyright or any United States or State trademark existing on the Closing Date, or
constitute unfair competition or actionable appropriation of rights with respect to
any other person, business or entity.
(iv) Zoning and Use. The housing development on the Real
Property complied with all zoning and building codes at the time it was
constructed and thereafter with respect to any remodeling, repairs, or
reconstruction, if any, and (b) there is no existing or proposed or contemplated
eminent domain proceeding that would affect the Real Property in any way
whatsoever.
(v) Governmental Inspection. There is no ruling, ordinance,
regulation or statute that requires any governmental agency to inspect the
Property and/or issue any documents affecting the continued occupancy and
specifications of the apartment project as a result of the sale of the Property to
Buyer.
(vi) UCC Financing Statement. As of the Closing Date, no portion
of the Property will be affected by any financing statements, except with respect
to the Existing Indebtedness and those which will be terminated at the Closing.
(vii) No Litigation. There are no pending or, to the best of Seller's
knowledge, threatened claims, allegations or lawsuits of any kind, whether for
personal injury, property damage, landlord -tenant disputes, property taxes or
otherwise, that could materially and adversely affect the operation or value of the
Property or prohibit the sale thereof, nor to the best of Seller's knowledge, is there
any governmental investigation of any type or nature pending or threatened
against or relating to the Property or the transactions contemplated hereby; and
Seller will hold Buyer harmless from all liability, loss, cost and expense resulting
from claims arising or becoming applicable during or as a result of Seller's
ownership of the Property.
(viii) Insurance Indemnifications. Seller has not received notices by
any insurance company which has issued a policy with respect to any portion of
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the Property, or by any board of fire underwriters, or from any governmental
authority, of zoning, building, fire or health code violations in respect to the
Property.
(ix) Enforceability of Agreement. The person executing any
instruments for or on behalf of the Seller was fully authorized to act on behalf of
Seller and that the Agreement is valid and enforceable against Seller in
accordance with its terms and each instrument to be executed by Seller pursuant
hereto or in connection therewith will, when executed, be valid and enforceable
against Seller in accordance with its terms. No approval, consent, order or
authorization of, or designation, registration or declaration with, any
governmental authority, including, but not limited to, subdivision approval, is
required in connection with the valid execution and delivery of and compliance
with this Agreement by Seller.
(x) Rent Roll. The Rent Roll and Certified Rent Roll delivered to
Buyer contain a complete and correct list of all Tenant Leases. Except as set forth
in the Rent Roll, each Tenant Lease is on the Form Lease and is valid and existing
and in full force and effect, has not been amended, modified or supplemented, and
the tenant, licensee or occupant thereunder is in actual possession.
(xi) Rental Concessions. Except as set forth on the Rent Roll and
the Certified Rent Roll, no tenant, under any of the Tenant Leases is, or as of the
Closing will be, entitled to any free rent, concessions, allowances, rebates or
refunds and no tenant under any of the Tenant Leases has, or as of the Closing
will have, prepaid any rent or other charges for more than one month in advance.
(xii) Leasing Commissions. As of the Closing, no brokerage or
leasing commissions or other compensation will be due or payable to anyone with
respect to or on account of any of the Tenant Leases.
(xiii) Service Contracts. Except as set forth on the list of Contracts
attached hereto as Exhibit "H", there is no agreement, in writing or otherwise,
between the Seller and any other person or persons for service, supply,
maintenance, management or the operation of the Property or any portion of the
business conducted thereon or thereat, which is not cancelable upon thirty (30)
days' notice, without payment of any penalty or premium.
(xiv) Hazardous Materials or Substances. The Property has not at any
time been used for the purposes of storing, manufacturing, releasing or dumping
Hazardous Materials or Substances, except for normal quantities of Hazardous
Materials or Substances utilized in connection with the construction and normal
maintenance and operation of the Property in compliance with all Environmental
Laws (as hereinafter defined) and so-called household Hazardous Materials
utilized by tenants of the Property. No underground storage tanks, pipelines or
clarifiers have been or are located on the Property. "Hazardous Materials or
"Substances" shall mean (1) hazardous wastes, hazardous materials, hazardous
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substances, hazardous constituents, toxic substances or related materials, whether
solids, liquids or gases, including, but not limited to, substances deemed as
"hazardous wastes," "hazardous materials," "hazardous substances," "toxic
substances," "pollutants," "contaminants," "radioactive materials," or other
similar designations in, or otherwise subject to regulation under, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), 42 U.S.C. § 9601 et seq.; the Toxic Substance
Control Act ("TSCA"), 15 U.S.C. § 2601 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. § 1802; the Resource Conservation and Recovery
Act ("RCRA"), 42 U.S.C. § 9601, et seq.; the Clean Water Act ("CWA"), 33
U.S.C. § 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300 et seq.; the
Clean Air Act ("CAA"), 42 U.S.C. § 7401 et seq.; the Hazardous Waste Control
Law, California Health and Safety Code § 25025 et seq., the Carpenter -Presley -
Tanner Hazardous Substance Account Act, California Health and Safety Code,
Division 20, Chapter 6.8, the Hazardous Materials Release Response Plans and
Inventory Act, California Health and Safety Code, Division 20, Chapter 6.95, The
Underground Storage of Hazardous Substances Act, California Health and Safety
Code, Division 20, Chapter 6.7, the Porter -Cologne Act, California Water Code §
13050 et seq. and in any permits, licenses, approvals, plans, rules, regulations or
ordinances adopted, or other criteria and guidelines promulgated pursuant to the
preceding laws or other similar federal, state or local laws, regulations, rules or
ordinances now or hereafter in effect relating to environmental matters
(collectively the "Environmental Laws"); and (ii) any other substances,
constituents or wastes subject to any applicable federal, state or local law,
regulation, ordinance or common law doctrine, including any Environmental Law,
now or hereafter in effect, including, but not limited to, (A) petroleum, (B) refined
petroleum products, (C) waste oil, (D) waste aviation or motor vehicle fuel, (E)
asbestos, (F) lead in water, paint or elsewhere, (G) radon, (H) polychlorinated
biphenyls (PCB's) and (I) ureaformaldehyde.
(xv) Black Mold. Seller has no knowledge of, and has received no
notices with respect to, mold or fungi, or the levels of mold or fungi, including,
but not limited to, penicillium/aspergillus and stachybotrys chartarum, located
within the improvements on the Property.
(xvi) Financial Statements. The financial statements delivered to
Buyer present fairly the financial condition of the Property at such date and the
result of its operations for the period then ended. With respect to the Property,
there are no material liabilities or obligations of Seller, whether accrued, absolute,
contingent or otherwise, which arose out of or relate to any transaction of Seller
on or prior to the Effective Date of this Agreement, which are not specifically
disclosed as liabilities or obligations on such financial statements and there are no
material liabilities or obligations of Seller with respect to the Property occurring
since the Effective Date of this Agreement other than liabilities or obligations
incurred in the normal course of business of Seller.
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(xvii) Condition of Improvements. As of the Closing Date, the
Improvements (which term as used in this Agreement includes sewer and water
and all parts of the Property, including, without limitation, plumbing, heating, air
conditioning, electric systems and the roof) are in good working order and repair.
(xviii) Structural Defects. There are no structural defects in any of the
Improvements.
(xix) Property Fully Taxed. Except as may be shown on a tax bill or
other statement from the tax assessor, the Property and all parts thereof were fully
assessed for general tax purposes and there has not been (other than low income
housing benefits), at any time, a tax break, concession or adjustment (in the
condition factor, assessed valuation or otherwise) given or applied, and that no
portion of the Property is, or as of the Closing will be subject to or affected by
special assessments, whether or not a lien thereon. Seller has not received any
notice or information of any contemplated increase of the assessments affecting
the Property.
(xx) Adequacy of Utilities. As of the Closing Date, the water supply
and water purity, the sewer, the sewage and waste disposal systems and all of the
utility services now servicing the Property are sufficient for the operation of the
Property.
(xxi) Compliance with Laws. Seller has not received any notices
from any governmental authority of zoning, building, environmental protection,
clean air, pollution, fire or health code violations with respect to the Property, or
violations pertaining to the use and occupancy of the Property, including, without
limitation, discrimination on any prohibited basis.
(xxii) Employees. Except as may be set forth in Section 6.3(i), with
reference to the Property no employees of Seller are under contracts which are not
terminable as of the Closing Date. There are no employee benefit plans in effect
and there are no unfunded liabilities with respect to employee fringe benefits.
(xxiii) Recapture Agreements. There are no obligations burdening the
Property created by any so called "recapture agreement" involving refund for
sewer or water extension or other improvement to any sewer or water systems,
oversizing utility, lighting or like expense or charge for work or services done
upon or relating to the Property which will bind the Buyer or the Property from
and after the Closing.
(xxiv) Special Studies Zone. The Property is not located within either
a designated earthquake fault zone pursuant to California Public Resources Code
§ 2621.9 or a designated area that is particularly susceptible to ground shaking,
liquefaction, landslides or other ground failure during an earthquake pursuant to
California Public Resources Code § 2694, except as provided in a Commercial
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Property Disclosure Statement to be expeditiously obtained by Escrow Holder (at
Seller's cost) and provided to Buyer and Seller.
(xxv) Existing Indebtedness. There are no written or oral agreements,
understandings, or commitments relating to the Existing Indebtedness other than
the Existing Loan Documents delivered to Buyer pursuant to Section 3.1. There
is no uncured default by Seller or, to the best of Seller's knowledge, the lender
under the Existing Indebtedness and no event has occurred which with notice, the
passage of time, or both, would constitute an event of default by Seller or, to the
best of Seller's knowledge, by lender under the Existing Indebtedness.
(b) If Seller becomes aware of any act or circumstance which would change
or render incorrect, in whole or in part, any representation or warranty made by Seller
under this Agreement, whether as of the date given or any time thereafter through the
Closing Date and whether or not such representation or warranty was based upon Seller's
knowledge and/or belief as of a certain date, Seller will give immediate written notice of
such changed fact or circumstance to Buyer, but such notice shall not release Seller of its
liabilities or obligations with respect thereto. Seller shall issue the Certificate regarding
Representations and Warranties in the form attached hereto as Exhibit "I" at the Closing
Date stating that all the representations and warranties contained in this Section 6.1 are
true and correct as of said date, or setting forth in detail which of such matters are not
true and correct.
(c) All representations and warranties contained in Subsection (a) of this
Section 6.1 made in writing by Seller in connection with the transactions herein provided
for shall be true and correct on the date hereof and on the Closing Date, which
representations and warranties shall survive the Closing for a period of one year.
(d) Seller shall indemnify Buyer against and hold Buyer harmless from any
and all loss, damage, liability or expense, including court costs and reasonable attorneys'
fees, which Buyer may reasonably incur or sustain either prior to or following the
Closing Date by reason of or in connection with (i) any breach of Seller's representations
and/or warranties contained herein; (ii) any and all obligations, liabilities, claims,
accounts, demands, liens or encumbrances, whether direct, contingent or consequential,
and no matter how arising, in any way related to or arising from any act, conduct,
omission, contract, agreement or commitment of Seller or in any way relating to or
arising from the construction, completion, sale, use or occupancy of the Property prior to
the Closing Date, and (iii) the existence on the Property, as of the Close of Escrow, of
any Hazardous Materials or Substances (as defined in above) placed on the Property by
Seller or Seller's employees, agents, or representatives, but excluding any such
Hazardous Materials or Substances placed on the Property in the control of any tenant
without the knowledge of Seller. Buyer shall notify Seller within fifteen (15) days in the
event any claim is made against it for which Seller shall have agreed to indemnify Buyer
as set forth in this Agreement, and Seller shall thereupon undertake to defend and hold
Buyer free and harmless therefrom. Should Seller fail to discharge or undertake to
defend against any such liability, then Buyer may settle the same, and Seller's liability to
Buyer shall be conclusively established by such settlement, the amount of such liability
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shall include both the settlement consideration and the reasonable costs, attorneys' fees
and expenses necessarily incurred by the Buyer in effecting such settlement.
6.2 R._pe resentations of Authority. Each party hereby represents to the other that this
Agreement has been duly executed by it or its duly authorized officers, partners or agents and
constitutes a valid, binding and enforceable obligation of such party.
6.3 Covenants of Seller. During the pendency of Escrow, Seller covenants and agrees
as follows:
(a) Insurance. Seller will keep all Property conveyed hereunder fully insured
against all usual risks and will maintain in effect all insurance policies now maintained on
the same, up to and including the Closing Date.
(b) Performance Under Tenant Leases. From and after receipt of the Rent
Roll by Buyer until the Closing Date, Seller agrees that it will continue to perform all of
its obligations as landlord under all of such Tenant Leases and shall, immediately upon
obtaining knowledge of a change in facts or circumstances which renders any information
contained on the Rent Roll inaccurate, promptly notify Buyer of said facts or
circumstances.
(c) Further Tenancies. Between the date of the execution of this Agreement
and the Closing Date, without the prior written consent of the Buyer, none of the Tenant
Leases will be amended to reduce the rents or other charges thereunder or will be
renewed for rents or other charges which are less than those payable prior to such
renewal; and no new Tenant Lease or extension to an existing Tenant Lease will be made
unless it is on the Form Lease for a term of not more than six (6) months and at rent not
less than that charged for similar apartments.
(d) Operation and Condition Pending Closing. Between the date of this
Agreement and the Closing Date, Seller will continue to manage, operate and maintain
the Property in the same manner as existed prior to the execution of this Agreement.
(e) Condition of Property. The Improvements and Personal Property
(including, but not limited to, that set forth on the list of Personal Property attached
hereto as Exhibit `B") shall on the day of the Closing be in such good condition and
repair as required in order to lease to tenants. On the Closing Date, all vacant apartments
(if any) shall be in a "Rent Ready Condition." "Rent Ready Condition" shall mean that
all vacant apartments have been thoroughly cleaned, recently painted (within a reasonable
time prior to the Closing Date) and that all apartments contain the following: (1)
refrigerator -freezer unit in working condition; (2) garbage disposal, stove and oven in
working condition; (3) plumbing, heating, air conditioning, and electrical systems in
working order and the roof in good condition and repair; (4) floors fully covered with a
combination of tile or linoleum and carpeting, all of which shall be in average or better
condition; and (5) blinds and/or drapes on all windows in average or better condition. If
any vacant apartment is not in a "Rent Ready Condition," or if any appliance or other
item listed above is missing or not in working order as of the Closing Date, Seller agrees
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to reimburse Buyer for the reasonable repair costs of the same, and if missing or not
repairable, shall pay for the cost of replacing same. Subsequent to the Closing Date, the
burden of proving that the apartments were not in a Rent Ready Condition as of the
Closing Date shall be on the Buyer.
(f) Required Repairs. Seller shall, prior to the Close of Escrow, perform such
repairs or retrofitting to the Property required by any local ordinance or regulation
applicable to the Property; notwithstanding the foregoing, if the cost of such repairs or
retrofitting is reasonably expected to exceed Ten Thousand Dollars ($10,000), the parties
shall meet and confer, in good faith, to determine an equitable method of allocating such
excess costs. If the parties are unable to reach agreement, then either party may terminate
this Agreement, by providing written notice thereof to the other party.
(g) Existing_ Indebtedness. Seller shall cooperate with Buyer in submitting
applications and other information to USDA and Provident in connection with the
assumption of the Existing Indebtedness. During the pendency of Escrow, Seller will
continue to perform all obligations under the Existing Loan Documents, including
making all scheduled principal and interest payments.
(h) Transfer of Property. Seller will not transfer any interest in the Property to
Seller's partners or to any other person or entity and no ownership interests in Seller will
be transferred prior to the Close of Escrow.
(i) Property Management Ag[eements. During the Financial/Operational Due
Diligence Period (see Section 3.3), Buyer shall consider, in its sole discretion, retaining
the current managing agent, Joan Berndt and the on -Site manager Cyndee Taylor. Buyer
shall notify Seller in writing as part of Buyer's Financial/Operational Condition Due
Diligence Notice (see Section 3.3) whether Buyer wishes to retain Cyndee Taylor as on -
Site manager and/or Joan Berndt as Managing Agent, and, if Buyer wishes to retain
Cyndee Taylor and/or Joan Berndt, on what terms and conditions. Seller shall terminate
as of the Closing any and all property management agreements affecting the Property
(including but not limited to the agreements with Cyndee Taylor and Joan Berndt if and
to the extent applicable pursuant to Buyer's notice) and Seller shall also terminate any
existing lease (whether written, oral or otherwise) on the Property between Seller and any
employee of the existing property management firm or Seller (including but not limited
to Cyndee Taylor if and to the extent applicable pursuant to Buyer's notice), and assure
that the subject apartment is vacated effective as of the Closing Date. Seller shall be
solely responsible for the payment of any and all wages, salaries, vacation and/or sick
leave compensation, pension or profit sharing benefits and other benefits, and any other
benefits or compensation inuring to the benefit of any and all employees of Seller, any
affiliate or agent, employed at the Property through the Closing Date, and all such
employees shall, at Seller's cost and expense, be terminated or otherwise employed by
Seller effective as of the Closing Date. Seller shall further indemnify, defend, and hold
Buyer harmless from any relocation benefits or assistance to which any on -site or
resident manager, including but not limited to Cyndee Taylor, may be entitled resulting
from the acquisition by Buyer, a public entity.
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ARTICLE 7
DAMAGE DESTRUCTION AND CONDEMNATION
7.1 Risk of Physical Loss. Prior to Seller's delivery of possession of the Property to
Buyer at the Closing, the risk of loss or damage to the Property shall remain upon Seller. If the
Property suffers damages as a result of any casualty prior to the Closing, then Seller shall give
written notice thereof to Buyer promptly after the occurrence of the casualty. Buyer can elect to
either (i) require Seller to repair and restore same, in which event, the Closing Date will be
extended until such date as may be reasonably required to complete the repair and restoration, in
which case, Seller shall retain all insurance proceeds [provided that in no event will the Closing
be extended for more than one hundred twenty (120) days]; or (ii) accept the Property in its
damaged condition, together with an assignment of Seller's insurance proceeds and a credit
against the Purchase Price for the amount of any deductible (and Seller hereby agrees that it shall
not sell or compromise any insurance claim affecting the Property without Buyer's prior written
consent); provided, however, that if as result of any casualty, (i) any single stand-alone structure
on the Property sustains damage in excess of TWO HUNDRED FIFTY THOUSAND
DOLLARS ($250,000.00) of the replacement cost of such structure or (ii) fifteen (15) or more
apartments are rendered uninhabitable for thirty (30) or more consecutive days (regardless of the
replacement costs for such apartments), then Buyer can elect to either: (i) require Seller to repair
and restore same, in which event, the Closing Date will be extended until such date as may be
reasonably required to complete the repair or restoration, in which case, Seller shall retain all
insurance proceeds (provided that in no event will the Closing be extended more than ninety (90)
days); (ii) accept the Property in its damaged condition, together with an assignment of Seller's
insurance proceeds and a credit against said Purchase Price for the amount of any deductible
(and Seller hereby agrees that it shall not settle or compromise any insurance claim affecting the
Property without Buyer's prior written consent); or (iii) terminate this Agreement upon notice to
Seller served within twenty (20) business days of such casualty.
7.2 Condemnation by Unrelated Governmental Entity. In the event that, prior to the
Close of Escrow, any governmental entity shall commence any actions of eminent domain or
similar type proceedings to take any portion of the Property, Seller shall give prompt written
notice thereof to Buyer, and Buyer shall have the option either to (i) elect not to acquire the
Property, or (ii) complete the acquisition of the Property, in which case Buyer shall be entitled to
all the proceeds of such taking (and Seller hereby agrees that it shall not settle or compromise the
proceedings without Buyer's prior written consent). Buyer represents that it currently has no
knowledge of the pendency of any such action, other than as contemplated herein.
7.3 Eminent Domain Authority. Buyer and the City of La Quinta have the power of
eminent domain within certain jurisdictional limits of the City of La Quinta. In the event Seller
had determined not to sell the Property to Buyer, staff would have recommended to the Board of
Directors of Buyer or to the City Council of the City of La Quinta that upon annexation of the
Property into the City of La Quinta Buyer and/or the City of La Quinta, after providing notice to
Seller and holding a hearing as required by applicable law, consider adopting a resolution of
necessity and thereafter commencing proceedings to acquire the Property by the exercise of its
power of eminent domain. Notwithstanding the foregoing, Buyer makes no representation,
warranty, or guaranty to Seller or to any other person, firm, or entity concerning the tax
treatment by any taxing authority, including but not limited to, the Internal Revenue Service, of
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the conveyance of the Property to Buyer, including the tax treatment and tax consequences of an
acquisition under the threat of condemnation. Seller acknowledges that Buyer is not providing
tax advice to Seller or to any person, firm, or entity and Seller further acknowledges and agrees
that Seller must consult Seller's own tax advisor concerning the tax treatment, tax implications,
and tax consequences of the sale of the Property to Buyer.
ARTICLE 8
ANNEXATION OF REAL PROPERTY INTO CITY
During the due diligence periods described in Sections 3.2, 3.3, 3.4, 3.7, and 3.8, Buyer
or the City of La Quinta, at Buyer's or the City's sole cost and expense, shall apply for and
commence proceedings to annex the Real Property into the City of La Quinta. Annexation of the
Real Property (or a decision that annexation is imminent as determined in Buyer's and Seller's
sole discretion) shall be a condition precedent to Buyer's and Seller's obligation to Close
Escrow. Seller shall use reasonable efforts to cooperate with Buyer and its agents, consultants,
representatives and employees in connection with the annexation, including without limitation,
the prompt execution of all applicable documents, at no cost or expense to Seller. If the Close of
Escrow does not occur by the Closing Date due to the annexation process being incomplete, then
Buyer may extend the Close of Escrow for thirty (30) day periods for the purpose of completing
annexation by providing written notice of such extension to Seller and Escrow Holder; provided,
however, that upon Buyer's notice of such an extension(s), Buyer shall concurrently instruct
Escrow Holder to release to Seller the sum of FIVE THOUSAND DOLLARS ($5,000.00) from
the Deposit, as an additional Release Amount, for each thirty (30) day extension.
Notwithstanding anything herein to the contrary, Deposit funds released pursuant to this section
shall not be credited against the Purchase Price and shall be considered nonrefundable, except
that if Seller defaults under this Agreement then such Release Amount shall be immediately
returned to Buyer.
ARTICLE 9
MISCELLANEOUS
9.1 Attorneys' Fees. In the event of any action between Buyer and Seller seeking
enforcement of any of the terms and conditions to this Agreement, or otherwise in connection
with the Property, the prevailing party in such action, whether by fixed judgment or settlement,
shall be entitled to recover, in addition to damages, injunctive or other relief, its actual costs and
expenses, including, but not limited to, actual attorneys' fees, court costs and expert witness fees.
Such costs shall include attorneys' fees, costs and expenses incurred in (a) post judgment
motions, (b) contempt proceedings, (c) garnishment, levy and debtor and third -party
examination, (d) discovery, and (e) bankruptcy litigation.
9.2 Notices. All notices under this Agreement shall be delivered by (i) personal
delivery, (ii) reputable same -day or overnight courier service (e.g., Federal Express) that
provides a receipt showing date and time of delivery, or (iii) United States mail, registered or
certified, return receipt requested, postage fully prepaid. Notices personally delivered or
delivered by courier shall be effective upon receipt. Mailed notices shall be effective upon the
earlier of actual receipt or three (3) business days following deposit with the United States Postal
System. Notice shall be directed to the parties as follows:
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To Seller: Frank R. Goodman and Associates
c/o Kittredge Sollenberger LLC. GP
P.O. Box 272469
2032 Caribou Drive, Suite 102
Fort Collins, CO. 80525
Attn: Mike Sollenberger
Telephone No.: (970) 226-8775
With Copy to: Ealy, Hemphill, Blasdel & Oleson, LLP
777 E. Tahquitz Canyon Way, Suite 328
Palm Springs, CA. 92262
Attn: W. Curt Ealy
Telephone No.: (760) 320-5977
To Buyer: La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
Telephone No.: (760) 777-7000
With Copy to: Rutan & Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, CA 92626
Attn: M. Katherine Jenson, Esq.
Telephone No.: (714) 641-3437
or to such other address as the parties may from time to time designate in writing.
9.3 Entire Agreement, Inten2retation. This Agreement and the exhibits, attachments,
and items incorporated herein contain all the agreements of the parties hereto with respect to the
matters contained herein; and no prior agreement or understanding pertaining to any such matter
shall be effective for any purpose. No provisions of this Agreement may be amended or
modified in any manner whatsoever except by an agreement in writing signed by duly authorized
officers or representatives of each of the parties hereto. The terms of this Agreement shall be
construed in accordance with the meaning of the language used and shall not be construed for or
against either party by reason of the authorship of this Agreement or any other rule of
construction that might otherwise apply.
9.4 Successors. The terms, covenants and conditions of this Agreement shall be
binding upon and shall inure to the benefit of the heirs, executors, administrators and assigns of
the respective parties hereto.
9.5 Assignment. Seller may not assign this Agreement without the prior written
consent of Buyer, which consent may be withheld in Buyer's sole and absolute discretion.
Subject to Seller's prior written consent which shall not be unreasonably withheld, Buyer may
transfer and assign at any time the rights and obligations of Buyer under this Agreement, in
882/015610-0047
715407.04 a08/31/06 -29-
which event, such transferee and assignee shall be entitled to the benefit of and may enforce
Seller's covenants, representations and warranties hereunder. Upon any such assignment, the
assignor's liabilities and obligations hereunder or under any instruments, documents or
agreements made pursuant thereto shall be binding upon such assignee, and the assignor shall be
relieved therefrom.
9.6 Choice of Laws. This Agreement shall be governed by the internal laws of the
State of California without regard to conflicts of law principles.
9.7 Headings. Headings at the beginning of each numbered Article and Section of
this Agreement are solely for the convenience of the parties and are not a part of this Agreement.
9.8 Survival. This Agreement and all covenants, representations and warranties
contained herein shall survive the close of this transaction and this Agreement shall remain a
binding contract between the parties hereto.
9.9 Time. Time is of the essence of this Agreement, it being understood that each
date set forth herein and the obligations of the parties to be satisfied by such date have been the
subject of specific negotiation by the parties.
9.10 Counterparts. This Agreement may be signed by the parties in different
counterparts and the signature pages combined to create a document binding on all parties.
9.11 Brokerage Commissions. La Quinta Palms Real Estate Co. Inc., a California
corporation and California Licensed Real Estate Brokerage, DBA La Quinta Palms Realty, is
acting as Agent ("Agent") for both the Buyer and Seller in the transaction contemplated by this
Agreement and is being compensated solely by the Seller under a separate commission
agreement. The Seller agrees to indemnify and hold the Buyer harmless from and against any
and all liability, loss, costs, damages, or expense (including court costs and reasonable attorney's
fees) in any manner connected with Seller's commission agreement with Agent. Each party
represents and warrants that neither party has retained any other brokers or finders to represent
its interests in connection with this transaction. Each party agrees to indemnify and hold the
other harmless from and against all liabilities, loss, costs, damages and expenses, including,
without limitation, reasonable attorneys' fees, resulting from any claims or fees or commissions,
based upon agreements by it, if any, to pay any broker's commission and/or finder's fee.
9.12 Information Report. Escrow Holder shall file and Buyer and Seller agree to
cooperate with Escrow Holder and with each other in completing any report ("Information
Report") and/or other information required to be delivered to the Internal Revenue Service
pursuant to Internal Revenue Code Section 6045(e) regarding the real estate sales transaction
contemplated by this Agreement, including, without limitation, Internal Revenue Service Form
1099-B as such may be hereinafter modified or amended by the Internal Revenue Service, or as
may be required pursuant to any regulation now or hereinafter promulgated by the Treasury
Department with respect thereto. Buyer and Seller also agree that Buyer and Seller, their
respective employees and attorneys, and Escrow Holder and its employees may disclose to the
Internal Revenue Service, whether pursuant to such Information Report or otherwise, any
information regarding this Agreement or the transaction contemplated herein as such party
882/015610-0047
715407.04 a08/31/06 -30-
reasonably deems to be required to be disclosed to the Internal Revenue Service by such party
pursuant to Internal Revenue Code Section 6045(e), and further agree that neither Buyer nor
Seller shall seek to hold any such party liable for the disclosure to the Internal Revenue Service
of any such information.
9.13 Nonliabilit of Officials. No officer, official, member, employee, agent, or
representative of Buyer shall be personally liable to Seller, or any successor in interest thereto, in
the event of any default or breach by Buyer or for any amount which may become due to Seller
or its successors, or on any obligations under the terms of this Agreement.
9.14 Buyer's Delegation of Authority. Buyer's Executive Director is hereby delegated
by Buyer to have the authority, but not the obligation, to approve and execute, on behalf of
Buyer, documents to implement this Agreement including the Exhibits hereto requiring Buyer's
signature, subordination agreements, escrow instructions, and other documents that are
commercially reasonably necessary to implement this transaction as contemplated in this
Agreement. All amendments to this Agreement, except amendments that alter the basic business
terms, may be approved by Buyer's Executive Director on behalf of Buyer. In addition, Buyer's
Executive Director shall have the authority, on behalf of Buyer, to approve extensions of time,
including times for Seller's performance of its obligations under this Agreement, for a
cumulative period of up to one (1) year.
9.15 Incorporation. Exhibits "A", `B", "C", "D", "E", "F", "G", "H", "I", " 9 and
"K", each as attached to this Agreement, is incorporated herein and made a part hereof.
[end —signature page and exhibits follow]
882/015610-0047
715407.04 a08/31/06 -3 1 -
IN WITNESS WHEREOF, Buyer and Seller have executed this Agreement as of the date
first above written.
Date: 0-fak /.::,
Date:
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKE "LP
By: 9z -.
A ncy A rney
882/015610-0047
715407.04 a08/30/06 -32-
"SELLER"
FRANK R. GOODMAN AND ASSOCIATES,
a California limited partnership
By: Kittrc
California
It: Genera
By
Its:
By
Its:
"BUYER"
LA QUINTA REDEVELOPMENT AGENCY,
' bo ;corporate anoli '
Thomas P. Genovese,
Executive Director
IN WITNESS WHEREOF, Buyer and Seller have executed this Agreement as of the date
first above written.
"SELLER"
FRANK R. GOODMAN AND ASSOCIATES,
a California limited partnership
Date:•
By: Kittredge Sollenberger, LLC, a
California li ted liability company
It: GeneralYad6r
Date:
Its:
By:
Its:
"BUYER"
LA QUINTA REDEVELOPMENT AGENCY,
�,b�oy, corporate d c
ByY
Thomas P. Genovese,
Executive Director
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
By: A0
Age cy Att ey
882/015610-0047
715407.04 a08/30/06 -32-
ACCEPTANCE BY ESCROW HOLDER
The undersigned hereby acknowledges that it has received originally executed
counterparts or a fully executed original of the foregoing Purchase and Sale Agreement and
Escrow Instructions and agrees to act as Escrow Holder thereunder and to be bound by and
perform the terms thereof as such terms apply to Escrow Holder.
Dated: , 2006
FOUR SEASONS ESCROW
Malia Monroe, Escrow Holder
882/015610-0047
715407.04 a08/31 /06 -3 3 -
EXHIBIT "A"
LEGAL DESCRIPTION OF REAL PROPERTY
THAT CERTAIN REAL PROPERTY SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF RIVERSIDE, DESCRIBED AS FOLLOWS:
Parcel 1, together with the West 11 feet of Parcel 2 of Parcel Map No. 12323, in
the County of Riverside, State of California, as per map recorded in Book 56,
page(s) 27 and 28, of Parcel Maps, in the office of the County Recorder of said
County.
APN: 609-040-007
609-040-023
EXHIBIT "A"
TO PURCHASE AND SALE AGREEMENT AND
715 0 7.04 aO 47
/31 ESCROW INSTRUCTIONS
715407.04 a08/31/06
EXHIBIT "B"
LIST OF PERSONAL PROPERTY
Individual Apartments (72 Tenants + Manager)
72 - 40 gallon water heaters
1 - 83 gallon water heater
73 Refrigerators
73 air conditioning units
73 gas stoves
I GE washer (mgr)
1 GE dryer (mgr)
On -Site Office
I office desk
I - 4 drawer filing cabinet
I - 2 drawer filing cabinet
1 Cannon copier
1 HP Lasedet 1200 printer
I Brother fax machine
1 Dell Computer + monitor/keyboard
2 office guest chairs
1 office chair w/wheels
1 shredder
1 Cannon calculator
1 AT&T answering machine
1 V-tech phone
Miscellaneous office supplies
Laundry Rooms
I - 40 gallon water heater
2 - 100 gallon water heaters
I swamp cooler
8 Maytag coin operated top loading washers
8 Maytag coin operated dryers
I Maytag coin operated front loading washer
1 Maytag coin operated front loading dryer
Common Area/Grounds
2 outdoor benches
3 plastic chairs
4 picnic tables
2 cigarette ash cans
Recreation Room
1 air conditioning unit
EXHIBIT `B"
TO PURCHASE AND SALE AGREEMENT AND
71540 .0 a0 47
/31 ESCROW INSTRUCTIONS
715407.04 a08/31 /06
1 Refrigerator
4 round tables
16 club chairs
1 computer desk
1 E-machine computer + monitor/keyboard
1 Xerox printer
2 office guest chairs
1 RCA flat screen T.V.
1 large wooden clock
2 easy chairs
2 sofas
1 stereo
6 conference room chairs
2 coffee tables
1 microwave
1 coffee maker
1 supply cabinet
Workshop/Garage Storage
1 swamp cooler
1 portable swamp cooler
1 portable air conditioning unit
1 Hampton Bay window A/C unit
1 Porter 25 gallon air compressor with hose (135 PSI)
3 Rainbird sprinkler controls
1 Refrigerator (used for parts)
Miscellaneous tools & maintenance inventory
2 air conditioning units in stock for emergency installation use
EXHIBIT `B"
TO PURCHASE AND SALE AGREEMENT
71507.04a0047
31 AND ESCROW INSTRUCTIONS
715407.04 a08/31/06
RECORDING REQUESTED BY AND:
WHEN RECORDED MAIL TO:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
MAIL TAX STATEMENTS TO:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
EXHIBIT "C"
GRANT DEED
Space above this line for Recorder's Use
Exempt from Recordation Fee per Gov. Code § 27383
DOCUMENTARY TRANSFER TAX $0.00 [PUBLIC
ENTITY TRANSFEREE]
.... Computed on the consideration or value of property
conveyed; OR
.... Computed on the consideration or value less liens or
encumbrances remaining at time of sale.
Signature of Declarant or Agent determining tax — Firm Name
GRANT DEED
Order No.
Escrow No.
Loan No.
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
FRANK R. GOODMAN AND ASSOCIATES, a California limited partnership, hereby grants to
the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, the real
property in the County of Riverside, State of California, described on Attachment No. 1 attached
hereto and incorporated herein by reference (the "Property").
[continued on following page]
EXHIBIT "C"
TO PURCHASE AND SALE AGREEMENT AND
ESCROW INSTRUCTIONS
882/015610-0047 Page 1 of 4
715407.04 a08/31/06 g
The Property conveyed hereby is subject to (i) non -delinquent general and special real
property taxes; and (h) matters of record.
Date:
Date:
"SELLER"
FRANK R. GOODMAN AND ASSOCIATES,
a California limited partnership
By: Kittredge Sollenberger, LLC, a
California limited liability company
It: General Partner
By:
Its:
By:
Its:
EXHIBIT "C"
TO PURCHASE AND SALE AGREEMENT AND
ESCROW INSTRUCTIONS
882/015610-0047
715407.04 a08/31/06 Page 2 of 4
STATE OF CALIFORNIA
COUNTY OF
On
appeared _
ss.
before me,
personally
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
[SEAL]
STATE OF CALIFORNIA
COUNTY OF
On
appeared _
Notary Public
ss.
before me,
personally
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
EXHIBIT "C"
TO PURCHASE AND SALE AGREEMENT AND
882/015610-0047 ESCROW INSTRUCTIONS
715407.04 a08/31/06 Page 3 of 4
CERTIFICATE OF ACCEPTANCE
This Certificate of Acceptance is to certify that the interest in real property conveyed by
the grant deed dated , from FRANK R. GOODMAN AND
ASSOCIATES, a California limited partnership ("Grantor"), to the LA QUINTA
REDEVELOPMENT AGENCY, a public body, corporate and politic ("Grantee"), is hereby
accepted by order of the LA QUINTA REDEVELOPMENT AGENCY pursuant to authority
conferred on by Resolution No. 2002-12 adopted by the Grantee's Board of Directors on
June 18, 2002, and Grantee hereby consents to recordation thereof by its duly authorized officer.
Dated: , 200 "GRANTEE"
LA QUINTA REDEVELOPMENT AGENCY
By:
Thomas P. Genovese, Executive Director
STATE OF CALIFORNIA
COUNTY OF RIVERSIDE
CITY OF LA QUINTA
On , 200, before me,
personally appeared THOMAS P. GENOVESE, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose names(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s) or the entity
upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
[SEAL]
EXHIBIT "C"
TO PURCHASE AND SALE AGREEMENT AND
882/015610-0047 ESCROW INSTRUCTIONS
715407.04 a08/31/06 Page 4 of 4
ATTACHMENT NO. 1 TO GRANT DEED
LEGAL DESCRIPTION OF REAL PROPERTY
THAT CERTAIN REAL PROPERTY SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF RIVERSIDE, CITY OF LA QUINTA, AND DESCRIBED AS FOLLOWS:
Parcel 1, together with the West 11 feet of Parcel 2 of Parcel Map No. 12323, in
the County of Riverside, State of California, as per map recorded in Book 56,
page(s) 27 and 28, of Parcel Maps, in the office of the County Recorder of said
County.
APN: 609-040-007
609-040-023
882/015610-0047
ATTACHMENT NO. 1
715407.04 a08/31/06 TO GRANT DEED
ATTACHMENT NO. 1 TO GRANT DEED
LEGAL DESCRIPTION OF REAL PROPERTY
THAT CERTAIN REAL PROPERTY SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF RIVERSIDE, CITY OF LA QUINTA, AND DESCRIBED AS FOLLOWS:
Parcel 1, together with the West 11 feet of Parcel 2 of Parcel Map No. 12323, in
the County of Riverside, State of California, as per map recorded in Book 56,
page(s) 27 and 28, of Parcel Maps, in the office of the County Recorder of said
County.
APN: 609-040-007
609-040-023
ATTACHMENT NO. 1
715 0 7.04 a0 47
/31 TO GRANT DEED
715407.04 a08/31/06
EXHIBIT "D"
WARRANTY BILL OF SALE
For good and valuable consideration, the receipt of which is hereby acknowledged,
FRANK R. GOODMAN AND ASSOCIATES, a California limited partnership ("Seller"), does
hereby sell, transfer and convey to LA QUINTA REDEVELOPMENT AGENCY, a public body,
corporate and politic ("Buyer"), all personal property of Seller described in Schedule No. 2
attached hereto which is located on and used in the operation, repair and maintenance of the real
property described in Schedule No. I attached hereto, which personal property Seller warrants to
be free and clear of all encumbrances.
Seller does hereby covenant with Buyer that Seller is the lawful owner of such personal
property, free and clear of all liens, encumbrances, security agreements and financing statements,
that such personal property is owned and not leased by Seller and that Seller has good right to
sell the same as aforesaid and will warrant and defend the title thereto unto Buyer, its successors
and assigns, against the claims and demands of all persons.
Dated this day of , 200_
"SELLER"
FRANK R. GOODMAN AND ASSOCIATES,
a California limited partnership
Date: By: Kittredge Sollenberger, LLC, a
California limited liability company
It: General Partner
Date:
By:
Its:
By:
Its:
EXHIBIT "D"
TO PURCHASE AND SALE AGREEMENT AND
715 0 7.04a 047
8/31 ESCROW INSTRUCTIONS
715407.04 a08/31/06
SCHEDULE NO. 1
LEGAL DESCRIPTION OF REAL PROPERTY
THAT CERTAIN REAL PROPERTY SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF RIVERSIDE, CITY OF LA QUINTA, AND DESCRIBED AS FOLLOWS:
Parcel 1, together with the West 11 feet of Parcel 2 of Parcel Map No. 12323, in
the County of Riverside, State of California, as per map recorded in Book 56,
page(s) 27 and 28, of Parcel Maps, in the office of the County Recorder of said
County.
APN: 609-040-007
609-040-023
SCHEDULE NO. 1
882/015610-0047
715407.04 a08/31/06 TO WARRANTY BILL OF SALE
SCHEDULE NO. 2
LIST OF PERSONAL PROPERTY
Individual Apartments (72 Tenants + Manager)
72 - 40 gallon water heaters
1 - 83 gallon water heater
73 Refrigerators
73 air conditioning units
73 gas stoves
1 GE washer (mgr)
1 GE dryer (mgr)
On -Site Office
1 office desk
1 - 4 drawer filing cabinet
1 - 2 drawer filing cabinet
1 Cannon copier
1 HP Laser et 1200 printer
1 Brother fax machine
1 Dell Computer + monitor/keyboard
2 office guest chairs
1 office chair w/wheels
1 shredder
1 Cannon calculator
1 AT&T answering machine
1 V-tech phone
Miscellaneous office supplies
Laundry Rooms
1 - 40 gallon water heater
2 - 100 gallon water heaters
1 swamp cooler
8 Maytag coin operated top loading washers
8 Maytag coin operated dryers
1 Maytag coin operated front loading washer
1 Maytag coin operated front loading dryer
Common Area/Grounds
2 outdoor benches
3 plastic chairs
4 picnic tables
2 cigarette ash cans
Recreation Room
1 air conditioning unit
SCHEDULE NO. 2
882/015610-0047
715407.04 a08/31/06 TO WARRANTY BILL OF SALE
1 Refrigerator
4 round tables
16 club chairs
1 computer desk
1 E-machine computer + monitor/keyboard
1 Xerox printer
2 office guest chairs
1 RCA flat screen T.V.
1 large wooden clock
2 easy chairs
2 sofas
1 stereo
6 conference room chairs
2 coffee tables
1 microwave
1 coffee maker
1 supply cabinet
Workshop/Garage Storage
1 swamp cooler
1 portable swamp cooler
1 portable air conditioning unit
1 Hampton Bay window A/C unit
1 Porter 25 gallon air compressor with hose (135 PSI)
3 Rainbird sprinkler controls
1 Refrigerator (used for parts)
Miscellaneous tools & maintenance inventory
2 air conditioning units in stock for emergency installation use
EXHIBIT "B"
71540 .0 a0047
31 TO WARRANTY BILL OF SALE
715407.04 a08/31/06
EXHIBIT "E"
ASSIGNMENT OF TENANT LEASES
This ASSIGNMENT OF TENANT LEASES ("Assignment") is made as of
, 200_, by and between FRANK R. GOODMAN AND ASSOCIATES, a
California limited partnership ("Assignor"), and LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic ("Assignee").
RECITALS:
A. Concurrently with the delivery of this Assignment, Assignor has conveyed to
Assignee and Assignee has acquired from Assignor a fee simple estate in and to certain real
property located in the County of Riverside, State of California, more particularly described in
Appendix No. I attached hereto (the "Real Property") pursuant to that certain Purchase and Sale
Agreement and Escrow Instructions dated , 2006 (the "Purchase Agreement").
B. Pursuant to the Purchase Agreement, Assignor is to assign to Assignee and
Assignee is to assume certain rights and obligations under those certain leases affecting the
Property as amended or modified (collectively, the "Tenant Leases"), which Tenant Leases are
more particularly described in Appendix No. 2 attached hereto and incorporated herein by this
reference.
NOW, THEREFORE, Assignor and Assignee agree as follows:
ARTICLE I
ASSIGNMENT OF TENANT LEASES
1.1 Assignment. Assignor hereby assigns to Assignee all of Assignor's right, title and
interest in and to all Tenant Leases affecting the Property as of the Effective Date, including, but
not limited to, all security and other deposits and prepaid rents paid thereunder (hereafter
defined).
1.2 Assumption. Assignee hereby accepts the foregoing assignment, assumes the
Tenant Leases and agrees to timely keep, perform and discharge all of the obligations of the
lessor under the Tenant Leases that accrue from and after the Effective Date hereof.
1.3 Indemnification. Assignor shall indemnify, protect, defend and hold Assignee
harmless from all losses, damages, claims, liabilities, demands, costs, offset rights and expenses,
including, without limitation, attorneys' fees arising out of any failure of Assignor to keep,
perform and discharge all of the obligations of lessor under the Tenant Leases prior to the
Effective Date. Assignee shall indemnify, protect, defend and hold Assignor harmless from all
losses, demands, damages, claims, liabilities, demands, costs, expenses and offset rights,
including, without limitation, attorneys' fees arising out of any failure of Assignee to so keep,
EXHIBIT "E"
TO PURCHASE AND SALE AGREEMENT AND
ESCROW INSTRUCTIONS
882/015610-0047
715407.04a08/31/06 Page 1 of
perform and discharge all of the obligations of the lessor under the Tenant Leases that accrue
from and after the Effective Date.
1.4 Effective Date. The "Effective Date" of this Assignment shall be the date that
Assignee acquires the Real Property.
1.5 Consistency with Purchase Agreement. Nothing in this Assignment shall be
construed to modify or limit any provisions of the Purchase Agreement and in the event of any
inconsistency between this Assignment and the Purchase Agreement, the Purchase Agreement
shall control
ARTICLE II
MISCELLANEOUS
2.1 Attorneys' Fees. In the event of any action between Assignor and Assignee
seeking enforcement of any of the terms and conditions to this Assignment, the prevailing party
in such action, whether by fixed judgment or settlement, shall be entitled to recover, in addition
to damages, injunctive or other relief, its actual costs and expenses, including, but not limited to,
actual attorneys' fees, court costs and expert witness fees. Such costs shall include attorneys'
fees, costs and expenses incurred in (a) post judgment motions, (b) contempt proceedings, (c)
garnishment, levy and debtor and third -party examination, (d) discovery, and (e) bankruptcy
litigation.
2.2 Inurement. This Assignment shall inure to the benefit of Assignor and Assignee,
and their respective heirs, assigns and successors in interest.
2.3 Counterparts. This Assignment may be signed by the parties in different
counterparts and the signature pages combined to create a document binding on all parties.
2.4 Governing Law. This Assignment shall be governed by and construed in
accordance with the internal laws of the State of California without regard to conflicts of law.
[end — signatures on next page]
EXHIBIT "E"
TO PURCHASE AND SALE AGREEMENT AND
ESCROW INSTRUCTIONS
882/015610-0047 Page 2 of 3
715407.04 a08/31/06 g
IN WITNESS WHEREOF, the parties have executed this Assignment as of the day and
year first above written to be effective as of the Effective Date defined in Paragraph 1.4 hereof.
Date:
Date:
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Lo
Agency Attorney
"ASSIGNOR"
FRANK R. GOODMAN AND ASSOCIATES,
a California limited partnership
By: Kittredge Sollenberger, LLC, a
California limited liability company
It: General Partner
By:
Its:
BE
"ASSIGNEE"
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
Bv:
Thomas P. Genovese,
Executive Director
EXHIBIT "E"
TO PURCHASE AND SALE AGREEMENT AND
882i015610ooa7 ESCROW INSTRUCTIONS
715407.04 a08/31/06 Page 3 of 3
APPENDIX NO. 1
LEGAL DESCRIPTION OF REAL PROPERTY
THAT CERTAIN REAL PROPERTY SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF RIVERSIDE, CITY OF LA QUINTA, AND DESCRIBED AS FOLLOWS:
Parcel 1, together with the West I 1 feet of Parcel 2 of Parcel Map No. 12323, in
the County of Riverside, State of California, as per map recorded in Book 56,
page(s) 27 and 28, of Parcel Maps, in the office of the County Recorder of said
County.
APN: 609-040-007
609-040-023
882/015610-0047 APPENDIX NO. 1
715407.04 a08/31/06 TO ASSIGNMENT OF LEASES
APPENDIX NO. 2
SCHEDULE OF TENANT LEASES
Seller shall prepare a list of the Tenant Leases affecting the Real Property including any
amendments or modifications thereto and all security and other deposits and prepaid rents
thereunder. Such list shall be inserted as Appendix No. 2 to the Assignment prior to its
execution.
APPENDIX NO.2
882/015610-0047
715407.04 a08/31/06 TO ASSIGNMENT OF LEASES
EXHIBIT "F"
NON -FOREIGN AFFIDAVIT
Section 1445 of the Internal Revenue Code provides that the transferee of an interest in
real property located in the United States must withhold tax if the transferor is a foreign person.
To inform . Buyer, LA QUINTA REDEVELOPMENT AGENCY ("Transferee"), that
withholding of tax is not required upon the sale by FRANK R. GOODMAN AND
ASSOCIATES, a California limited partnership ("Transferor"), of its fee simple interest in that
certain real property sold pursuant to the Purchase and Sale Agreement and Escrow Instructions
dated , 2006, which real property is described in Attachment No. 1, attached
hereto and made a part hereof, the undersigned hereby certifies the following:
1. The Transferor is not a foreign corporation, foreign partnership, foreign trust, or
foreign estate (as those terms are defined in the Internal Revenue Code and the income tax
regulations promulgated thereunder);
2. The Transferor's United States Taxpayer Identification Number is
3. The Transferor's office address is 3091 Old Post Lane, Auburn, CA 95603; and
4. The Internal Revenue Service has not issued any notice with respect to Transferor
or listed Transferor as a person whose affidavit may not be relied upon for purposes of Section
1445 of the Internal Revenue Code.
The Transferor understands that this certification may be disclosed to the Internal
Revenue Service by Transferee and that any false statement contained herein could be punished
by fine, imprisonment or both.
[continued on next page]
EXHIBIT "F"
TO PURCHASE AND SALE AGREEMENT AND
882/015610-0047
715407.04 a08/31 /06 ESCROW INSTRUCTIONS
Under penalty of perjury, I declare that I have examined this certification and to the best
of my knowledge and belief it is true, correct and complete, and I further declare that I am the
General Partner of Transferor and that I have authority to sign this document on behalf of the
Transferor.
Date:
Date:
"ASSIGNOR"
FRANK R. GOODMAN AND ASSOCIATES,
a California limited partnership
By: Kittredge Sollenberger, LLC, a
California limited liability company
It: General Partner
By:
Its:
By:
Its:
EXHIBIT "F"
TO PURCHASE AND SALE AGREEMENT AND
715 0 7.04 a0 47
/31 ESCROW INSTRUCTIONS
715407.04 a08/31 /06
ATTACHMENT NO. 1
LEGAL DESCRIPTION OF REAL PROPERTY
.,
THAT CERTAIN REAL PROPERTY SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF RIVERSIDE, CITY OF LA QUINTA, AND DESCRIBED AS FOLLOWS:
Parcel 1, together with the West 1 I feet of Parcel 2 of Parcel Map No. 12323, in
the County of Riverside, State of California, as per map recorded in Book 56,
page(s) 27 and 28, of Parcel Maps, in the office of the County Recorder of said
County.
APN: 609-040-007
609-040-023
ATTACHMENT NO. 1
715 0 7.04a0 47
/31 TO NON -FOREIGN AFFIDAVIT
715407.04 a08/31/O6
EXHIBIT "G"
ASSIGNMENT OF CONTRACTS PERMITS, INTANGIBLE
PERSONAL PROPERTY, WARRANTIES AND GUARANTIES
This ASSIGNMENT OF CONTRACTS, PERMITS, INTANGIBLE PERSONAL
PROPERTY, WARRANTIES AND GUARANTIES ("Assignment") is made and entered into
this day of , 200_, by and between FRANK R. GOODMAN AND
ASSOCIATES, a California limited partnership ("Assignor"), and LA QUINTA
REDEVELOPMENT AGENCY, a public body, corporate and politic ("Assignee").
RECITALS:
This Assignment is made with reference to the following facts and intentions of the
parties:
A. Concurrently with the delivery of this Assignment, Assignor has conveyed to
Assignee and Assignee has acquired from Assignor a fee simple estate in and to certain real
property located in the County of Riverside, State of California, more particularly described in
Schedule No. I attached hereto (the "Real Property") pursuant to that certain Purchase and Sale
Agreement and Escrow Instructions dated , 2006 (the "Purchase Agreement").
B. Assignor, in connection with the orderly operation of the Real Property, has
entered into certain labor service, supply maintenance, landscape, property management, leasing,
insurance and other contracts, copies of which have been given to and approved by Assignee. In
accordance with the terms and conditions of the Purchase Agreement, Assignor has agreed to
assign to Assignee and Assignee has agreed to accept the assignment of all contracts which
Assignee elects to assume. A schedule of all such contracts Assignee has elected to assume are
attached hereto as Schedule No. 2 (collectively, "Contracts").
C. Assignor is the owner of or holder of certain permits, licenses, plans and
specifications and certificates of occupancy relating to the Real Property (collectively,
"Permits") including but not limited to those permits, licenses, plans and specifications and
certificates of occupancy set forth in the schedule attached hereto as Schedule No. 3.
D. Assignor is the owner and possessor of certain trade names, logos, signs,
trademarks, styles, telephone listings and numbers, manuals, lists of prospective tenants,
advertising materials, all plans and specifications, specifications relating to the improvements
and fixtures located on the Real Property, including all working drawings and "as -built"
drawings and all reports and studies relating to the Property (as defined in the Purchase
Agreement") and similar items included within, related to or otherwise pertaining to the Property
(collectively, "Intangible Personal Property"), including but not limited to the Intangible
Personal Property set forth in the schedule attached hereto as Schedule No. 4.
EXHIBIT "G"
TO PURCHASE AND SALE AGREEMENT AND
882/015610-0047 ESCROW INSTRUCTIONS
715407.04 a08/31/06 Page I of 4
E. Assignor is the owner or holder of certain warranties and guaranties now in effect
with respect to the Property (collectively, "Warranties and Guaranties"), including, but not
limited to, the warranties and guaranties listed in the schedule set forth in Schedule No. 5
attached hereto.
F. Pursuant to the terms of the Purchase Agreement, Assignor has agreed to assign, to
Assignee all of its right, title and interest in and to the Contracts, Permits, Intangible Personal
Property and Warranties and Guaranties.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the parties agree as follows:
ARTICLE I
ASSIGNMENT_ OF CONTRACTS PERMITS INTANGIBLE
PERSONAL PROPERTY, WARRANTIES AND GUARANTIES
1.1 Assignment of Contracts. Assignor hereby assigns, transfers and conveys to
Assignee all of Assignor's right, title and interest in and to all of the Contracts set forth in
Schedule No. 2, and Assignee accepts and agrees to assume the obligations of Assignor under
the Contracts occurring after the Effective Date (as hereinafter defined).
1.2 Assignment of Permits, Intangible Personal Property Warranties and Guaranties.
As of the Effective Date, Assignor hereby assigns to Assignee all of Assignor's right, title and
interest in and to all Permits, Intangible Personal Property and Warranties and Guaranties
relating to the Real Property, including, without limitation, those Permits, Intangible Personal
Property and Warranties and Guaranties described in Schedule Nos. 3, 4, and 5, respectively. As
of the Effective Date, Assignee hereby accepts the foregoing assignment of any and all Permits,
Intangible Personal Property and Warranties and Guaranties now in effect with respect to the
Property.
1.3 No Liability; Indemnification. This Assignment and its acceptance by Assignee
shall not impose any liability on Assignee for any default by Assignor under the Contracts,
Permits, Intangible Personal Property, and Warranties and Guaranties occurring prior to the
Effective Date. Assignor shall indemnify, protect, defend and hold Assignee harmless from any
and all losses, demands, damages, claims, liabilities, costs and expenses, including, but not
limited to, attorneys' fees arising out of or in connection with any default by Assignor under the
Contracts, Permits, Intangible Personal Property, and Warranties and Guarantees occurring prior
to the Effective Date. Assignee shall indemnify, protect, defend and hold Assignor harmless
from any and all losses, damages, claims, liabilities, costs and expenses including, without
limitation, attorneys' fees, arising out of or in connection with any default by Assignee under the
Contracts, Permits, Intangible Personal Property, and Warranties and Guarantees that occurs
after the Effective Date.
EXHIBIT "G"
TO PURCHASE AND SALE AGREEMENT AND
882/015610-0047 ESCROW INSTRUCTIONS
715407.04 a08/31/06 Page 2 of 4
1.4 Effective Date. The "Effective Date" of this Assignment shall be the date that
Assignee acquires fee simple interest in and to the Real Property described in Schedule No. 1
attached hereto pursuant to the Purchase Agreement.
1.5 Consistency with Purchase Agreement. Nothing in this Assignment shall be
construed to modify or limit any provisions in the Purchase Agreement and in the event of any
inconsistency between this Assignment and the Purchase Agreement, the latter shall govern and
control.
ARTICLE II
MISCELLANEOUS
2.1 Attorneys' Fees. In the event of any action between Assignor and Assignee
seeking enforcement of any of the terms and conditions to this Assignment, the prevailing party
in such action, whether by fixed judgment or settlement, shall be entitled to recover, in addition
to damages, injunctive or other relief, its actual costs and expenses, including, but not limited to,
actual attorneys' fees, court costs and expert witness fees. Such costs shall include attorneys'
fees, costs and expenses incurred in (a) post judgment motions, (b) contempt proceedings, (c)
garnishment, levy and debtor and third -party examination, (d) discovery, and (e) bankruptcy
litigation.
2.2 Inurement. This Assignment shall inure to the benefit of Assignor and Assignee,
and their respective heirs, assigns and successors in interest.
2.3 Counterparts. This Assignment may be signed by the parties in different
counterparts and the signature pages combined to create a document binding on all parties.
2.4 Governing Law. This Assignment shall be governed by and construed in
accordance with the internal laws of the State of California without regard to conflicts of law.
[end — signature page follows]
EXHIBIT "G"
TO PURCHASE AND SALE AGREEMENT AND
ESCROW INSTRUCTIONS
882/015610-0047
715407.04 a08/31/06 Page 3 of 4
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the
date first above written to be effective as of the Effective Date.
Date:
Date:
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
IM
Agency Attorney
"ASSIGNOR"
FRANK R. GOODMAN AND ASSOCIATES,
a California limited partnership
By: Kittredge Sollenberger, LLC, a
California limited liability company
It: General Partner
By:
Its:
By:
Its:
"ASSIGNEE"
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
By:
Thomas P. Genovese,
Executive Director
EXHIBIT "G"
TO PURCHASE AND SALE AGREEMENT AND
ESCROW INSTRUCTIONS
882/015610-0047 Page 4 of 4
715407.04 a08/31/06 g
SCHEDULE NO. 1
LEGAL DESCRIPTION OF REAL PROPERTY
THAT CERTAIN REAL PROPERTY SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF RIVERSIDE, CITY OF LA QUINTA, AND DESCRIBED AS FOLLOWS:
Parcel 1, together with the West I 1 feet of Parcel 2 of Parcel Map No. 12323, in
the County of Riverside, State of California, as per map recorded in Book 56,
page(s) 27 and 28, of Parcel Maps, in the office of the County Recorder of said
County.
APN: 609-040-007
609-040-023
SCHEDULE NO. 1
882/015610-0047 715407.04 a08/31/06 TO ASSIGNMENT OF CONTRACTS
7131
SCHEDULE NO. 2
SCHEDULE OF CONTRACTS ASSIGNED
Prior to execution of this document, Assignor shall provide a list of all Contracts and,
from that list, Assignee shall prepare and insert a schedule of all of the Contracts it elects to
assume pursuant to this Assignment prior to execution of this Assignment.
SCHEDULE NO.2
882/015610-0047
715407.04 a08/31/06 TO ASSIGNMENT OF CONTRACTS
SCHEDULE NO. 3
SCHEDULE OF PERMITS LICENSES AND CERTIFICATES OF OCCUPANCY
A list of any and all permits, licenses and certificates of occupancy in Assignor's
possession issued or obtained for the Property, or any part thereof, shall be prepared by Assignor
and approved by Assignee and inserted herein prior to the execution of this Assignment.
882/015610-0047 SCHEDULE NO.3
715407.04 a08/31/06 TO ASSIGNMENT OF CONTRACTS
SCHEDULE NO.4
SCHEDULE OF INTANGIBLE PERSONAL PROPERTY
A list of any and all Intangible Personal Property included within the Property shall be
prepared by Assignor and approved by Assignee and inserted herein prior to execution of this
Assignment.
882/015610-0047 SCHEDULE NO.4
715407.04 ao8/31/06 TO ASSIGNMENT OF CONTRACTS
SCHEDULE NO.5
SCHEDULE OF WARRANTIES AND GUARANTIES
Prior to execution of the Assignment, Assignor shall prepare a list to be approved by
Assignee of any and all warranties and guaranties then in effect with respect to the Property
conveyed to Assignee.
SCHEDULE NO. 5
882/015610-0047
715407.04 a08/31/06 TO ASSIGNMENT OF CONTRACTS
EXHIBIT "H"
SCHEDULE OF ALL LABOR, SERVICE, EMPLOYMENT SUPPLY
MAINTENANCE AND BROKERAGE LEASING CONTRACTS
There are no contracts for labor, service, employment, supply, maintenance or brokerage
leasing contracts. There are vendors and contractors that have provided services on a monthly
basis for years, however, they are not under contract.
EXHIBIT "H"
882/015610-0047 TO PURCHASE AND SALE AGREEMENT AND
715407.04 a08/31/06 ESCROW INSTRUCTIONS
EXHIBIT "I"
CERTIFICATE OF SELLER REGARDING REPRESENTATIONS
AND WARRANTIES
FRANK R. GOODMAN AND ASSOCIATES ("Seller") has entered into a Purchase and
Sale Agreement and Escrow Instructions (the "Agreement") dated , 2006
with LA QUINTA REDEVELOPMENT AGENCY ("Buyer"), for the purchase and sale of that
certain real property as described in Exhibit "A" attached to the Agreement. Pursuant to Section
6.1(b) of the Agreement, Seller hereby certifies to Buyer that all representations and warranties
made by Seller pursuant to Section 6.1 of the Agreement are true and correct as of the Close of
Escrow excepting those matters which are set forth in detail in Schedule No. 1 attached hereto
and incorporated herein by this reference.
All representations and warranties made by Seller shall survive the Close of Escrow.
"SELLER"
FRANK R. GOODMAN AND ASSOCIATES,
a California limited partnership
By: Kittredge Sollenberger, LLC, a
California limited liability company
It: General Partner
By:
Its:
By:
Its:
EXHIBIT "I"
882/015610-0047 TO PURCHASE AND SALE AGREEMENT AND
715407.04a08/31/06 ESCROW INSTRUCTIONS
SCHEDULE NO. 1
EXCEPTIONS FROM SELLER'S REPRESENTATIONS AND WARRANTIES
882/015610-0047 SCHEDULE NO. 1
715407.04 a08/31/06 TO CERTIFICATE OF SELLER
EXHIBIT "J"
NOTICE TO TENANTS
TO: All Tenants of WASHINGTON STREET APARTMENTS ("Apartments")
Please be advised that the Apartments has, on the date hereof, been sold by the
undersigned Seller to La Quinta Redevelopment Agency.
All future rent payments should be made to the new owner at:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Finance Department
Your security deposit in the amount of $ has been assigned to the new owner
who will be responsible for complying with the provisions of the California Civil Code with
respect to return of the deposit.
If you have any questions, notify:
Dated: , 200
Date:
Date:
"SELLER"
FRANK R. GOODMAN AND ASSOCIATES,
a California limited partnership
By: Kittredge Sollenberger, LLC, a
California limited liability company
It: General Partner
By:
Its:
By:
Its:
EXHIBIT "J"
882/015610-0047 TO PURCHASE AND SALE AGRAEEMENT
715407.04 a08/31/06 AND ESCROW INSTRUCTIONS
EXHIBIT "K"
LEAD -BASED PAINT DISCLOSURE AND ACKNOWLEDGMENT
LEAD WARNING STATEMENT:
Every purchaser of any interest in residential real property on which a residential dwelling was
built prior to 1978 is notified that such property may present exposure to lead from lead -based
paint, paint chips and dust that may place young children at risk of developing lead poisoning.
Lead can pose health hazards if not taken care of properly. Lead poisoning in young children
may produce permanent neurological damage, including learning disabilities, reduced
intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a
particular risk to pregnant women. The seller of any interest in pre-1978 residential real
property, prior to the sale, is required to: (a) provide the buyer with any information on lead -
based paint hazards from risk assessments or inspections in the seller's possession; (b) notify the
buyer of any known lead -based paint hazards; and (c) give the buyer a Federally approved
pamphlet on lead poisoning prevention. A risk assessment or inspection for possible lead -based
paint hazards is recommended prior to purchase.
SELLER'S DISCLOSURE
(A) Presence of lead -based paint and lead -based paint hazards (check one below):
o Known lead -based paint and/or lead -based paint hazards are present in the
housing. (Explanation:
o Seller has no knowledge of lead -based paint and/or lead -based paint hazards in
the housing.
(B) Records and reports available to the seller (check one below):
o Seller has provided the purchaser with all available records and reports pertaining
to lead -based paint and/or lead -based paint hazardous in the housing. (List
documents:)
o Seller has no reports or records pertaining to lead -based paint and/or lead -based
paint hazards in the housing.
EXHIBIT "K"
882/015610-0047 TO PURCHASE AND SALE AGREEMENT AND
715407.04 a08/31/06 ESCROW INSTRUCTIONS
CERTIFICATION OF ACCURACY
The undersigned has reviewed the information above and certifies, to the best of its knowledge,
that the information provided by the signatory is true and accurate.
Date:
Date:
"SELLER"
FRANK R. GOODMAN AND ASSOCIATES,
a California limited partnership
By: Kittredge Sollenberger, LLC, a
California limited liability company
It: General Partner
By:
Its:
By:
Its:
EXHIBIT "K"
882/015610-0047 TO PURCHASE AND SALE AGREEMENT AND
715407.04 a08/31/06 ESCROW INSTRUCTIONS
EXHIBIT "L"
PENDING OR THREATENED CLAIMS, ALLEGATIONS OR LAWSUITS
On or before the execution of this Agreement, Seller shall prepare a Schedule of all
pending or threatened claims, allegations or lawsuits whether for personal injury, property
damage, landlord -tenant disputes, property taxes or otherwise affecting Seller or the Property,
shall deliver the Schedule to Buyer who shall approve it, and if approved, thereafter said
Schedule shall be inserted herein.
EXHIBIT "L"
882/015610-0047 TO PURCHASE AND SALE AGREEMENT AND
715407.04 a08/31/06 ESCROW INSTRUCTIONS
AMENDMENT NO.1 TO PURCHASE AND SALE
AGREEMENT AND ESCROW INSTRUCTIONS
THIS AMENDMENT NO. 1 TO PURCHASE AND SALE AGREEMENT AND
ESCROW INSTRUCTIONS ("Amendment No. 1") is made and entered into as of
ata,bel- 3 , 2007 (the "Amendment Date") by and between LA QUINTA
REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and FRANK
R. GOODMAN & ASSOCIATES, a California partnership (the "Partnership").
RECITALS:
A. On or about December September 6, 2006, the Agency and the Partnership
entered into that certain Purchase and Sale Agreement and Escrow Instructions (the
"Agreement"), pursuant to which the Partnership agreed to sell to the Agency, and the Agency
agreed to purchase from the Partnership, that certain improved real property located at 42-800
Washington Street, in unincorporated territory in the County of Riverside, State of California
(the "Property"). Unless otherwise specifically provided herein, all of the capitalized terms
used herein shall have the meanings ascribed thereto in the Agreement.
B. Pursuant to the Agreement, Agency's conditions precedent to the Close of Escrow
include that (i) the Property shall, concurrently with the Closing, be annexed into the City of La
Quinta ("City") (or such annexation shall be imminent as determined by Agency in Agency's
sole discretion) and no judicial challenges shall have been presented or filed against the Local
Agency Formation Commission or the City of La Quinta's actions in connection with said
annexation;, and (ii) the Agency shall have determined that the Property is compliant with all of
the USDA Restrictions and shall have negotiated the USDA Assumption Agreements, pursuant
to Section 3.7 of the Agreement.
C. As of the Amendment Date, all conditions precedent to the Agency's annexation
of the Property into the City have been satisfied, but the Agency has not yet determined that the
Property is compliant with all of the USDA Restrictions and has not yet negotiated the USDA
Assumption Agreements, pursuant to Section 3.7 of the Agreement.
D. Agency and the Partnership now wish to amend the Agreement to provide (i) for
the release to the Partnership of all portions of the Deposit that are still held by the Escrow
Holder; (ii) that all amounts released from the Deposit prior to and as a result of this Amendment
No. 1 shall be applied to the Purchase Price; (iii) that the Agency and/or City may complete the
annexation of the Property into the City prior to the Close of Escrow; and (iv) for the Agency's
payment to the Partnership, on a monthly basis until the earlier of the Closing or the date the
Agency acquires the Partnership, of an option payment, all as further described below.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated
herein by this reference, and for valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
882/015610-0047
845569 02 a09/12/07 -1-
1. Within five (5) days after the date hereof, Agency shall instruct the Escrow Holder to
release to the Partnership all portions of the Deposit that are still held by the Escrow Holder.
2. The Partnership hereby agrees that all amounts released to the Partnership from the
Deposit prior to and/or as a result of this Amendment No. 1 shall be applied to the Purchase
Price.
3. The Agency hereby agrees that the conditions precedent listed in Sections 4.1(b), (c), (d),
(e), (f), (h), (1), and (m) of the Agreement are satisfied or waived.
4. The Agency and Partnership hereby agree that the City and/or Agency may complete the
annexation of the Property into the City prior to the Close of Escrow.
5. Commencing on October 1, 2007, and continuing on the first of each month thereafter
until the earlier of (a) the Close of Escrow; or (b) the date the Agency acquires a majority interest
in the Partnership (with the first of such foregoing dates hereinafter referred to as the "Option
Tennination Date"), the Agency shall pay to the Partnership an option payment in the sum of
Fourteen Thousand Forty Dollars ($14,040) (each payment, an "Option Payment"). If the Option
Termination Date occurs on any date other than the last day of a month, the Option Payment paid
in that month shall be prorated for the month, and all excess amounts paid by the Agency shall
be applied towards the Purchase Price. Except as set forth in the preceding sentence, the
Agency's Option Payments hereunder shall not be applied towards the Purchase Price.
6. Notwithstanding anything herein or in the Agreement to the contrary, if the Close of
Escrow does not occur by October 1, 2008, either party may terminate the Agreement and
Escrow, by providing written notice thereof to the other party, and neither party shall have any
further liability to the other party thereafter.
7. Except as otherwise expressly provided in this Amendment No. 1, all of the terms and
conditions of the Agreement shall remain in full force and effect.
8. In the event of any action between Agency and the Partnership seeking enforcement of
any of the terms and conditions to this Amendment No. 1, the prevailing party in such action
shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and
expenses, including without limitation its expert witness fees and reasonable attorney's fees.
9. This Amendment No. 1 shall be construed according to its fair meaning and as if
prepared by both parties hereto.
10. This Amendment No. 1 shall be governed by the internal laws of the State of California
and any question arising hereunder shall be construed or determined according to such law. The
Superior Court of the State of California in and for the County of Riverside, or such other
appropriate court in such county, shall have exclusive jurisdiction of any litigation between the
parties concerning this Amendment No. 1. Service of process on Agency shall be made in
accordance with California law. Service of process on the Partnership shall be made in any
882/015610-0047
845569.02 a09/12/07 -2-
manner permitted by California law and shall be effective whether served inside or outside
California.
11. Time is of the essence of this Amendment No. 1 and of each and every term and
provision hereof.
12. A waiver of a provision hereof, or modification of any provision herein contained, shall
be effective only if said waiver or modification is in writing, and signed by both Agency and the
Partnership. No waiver of any breach or default by any party hereto shall be considered to be a
waiver of any breach or default unless expressly provided herein or in the waiver.
13. This Amendment No. 1 may be executed in counterparts, each of which, when this
Amendment No. 1 has been signed by all the parties hereto, shall be deemed an original, and
such counterparts shall constitute one and the same instrument.
14. The person(s) executing this Amendment No. 1 on behalf of each of the parties hereto
represent and warrant that (i) such party is duly organized and existing, (ii) they are duly
authorized to execute and deliver this Amendment No. 1 on behalf of said party, (iii) by so
executing this Amendment No. 1 such party is formally bound to the provisions of this
Amendment No. 1, and (iv) the entering into this Amendment No. 1 does not violate any
provision of any other agreement to which such party is bound.
[End — Signature Page Follows]
182/015610-0047
845569 02 a09/12/07 -3-
IN WITNESS WHEREOF, Agency and the Partnership each hereby represents that it has
read this Amendment No. 1, understands it, and hereby executes this Amendment No. 1 to be
effective as of the day and year first written above.
Date: 2007
Date:
2007
Date: 4Zkh&` 5 , 2007
"Partnership"
FRANK R. GOODMAN AND ASSOCIATES,
a California limited partnership
By: Kittredge Sollenberger, LLC, a
California limited ability company
It: General PadJ A—/ ,/
By:
Its:
By:
Its:
"Agency"
LA QUINTA4REDELOP�M�ENTAGENCY,
a public bodyanditic
By:A
ATTFT:
eronica J. Mo ecino, Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
By:
Nf Kath 'ne Jenson, Whey Counsel
882/015610-0047
845569.02 a09/12/07 -4-
IN WITNESS WHEREOF, Agency and the Partnership each hereby represents that it has
read this Amendment No. 1, understands it, and hereby executes this Amendment No. 1 to be
effective as' of the day and year first written above.
"Partnership"
FRANK R. GOODMAN AND ASSOCIATES,
a California limited partnership
Date: q - 9-(0 2007
Date,: 2007
Date: a fps/ ' 2007
APPROVED AS TO FORM:
RUTAN &,4UCKER, LLP
By:
. Kather ne Jenso ency Counsel
By: Kittredge Sollenberger, LLC, a
California limited liability company
It: General P
ts.' �'
"Agency"
LA QUINTA RP)EVELOPMENT AGENCY,
a public body rporate and politic
M-
882/015610-0047
845569.02 a09/12/07 4-