Form 8-K - CURRENT REPORT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 27, 2002
WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 2-84760 04-2839837
(State or other jurisdiction (Commission (I.R.S. Employer
incorporation) File Number) Identification Number)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(Registrant's telephone number)
(864) 239-1000
N/A
(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
The Registrant sold one of its investment properties, Stratford Village
Apartments located in Montgomery, Alabama on November 27, 2002. Stratford
Village Apartments was sold to B&M Management Company, LLC, an unrelated party,
for $9,514,000.
Item 7. Financial Statements and Exhibits
(b) Pro forma financial information.
The required pro forma financial information will be provided in the
Registrant's annual report on Form 10-KSB for the year ended December 31, 2002.
(c) Exhibits
10.21 Purchase and Sale Contract between Registrant and B&M Management
Company, LLC, effective November 27, 2002.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WINTHROP GROWTH INVESTORS I LIMITED PARTNERSHIP
By: Two Winthrop Properties, Inc.
Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Vice President - Residential
Date: December 24, 2002
EXHIBIT 10.21
PURCHASE AND SALE CONTRACT
BETWEEN
STRATFORD VILLAGE REALTY TRUST,
a Massachusetts trust
AS SELLER
AND
B&M MANAGEMENT COMPANY, L.L.C.,
an Alabama limited liability company
AS PURCHASER
Table of Contents
Page
Article 1 DEFINED TERMS.................................................1
Article 2 PURCHASE AND SALE OF PROPERTY.................................4
Article 3 PURCHASE PRICE, DEPOSIT AND ESCROW PROVISIONS.................4
Article 4 FEASIBILITY PERIOD............................................5
Article 5 TITLE AND SURVEY .............................................7
Article 6 FINANCING....................................................10
Article 7 CLOSING......................................................10
Article 8 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND
PURCHASER....................................................15
Article 9 CONDITIONS PRECEDENT TO CLOSING..............................19
Article 10 BROKERAGE....................................................21
Article 11 POSSESSION...................................................21
Article 12 DEFAULTS AND REMEDIES........................................21
Article 13 RISK OF LOSS OR CASUALTY.....................................23
Article 14 OFFER DEADLINE DATE..........................................23
Article 15 EMINENT DOMAIN...............................................23
Article 16 MISCELLANEOUS................................................24
Article 17 OPERATION OF THE PROPERTY....................................28
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT ("Purchase Contract") is entered into as
of the 18th day of October, 2002 (the "Effective Date"), by and between
STRATFORD VILLAGE REALTY TRUST, a Massachusetts trust, having a principal
address at c/o AIMCO, 2000 South Colorado Blvd., Suite 2-1000, Denver, Colorado
80222 ("Seller") and B&M MANAGEMENT COMPANY, L.L.C., an Alabama limited
liability company, having a principal address at 8650 Minnie Brown Road,
Montgomery, AL 36117 ("Purchaser").
NOW, THEREFORE WITNESSETH: That for and in consideration of mutual
covenants and agreements herein after set forth, Seller and Purchaser hereby
agree as follows:
RECITALS
R-l. Seller holds legal title to that certain parcel of real estate located in
Montgomery County, Alabama as more particularly described in Exhibit A attached
hereto and made a part hereof on which improvements have been constructed.
R-2. Purchaser desires to purchase and Seller has agreed to sell such land and
improvements defined below as the "Property" on the terms and conditions set
forth below (which terms and conditions shall control in the event of any
conflict with these Recitals), such that on the Closing Date as defined in this
Purchase Contract the Property will be conveyed by special warranty or
equivalent deed to Purchaser.
R-3. Purchaser has agreed to pay to Seller the Purchase Price for the Property,
and Seller has agreed to sell the Property to Purchaser on the terms and
conditions set forth below.
Article 1...
DEFINED TERMS
1.1 Terms with initial capital letters in this Purchase Contract and not
otherwise defined herein shall have the meanings set forth in this Article l
below.
1.1.1 "Business Day" means any day other than a Saturday or Sunday or Federal
holiday or legal holiday in the State in which the Land is located.
1.1.2 "Closing" means the consummation of the purchase and sale contemplated by
this Purchase Contract in accordance with the terms and conditions of this
Purchase Contract.
1.1.3 "Closing Date" means the date on which the Closing of the conveyance of
the Property is required to be held under the terms and conditions of this
Purchase Contract.
1.1.4 "Escrow Agent" means Fidelity Title Insurance Company.
1.1.5 "Excluded Permits" means those Permits which, under applicable law, are
nontransferable and such other Permits as may be designated as Excluded Permits
on Exhibit 1.1.5, if any, attached hereto.
1.1.6 "Existing Financing" shall mean the loan made by the Lender in the
original principal amount shown on Exhibit 1.1.6 attached hereto which is
secured by a first priority lien encumbering the Property.
1.1.7 "Feasibility Period" shall have the meaning ascribed to it in Section 4.1.
1.1.8 "Fixtures and Tangible Personal Property" means all fixtures, furniture,
furnishings, fittings, equipment, machinery, apparatus, appliances and other
articles of tangible personal property now located on the Land or in the
Improvements as of the Effective Date (or hereafter acquired by Seller prior to
the Closing Date) and used or usable in connection with any present or future
occupation or operation of all or any part of the Property, but only to the
extent transferable. The term "Fixtures and Tangible Personal Property" does not
include (i) equipment leased by Seller and the interest of Seller in any
equipment provided to the Property for use, but not owned or leased by Seller,
or (ii) property owned or leased by any Tenant and guest, employee or other
person furnishing goods or services to the Property, or (iii) property and
equipment owned by Seller, which in the ordinary course of business of the
Property is not used exclusively for the business, operation or management of
the Property, or (iv) the property and equipment, if any, expressly identified
as being excluded in Exhibit 1.1.8; provided, however Seller shall, during the
Feasibility Period, by written notice to Purchaser; identify any items referred
to in (i) or (iii) hereof.
1.1.9 "Improvements" means all buildings and improvements located on the Land
taken "as is", but in reliance on the representations and warranties set forth
herein.
1.1.10......"Land" means all of that certain tract of land more particularly
described on Exhibit A attached hereto and made a part hereof and all rights,
privileges and appurtenances pertaining thereto.
1.1.11......"Lease(s)" means the interest of the Seller in and to all written
leases, subleases and other occupancy agreements, whether or not of record,
which provide for the use or occupancy of space or facilities on or relating to
the Property owned by the Seller and which are in force as of the Effective Date
and the Closing Date.
1.1.12......"Lender" means Reinlein/Lieser/McGee, its successors and assigns.
1.1.13......"Loan Documents" means the documents evidencing and securing or
relating to the repayment of the Existing Financing including, without
limitation, all amendments and modifications thereto and any mortgage or deed of
trust or equivalent security title and lien encumbering the Property as of the
date hereof.
1.1.14......"Miscellaneous Property Assets" means all contract rights, leases,
concessions, warranties, plans, drawings and other items of intangible personal
property relating to the ownership or operation of the Property and owned by
Seller, but only to the extent transferable, excluding, however, (i)
receivables, (ii) Property Contracts, (iii) Leases (other than leases, subleases
and other occupancy agreements that are not written), (iv) Permits, (v) fixtures
and Tangible Personal Property, (vi) cash or other funds, whether in petty cash
or house "banks," or on deposit in bank accounts or in transit for deposit,
unless otherwise payable to Purchaser pursuant to this Purchase Contract, (vii)
escrow, reserves or other impound accounts, (viii) refunds, rebates or other
claims, or any interest thereon, for periods or events occurring prior to the
Closing Date unless Seller is obligated to apply such items for the benefit of
tenants, (ix) utility and similar deposits, (x) insurance or other prepaid
items, or (xi) Seller's proprietary books and records.
1.1.15......"Notice" shall have the meaning ascribed thereto in Section 16.6.
1.1.16......"Permits" means all licenses and permits granted by governmental
authorities having jurisdiction over the Property owned by Seller and required
in order to own and operate the Property.
1.1.17......"Permitted Exceptions" means those exceptions or conditions
permitted to encumber the title to the Property in accordance with the
provisions of Section 5.2.
1.1.18......"Property" means the Land and Improvements and all rights of Seller
relating to the Land and the Improvements, including without limitation, any
rights, title and interest of Seller, if any, in and to (i) any strips and gores
adjacent to the Land and any land lying in the bed of any street, road, or
avenue opened or proposed, in front of or adjoining the Land, to the center line
thereof; (ii) any unpaid award for any taking by condemnation or any damage to
the Property by reason of a change of grade of any street or highway; (iii) all
of the easements, rights, privileges, and appurtenances belonging or in any way
appertaining to the Land and Improvements; together with all Fixtures and
Tangible Personal Property, the right, if any and only to the extent
transferable, of Seller in the Property Contracts, Leases, Permits (other than
Excluded Permits), and the Miscellaneous Property Assets owned by Seller which
are located on the Property and used in its operation.
1.1.19......"Property Contracts" means all maintenance, service or utility
contracts and similar contracts, excluding Leases, which relate to the
ownership, maintenance, construction or repair and/or operation of the Property,
but only to the extent transferable and which are other than any property
management agreement.
1.1.20......"Purchase Contract" means this Purchase and Sale Contract by and
between Seller and Purchaser.
1.1.21......"Purchase Price" means the total consideration to be paid by
Purchaser to Seller for the purchase of the Property, as set forth in Section
3.1.
1.1.22......"Rent Roll" shall have the meaning ascribed thereto in Section
8.1.1.9.
1.1.23......"Survey" shall have the meaning ascribed thereto in Section 5.11.
1.1.24......"Tenant" or "Tenants" means any person or persons or entity entitled
to occupy any portion of the Property under a Lease.
1.1.25......"Title Commitment" shall have the meaning ascribed thereto in
Section 5.1.
1.1.26......"Title Insurer" shall have the meaning set forth in Section 5.1.
Article 2...
PURCHASE AND SALE OF PROPERTY
2.1 Seller agrees to sell and convey the Property to Purchaser and Purchaser
agrees to purchase the Property from Seller, in accordance with the terms and
conditions set forth in this Purchase Contract.
Article 3...
PURCHASE PRICE, DEPOSIT AND ESCROW PROVISIONS
3.1 The purchase price ("Purchase Price") for the Property shall be Nine Million
Five Hundred Fourteen Thousand and 00/100 Dollars ($9,514,000), which shall be
paid by Purchaser, as follows:
3.1.1 Upon the execution of this Purchase Contract, Purchaser shall deliver to
Escrow Agent a deposit in the sum of One Hundred Thousand and 00/100 Dollars
($100,000) (the "Deposit"), by federal wire transfer. Purchaser's failure to
timely deliver the Deposit shall terminate this Purchase Contract. Purchaser and
Seller each approve the form of Escrow Agreement attached as Exhibit B.
3.1.2 The Escrow Agent shall hold the Deposit and make delivery of the Deposit
to the party entitled thereto under the terms hereof. Escrow Agent shall invest
the Deposit as directed by Purchaser in its sole discretion and all interest and
income thereon shall become part of the Deposit and shall be remitted to the
party entitled to the Deposit, as set forth below.
3.1.3 If the sale of the Property is closed by the date fixed therefor (subject
to extension as set forth herein), monies held as the Deposit shall be applied
against the Purchase Price (and paid over to the Seller) on Closing Date. If the
sale of the Property is not closed by the date fixed therefor (or any such
extension date) owing to failure of satisfaction of a condition precedent to
Purchaser's obligations that is not caused by or attributable to, directly or
indirectly, any act or failure to act of Purchaser, the Deposit shall be
returned and refunded to Purchaser, and neither party shall have any further
liability hereunder, subject to and except for Purchaser's liability under
Section 4.4.
3.1.4 If the sale of the Property is not closed by the date fixed therefor
(subject to any extension set forth herein) owing to failure of performance by
Seller, Purchaser shall be entitled to the remedies set forth in Article 12
hereof. If the sale of the Property is not closed by the date fixed therefor (or
any such extension date set forth herein) owing to failure of performance by
Purchaser, the Deposit shall be forfeited by Purchaser and the sum thereof shall
go to Seller as Seller's sole and exclusive remedy forthwith as liquidated
damages for the lost opportunity costs and transaction expenses incurred by
Seller, as more fully set forth in Article 12 below.
3.1.5 The balance of the Purchase Price for the Property shall be paid to and
received by Escrow Agent by wire transfer of Good Funds no later than 1:00 p.m.
(in the time zone in which Escrow Agent is located) on the Closing Date.
Article 4...
FEASIBILITY PERIOD
4.1 Subject to the terms of Section 4.4 below, for thirty (30) calendar days
following the Effective Date (the "Feasibility Period"), Purchaser, and its
agents, contractors, engineers, surveyors, attorneys, and employees
("Consultants") shall have the right from time to time, during normal business
hours and after prior notice to Seller, to enter onto the Property:
4.1.1 To conduct and make any and all studies, tests, examinations and
inspections, or investigations of or concerning the Property (at Purchaser's
expense) (including, without limitation, environmental studies, structural
engineering and feasibility studies, evaluation of drainage and flood plain,
soil tests for bearing capacity and percolation, surveys, including
topographical surveys, title and zoning law compliance.
4.1.2 To confirm any and all matters which Purchaser may desire to confirm with
respect to the Property.
4.1.3 To ascertain and confirm the suitability of the Property for Purchaser's
intended use for such Property.
4.1.4 To review and copy (at Purchaser's expense) the materials referenced in
Section 4.3 (other than Seller's proprietary information).
4.2 Should the results of any of the matters referred to in sub paragraphs
4.1.1, 4.1.2, 4.1.3 and 4.1.4 above appear unsatisfactory to Purchaser for any
reason or if Purchaser elects not to proceed with the transaction contemplated
by this Purchase Contract, for any other reason, or for no reason whatsoever, in
Purchaser's sole and absolute discretion, Purchaser shall have the right to
terminate this Purchase Contract by giving written Notice to that effect to
Seller and Escrow Agent on or before 5:00 p.m. EST on the date of expiration of
the Feasibility Period. If Purchaser exercises its rights to terminate, this
Purchase Contract shall terminate and be of no further force and effect, subject
to and except for Purchaser's liability under Section 4.4, and Escrow Agent
shall forthwith deliver to Seller One Hundred and 00/100 Dollars ($100.00) as
consideration for Seller having taken the Property off the market, and return
the Deposit to Purchaser. If Purchaser fails to provide Seller with written
Notice of termination prior to the expiration of the Feasibility Period in
strict accordance with the Notice provisions of this Purchase Contract, this
Purchase Contract shall remain in full force and effect and Purchaser's
obligation to purchase the Property shall be non-contingent and unconditional
except only for Purchaser's right to terminate this Contract under Section 5.12
(if applicable) and satisfaction of the conditions expressly stated in this
Article 4 and in Article 9.
4.3 Within 10 days after the Effective Date, and to the extent the same exist
and are in Seller's possession or reasonable control (subject to Section 4.3.1),
Seller agrees to make the documents set forth on Schedule 4.3 (the "Materials")
available at the Property for review and copying by Purchaser at Purchaser's
sole cost and expense. In the alternative, at Seller's option and within the
foregoing 10-day period, Seller may deliver some or all of the Materials to
Purchaser, or make the same available to Purchaser on a secure web site
(Purchaser agrees that any item to be delivered by Seller under this Purchase
Contract shall be deemed delivered to the extent available to Purchaser on such
secured web site). To the extent that Purchaser determines that any of the
Materials have not been made available or delivered to Purchaser pursuant to
this Section 3.5.1, Purchaser shall notify Seller and Seller shall use
commercially reasonable efforts to deliver the same to Purchaser within 5
Business Days after such notification is received by Seller; provided, however,
that under no circumstances will the Feasibility Period be extended and Buyer's
sole remedy will be to terminate this Purchase Contract pursuant to Section 4.2.
4.3.1 Purchaser recognizes and agrees that the Materials and other documents and
information delivered or made available by Seller pursuant to this Purchase
Contract may not constitute all of such documents which are in Seller's
possession or control, but are those that are readily available to Seller after
reasonable inquiry to ascertain their availability.
4.3.2 The provisions of this Section 4.3 shall survive the Closing and delivery
of the Deed to Purchaser.
4.4 Purchaser shall indemnify, defend (with attorneys selected by Seller and
approved by Purchaser which approval shall not be unreasonably withheld,
conditioned or delayed) and hold Seller harmless for any actions taken by
Purchaser and its Consultants and any and all claims, damages, costs and
liability which may arise due to such entries, surveys, tests, investigation and
the like on the Property in connection with the performance of Purchaser's due
diligence hereunder; provided, however, that notwithstanding anything herein to
the contrary, Purchaser shall not be liable for any damages incurred by Seller
resulting from the mere discovery by Purchaser of a condition at or with regard
to the Property, Purchaser hereby acknowledging, however, that Seller shall have
no obligation to Purchaser in connection with such condition or otherwise to
remedy such condition unless the remedy of specific performance, as provided in
Article 12 hereof, would require a Seller to do so. Seller shall have the right,
without limitation, to disapprove any and all entries, surveys, tests,
investigations and the like other than Phase I environmental investigations that
in its reasonable judgment could result in any injury to the Property or breach
of any agreement, or expose Seller to any liability, costs, liens or violations
of applicable law, or otherwise adversely affect the Property or Seller's
interest therein. No consent by the Seller to any such activity shall be deemed
to constitute a waiver by Seller or assumption of liability or risk by Seller.
Purchaser hereby agrees to restore the Property to the same condition existing
immediately prior to Purchaser's exercise of its rights pursuant to this Article
4, at Purchaser's sole cost and expense, to the extent the damage to such
Property or the change in condition thereof is attributable to the performance
of due diligence hereunder by Purchaser or its Consultants. Purchaser shall
maintain comprehensive public liability insurance with broad form contractual
and personal injury liability endorsements with respect to the Property and
Purchaser's activities carried on therein, in amounts (including deductible
amounts) and with such insurance carriers as shall be approved by Seller and
naming Seller and its affiliates as additional insureds, with endorsements
acceptable to Seller, including a waiver of defenses of the insurer based on the
actions or inaction of Purchaser. Such liability insurance shall provide
coverages of not less than $1,000,000 (per occurrence and in the aggregate) for
death or injury to persons and for property damage. The provisions of this
Section shall survive the Closing or termination of this Purchase Contract.
4.5 Purchaser shall not permit any mechanic's or materialman's liens or any
other liens to attach to the Property by reason of the performance of any work
or the purchase of any materials by Purchaser or any other party in connection
with any studies or tests conducted by or for Purchaser. Purchaser shall give
notice to Seller within a reasonable time prior to entry onto the Property and
shall permit Seller to have a representative present during all investigations
and inspections conducted with respect to the Property. Purchaser shall take all
reasonable actions and implement all protections necessary to ensure that all
actions taken in connection with the investigations and inspections of the
Property, and all equipment, materials and substances generated, used or brought
onto the Property, pose no material threat to the safety of persons or the
environment and cause no damage to the Property or other property of Seller or
other persons.
Article 5...
TITLE AND SURVEY
5.1 Seller has secured a commitment for title insurance for the Property in an
amount equal to the Purchase Price ("Title Commitment") from Fidelity Title
Insurance Company (the "Title Insurer") for an owner's title insurance policy,
(a 1992 ALTA), together with copies of all instruments identified as exceptions
therein and has delivered the same to Purchaser. Purchaser agrees that it shall
be solely responsible for payment of all costs relating to procurement of the
Title Commitment and shall be responsible for any additional costs relating to
the Title Commitment or requested endorsements.
5.2 Purchaser agrees to accept title to the Land and Improvements in accordance
with the terms of this Purchase Contract, so long as with respect to the
Property (i) the title is good and marketable and insurable, and (ii) any
conveyance by special warranty or an equivalent deed pursuant to this Purchase
Contract shall be subject to the following, all of which shall be deemed
"Permitted Exceptions," and Purchaser agrees to accept the deed and title
subject thereto:
5.2.1 All exceptions shown in the Title Commitment on the date three (3)
Business Days prior to the Title Termination Deadline (other than mechanics'
liens and taxes due and payable with respect to the period preceding Closing and
the standard exceptions which shall be omitted except that the standard
exception for parties in possession shall be modified to read "rights of tenants
as tenants only under unrecorded leases");
5.2.2 All Leases;
5.2.3 Real estate and property taxes to the extent not due and payable;
5.2.4 Such exceptions and matters as the Title Insurer shall be willing to
omit as exceptions to coverage; and
5.2.5 All Property Contracts which are not identified for termination by
Purchaser during the Feasibility Period. Notwithstanding the foregoing, all
Property Contracts which (i) are not cancelable upon 30 days or less notice or
(ii) require payment of a penalty or premium for cancellation shall be assumed
by Purchaser or cancelled with Purchaser being solely responsible for the
payment of any cancellation fees or penalties.
5.3 With respect to the Property, the existence of the Loan Documents, liens, or
encumbrances shall not be objections to title, provided that properly executed
instruments in recordable form necessary to satisfy and remove the same of
record are delivered to the Purchaser at Closing or, in the alternative, payoff
letters from the Lender or holder of any Loan Documents shall have been
delivered to and accepted by the Title Insurer (sufficient to remove the same
from the policy issued at Closing), together in either case, with recording
and/or filing fees.
5.4 Unpaid liens for taxes, charges, and assessments shall not be objections to
title, but the amount thereof plus interest and penalties thereon shall be
deducted from the Purchase Price to be paid for the Property hereunder and
allowed to Purchaser, subject to the provisions for apportionment of taxes and
charges contained herein.
5.5 Unpaid franchise or business corporation taxes of any corporations in the
chain of title shall not be an objection to title, provided that the Title
Insurer agrees to insure against collection out of the Property or otherwise
against Purchaser or its affiliates, and provided further that the Title Insurer
agrees to omit such taxes as exceptions to coverage with respect to any lender's
title insurance policy with respect to the Property.
5.6 If on the Closing Date there shall be conditional bills of sale or Uniform
Commercial Code Financing Statements applicable to the Property that exceed the
period of time mandated under the law of the state where the Property is located
that a Uniform Commercial Code Financing Statement is perfected without the
filing of UCC-3 continuation statements and such Financing Statements have not
been extended by the filing of UCC-3 continuation statements within the
applicable time period mandated by the applicable state law, such Financing
Statements shall not be deemed an objection to title.
5.7 If on the Closing Date, the state of title is other than in accordance with
the requirements set forth in this Purchase Contract or if any condition to be
fulfilled by Seller shall not be satisfied, Purchaser shall provide Seller with
written Notice thereof at such time, or such title objection or unfulfilled
condition shall be deemed waived by Purchaser in which case Purchaser and Seller
shall proceed to consummate the Closing on the Closing Date. If Purchaser timely
gives Seller such Notice, Seller at its sole option and within seven (7)
calendar days following receipt of such Notice may elect to cure such objection
or unfulfilled condition for up to thirty (30) calendar days. Should Seller be
able to cure such title objection or condition, or should Seller be able to
cause title insurance over the same by the Closing Date or any postponed Closing
Date, or should Purchaser waive such objection or condition within such period
for cure, then the Closing shall take place on or before fifteen (15) calendar
days after such cure or waiver.
5.8 Subject to Seller's obligation to cure under Section 5.9, if Seller elects
to cure under Section 5.7, and during the period of cure Seller is unable or
unwilling, in its sole discretion or opinion, to eliminate such title objection
or cause a title insurance company to insure over such matter or satisfy such
unfulfilled condition, Seller shall give Purchaser written Notice thereof, and
if Purchaser does not waive such objection by written Notice delivered to Seller
and the Title Insurer on or before seven (7) calendar days following the date
Seller gives such Notice, then this Purchase Contract shall automatically
terminate, the Deposit shall be returned to Purchaser by the Escrow Agent less
the sum of One Hundred and 00/100 Dollars ($100) paid to Seller as consideration
for taking the Property off of the market. If Seller has elected to cure under
Section 5.7 (which Seller has no obligation to do, except as provided in Section
5.9) and subsequently does not cure such item as described above in this
section, Seller shall pay to Purchaser the amount of actual third party
out-of-pocket costs and expenses incurred by Purchaser in connection with the
investigations of Seller's Property in an amount not to exceed a total of Ten
Thousand and 00/100 Dollars ($10,000) and as a condition of and prior to such
payment to Purchaser, Seller shall have been provided copies of and rights to
all inspections and reports; and the parties hereto shall have no further
obligations to each other.
5.9 Seller covenants that it will not voluntarily create or cause any lien or
encumbrance (other than Leases and Property Contracts permitted by this Purchase
Contract) to attach to the Property between the Effective Date and the Closing
Date. Any monetary lien or encumbrance so attaching by voluntary act of Seller
shall be discharged by the Seller at or prior to Closing, on the Closing Date or
any postponed Closing Date. Except as expressly provided above, Seller shall not
be required to undertake efforts to remove any other lien, encumbrance, security
interest, exception, objection or other matter, to make any expenditure of money
or institute litigation or any other judicial or administrative proceeding and
Seller may elect not to discharge the same.
5.10 Anything to the contrary notwithstanding, Purchaser shall not have any
right to terminate this Purchase Contract or object to any lien, encumbrance,
exception or other matter that is a Permitted Exception, that has been waived or
that has been deemed to have been waived by Purchaser.
5.11 Seller will cause to be prepared a survey (or an update to any existing
survey) for the Property ("Survey") to be delivered to Purchaser and Seller no
later than 30 days after the Effective Date. Seller will pay the cost of the
Survey, but at the Closing Purchaser will reimburse Seller for the cost of the
Survey, not to exceed $2,500. Within 5 days after the Effective Date, Seller
shall deliver to Purchaser or make available at the Property any existing survey
of the Property which to Seller's knowledge is in Seller's possession or
reasonable control. In the event that the perimeter legal description of the
Property contained in the Survey differs from that contained in the deed or
deeds by which Seller took title to the Property, the latter description shall
be used in the special warranty deed or equivalent delivered to Purchaser at
Closing, and the Survey legal shall be used in a quitclaim deed to the Property
which also shall be delivered to Purchaser at Closing. Should such Survey
disclose conditions that give rise to a title exception other than a Permitted
Exception, Purchaser shall have the right to object thereto within the
Feasibility Period in accordance with the procedures set forth in Article 4
above. Purchaser agrees to make payment in full of all costs of obtaining the
Survey and all costs relating to any update thereto, on or before Closing or
termination of this Purchase Contract.
5.12 On or before the later of (a) the date which is 10 days after Purchaser has
received both the Title Commitment and the Survey, or (b) the expiration of the
Feasibility Period (the later of the foregoing (a) and (b) referred to herein as
the "Title Termination Deadline"), Purchaser shall have the right to terminate
this Contract based solely on any matter set forth in the Title Commitment
(including exceptions listed therein) or the Survey. If Purchaser fails to
terminate this Contract on or before the Title Termination Deadline, Purchaser
shall be deemed to have approved and irrevocably waived any objections to any
matters covered by the Title Commitment (including exceptions listed therein)
and the Survey.
Article 6...
FINANCING
6.1 Purchaser assumes full responsibility to expeditiously and diligently
initiate and pursue all steps necessary to obtain the funds required for
settlement, and Purchaser's acquisition of such funds shall not be a contingency
to Closing. It is specifically agreed that Seller shall not be obligated to
prepay the Existing Financing until the Closing Date, and then only from the
proceeds of the Purchase Price.
Article 7...
CLOSING
7.1 Dates, Places of Closing, Prorations, and Delinquent Rent.
7.1.1 The Closing shall take place on the date which is fifteen (15) calendar
days after expiration of the Feasibility Period, provided that Purchaser has not
terminated this Purchase Contract pursuant to Section 4.2 hereof. The parties
may mutually agree to an earlier Closing Date. Purchaser and Seller shall
conduct the Closing through an escrow with the Title Insurer in its Houston,
Texas office, whereby Seller, Purchaser and their attorneys need not be
physically present at the Closing and each may deliver documents by overnight
air courier or other means to the Escrow Agent.
7.1.2 The Closing may be extended without penalty at the option of Seller to a
date not later than thirty (30) days following the Closing Date specified in
Section 7.1.1 above to satisfy a condition to Closing to be satisfied by Seller.
7.1.3 All normal and customarily proratable items, including, without
limitation, Rents (as defined below), other income derived from the Property,
personal and real property taxes, Property Contracts and laundry leases and
utilities (except as otherwise provided in Section 7.1.6) shall be prorated as
of midnight on the day preceding the Closing Date, Seller being charged and
credited for all of same attributable to the period up to midnight on the day
preceding the Closing Date (and credited for any amounts paid by Seller
attributable to the period on or after midnight on the day preceding the Closing
Date) and Purchaser being responsible for, and credited or charged, as the case
may be, for all of same attributable to the period on and after midnight on the
day preceding the Closing Date. Purchaser shall have no responsibility for the
payment of wages, taxes or other benefits of Seller's employees or any person
currently employed on the Property by the Seller which may accrue up to the
Closing Date. Any up-front bonus payments received by Seller during the twenty
four (24) month period preceding the Closing Date for laundry contracts or the
Property Contracts shall be prorated with Purchaser receiving a credit for the
unused portion of any such payment for the term of such contract which extends
beyond the Closing Date. All unapplied security deposits under Leases, if any,
shall be transferred or credited by Seller to Purchaser at the Closing.
Purchaser shall assume at Closing the obligation to pay the security deposits to
Tenants, if required under the Leases, to the extent that such security deposits
are transferred to Purchaser at Closing. Any real estate ad valorem or similar
taxes for the Property, or any installment of assessments payable in
installments which installment is payable in the year of Closing, shall be
prorated to midnight on the day preceding the date of Closing, based upon actual
days involved. The proration of real property taxes or installments of
assessments shall be based upon the assessed valuation and tax rate figures for
the year in which the Closing occurs to the extent the same are available;
provided, that in the event that actual figures (whether for the assessed value
of the Property or for the tax rate) for the year of Closing are not available
at the Closing Date, the proration shall be made using figures from the
preceding year and a re-proration of real estate taxes shall subsequently be
performed based upon the assessed value and tax rate for the year in which the
Closing occurs at the time that such information becomes available. The
proration shall be final and unadjustable except-as provided in the following
paragraph. For purposes of this Section 7.1.3 and Sections 7.1.4 and 7.1.5 the
terms "Rent" and "Rents" shall include, without limitation, base rents,
additional rents, and any other charges under the Leases. The provisions of this
Section 7.1.3 shall apply during the Proration Period (as defined below).
7.1.4 If any of the items subject to proration hereunder cannot be prorated at
the Closing because the information necessary to compute such proration is
unavailable, or if any errors or omissions in computing prorations at the
Closing are discovered subsequent to the Closing, then such item shall be
reapportioned and such errors and omissions corrected promptly after the date of
such availability or discovery and the proper party reimbursed, which obligation
shall survive the Closing for a period (the "Proration Period") from the Closing
Date until one (l) year after the Closing Date. Neither party hereto shall have
the right to require a recomputation of a Closing proration or a correction of
an error or omission in a Closing proration unless within the Proration Period
one of the parties hereto (i) has obtained the previously unavailable
information or has discovered the error or omission, and (ii) has given Notice
thereof to the other party together with a copy of its good faith recomputation
of the proration and copies of all substantiating information used in such
recomputation. The failure of a party to obtain any previously unavailable
information or discover an error or omission with respect to an item subject to
proration hereunder and to give Notice thereof as provided above within the
Proration Period shall be deemed a waiver of its right to cause a recomputation
or a correction of an error or omission with respect to such item after the
Closing Date.
7.1.5 With respect to unpaid Rent not more than thirty (30) days delinquent,
Purchaser shall use reasonable efforts to collect the same for Seller's benefit
after the Closing in the usual course of the operation of the Property (but
Purchaser shall not be required to incur any expense in such collection effort)
and such collection, if any shall be remitted to Seller (less costs and expenses
of collection, if any) promptly upon receipt by Purchaser; provided Purchaser's
obligation to remit such delinquent rental payments to Seller shall terminate
sixty (60) days after the Closing Date. Nothing contained herein shall operate
to require Purchaser to institute any lawsuit or other collection procedure to
collect such delinquent rentals. Seller and Purchaser agree that any sums
received by Purchaser from any tenant owing delinquent rentals shall first be
applied to rentals and any other amounts owed to Purchaser and then to
delinquent rentals with respect to the period before Closing. This provision
shall survive the Closing for a period not to exceed ninety (90) days.
7.1.6 Fuel, water and sewer service charges, and charges for gas, electricity,
telephone and all other public utilities shall be adjusted as of midnight of the
day immediately preceding the Closing Date. If there are meters on any Property
measuring the consumption of water, gas or electric current, Seller shall, not
more than one (1) Business Day prior to the Closing Date, cause such meters (for
utilities for which Seller, and not Tenants, is responsible) to be read and
shall pay promptly all utility bills for which Seller is liable upon receipt of
statements therefor. Purchaser shall be liable for and shall pay all utility
bills for services rendered after such meter readings.
7.1.7 If any security deposit for a corporate apartment unit is in the form of a
letter of credit, then Seller shall cause a replacement letter of credit to be
issued and delivered to Purchaser on the Closing Date upon the same terms and
conditions as the original letter of credit. If replacement letters of credit
cannot be issued and delivered to Purchaser on the Closing Date, then Seller
shall deposit with Purchaser on the Closing Date cash equal to the amount of the
letters of credit not replaced, to be held by Purchaser as tenant security
deposits until replacement letters of credit are delivered to Purchaser.
7.1.8 All apartment units vacated for more than seven (7) Business Days must be
in a "rent ready" condition. Rent ready means, Seller's routine and customary
preparation of units for rental in Seller's ordinary course of business.
7.2 To Be Delivered Prior To or At Closing.
7.2.1 Seller. At Closing, Seller shall deliver to Purchaser, each of the
following items, as applicable:
7.2.1.1.....Special warranty or equivalent deed in the form attached as Exhibit
7.2.1.1 to Purchaser. The acceptance of the deed at Closing, shall be deemed to
be full performance of, and discharge of, every agreement and obligation on
Seller's part to be performed under this Purchase Contract, except for those
that this Purchase Contract specifically provides shall survive Closing.
7.2.1.2.....A Bill of Sale in the form attached as Exhibit 7.2.1.2 covering all
Property Contracts, Permits (other than Excluded Permits), and Fixtures and
Tangible Personal Property required to be transferred to Purchaser with respect
to such Property. Purchaser shall countersign the same so as to effect an
assumption by Purchaser, including, without limitation, of Seller's obligations
thereunder.
7.2.1.3.....A General Assignment (to the extent assignable and in effect),
without recourse or warranty, in the form attached hereto as Exhibit 7.2.1.3 of
all of Seller's right, title and interest in and to the Miscellaneous Property
Assets, subject to required consents. Purchaser shall counter sign the same so
as to effect an assumption by Purchaser, including, without limitation, of
Seller's obligations thereunder.
7.2.1.4.....A closing statement executed by Seller.
7.2.1.5.....A title affidavit or at Seller's option an indemnity, as applicable,
in the customary form reasonably acceptable to Seller and Title Insurer to
enable Title Insurer to delete the standard exceptions, (other than matters
constituting any Permitted Exceptions to the title insurance policies set forth
in this Purchase Contract to be issued pursuant to the Title Commitment);
provided that such affidavit does not subject Seller to any greater liability,
or impose any additional obligations, other than as set forth in this Purchase
Contract; and
7.2.1.6.....A certification of Seller's non-foreign status pursuant to Section
1445 of the Internal Revenue Code of 1986, as amended, in the form attached as
Exhibit 7.2.1.6.
7.2.1.7.....A letter duly executed by Seller advising the tenants under the
Leases of the change in ownership of the Property.
7.2.1.8.....An Assignment of Leases and Security Deposits in the form attached
as Exhibit 7.2.1.8 covering all Leases and Security Deposits. Purchaser shall
countersign the same so as to effect an assumption by Purchaser, including,
without limitation, of Seller's obligations thereunder.
7.2.1.9.....The most current rent roll together with a Certification by Seller
that such Rent Roll is in all material respects a true, correct and complete
list of all the Leases currently in effect.
7.2.1.10....Notices of termination (effective as of the Closing Date) to service
providers whose Property Contracts will not be assumed by Purchaser at the
Closing, the identification of such providers being provided by Purchaser to
Seller prior to the expiration of the Feasibility Period.
7.2.1.11....Original tenant leases, modifications and amendments to the extent
in Seller's possession or control.
7.2.1.12....All certificates of occupancy with respect to the Property that are
in Seller's possession.
7.2.1.13....A complete set of architectural, structural, mechanical and
electrical plans and specifications for the Property, to the extent in Seller's
possession or control.
7.2.1.14....Copies of all existing books, records, papers, agreements, including
bookkeeping and accounting records (other than Seller's proprietary
information), which are in Seller's possession or control relating to the
Property.
7.2.1.15....All keys to the Property which are in Seller's possession.
7.2.1.16....Proof that the property management agreement has been terminated and
is of no further force and effect, if cancelable.
7.2.1.17....Resolutions, certificates of good standing, and such other
organizational documents of Seller as the Title Insurer may reasonably require
evidencing Seller's authority to consummate the transaction.
7.2.1.18....Such other instruments, documents or certificates as are required to
be delivered or made available by Seller to Purchaser in accordance with any of
the other provisions of this Purchase Contract, including, without limitation,
Section 4.3 hereof, which have not already been provided to Purchaser.
7.3 Purchaser. At Closing, Purchaser shall deliver to Title Insurer (for
disbursement to Seller upon Closing) the following items with respect to the
Property being conveyed at such Closing:
7.3.1 The full Purchase Price as required by Article 3 hereof minus the Deposit
applied to the Purchase Price, plus or minus the adjustments or prorations
required by this Purchase Contract. If at Closing there are any liens or
encumbrances on the Property that Seller is obligated or elects to pay and
discharge, Seller may use any portion of the Purchase Price for the Property to
satisfy the same, provided that Seller shall have delivered to Title Insurer on
such Closing instruments in recordable form sufficient to satisfy such liens and
encumbrances of record (or as to any mortgages, deeds to secure debt or deeds of
trust, appropriate payoff letters, acceptable to the Title Insurer), together
with the cost of recording or filing such instruments. The existence of any such
liens or encumbrances shall not be deemed objections to title if Seller shall
comply with the foregoing requirements.
7.3.2 A closing statement executed by Purchaser.
7.3.3 A countersigned counterpart of the Bill of Sale in the form attached as
Exhibit 7.2.1.2.
7.3.4 A countersigned counterpart of the General Assignment in the form
attached as Exhibit 7.2.1.3.
7.3.5 A countersigned counterpart of the Assignment of Leases and Security
Deposits in the form attached as Exhibit 7.2.1.8.
7.3.6 Such other instruments, documents or certificates as are required to be
delivered by Purchaser to Seller in accordance with any of the other provisions
of this Purchase Contract.
7.4 Closing Costs. Except as otherwise provided in this Purchase Contract each
party shall pay its own costs to close the purchase and sale of the Property and
one-half the expenses of the Escrow Agent. Each party shall pay the fees and
costs of its own attorneys and agents. Purchaser shall pay all recording costs.
Seller shall pay all costs and fees relating to the prepayment of the Existing
Financing. Purchaser shall pay the State excise, recording, transfer or similar
taxes payable in connection with the transfer of real property in the
jurisdiction where the Property is located. Purchaser shall pay all title
insurance premiums.
Article 8...
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF SELLER AND PURCHASER
8.1 Representations and Warranties of Seller.
8.1.1 For the purpose of inducing Purchaser to enter into this Purchase Contract
and to consummate the sale and purchase of the Property in accordance herewith,
Seller represents and warrants to Purchaser the following as of the Effective
Date and as of the Closing Date:
8.1.1.1.....Seller is a trust, lawfully and duly organized, validly existing
under the laws of the state of its formation set forth in the initial paragraph
of this Purchase Contract; and shall at the Closing have the power and authority
to sell and convey the Property and to execute the documents to be executed by
Seller and prior to Closing will have taken, as applicable, all corporate,
partnership, limited liability company or equivalent entity actions required for
the execution and delivery of this Purchase Contract, and the consummation of
the transactions contemplated by this Purchase Contract. The compliance with or
fulfillment of the terms and conditions hereof will not conflict with, or result
in a breach of, the terms, conditions or provisions of, or constitute a default
under, any purchase contract to which Seller is a party or by which Seller is
otherwise bound.
8.1.1.2.....To Seller's knowledge, no pending or threatened litigation exists
which if determined adversely would restrain the consummation of the
transactions contemplated by this Purchase Contract or would declare illegal,
invalid or non-binding any of Seller's obligations or covenants to Purchaser.
8.1.1.3.....Seller holds title to the Property, including all real property
contained therein required to be sold to Purchaser, subject only to the
Permitted Exceptions applicable to the Property, Purchaser hereby agrees that
the foregoing representation and warranty shall not survive the Closing but
shall merge into the special warranty deed or equivalent as delivered to
Purchaser.
8.1.1.4.....There are no adverse or other parties in possession of the Property,
except for occupants, guests and tenants under the Leases or otherwise as set
forth in the Rent Roll.
8.1.1.5.....The joinder of no person or entity other than Seller is necessary to
convey the Property, fully and completely to Purchaser at Closing, or to fulfill
Seller's obligations, and Seller has all necessary right and authority to convey
and assign to Purchaser all contract rights and warranties required to be
conveyed and assigned to Purchaser hereunder.
8.1.1.6.....Purchaser has no duty to collect withholding taxes for Seller
pursuant to the Foreign Investors Real Property Tax Act of 1980, as amended.
8.1.1.7.....To Seller's knowledge, there are no actions, proceedings, litigation
or governmental investigations or condemnation actions pending or threatened
against the Property, to the transactions hereby or against Seller relating to
the Property as applicable, except as set forth in Exhibit 8.1.1.7.
8.1.1.8.....Seller has no knowledge of any claims for labor performed, materials
furnished or services rendered in connection with constructing, improving or
repairing the Property, caused by the Seller and which remain unpaid beyond the
date for which payment was due and in respect of which liens may or could be
filed against the Property, except for repairs, materials or services furnished
in the ordinary course of business. Purchaser hereby agrees that the foregoing
representation and warranty shall not survive the Closing but shall merge into
the special warranty deed and the "Seller's Affidavit" executed by Seller and
delivered to the Title Insurer.
8.1.1.9.....To the best of Seller's knowledge, there are no leases, license
agreements, occupancy agreements or tenancies for any space in the Property
other than those Leases set forth on the rent roll for the Property (the "Rent
Roll") and those Leases listed on Exhibit 8.1.1.9 attached hereto, if any. To
the best of Seller's knowledge, there are no oral agreements relating to the use
or occupancy of the Property or any oral leases which will be binding upon any
portion of the Property or Purchaser and the Leases delivered to Purchaser by
Seller are true and correct copies of all such Leases.
8.1.1.10....To the best of Seller's knowledge, Seller has not received any
notice of any violation or alleged violation of any laws, regulations,
ordinances or restrictions or other requirements of any governmental,
quasi-governmental agency or authority having jurisdiction over or affecting the
Property, to include, without limitation, notice of the violation or alleged
violation of any environmental protection laws or regulations.
8.1.1.11....To the best of Seller's knowledge, all commissions due on Leases or
renewals of Leases have been paid in full as of the Effective Date and all
tenant buildout and other obligations due to tenants under the Leases have been
paid in full or otherwise have been satisfied.
8.1.1.12....To the best of Seller's knowledge, the Rent Roll delivered by Seller
with respect to the Property is true and correct in all material respects.
8.1.1.13....Seller shall provide notice to Purchaser of any damage to the
Property if the cost to repair the same would reasonably exceed $50,000 as
determined in Seller's reasonable discretion.
8.1.1.14....Except for the representations and warranties expressly set forth
above in Section 8.1., or as otherwise set forth in this Contract, the Property
is expressly purchased and sold "AS IS," "WHERE IS," and "WITH ALL FAULTS." The
Purchase Price and the terms and conditions set forth herein are the result of
arm's-length bargaining between entities familiar with transactions of this
kind, and said price, terms and conditions reflect the fact that Purchaser shall
have the benefit of, and is relying upon, no information provided by Seller and
no statements, representations or warranties, express or implied, made by or
enforceable directly against Seller, including, without limitation, any relating
to the value of the Property, the physical or environmental condition of the
Property, the state, federal, county or local law, ordinance, order, permit or
suitability, compliance or lack of compliance of the Property with any
regulation, or any other attribute or matter of or relating to the Property
(other than any covenants of title contained in the deed or other conveyance
instruments conveying each Property and the warranties or representations set
forth in this Purchase Contract). Purchaser represents and warrants that as of
the Closing Date, it shall have reviewed and conducted such _independent
analyses, studies, reports, investigations and inspections as it deems
appropriate in connection with the Property. If Seller provides or has provided
any documents, opinions or work product of consultants, surveyors, architects,
engineers, title companies, governmental authorities or any other person or
entity with respect to the Property, Purchaser and Seller agree that Seller has
done so or shall do so only for the convenience of both parties and any reliance
by Purchaser upon any such documents, opinions or work product shall not create
or give rise to any liability of or against Seller, Seller's partners or
affiliates or any of its respective partners, officers, directors, participants,
employees, contractors, attorneys, consultants, representatives, agents,
successors, assigns or predecessors-in-interest. Purchaser shall rely only upon
any title insurance obtained by Purchaser with respect to title to the Property
and the warranties in the special warranty deed. Purchaser acknowledges and
agrees that no representation has been made and no responsibility is assumed by
Seller with respect to and future applicable zoning or building code
requirements or the compliance of the Property with any other future laws,
rules, ordinances or regulations, the financial earning capacity or expense
history of the Property, the continuation of contracts, continued occupancy
levels of the Property, or any part thereof, or the continued occupancy by
tenants of any Leases or, without limiting any of the foregoing, occupancy at
Closing. Purchaser hereby releases Seller from any and all claims and
liabilities relating to the foregoing matters, except as provided in Subsection
8.1.1.13.
8.1.1.15....Unless otherwise set forth in Section 8.1, Seller and Purchaser
agree that those representations contained in Section 8.1 shall survive Closing
for a period of one (1) year after the Closing Date (that is, any proceeding
based on the breach of a representation contained in Section 8.1 that survives
Closing must be commenced within one (1) year subsequent to the Closing Date).
In the event that (a) Purchaser makes a claim or brings an action against Seller
with respect to a breach of Seller's representations or warranties, and (b) the
amount of damages or other losses claimed by Purchaser as result of or in
connection with such breach exceeds 5% of the Purchase Price, then, at Seller's
sole option, Seller may re-purchase the Property from Purchaser pursuant to the
following terms: (i) the repurchase price shall be equal to the Purchase Price
paid by Purchaser to Seller for the Property plus all reasonable out-of-pocket
expenses incurred by Purchaser in purchasing the Property; (ii) conveyance shall
be by means of deed and other instruments of conveyance in the same form as
those delivered by Seller to Purchaser at the Closing; (iii) title to the
Property shall be conveyed by Purchaser to Seller subject only to those matters
affecting Purchaser's title to the Property as of the date of Seller's election
to re-purchase the Property, but Purchaser shall be obligated to obtain the
release, prior to or concurrently with the conveyance of the Property to Seller,
of any and all deeds of trust, mortgages, judgment liens, mechanics' liens or
other lien securing the payment of money that affect title to the Property; (iv)
Purchaser shall execute any and all documents, instruments and agreements
reasonably required by Seller or Seller's counsel to effect the transfer and
conveyance of the Property; (v) Seller shall obtain, at Seller's expense, a
title insurance policy insuring Seller's title to the Property in a manner
consistent with the preceding clause (iii), and (vi) Purchaser shall convey they
Property to Seller in substantially the same condition as Seller conveyed to
Purchaser, reasonable wear and tear excepted. If Seller exercises its option to
re-purchase the Property pursuant to this Section 8.1.1.15, then Purchaser shall
waive and be forever precluded from proceeding with any claim or action with
respect to a breach of Seller's representations or warranties hereunder.
8.1.1.16....Any statement contained in the representations and warranties in
this Section 8.1 and made to the knowledge or best knowledge of Seller shall
mean ONLY the actual knowledge of individuals listed on Exhibit 8.1.1.16
attached hereto; and otherwise any reference to the "knowledge" of Seller shall
not be deemed to imply any duty of investigation or inquiry by Seller, and shall
not be construed to include the knowledge of any member, partner, officer,
director, agent, employee or representative of the Seller or any affiliate of
the Seller, imputed to Seller or constructively attributed to Seller, other than
as set forth in this Section 8.1.1.14, Seller hereby warrants and represents to
Purchaser that the persons identified in this Section 8.1.1.14 are the persons
who have the most definitive knowledge with respect to the Seller and the
Property.
8.2 Representations and Warranties of Purchaser.
8.2.1 For the purpose of inducing Seller to enter into this Purchase Contract
and to consummate the sale and purchase of the Property in accordance herewith,
Purchaser represents and warrants to Seller the following as of the Effective
Date and as of the Closing Date:
8.2.1.1.....With respect to Purchaser and its business, Purchaser represents and
warrants, in particular, that:
8.2.1.2.....Purchaser is a limited liability company duly organized, validly
existing and in good standing under the laws of State of Alabama. Purchaser is
sophisticated and experienced in the acquisition, ownership and operation of
multi-family housing projects similar to the Property, and has full knowledge of
all applicable federal, state and local laws, rules, regulations and ordinances
in connection therewith.
8.2.1.3.....Purchaser, acting through any of its or their duly empowered and
authorized officers, joint venturers, partners or members, has all necessary
power and authority to own and use its properties and to transact the business
in which it is engaged, and has full power and authority to enter into this
Purchase Contract, to execute and deliver the documents and instruments required
of Purchaser herein, and to perform its obligations hereunder; and no consent of
any Purchaser's officers, joint venturers, partners, managers or members is
required to so empower Purchaser.
8.2.1.4.....No pending or, to the knowledge of Purchaser, threatened litigation
exists which if determined adversely would restrain the consummation of the
transactions contemplated by this Purchase Contract or would declare illegal,
invalid or non-binding any of Purchaser's obligations or covenants to Seller.
8.2.1.5.....Purchaser is duly authorized to execute and deliver, acting through
its duly empowered and authorized officers, joint venturers, partners, managers
and members, respectively, and perform this Purchase Contract and all documents
and instruments and transactions contemplated hereby or incidental hereto, and
such execution, delivery and performance by Purchaser does not (i) violate any
of the provisions of their respective articles of incorporation or organization,
operating agreements, partnership agreements or bylaws, (ii) violate any
provision of any law, governmental rule or regulation currently in effect, (iii)
violate any judgment, decree, writ, injunction, award, determination or order
currently in effect that names or is specifically directed at Purchaser or its
property, and (iv) require the consent, approval, order or authorization of, or
any filing with or notice to, any court or other governmental authority.
8.2.1.6.....The joinder of no person or entity other than Purchaser is necessary
to consummate the transactions to be performed by Purchaser and Purchaser has
all necessary right and authority to perform such acts as are required and
contemplated by this Purchase Contract.
8.2.1.7.....Purchaser will cooperate with Seller in obtaining the consent of the
Lender to the prepayment of the Existing Financing, if required.
Article 9...
CONDITIONS PRECEDENT TO CLOSING
9.1 Purchaser's obligation to close under this Purchase Contract, shall be
subject to and conditioned upon the fulfillment of each and all of the following
conditions precedent; provided, however, that Purchaser shall be entitled to
waive any condition to Closing:
9.1.1 All of the documents required to be delivered by Seller to Purchaser at
the Closing pursuant to the terms and conditions hereof shall have been
delivered and shall be in form and substance reasonably satisfactory to
Purchaser.
9.1.2 Each of the representations and warranties of Seller contained herein
shall be true in all material respects as of the Closing Date.
9.1.3 Seller shall have complied with, fulfilled and performed each of the
covenants, terms and conditions to be complied with, fulfilled or performed by
Seller hereunder;
9.1.4 Notwithstanding anything to the contrary, there are no other conditions on
Purchaser's obligation to Close except as expressly set forth above.
9.1.5 On the Closing Date, the Title Insurer shall be prepared, subject to the
payment of the applicable title insurance premium and other related charges and
Purchaser's performance of its obligations hereunder, to issue to Purchaser a
full coverage owner's title insurance policy, with all standard exceptions
deleted (except that the standard exception for parties in possession shall be
modified to read "rights of tenants as tenants only under unrecorded leases"),
for the Property in compliance with the applicable Title Commitment in the form
as required by Purchaser prior to the expiration of the Feasibility Period, such
required form being confirmed in writing by Purchaser to Seller, with a copy of
the required Title Commitment and endorsements attached), (including
endorsements as Purchaser has required prior to the expiration of the
Feasibility Period as aforesaid), together with such reinsurance and/or
coinsurance and direct access agreements as may be reasonably required by
Purchaser.
9.1.6 On the Closing Date, no action or proceeding shall have been instituted
before any court or governmental authority which would have a material adverse
effect on the Property or the use or occupancy thereof.
9.1.7 As of the Closing Date, Seller shall not have pending a voluntary case,
nor shall there have been commenced against Seller an involuntary case, nor
shall Seller have consented to the appointment of a Custodian of it or for all
or any substantial part of its property, nor shall a court of competent
jurisdiction have entered an order or decree under any Bankruptcy Law that is
for relief against Seller in an involuntary case or appoint a Custodian of
Seller for all or any substantial part of its property. The term "Bankruptcy
Law" means Title 11, U.S. Code, or any similar state law for the relief of
debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
9.2 Without limiting any of the rights of Seller elsewhere provided for in this
Purchase Contract, Seller's obligation to close with respect to conveyance of
the Property under this Purchase Contract shall be subject to and conditioned
upon the fulfillment of each and all of the following conditions precedent:
9.2.1 Each of the representations and warranties of Purchaser contained herein
shall be true in all material respects as of the Closing Date.
9.2.2 Purchaser shall have fully performed and complied with all covenants,
conditions, and other obligations in this Purchase Contract to be performed or
complied with by it at or prior to Closing including, without limitation,
payment in full of the Purchase Price.
9.2.3 There shall not be pending or, to the knowledge of either Purchaser or
Seller, any litigation or threatened litigation which, if determined adversely,
would restrain the consummation of any of the transactions contemplated by this
Purchase Contract or declare illegal, invalid or non-binding any of the
covenants or obligations of the Purchaser.
9.2.4 Seller shall have received all consents and approvals to the consummation
of the transactions contemplated hereby (a) of Seller's partners or affiliates
(to the extent required by the governing documents or (b) that are required by
law. If Seller does not receive such consents and terminates this Purchase
Contract solely as a result of a failure of the condition set forth in this
Section 9.2.4, Seller shall reimburse Purchaser for Purchaser's actual
out-of-pocket expenses incurred in connection with this Purchase Contract, but
in no event shall Seller be responsible for in excess of $25,000 under this
Section 9.2.4.
9.2.5 All consents required for the prepayment of the Existing Financing, which
may be required, shall have been obtained all on conditions reasonably
acceptable to Seller.
Article 10..
BROKERAGE
10.1 Seller represents and warrants to Purchaser that it has dealt only with The
Apartment Group ("Broker") in connection with this Purchase Contract. Seller and
Purchaser each represent and warrant to the other that other than Broker, it has
not dealt with or utilized the services of any other real estate broker, sales
person or finder in connection with this Purchase Contract, and each party
agrees to indemnify the other party from and against all claims for brokerage
commissions and finder's fees arising from or attributable to the acts of
omissions of the indemnifying party, except that Purchaser shall not indemnify
Seller for any liability arising pursuant to the commission due to Broker. The
provisions of this section shall survive the Closing or termination of the
Purchase Contract.
10.2 Seller agrees to pay Broker a commission according to the terms of a
separate agreement. Broker shall not be deemed a party or third party
beneficiary of this Purchase Contract.
10.3 Broker assumes no responsibility for the condition of the Property or
representation for the performance of this Purchase Contract by the Seller or
Purchaser.
Article 11..
POSSESSION
11.1 Possession of the Property subject to the Permitted Exceptions and the
Leases shall be delivered to Purchaser at the Closing.
Article 12..
DEFAULTS AND REMEDIES
12.1 In the Event Purchaser fails to close when obligated to do so under this
Purchase Contract, Seller and Purchaser agree that it would be impractical and
extremely difficult to estimate the damages which Seller may suffer. Therefore
Seller and Purchaser hereby agree that, except for the Purchaser's obligations
to Seller under Section 4.4, the reasonable estimate of the total net detriment
that Seller would suffer in the event that Purchaser terminates this Purchase
Contract or defaults hereunder prior to the Closing Date is and shall be, as
Seller's sole and exclusive remedy (whether at law or in equity), the right to
receive from the Escrow Agent and retain the full amount of the Deposit. The
payment and performance of the above as liquidated damages is not intended as a
forfeiture or penalty within the meaning of applicable law and is intended to
settle all issues and questions about the amount of damages suffered by Seller
in the applicable event, except only for damages under Section 4.4 above,
irrespective of the time when the inquiry about such damages may take place.
Upon any such default by Purchaser hereunder, this Purchase Contract shall be
terminated, and neither party shall have any further rights or obligations
hereunder, each to the other, except for the Purchaser's obligations to Seller
under Section 4.4 and the obligations of Seller and Purchaser pursuant to
Sections 10.1 and 10.2 of this Purchase Contract, and Purchaser and Seller shall
not be relieved of their respective obligations pursuant to Sections 10.1 and
10.2 of this Purchase Contract above, and the right of Seller to collect such
liquidated damages to the extent not theretofore paid by Purchaser.
________________ _________________
Initials for Seller Initials for Purchaser
12.2 If the Purchaser terminates this Purchase Contract in accordance with its
terms, then this Purchase Contract shall be null and void, the Escrow Agent
shall return the Deposit to the Purchaser and no party shall have any further
liability or obligation to any other party under this Purchase Contract, except
that Purchaser shall not be relieved of its obligations under the last sentence
of Section 4.4 and Purchaser and Seller shall not be relieved of their
respective obligations pursuant to Section 10.1 of this Purchase Contract. If
Seller defaults in performing any covenants or agreements to be performed by
Seller under this Purchase Contract or Seller breaches any representations or
warranties made by Seller in this Purchase Contract, Purchaser shall have the
right, instead of terminating this Purchase Contract, to elect to permit this
Purchase Contract to remain in effect and, in lieu of the remedies set forth in
this Section 12.2 other than the obligation to return the Deposit to Purchaser,
to seek specific performance or other injunctive relief, it being agreed that
Purchaser's election to terminate this Purchase Contract or make full settlement
under this Purchase Contract shall not relieve Seller of its liability for
breach of any representation, warranty, covenant or agreement of Seller. In the
event that specific performance or other injunctive relief is unavailable to
Purchaser, but a court determines that Seller's refusal to close under this
Purchase Contract was wrongful the Deposit shall be returned to Purchaser and,
Seller shall pay to Purchaser the actual third party out-of-pocket costs and
expenses that Purchaser has incurred in connection with the negotiation and
preparation of this Agreement, its due diligence investigations and the
prospective purchase of the Property in an amount not to exceed Twenty Five
Thousand and 00/100 Dollars ($25,000).
Article 13
RISK OF LOSS OR CASUALTY
13.1 The risk of loss or damage to the Property by fire or other casualty until
the deed of conveyance is recorded is assumed by the Seller, provided that the
Seller's responsibility shall be only to the extent of any recovery from
insurance carried on the Property. In the event of the damage or destruction of
all or any part of the Property, the aggregate cost to repair, replace and/or
restore of which shall be $200,000 or more (as estimated by Seller's insurance
carrier and reasonably acceptable to Purchaser), prior to Closing, Purchaser
may, at its option, exercisable by written notice to Seller, either (i)
terminate this Purchase Contract, or (ii) continue under this Purchase Contract,
whereupon Seller will assign to Purchaser its interest in and to any insurance
proceeds thereof payable as a result of such damage or destruction and pay the
amount of any deductible under such policy to Purchaser. In the event of the
damage or destruction of any part of the Property prior to Closing, the
aggregate cost to repair, replace and/or restore of which shall be less than
$200,000 (as estimated by Seller's insurance carrier and reasonably acceptable
to Purchaser), Purchaser shall have no right to terminate this Purchase Contract
on account thereof, but Seller shall assign to Purchaser all of its interest in
and to any insurance proceeds thereof payable as a result of such damage or
destruction and pay the amount of any deductible under such policy to Purchaser.
Seller shall not, in any event, be obligated to effect any repair, replacement,
and/or restoration, but shall take all necessary actions to protect and preserve
the damaged improvements and shall comply with the terms and conditions of the
Leases. Seller may elect at its option to effect a repair, replacement or
restoration, in which case Seller may apply the insurance proceeds to the costs
of restoration; provided, however, that if Seller commences restoration, it
shall be obligated to complete the repair, replacement and/or restoration of the
Improvements.
Article 14
OFFER DEADLINE DATE
14.1 This Purchase Contract shall be null and void unless fully executed by
Purchaser and Seller and delivered to each of the parties on or before October
18, 2002.
Article 15
EMINENT DOMAIN
15.1 In the event that at the time of Closing all or any part of the Property is
(or has previously been) acquired, or Seller has received notice of any pending
or threatened taking by authority of any governmental agency in purchase in lieu
thereof or access to the Property would be denied or limited because of the
condemnation of property adjacent to the Property (or in the event that at such
time there is any notice of any such acquisition by any such governmental
agency), Purchaser shall have the right, at Purchaser's option, to terminate
this Purchase Contract by giving written Notice within fifteen (15) days of the
occurrence of such event and recover the Deposit hereunder, or to close in
accordance with the terms of this Purchase Contract for the full Purchase Price
and receive the full benefit or any condemnation award.
Article 16
MISCELLANEOUS
16.1 Exhibits, Schedules and Riders. All Exhibits, Schedules and Riders
annexed hereto are a part of this Purchase Contract for all purposes.
16.2 Assignability. This Purchase Contract is not assignable without first
obtaining the prior written approval of the non-assigning party; provided,
however, that Purchaser may assign this Purchase Contract prior to Closing to a
partnership or partnerships or limited liability company or limited liability
companies which entities shall be affiliated with Purchaser so long as (i)
Purchaser is not released from its liability hereunder and (ii) Seller consents
thereto (which consent shall not be unreasonably withheld, conditioned or
delayed).
16.3 Binding Effect. This Purchase Contract shall be binding upon and inure to
the benefit of Seller and Purchaser, and their respective successors, heirs and
permitted assigns.
16.4 Captions. The captions, headings, and arrangements used in this Purchase
Contract are for convenience only and do not in any way affect, limit, amplify,
or modify the terms and provisions hereof.
16.5 Number and Gender of Words. Whenever herein the singular number is used,
the same shall include the plural where appropriate, and words of any gender
shall include each other gender where appropriate.
16.6 Notices. All notices, demands, requests and other communications required
pursuant to the provisions of this Purchase Contract ("Notice") shall be in
writing and shall be deemed to have been properly given or served for all
purposes (i) if sent by Federal Express or the nationally recognized overnight
carrier for next business day delivery, on the first business day following
deposit of such Notice with such carrier, or (ii) if personally delivered, on
the actual date of delivery, or (iii) if sent by certified mail, return receipt
requested postage prepaid, on the fifth (5th) business day following the date of
mailing, or (iv) if sent by facsimile, on the date such facsimile is sent and a
confirmation of transmission is received by the sender, provided that a copy is
sent by nationally recognized overnight courier on the day following the date of
receipt, addressed as follows:
If to Seller: 2000 S. Colorado Blvd.
Tower Two, Suite 2-1000
Denver, Colorado 80222
Attention: Mr. Patrick Slavin
Telephone: 303-691-4340
Facsimile: 303-300-3282
And: c/o AIMCO
2000 S. Colorado Blvd.
Tower Two, Suite 2-1000
Denver, Colorado 80222
Attention: Mr. Harry Alcock
Telephone: 303-691-4344
Facsimile: 303-300-3282
with copy to: Chad Asarch, Esq.
Vice President and Assistant General Counsel
AIMCO
2000 S. Colorado Blvd.
Tower Two, Suite 2-1000
Denver, Colorado 80222
Facsimile: 303-300-3297
and a copy to: Argent Real Estate
1401 Brickell Avenue, Suite 520
Miami, Florida 33131
Attention: Mr. David Marquette
Telephone: 305-371-9299
Facsimile: 305-371-6898
and a copy to: Brownstein Hyatt & Farber, P.C.
410 17th Street, 22nd Floor
Denver, Colorado 80202
Attention: Gary M. Reiff, Esq.
Facsimile: 303-223-1111
If to Purchaser: 8650 Minnie Brown Road
Montgomery, AL 36117
Attention: John D. Blanchard
TELEPHONE: (334) 215-1411
FAX: (334) 215-4420
with a copy to: Sasser, Littleton & Stidham, P.C.
Colonial Financial Center, Suite 700
Montgomery, Alabama 36104
Attention: Jeff Kohn, Esq.
TELEPHONE: (334) 532-3412
FAX: (334) 532-3610
Any of the parties may designate a change of address by Notice in writing to the
other parties. Whenever in this Purchase Contract the giving of Notice by mail
or otherwise is required, the giving of such Notice may be waived in writing by
the person or persons entitled to receive such Notice.
16.7 Governing Law and Venue. The laws of the State of Alabama shall govern the
validity, construction, enforcement, and interpretation of this Purchase
Contract, without resort to such state's conflict of laws provisions. All
claims, disputes and other matters in question arising out of or relating to
this Purchase Contract, or the breach thereof, shall be decided by proceedings
instituted and litigated in the United States District Court for the district in
which the Property is situated, and the parties hereto expressly consent to the
venue and jurisdiction of such court.
16.8 Entirety and Amendments. This Purchase Contract embodies the entire
Purchase Contract between the parties and supersedes all prior Purchase
Contracts and understandings, if any, relating to the Property, and may be
amended or supplemented only by an instrument in writing executed by the party
against whom enforcement is sought.
16.9 Severability. If any of the provisions of this Purchase Contract is held to
be illegal, invalid, or unenforceable under present or future laws, such
provision shall be fully severable. The Purchase Contract shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Purchase Contract; and the remaining provisions of this
Purchase Contract shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its severance
from this Purchase Contract. In lieu of such illegal, invalid, or unenforceable
provision, there shall be added automatically as a part of this Purchase
Contract a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible to make such provision legal, valid,
and enforceable.
16.10 Multiple Counterparts. This Purchase Contract may be executed in a number
of identical counterparts. If so executed, each of such counterparts is to be
deemed an original for all purposes and all such counterparts shall,
collectively, constitute one Purchase Contract. In making proof of this Purchase
Contract, it shall not be necessary to produce or account for more than one such
counterparts.
16.11 Further Acts. In addition to the acts and deeds recited herein and
contemplated and performed, executed and/or delivered by Seller and Purchaser,
Seller and Purchaser agree to perform, execute and/or deliver or cause to be
performed, executed and/or delivered any and all such further acts, deeds, and
assurances as may be necessary to consummate the transactions contemplated
hereby.
16.12 Construction. No provision of this Purchase Contract shall be construed in
favor of, or against, any particular party by reason of any presumption with
respect to the drafting of this Purchase Contract; both parties, being
represented by counsel, having fully participated in the negotiation of this
instrument.
16.13 Confidentiality. Purchaser and Seller shall not disclose the terms and
conditions contained in this Purchase Contract and shall keep the same
confidential except that Purchaser and Seller may disclose the terms and
conditions of this Purchase Contract to the limited extent required to comply
with federal, state or local governmental reporting requirements. Purchaser
shall not disclose and shall keep the same confidential any of the information
delivered or made available by Seller to Purchaser in accordance with this
Purchase Contract or obtained by Purchaser in the course of its investigations,
provided that Purchaser may disclose the terms and conditions of this Purchase
Contract or such information delivered, made available or obtained as aforesaid
(i) as required by law, (ii) to consummate the terms of this Purchase Contract,
or any financing relating thereto, or (iii) to Purchaser's or Seller's lenders,
attorneys, accountants, engineers, consultants, partners, members, affiliates or
controlling persons. Any information provided by Seller to Purchaser under the
terms of this Purchase Contract is for informational purposes only. In providing
such information to Purchaser, Seller makes no representation or warranty,
express, written, oral, statutory, or implied, unless expressly set forth
herein, and all other representations and warranties are hereby expressly
excluded. Purchaser shall not in any way be entitled to rely upon the accuracy
of such information. Such information is also confidential and Purchaser shall
be prohibited from making such information public to any other person or entity
other than its agents and legal representatives, without Seller's prior written
authorization, which may be granted or denied in Seller's sole discretion. If
Purchaser closes on the purchase of the Property, Purchaser's confidentiality
obligations under this Section 16.13 shall not survive the Closing, but Seller's
obligations under this Section 16.13 shall survive the Closing.
16.14 Time of the Essence. IT IS EXPRESSLY AGREED BY THE PARTIES HERETO THAT
TIME IS OF THE ESSENCE WITH RESPECT TO THIS PURCHASE CONTRACT.
16.15 Cumulative Remedies and Waiver. Except as otherwise provided herein, no
remedy herein conferred or reserved is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Purchase
Contract or now or hereafter existing at law or in equity. No delay or omission
to exercise any right or power accruing upon any default, omission, or failure
of performance hereunder shall impair any right or power or shall be construed
to be a waiver thereof, but any such right and power may be exercised from time
to time and as often as may be deemed expedient. No waiver, amendment, release,
or modification of this Purchase Contract shall be established by conduct,
custom, or course of dealing.
16.16 Litigation Expenses. In the event either party hereto commences litigation
against the other to enforce its rights hereunder, the prevailing party in such
litigation shall be entitled to recover from the other party its reasonable
attorneys' fees and expenses incidental to such litigation.
16.17 Time Periods. Should the last day of a time period fall on a weekend or
legal holiday, the next Business Day thereafter shall be considered the end of
the time period.
16.18 Section 1031 Exchange. Notwithstanding the provisions contained in this
Purchase Contract relating to the sale of the Property, the parties acknowledge
that it is the desire and intention of Seller, if possible, to exchange the
Property for property of a like kind in an exchange qualifying as a tax-free
exchange under Section 1031 of the Internal Revenue Code of 1986. If requested
by Seller, Purchaser shall cooperate with Seller in attempting to implement such
exchange as hereinafter provided, at Seller's sole cost and expense, provided
that: (i) Purchaser incurs no liability, obligation, cost or expense associated
with the exchange; (ii) the exchange does not affect or delay settlement of
Purchaser's acquisition of any of the Property as provided in this Purchase
Contract; and (iii) Seller agrees to indemnify and hold Purchaser harmless from
and against all liability arising out of its cooperation in effecting the
exchange as requested by Seller.
16.19 Lead-Based Paint Disclosure.
16.19.1 Every purchaser of an interest in residential 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 that may place young children at
risk of developing lead poisoning. 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
residential real property is required to provide the purchaser with any
information on lead-based paint hazards from risk assessments or inspections in
the seller's possession and notify the purchaser of any known lead-based paint
hazards. A risk assessment or inspection for possible lead-based paint hazards
in the housing located on the Land is recommended prior to purchase.
16.19.2 Seller has no knowledge of lead-based paint and/or lead-based paint
hazards in the housing located on the Land. Seller has no reports pertaining to
lead-based paint and/or lead-based paint hazards in the housing located on the
Land.
16.19.3 Purchaser has received from Seller the pamphlet Protect Your Family from
Lead in Your Home.
16.19.4 Purchaser has received the opportunity to conduct a risk assessment or
inspection for the presence of lead-based paint and/or lead-based paint hazards.
Article 17
OPERATION OF THE PROPERTY
17.1 During the period of time from the Effective Date to the Closing Date, in
the ordinary course of business Seller may enter into new Property Contracts,
new Leases, renew existing Leases or modify, terminate or accept the surrender
or forfeiture of any of the Leases, modify any Property Contracts, or institute
and prosecute any available remedies for default under any Lease without first
obtaining the written consent of Purchaser; provided, however, Seller agrees
that any such new Property Contracts in excess of $1,000 or any new or renewed
Leases having a term in excess of one (1) year shall not be entered into after
the Effective Date by Seller without Purchaser's prior written consent, such
consent not to be unreasonably withheld, conditioned or delayed by Purchaser
unless required by any mortgage holder. If Seller shall enter into a new
permitted Property Contract or a new Lease, or shall renew, modify, terminate or
accept the surrender of any Lease, or modify any Property Contract during such
time period, Seller shall provide Purchaser with written notice of such event
and a true, correct and complete copy of any new Lease or new Property Contract,
or any modification of any Lease or Property Contract within two (2) Business
Days after executing same.
17.2 Except as specifically set forth in this Article 17, Seller shall operate
the Property after the Effective Date in the ordinary and customary course of
business consistent with the past practices of Seller, and except as necessary
in the Seller's sole discretion to address any life or safety issue at the
Property, Seller will not make any material alterations to the Property or
remove any material Fixtures and Tangible Personal Property without the prior
written consent of Purchaser which consent shall not be unreasonably withheld,
denied or delayed.
[SIGNATURES ON FOLLOWING PAGE]
NOW WHEREFORE, the parties hereto have executed this Purchase Contract as
of the date first set forth above.
SELLER:
STRATFORD VILLAGE REALTY TRUST,
a Massachusetts trust
By: ___________________________________________
Trustee, not in his individual capacity,
but solely
as trustee
PURCHASER:
B&M MANAGEMENT COMPANY, L.L.C.,
an Alabama limited liability company
By: __________________________________________
Title:
Exhibit A
Legal Description of Property
Exhibit B
Escrow Agreement
This Escrow Agreement, dated as of _____________________, by and between
B&M MANAGEMENT COMPANY, L.L.C., an Alabama limited liability company
("Purchaser"), STRATFORD VILLAGE REALTY TRUST, a Massachusetts trust ("Seller")
and FIDELITY TITLE INSURANCE COMPANY ("Escrow Agent");
WITNESSETH:
WHEREAS, Purchaser has entered into a Purchase and Sale Contract dated
_________ (the "Purchase Contract") with Seller, whereby Seller has agreed to
sell and Purchaser has agreed to buy certain premises described on Exhibit A
attached hereto and made a part hereof (the "Premises");
WHEREAS, pursuant to the provisions of the Purchase Contract, Seller and
Purchaser have requested that Escrow Agent act as escrow agent under the
Purchase Contract, and have tendered good funds to Escrow Agent in the amount of
________________________ ($_________) (the "Deposit") pursuant to said Purchase
Contract;
WHEREAS, Purchaser, Escrow Agent and Seller wish to more particularly set
forth and define the rights, obligations and duties of Escrow Agent in and to
the Deposit;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Purchaser, Seller and Escrow Agent hereby agree as follows:
1. The Deposit is to be held in insured accounts and invested in such
short-term, high-grade securities, money market funds or accounts, interest
bearing accounts, bank certificates of deposit or bank repurchase agreements as
directed by Purchaser in its sole discretion and all interest and income thereon
shall become part of the Deposit and shall be remitted to the party entitled to
the Deposit as set forth in the Purchase Contract.
2. Both Purchaser and Seller shall give notice to Escrow Agent at least two (2)
business days prior to closing pursuant to the Purchase Contract. Such notice
shall also include instructions for disbursement of the Deposit at Closing.
3. Purchaser and Seller agree that (i) Escrow Agent is a mere stakeholder with
respect to the Deposit and/or other monies payable to Escrow Agent as escrow
agent under the Purchase Contract and/or this Escrow Agreement, and (ii) Escrow
Agent has no liability with respect to said Deposit and other monies, except for
gross negligence and/or willful neglect on the part of Escrow Agent.
4. In the event of a dispute between Purchaser and Seller with respect to the
Deposit and/or other monies payable to Escrow Agent as escrow agent under the
Purchase Contract and/or this Escrow Agreement, Escrow Agent has the right, at
its exclusive discretion, to deposit the Deposit into any court having
jurisdiction over the dispute between Purchaser and Seller. In the event Escrow
Agent exercises its rights under this paragraph, (a) all costs incurred by
Escrow Agent (including but not limited to reasonable attorney's fees) shall be
borne equally by Seller and Purchaser, and (b) all obligations of Escrow Agent
under the Purchase Contract and/or this Escrow Agreement shall terminate (except
for liability of Escrow Agent for gross negligence and/or willful neglect as
aforesaid).
5. All costs incurred by Escrow Agent as escrow agent under the Purchase
Contract and/or this Escrow Agreement (except costs or liabilities arising from
Escrow Agent's gross negligence and/or willful neglect) shall be borne equally
by Purchaser and Seller. Escrow Agent shall receive a fee of Three Hundred and
00/100 Dollars ($300) for its services hereunder to be paid in accordance with
the Purchase Contract and not out of the Deposit. Non-payment of such fee shall
not entitle Escrow Agent to refuse or fail to act as required by this Escrow
Agreement.
6. Any notice, requests or demands to be made or given hereunder to any party
shall be deemed duly given only if in writing and sent (i) by messenger for hand
delivery, (ii) by overnight delivery service or (iii) by certified mail, return
receipt requested and is addressed to the parties as follows:
(a) If to Seller:
c/o AIMCO
2000 S. Colorado Blvd.
Suite 2-1000
Denver, CO 80222
Attention: Mr. Harry Alcock
Telephone: (303) 691-4344
With a copy to:
Gary M. Reiff, Esq.
Brownstein, Hyatt & Farber P.C.
Twenty-Second Floor
410 17th Street
Denver, CO 80202
Telephone: (303) 223-1100
(b) If to Purchaser:
With a copy to:
(c) If to Escrow Agent:
7. This Escrow Agreement may be executed in counterparts. This Escrow Agreement
shall be governed by the laws of the state in which the Premises are located.
8. Time is of the essence of this Escrow Agreement.
[Signatures on Following Page]
IN WITNESS WHEREOF, this Escrow Agreement has been duly executed by the
parties hereto, to be effective as of the date above written.
PURCHASER:
B&M MANAGEMENT COMPANY, L.L.C., an
Alabama limited liability company
By:
Print Name:
Title:
SELLER:
STRATFORD VILLAGE REALTY TRUST, a
Massachusetts trust
By:
Print Name:
Title:
ESCROW AGENT:
FIDELITY TITLE INSURANCE COMPANY
By:
Print Name:
Title:
Exhibit 1.1.5
Excluded Permits
None.
Exhibit 1.1.6
Existing Financing Information
Mortgage Note, dated December 12, 1989, in the original stated principal
amount of $5,530,000.00.
Exhibit 1.1.8
Excluded Fixtures and Tangible Personal Property
1. "Buyer's Access Computer Hardware and Software"; and
2. AIMCO Benchmark Series Books;
3. Connect: Remote Horizon Software; and
4. All items listed in Section 1.1.8 (i) through (iii) of the Contract.
Exhibit 7.2.1.1
Form of Special Warranty Deed
This instrument was prepared by: SEND TAX NOTICE TO:
Joshua J. Widoff, Esq.
Brownstein, Hyatt & Farber, P.C.
410 17th Street, 22nd Floor
Denver, Colorado 80202
STATUTORY WARRANTY DEED
STATE OF ALABAMA )
COUNTY OF MONTGOMERY)
KNOW ALL MEN BY THESE PRESENTS:
That in consideration of Ten and No/100 Dollars ($10.00) to the
undersigned grantor, in hand paid by the grantee herein, the receipt whereof is
acknowledged, _________________, a ________________ (herein referred to as
"Grantor"), grants, bargains, sells and conveys, subject to the matters set
forth below, unto _____________, a ________________ (herein referred to as
"Grantee"), the real estate situated in Montgomery County, Alabama described on
Exhibit A attached hereto and made a part hereof, together with all improvements
and fixtures thereon and all easements and other appurtenances thereto (the
"Property").
TO HAVE AND TO HOLD to the Grantee, its successors and assigns forever.
The Property is conveyed to the Grantee subject to the matters set forth
on Exhibit B attached hereto and made a part hereof.
IN WITNESS WHEREOF, Grantor has hereunto caused this conveyance to be
executed effective as of the day of , 2002.
Witness or Attest:
By: By:
Its: Name:
Title:
STATE OF _________________ )
COUNTY OF ________________ )
I, the undersigned, a Notary Public in and for said County in said State,
hereby certify that ________________________________ of
__________________________________________, a _______________________ as
______________ of _____________________, a _________________________________, is
signed to the foregoing instrument and who is known to me, acknowledged before
me on this day that, being informed of the contents of such instrument, he, as
such officer, and with full authority, executed the same voluntarily for and as
the act of said corporation acting in its capacity as general partner for such
partnership acting in its capacity as general partner as aforesaid.
Given under my hand and official seal this day
of , 200__.
Notary Public
[ Notarial Seal ]
My Commission Expires:
EXHIBIT A
Description of Property
EXHIBIT B
Title Exceptions
1. Encroachments, overlaps, boundary line disputes or other matters which
would be disclosed by an accurate surveyor or inspection of the premises.
2. General and special taxes or assessments for 2002 and subsequent years
which are not yet due and payable.
3. Parties in possession pursuant to existing leases.
4. [Additional Permitted Exceptions]
5. [Assumed Encumbrances]
EXHIBIT 7.2.1.2
Form of Bill of Sale
THIS BILL OF SALE ("Bill of Sale") is made this ____ day of October 2002
by STRATFORD VILLAGE REALTY TRUST, a Massachusetts trust ("Seller"), in favor of
B&M MANAGEMENT COMPANY, L.L.C. ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller and Purchaser entered into that certain Purchase and Sale
Contract dated as of _______________, 200__ ("Contract") with respect to the
sale of certain the Real Property identified on Schedule A attached hereto and
the Improvements located thereon. (Any term with its initial letter capitalized
and not otherwise defined herein shall have the meaning set forth in the
Contract.)
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller does hereby absolutely and
unconditionally give, grant, bargain, sell, transfer, set over, assign, convey,
release, confirm and deliver to Purchaser all of the Fixtures and Tangible
Personal Property. Seller hereby warrants Purchaser's title to the Fixtures and
Tangible Personal Property and will forever defend the same against the claims
of all persons or entities owning, holding or claiming by, through or under
Seller, but not otherwise.
WITH RESPECT TO ALL MATTERS TRANSFERRED, WHETHER TANGIBLE OR INTANGIBLE,
PERSONAL OR REAL, SELLER EXPRESSLY DISCLAIMS A WARRANTY OF MERCHANTABILITY AND
WARRANTY FOR FITNESS FOR A PARTICULAR USE OR ANY OTHER WARRANTY EXPRESSED OR
IMPLIED THAT MAY ARISE BY OPERATION OF LAW OR UNDER THE UNIFORM COMMERCIAL CODE
FOR THE STATE IN WHICH THE PROPERTY IS LOCATED.
This Bill of Sale shall be binding upon and inure to the benefit of the
successors, assigns, personal representatives, heirs and legatees of Purchaser
and Seller.
This Bill of Sale shall be governed by, interpreted under, and construed
and enforceable in accordance with, the laws of the State of
____________________.
EXECUTED as of the ______ day of ________________, 200__.
STRATFORD VILLAGE REALTY TRUST, a
Massachusetts trust
By: [the partnership name]
a [State] general partnership,
Its General Partner
By: [the general partnership name]
a [State] [type entity],
Its General Partner
By:
Name:
Title:
EXHIBIT A
(Excluded Fixtures and Tangible Personal Property)
EXHIBIT 7.2.1.3
Form of General Assignment
This General Assignment and Assumption (this "Assignment") is executed by
STRATFORD VILLAGE REALTY TRUST, a Massachusetts trust ("Seller"), in favor of
B&M MANAGEMENT COMPANY, L.L.C., an Alabama limited liability company
("Purchaser") as of ________, 20__ (the "Effective Date").
Seller and Purchaser, have entered into that certain Purchase and Sale
Contract dated as of _______________ __, 200___ ("Contract"), in which Seller
has agreed to sell and Purchaser has agreed to purchase the real property
described in Exhibit A attached thereto and the improvements located thereon
collectively, the "Project"). Capitalized terms not otherwise defined herein
shall have the meaning ascribed to them in the Contract.
Pursuant to the Contract, Seller has agreed to assign, without recourse or
warranty, to Purchaser all of Seller's right, title and interest, if any, in and
to the Miscellaneous Property Assets, the Permits (other than the Excluded
Permits), and the Property Contracts.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser agree as
follows:
1. Assignment. As of the Effective Date, Seller hereby assigns, sells and
transfers, without recourse or warranty (except as specifically set forth in the
Contract), to Purchaser all of Seller's right, title and interest, if any, in
and to the Miscellaneous Property Assets, the Permits (other than the Excluded
Permits), and the Property Contracts.
2. Assumption. As of the Effective Date, Purchaser expressly agrees to
assume and hereby assumes all liabilities and obligations of the Seller in
connection with the Miscellaneous Property Assets, the Permits (other than the
Excluded Permits), and the Property Contracts, which arise on or after the date
hereof (but not those arising prior to the date hereof).
3. Counterparts. This Assignment may be executed in counterparts, each of
which shall be deemed an original, and both of which together shall constitute
one and the same instrument.
4. Attorneys' Fees. If any action or proceeding is commenced by either
party to enforce its rights under this Assignment, the substantially prevailing
party in such action or proceeding shall be awarded all reasonable costs and
expenses incurred in such action or proceeding, including reasonable attorneys'
fees and costs (including the cost of in-house counsel and appeals), in addition
to any other relief awarded by the court.
5. Applicable Law. This Assignment shall be governed by and interpreted in
accordance with the laws of the State of Alabama.
6. Binding Effect. This Assignment shall be binding upon and inure to the
benefit of the parties hereto and their respective transferees, successors, and
assigns.
WITH RESPECT TO ALL MATTERS TRANSFERRED, WHETHER TANGIBLE OR INTANGIBLE,
PERSONAL OR REAL, SELLER EXPRESSLY DISCLAIMS A WARRANTY OF MERCHANTABILITY AND
WARRANTY FOR FITNESS FOR A PARTICULAR USE OR ANY OTHER WARRANTY EXPRESSED
(EXCEPT AS MAY BE SPECIFICALLY SET FORTH IN THE CONTRACT) OR IMPLIED THAT MAY
ARISE BY OPERATION OF LAW OR UNDER THE UNIFORM COMMERCIAL CODE FOR THE STATE IN
WHICH THE PROPERTY IS LOCATED.
[Remainder of Page Intentionally Left Blank]
EXHIBIT 7.2.1.6
Form of FIRPTA Affidavit
1. Section 1445 of the Internal Revenue Code of 1986, as amended (the
"IRC"), provides that a transferee of a United States real property
interest must withhold tax if the transferor is a foreign person.
2. In order to inform _______________________________________________ (the
"Transferee"), that withholding of tax is not required upon the
disposition by ___________________________________,
________________________________ (the "Transferor"), of the United
States real property more particularly described on Exhibit "A"
attached hereto and incorporated herein by reference (the "Property"),
the undersigned Transferor certifies and declares by means of this
certification, the following:
(a) The Transferor is not a foreign person, foreign corporation,
foreign partnership, foreign trust or foreign estate (as such terms
are defined in the IRC and the Income Tax Regulations).
(b) The Transferor is a ________________________________.
(c) Record title to the Property is in the name of the Transferor.
(d) The Federal Taxpayer Identification Number for the Transferor is
____________.
(e) The address for the Transferor is:
__________________________
c/o AIMCO
2000 S. Colorado Blvd.
Suite 2-1000
Denver, Colorado 80222
3. The Transferor understands that this certification may be disclosed to the
Internal Revenue Service by the Transferee and that any false statement
contained in this certification may be punished by fine, imprisonment or
both.
Executed this ______ day of , 2002.
TRANSFEROR:
EXHIBIT 7.2.18
Form of Assignment of Leases and Security Deposits
This Assignment and Assumption of Leases and Security Deposits (this
"Assignment") is executed by and between ___________________________________
("Assignor"), and ___________________________ ("Assignee"), as of _________,
20___ (the "Effective Date").
Assignee and Assignor have entered into that certain Purchase and Sale
Contract, dated _____________________ ("Purchase Contract"), in which Assignor
has agreed to sell and Assignee has agreed to purchase the real property
described in Exhibit A attached to the Purchase Contract and the improvements
located thereon (collectively, the Project).
Assignor, as landlord, has entered into those certain leases identified on
Exhibit A attached hereto and incorporated herein by reference (collectively,
together with all amendments, modifications, supplements, restatements and
guarantees thereof, the "Leases") for the Project.
The Purchase Contract requires Assignor and Assignee to execute this
Assignment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree
as follows:
1. Capitalized Terms. Unless the context otherwise requires, all
capitalized terms used, but not otherwise defined herein, shall have the
meanings set forth for the same in the Purchase Contract.
2. Assignment and Assumption. As of the Effective Date, Assignor hereby
irrevocably assigns, sets over, transfers and conveys to Assignee all of
Assignor's right, title and interest in and to (a) the Leases and (b) the Tenant
Security Deposit Balance (defined below). Assignee hereby accepts this
Assignment and the rights granted herein, and Assignee hereby expressly assumes,
for itself and its successors, assigns and legal representatives, all of the
obligations and liabilities, fixed and contingent, of Assignor which arise from
and after the date hereof with respect to the Leases and the Tenant Security
Deposit Balance and agrees to (i) be fully bound by all of the terms, covenants,
agreements, provisions, conditions, obligations and liability of Assignor
thereunder, which arise and are to be performed from and after the date hereof,
and (ii) keep, perform and observe all of the covenants and conditions contained
therein on the part of Assignor which are to be kept, performed and observed,
from and after the date hereof. "Tenant Security Deposit Balance" shall mean the
received and unapplied balance of all cash (or cash equivalent) security
deposits, prepaid rentals, cleaning fees and other refundable deposits and fees
collected from Tenants, plus any interest accrued thereon, paid by Tenants to
Seller pursuant to the Leases, including, but not limited to, security, damage
or other refundable deposits or required to be paid by any of the Tenants to
secure their respective obligations under the Leases, together, in all cases,
with any interest payable to the Tenants thereunder as may be required by their
respective Lease or state law.
3. General Provisions.
a. Successors. This Assignment shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors and assigns.
b. Counterparts. This Assignment may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument.
c. Governing Law. This Assignment and the legal relations between
the parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State wherein the Project is located, without reference to
the conflict of law provisions thereof.
d. Attorney's Fees. If any action or proceeding is commenced by
either party to enforce its rights under this Assignment, the substantially
prevailing party in such action or proceeding shall be awarded all reasonable
costs and expenses incurred in such action or proceeding, including reasonable
attorneys' fees and costs (including the cost of in-house counsel and appeals),
in addition to any other relief awarded by the court.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, this Assignment was made and executed as of the date
first above written.
ASSIGNEE:
ASSIGNOR:
EXHIBIT A
(Rent Roll)
EXHIBIT 8.1.1.7
List of Pending Litigation
None, other than Tenant evictions.
EXHIBIT 8.1.1.9
List of Leases for the Property
None, other than Leases to Tenants shown on the Rent Roll for the
Property.
EXHIBIT 8.1.1.16
List of Person(s) Making Representations and Warranties
Ann Porter, Regional Property Manager.
SCHEDULE 4.3
LIST OF MATERIALS
(a) Seller's form of residential lease agreement used at the Property
(b) all Property Contracts and any equipment leases
(c) any property locator or similar agreements (other than agreements with the
Property Manager), if any, pertaining to the marketing and advertisement
of the Property for leasing (and payment of commissions in connection
therewith), but only to the extent the same will remain in effect after
the Closing
(d) all engineering studies, environmental reports, termite inspections or
warranties, to the extent available and in Seller's possession (subject to
Section 4.3.1), which relate to the Property and were prepared for Seller
by third parties
(e) to the extent in Seller's possession (subject to Section 4.3.1), ad
valorem and personal property tax statements for the current year, and the
status of any pending appeal
(f) a current rent roll for the Property, in Seller's existing format, showing
the unit number, tenant name, term of lease, rental amount and amount of
security deposit
(g) current operating statements for the Property, and to the extent available
and in Seller's possession (subject to Section 4.3.1), for the three years
prior to the year in which the Effective Date occurs
(h) a summary of pending insurance claims and pending litigation, if any,
provided that such summary shall be prepared to Seller's knowledge (as
defined in Section 6.4 of the Contract) and Seller makes no
representations or warranties regarding the outcome of such claims or
litigation
(i) to the extent available and in Seller's possession (subject to Section
4.3.1), guaranties or warranties with respect to the roof of the Property,
if any
(j) Seller's ACM plan, lead in water O&M, and other O&M plans, if any
(k) copies of any certificates of occupancy and/or other Permits, to the
extent available and in Seller's possession (subject to Section 4.3.1)