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) December 27, 2002
SHELTER PROPERTIES I
(Exact name of registrant as specified in its charter)
South Carolina 0-10255 57-0707398
(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
Item 2. Acquisition or Disposition of Assets.
On December 27, 2002, the Registrant sold one of its investment properties,
Stone Mountain West Apartments, located in Stone Mountain, GA. The Registrant
sold Stone Mountain West Apartments to Stone Mountain Townhomes, Inc., a Georgia
corporation, an unrelated party, for approximately $7,100,000. J and J
Construction Group, Inc., a Georgia Corporation, also an unrelated party,
assigned the purchase agreement to Stone Mountain Townhomes, Inc. The sale price
was determined based on the fair market value of the investment property.
In accordance with the Amended and Restated Certificate and Agreement of Limited
Partnership of the Registrant, the Registrant's general partner is evaluating
the cash requirements of the Registrant to determine whether any portion of the
net proceeds will be distributed to the Registrant's partners.
Item 7. Financial Statements and Exhibits
(b) Pro forma financial information.
The required pro forma financial information for the Registrant is not included
in this report. This information will be submitted no later than March 12, 2003.
10(i) Contracts related to disposition of property
(k) Contract of sale between Registrant and J and J Construction Group, Inc.,
a Georgia Corporation, effective October 28, 2002 for the sale of Stone
Mountain West Apartments.
(l) Assignment and Assumption of sale contract between J and J Construction
Group, Inc., a Georgia Corporation and Stone Mountain Townhomes, Inc., a
Georgia Corporation dated December 16, 2002.
Schedules and supplemental materials to the exhibits filed herewith have been
omitted but will be provided to the Securities and Exchange Commission upon
request.
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.
SHELTER PROPERTIES I
By: Shelter Realty I Corporation
Corporate General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
Date: January 13, 2003
EXHIBIT 10(i)(k)
PURCHASE AND SALE CONTRACT
BETWEEN
SHELTER PROPERTIES I LIMITED PARTNERSHIP,
a South Carolina limited partnership
AS SELLER
AND
J&J CONSTRUCTION GROUP, INC.,
a Georgia corporation
AS PURCHASER
STONE MOUNTAIN WEST
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as of
the 28th day of October, 2002 (the "Effective Date") by and between SHELTER
PROPERTIES I LIMITED PARTNERSHIP, a South Carolina limited partnership, having
an address at 2000 South Colorado Boulevard, Tower Two, Suite 2-1000, Denver,
Colorado 80222 ("Seller") and J&J CONSTRUCTION GROUP, INC., a Georgia
corporation, having a principal address at 6642 Clubview Court, Flowery Branch,
Georgia 30542 ("Purchaser").
NOW, THEREFORE, in consideration of mutual covenants set forth herein,
Seller and Purchaser hereby agree as follows:
RECITALS
A. Seller owns the real estate located in DeKalb County, Georgia, as more
particularly described in Exhibit A attached hereto and made a part hereof, and
the improvements thereon, commonly known as Stone Mountain West Apartments.
B. Purchaser desires to purchase, and Seller desires to sell, such land,
improvements and certain associated property, on the terms and conditions set
forth below.
ARTICLE 1
DEFINED TERMS
1.1 Unless otherwise defined herein, any term with its initial letter
capitalized in this Contract shall have the meaning set forth in this ARTICLE 1.
1.1.1 "ADA" shall have the meaning set forth in Section 13.22. 1.1.2
Intentionally Omitted. 1.1.3 "AIMCO" shall have the meaning set forth in Section
14.2. 1.1.4 "AIMCO Marks" means all words, phrases, slogans, materials,
software, proprietary systems, trade secrets, proprietary information and lists,
and other intellectual property owned or used by Seller, the Property Manager,
or AIMCO in the marketing, operation or use of the Property (or in the
marketing, operation or use of any other properties managed by the Property
Manager or owned by AIMCO or an affiliate of either Property Manager or AIMCO).
1.1.5 "Broker" shall have the meaning set forth in Section 9.1. 1.1.6 "Business
Day" means any day other than a Saturday or Sunday or Federal holiday or legal
holiday in the States of Colorado, Texas or Georgia. 1.1.7 "Closing" means the
consummation of the purchase and sale and related transactions contemplated by
this Contract in accordance with the terms and conditions of this Contract.
1.1.8 "Closing Date" means the date on which date the Closing of the conveyance
of the Property is required to be held pursuant to Section 5.1. 1.1.9 "Code"
shall have the meaning set forth in Section 2.3.6. 1.1.10 "Consent Contract"
shall have the meaning set forth in Section 14.2.
1.1.11 "Consultants" shall have the meaning set forth in Section 3.1. 1.1.12
"Damage Notice" shall have the meaning set forth in Section 11.1. 1.1.13 "Deed"
shall have the meaning set forth in Section 5.2.1. 1.1.14 "Deed of Trust" shall
have the meaning set forth in Section 4.5. 1.1.15 "Deposit" shall have the
meaning set forth in Section 2.2.1. 1.1.16 "Escrow Agent" shall have the meaning
set forth in Section 2.2.1. 1.1.17 "Excluded Permits" means those Permits which,
under applicable law, are nontransferable and such other Permits, if any, as may
be designated as Excluded Permits on Schedule 1.1.17.
1.1.18 "Feasibility Period" shall have the meaning set forth in Section 3.1.
1.1.19 "Fixtures and Tangible Personal Property" means all fixtures, furniture,
furnishings, fittings, equipment, machinery, apparatus, appliances and other
articles of tangible personal property located on the Land or in the
Improvements as of the Effective Date and used or usable in connection with the
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 (a) 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 (b) property owned or leased by any Tenant or guest, employee or other person
furnishing goods or services to the Property, or (c) property and equipment
owned by Seller, which in the ordinary course of business of the Property is not
located on the Property and used exclusively for the business, operation or
management of the Property, or (d) the property and equipment, if any, expressly
identified in Schedule 1.1.19. 1.1.20 "General Assignment" shall have the
meaning set forth in Section 5.2.3.
1.1.21 "Good Funds" shall have the meaning set forth in Section 2.2.1.
1.1.22 "Improvements" means all buildings and improvements located on
the Land taken "as is."
1.1.23 Intentionally Omitted.
1.1.24 "Land" means all of those certain tracts of land located in the State of
Georgia described on Exhibit A, and all rights, privileges and appurtenances
pertaining thereto.
1.1.25 "Lease(s)" means the interest of Seller in and to all leases, subleases
and other occupancy contracts, whether or not of record, which provide for the
use or occupancy of space or facilities on or relating to the Property and which
are in force as of the Closing Date for the applicable Property.
1.1.26 "Leases Assignment" shall have the meaning set forth in Section 5.2.4.
1.1.27 "Lender" means Lehman Brothers Holdings Inc., d/b/a Lehman Capital, a
Division of Lehman Brothers Holdings Inc., a Delaware corporation, and
subsequently assigned to Federal Home Loan Mortgage Corporation. 1.1.28 "Lender
Fees" shall mean all fees and expenses (including, without limitation, all
prepayment penalties and pay-off fees) imposed or charged by Lender or its
counsel in connection with the Loan Payoff, and, to the extent that the Loan
Payoff occurs on a date other than as permitted under the Note and Deed of
Trust, any amounts of interest charged by Lender for the period from the Closing
Date to the permitted prepayment date, the amount of the Lender Fees to be
determined as of the Closing Date. 1.1.29 "Loan" means the indebtedness owing to
Lender evidenced by the Note.
1.1.30 "Loan Payoff" shall have the meaning set forth in Section 5.4.7. 1.1.31
"Losses" shall have the meaning set forth in Section 3.4.1. 1.1.32 "Materials"
shall have the meaning set forth in Section 3.5. 1.1.33 "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, excluding, however,
(a) receivables, (b) Property Contracts, (c) Leases, (d) Permits, (e) cash or
other funds, whether in petty cash or house "banks," or on deposit in bank
accounts or in transit for deposit, (f) refunds, rebates or other claims, or any
interest thereon, for periods or events occurring prior to the Closing Date, (g)
utility and similar deposits, (h) insurance or other prepaid items, (i) Seller's
proprietary books and records, or (j) any right, title or interest in or to the
AIMCO Marks. The term "Miscellaneous Property Assets" also shall include all of
Seller's rights, if any, in and to the name "STONE MOUNTAIN WEST" as it relates
solely to use in connection with the Property (and not with respect to any other
property owned or managed by Seller, Property Manager, AIMCO, or their
respective affiliates).
1.1.34 "Note" means that certain multifamily Note, in the original principal
amount of $4,945,000.00, dated August 30, 2001, executed by Seller and payable
to the order of Lender.
1.1.35 "Objection Deadline" shall have the meaning set forth in
Section 4.3.
1.1.36 "Objection Notice" shall have the meaning set forth in
Section 4.3.
1.1.37 "Objections" shall have the meaning set forth in Section 4.3.
1.1.38 "Permits" means all licenses and permits granted by any
governmental authority having jurisdiction over the Property owned by Seller
and required in order to own and operate the Property.
1.1.39 "Permitted Exceptions" shall have the meaning set forth in Section 4.4.
1.1.40 "Property" means (a) the Land and Improvements and all rights of Seller,
if any, in and to all of the easements, rights, privileges, and appurtenances
belonging or in any way appertaining to the Land and Improvements, (b) the
right, if any and only to the extent transferable, of Seller in the Property
Contracts, Leases, Permits (other than Excluded Permits), and the Fixtures and
Tangible Personal Property, and (c) the Miscellaneous Property Assets owned by
Seller which are located on the Property and used in its operation.
1.1.41 "Property Contracts" means all contracts, agreements, equipment leases,
purchase orders, 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
the assignment of such contract to Purchaser is permitted pursuant to the
express terms of such contract, and not including (a) any national contracts
entered into by Seller, Property Manager, or AIMCO with respect to the Property
(i) which terminate automatically upon transfer of the Property by Seller, or
(ii) which Seller, in Seller's sole discretion, elects to terminate with respect
to the Property effective as of the Closing Date, or (b) any property management
contract for the Property. 1.1.42 "Property Contracts Notice" shall have the
meaning set forth in Section 3.6.
1.1.43 "Property Manager" means the current property manager of the
Property.
1.1.44 "Proration Schedule" shall have the meaning set forth in
Section 5.4.1.
1.1.45 "Purchase Price" means the consideration to be paid by Purchaser
to Seller for the purchase of the Property pursuant to Section 2.2.
1.1.46 "Regional Property Manager" shall have the meaning set forth in
Section 6.4.
1.1.47 "Remediation" shall have the meaning set forth in Section 14.2.
1.1.48 "Response Deadline" shall have the meaning set forth in
Section 4.3.
1.1.49 "Response Notice" shall have the meaning set forth in Section 4.3.
1.1.50 "Seller's Indemnified Parties" shall have the meaning set forth
in Section 3.4.1
1.1.51 "Seller's Representations" shall have the meaning set forth in
Section 6.1.
1.1.52 "Survey" shall have the meaning ascribed thereto in Section 4.2.
1.1.53 "Survival Period" shall have the meaning set forth in Section 6.3.
1.1.54 "Survival Provisions" shall have the meaning set forth in Section
13.28.
1.1.55 "Tenant" means any person or entity entitled to occupy any portion of the
Property under a Lease. 1.1.56 "Tenant Deposits" means all 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. Tenant Deposits shall not include any non-refundable
deposits or fees paid by Tenants to Seller, either pursuant to the Leases or
otherwise. 1.1.57 "Tenant Security Deposit Balance" shall have the meaning set
forth in Section 5.4.6.2.
1.1.58 "Terminated Contracts" shall have the meaning set forth in
Section 3.6.
1.1.59 "Testing" shall have the meaning set forth in Section 14.2.
1.1.60 "Title Commitment" shall have the meaning ascribed thereto in
Section 4.1.
1.1.61 "Title Documents" shall have the meaning set forth in Section
4.1.
1.1.62 "Title Insurer" shall have the meaning set forth in Section 2.2.1.
1.1.63 "Title Policy" shall have the meaning set forth in Section 4.1.
1.1.64 "Uncollected Rents" shall have the meaning set forth in Section
5.4.6.1.
1.1.65 "Vendor Terminations" shall have the meaning set forth in Section
5.2.5.
ARTICLE 2
PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT 2.1 Purchase and
Sale. Seller agrees to sell and convey the Property to Purchaser and Purchaser
agrees to purchase the Property from Seller, all in accordance with the terms
and conditions set forth in this Contract. 2.2 Purchase Price and Deposit. The
total purchase price ("Purchase Price") for the Property shall be an amount
equal to Eight Million Two Hundred Thousand and No/100 Dollars ($8,200,000.00)
less the Lender Fees, which amount shall be paid by Purchaser, as follows:
2.2.1 On the Effective Date, Purchaser shall deliver to Fidelity National Title
Insurance Company, c/o Lolly Avant, 1900 West Loop South, Suite 650, Houston, TX
77027, 800-879-1677 ("Escrow Agent" or "Title Insurer") a deposit (the
"Deposit") of $164,000.00 by wire transfer of immediately available funds ("Good
Funds"). The Deposit shall be held and disbursed in accordance with the escrow
provisions set forth in Section 2.3. 2.2.2 Intentionally Omitted.
2.2.3 Intentionally Omitted.
2.2.4 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
11:00 a.m. (in the time zone in which Escrow Agent is located) on the Closing
Date (or such earlier time as required by Seller's lender).
2.3 Escrow Provisions Regarding Deposit.
2.3.1 Escrow Agent shall hold the Deposit and make delivery of the Deposit to
the party entitled thereto under the terms of this Contract. Escrow Agent shall
invest the Deposit in such short-term, high-grade securities, interest-bearing
bank accounts, money market funds or accounts, bank certificates of deposit or
bank repurchase contracts as Escrow Agent, in its discretion, deems suitable,
and all interest and income thereon shall become part of the Deposit and shall
be remitted to the party entitled to the Deposit pursuant to this Contract.
2.3.2 Escrow Agent shall hold the Deposit until the earlier occurrence of (i)
the Closing Date, at which time the Deposit shall be applied against the
Purchase Price, or (ii) the date on which Escrow Agent shall be authorized to
disburse the Deposit as set forth in Section 2.3.3. The tax identification
numbers of the parties shall be furnished to Escrow Agent upon request. 2.3.3 If
the Deposit has not been released earlier in accordance with Section 2.3.2, and
either party makes a written demand upon Escrow Agent for payment of the
Deposit, Escrow Agent shall give written notice to the other party of such
demand. If Escrow Agent does not receive a written objection from the other
party to the proposed payment within 5 Business Days after the giving of such
notice, Escrow Agent is hereby authorized to make such payment. If Escrow Agent
does receive such written objection within such 5-Business Day period, Escrow
Agent shall continue to hold such amount until otherwise directed by written
instructions from the parties to this Contract or a final judgment or
arbitrator's decision. However, Escrow Agent shall have the right at any time to
deposit the Deposit and interest thereon, if any, with a court of competent
jurisdiction in the state in which the Property is located. Escrow Agent shall
give written notice of such deposit to Seller and Purchaser. Upon such deposit,
Escrow Agent shall be relieved and discharged of all further obligations and
responsibilities hereunder. 2.3.4 The parties acknowledge that Escrow Agent is
acting solely as a stakeholder at their request and for their convenience, that
Escrow Agent shall not be deemed to be the agent of either of the parties for
any act or omission on its part unless taken or suffered in bad faith in willful
disregard of this Contract or involving gross negligence. Seller and Purchaser
jointly and severally shall indemnify and hold Escrow Agent harmless from and
against all costs, claims and expenses, including reasonable attorney's fees,
incurred in connection with the performance of Escrow Agent's duties hereunder,
except with respect to actions or omissions taken or suffered by Escrow Agent in
bad faith, in willful disregard of this Contract or involving gross negligence
on the part of the Escrow Agent. 2.3.5 The parties shall deliver to Escrow Agent
an executed copy of this Contract, which shall constitute the sole instructions
to Escrow Agent. Escrow Agent shall execute the signature page for Escrow Agent
attached hereto with respect to the provisions of this Section 2.3; provided,
however, that (a) Escrow Agent's signature hereon shall not be a prerequisite to
the binding nature of this Contract on Purchaser and Seller, and the same shall
become fully effective upon execution by Purchaser and Seller, and (b) the
signature of Escrow Agent will not be necessary to amend any provision of this
Contract other than this Section 2.3.
2.3.6 Escrow Agent, as the person responsible for closing the transaction within
the meaning of Section 6045(e)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code"), shall file all necessary information, reports, returns,
and statements regarding the transaction required by the Code including, but not
limited to, the tax reports required pursuant to Section 6045 of the Code.
Further, Escrow Agent agrees to indemnify and hold Purchaser, Seller, and their
respective attorneys and brokers harmless from and against any Losses resulting
from Escrow Agent's failure to file the reports Escrow Agent is required to file
pursuant to this section. 2.3.7 The provisions of this Section 2.3 shall survive
the termination of this Contract, and if not so terminated, the Closing and
delivery of the Deed to Purchaser.
ARTICLE 3
FEASIBILITY PERIOD
3.1 Feasibility Period. Subject to the terms of Section 3.3 and 3.4 and the
right of Tenants under the Leases, from the Effective Date to and including
November 22, 2002 (the "Feasibility Period"), Purchaser, and its agents,
contractors, engineers, surveyors, attorneys, and employees (collectively,
"Consultants") shall have the right from time to time to enter onto the
Property:
3.1.1 To conduct and make any and all customary studies, tests, examinations,
inquiries, and inspections, or investigations (collectively, the "Inspections")
of or concerning the Property (including, without limitation, engineering and
feasibility studies, evaluation of drainage and flood plain, soil tests for
bearing capacity and percolation and surveys, including topographical surveys);
3.1.2 To confirm any and all matters which Purchaser may reasonably desire to
confirm with respect to the Property; 3.1.3 To ascertain and confirm the
suitability of the Property for Purchaser's intended use of the Property; and
3.1.4 To review the Materials at Purchaser's sole cost and expense. 3.2
Expiration of Feasibility Period. If the results of any of the matters referred
to in Section 3.1 appear unsatisfactory to Purchaser for any reason or if
Purchaser elects not to proceed with the transaction contemplated by this
Contract for any other reason, or for no reason whatsoever, in Purchaser's sole
and absolute discretion, then Purchaser shall have the right to terminate this
Contract by giving written notice to that effect to Seller and Escrow Agent on
or before 5:00 p.m. (in the time zone in which the Escrow Agent is located) on
the date of expiration of the Feasibility Period. If Purchaser exercises such
right to terminate, this Contract shall terminate and be of no further force and
effect, subject to and except for Purchaser's liability pursuant to Section 3.3
and any other provision of this Contract which survives such termination, and
Escrow Agent shall forthwith 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
Contract, Purchaser's right to terminate under this Section 3.2 shall be
permanently waived and this Contract shall remain in full force and effect, the
Deposit shall be non-refundable, and Purchaser's obligation to purchase the
Property shall be non-contingent and unconditional except only for satisfaction
of the conditions expressly stated in Section 8.1.
Subject to the terms of Section 3.3 and 3.4 and the right of Tenants under
the Leases, following the expiration of the Feasibility Period, provided
Purchaser has not terminated the Contract as provided for herein, Purchaser and
its Consultants shall have the right from time to time and upon reasonable
notice to Seller to enter onto the Property as reasonably necessary.
3.3 Conduct of Investigation. Purchaser shall not permit any mechanic's or
materialmen'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 Inspections conducted by or for Purchaser.
Purchaser shall give notice to Seller a reasonable time prior to entry onto the
Property and shall permit Seller to have a representative present during all
Inspections conducted at the Property. All information made available by Seller
to Purchaser in accordance with this Contract or obtained by Purchaser in the
course of its Inspections shall be treated as confidential information by
Purchaser, and, prior to the purchase of the Property by Purchaser, Purchaser
shall use its best efforts to prevent its Consultants from divulging such
information to any unrelated third parties except as reasonably necessary to
third parties engaged by Purchaser for the limited purpose of analyzing and
investigating such information for the purpose of consummating the transaction
contemplated by this Contract. The provisions of this Section 3.3 shall survive
the termination of this Contract, and if not so terminated shall survive (except
for the confidentiality provisions of this Section 3.3) the Closing and delivery
of the Deed to Purchaser.
3.4 Purchaser Indemnification.
3.4.1 Purchaser shall indemnify, hold harmless and, if requested by Seller (in
Seller's sole discretion), defend (with counsel approved by Seller) Seller,
together with Seller's affiliates, parent and subsidiary entities, successors,
assigns, partners, managers, members, employees, officers, directors, trustees,
shareholders, counsel, representatives, agents, Property Manager, Regional
Property Manager, and AIMCO (collectively, including Seller, "Seller's
Indemnified Parties"), from and against any and all damages, mechanics' liens,
liabilities, losses, demands, actions, causes of action, claims, costs and
expenses (including reasonable attorneys' fees, including the cost of in-house
counsel and appeals) (collectively, "Losses") arising from or related to
Purchaser's or its Consultant's entry onto the Property, and any Inspections or
other matters performed by Purchaser with respect to the Property during the
Feasibility Period or otherwise. 3.4.2 Notwithstanding anything in this Contract
to the contrary, Seller shall have the right, without limitation, to disapprove
any and all entries, surveys, tests (including, without limitation, a Phase II
environmental study of the Property), investigations and other matters that in
Seller's reasonable judgment could result in any injury to the Property or
breach of any contract, or expose Seller to any Losses or violation of
applicable law, or otherwise adversely affect the Property or Seller's interest
therein. Purchaser shall use best efforts to minimize disruption to Tenants in
connection with Purchaser's or its Consultants' activities pursuant to this
Section. 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, at Purchaser's sole cost and expense, the
Property to the same condition existing immediately prior to Purchaser's
exercise of its rights pursuant to this Article 3. Purchaser shall maintain and
cause its third party consultants to maintain (a) casualty insurance and
comprehensive public liability insurance with coverages of not less than
$1,000,000.00 for injury or death to any one person and $2,000,000.00 for injury
or death to more than one person and $500,000.00 with respect to property
damage, by water or otherwise, and (b) worker's compensation insurance for all
of their respective employees in accordance with the law of the state in which
the Property is located. Purchaser shall deliver proof of the insurance coverage
required pursuant to this Section 3.4.2 to Seller (in the form of a certificate
of insurance) prior to the earlier to occur of (i) Purchaser's or Purchaser's
Consultants' entry onto the Property, or (ii) the expiration of 5 days after the
Effective Date. The provisions of this Section 3.4 shall survive the termination
of this Contract, and if not so terminated, the Closing and delivery of the Deed
to Purchaser. 3.5 Property Materials.
3.5.1 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 3.5.2),
Seller agrees to make the documents set forth on Schedule 3.5 (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 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 Purchaser's sole
remedy will be to terminate this Contract pursuant to Section 3.2.
3.5.2 In providing such information and Materials to Purchaser, Seller makes no
representation or warranty, express, written, oral, statutory, or implied, and
all such representations and warranties are hereby expressly excluded and
disclaimed. Any information and Materials provided by Seller to Purchaser under
the terms of this Contract is for informational purposes only and shall be
returned by Purchaser to Seller as a condition to return of the Deposit to
Purchaser (if Purchaser is otherwise entitled to such Deposit pursuant to the
terms of this Contract) if this Contract is terminated for any reason. Purchaser
shall not in any way be entitled to rely upon the accuracy of such information
and Materials. Purchaser recognizes and agrees that the Materials and other
documents and information delivered or made available by Seller pursuant to this
Contract may not be complete or 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. Purchaser
understands that, although Seller will use commercially reasonable efforts to
locate and make available the Materials and other documents required to be
delivered or made available by Seller pursuant to this Contract, Purchaser will
not rely on such Materials or other documents as being a complete and accurate
source of information with respect to the Property, and will instead in all
instances rely exclusively on its own Inspections and Consultants with respect
to all matters which it deems relevant to its decision to acquire, own and
operate the Property. 3.5.3 The provisions of this Section 3.5 shall survive the
Closing and delivery of the Deed to Purchaser.
3.6 Property Contracts. On or before the expiration of the Feasibility Period,
Purchaser may deliver written notice to Seller (the "Property Contracts Notice")
specifying any Property Contracts with respect to which Purchaser desires to
have Seller deliver notices of termination at the Closing (the "Terminated
Contracts"); provided that (a) the effective date of such termination after
Closing shall be subject to the express terms of such Terminated Contracts, (b)
if any such Property Contract cannot by its terms be terminated, it shall be
assumed by Purchaser and not be a Terminated Contract, and (c) to the extent
that any such Terminated Contract requires payment of a penalty or premium for
cancellation, Purchaser shall be solely responsible for the payment of any such
cancellation fees or penalties. If Purchaser fails to deliver the Property
Contracts Notice on or before the expiration of the Feasibility Period, there
shall be no Terminated Contracts and Purchaser shall assume all Property
Contracts at the Closing.
ARTICLE 4
TITLE
4.1 Title Documents. Within 10 calendar days after the Effective Date, Seller
shall cause to be delivered to Purchaser a standard form commitment for title
insurance ("Title Commitment") for the Property in an amount equal to the
Purchase Price from Title Insurer for an owner's title insurance policy (the
"Title Policy") on the most recent standard American Land Title Association
form, together with copies of all instruments identified as exceptions therein
(together with the Title Commitment, referred to herein as the "Title
Documents"). Purchaser shall be solely responsible for payment of the basic
premium for the Title Policy and all other costs relating to procurement of the
Title Commitment, the Title Policy, and any requested endorsements.
4.2 Survey. Purchaser, at Purchaser's sole cost and expense, may cause to be
prepared a survey (or an update to any existing survey) for the Property
("Survey") to be delivered to Purchaser and Seller within 20 days after the
Effective Date, but no later than November 15, 2002, subject to the availability
of the surveyor to provide the Survey within such time frame. In the event the
surveyor does not deliver the Survey within such time frame, Purchaser may
extend the date for providing Purchaser's Objections (as hereinafter defined) to
the Survey by one day for each day that Purchaser does not receive the Survey
within the time frame set forth above; provided, however, that such day to day
extension shall not exceed 5 Business Days after the Objection Deadline (defined
below). Within 10 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
(subject to Section 3.5.2). 4.3 Objection and Response Process. On or before the
date which is 10 Business Days after its receipt of the Survey (as set forth in
Section 4.2 above) to review the Title Documents and the Survey, but not later
than November 29, 2002, and subject to the provisions of Section 4.2 (the
"Objection Deadline"). On or before the expiration of the Objection Deadline,
Purchaser shall give written notice (the "Objection Notice") to the attorneys
for Seller of any matter set forth in the Title Documents or the Survey to which
Purchaser objects (the "Objections"). If Purchaser fails to tender an Objection
Notice on or before the Objection Deadline (as extended for the Survey by the
provisions of Section 4.2), Purchaser shall be deemed to have approved and
irrevocably waived any objections to any matters covered by the Title Documents
and the Survey. Within 5 Business Days after Seller's receipt of Purchaser's
Objection Notice, but subject to the provisions of Section 4.2 (the "Response
Deadline"), Seller may, in Seller's sole discretion, give Purchaser notice (the
"Response Notice") of those Objections which Seller is willing to cure, if any.
Seller shall be entitled to reasonable adjournments of the Closing Date to cure
the Objections. If Seller fails to deliver a Response Notice by the Response
Deadline, Seller shall be deemed to have elected not to cure or otherwise
resolve any matter set forth in the Objection Notice. If Purchaser is
dissatisfied with the Response Notice which indicates Seller has elected not to
cure any material Objections, Purchaser may, as its exclusive remedy, elect by
written notice given to Seller on or before 5 days after the Response Notice is
given, either (a) to accept the Title Documents and Survey with resolution, if
any, of the Objections as set forth in the Response Notice (or if no Response
Notice is tendered, without any resolution of the Objections) and without any
reduction or abatement of the Purchase Price, or (b) to terminate this Contract,
in which event the Deposit shall be returned to Purchaser. If Purchaser fails to
give notice to terminate this Contract as set forth in the foregoing sentence,
Purchaser shall be deemed to have elected to waive all objections set forth in
the Objection Notice (other than those which Seller has agreed to cure in the
Response Notice and to have elected to proceed to closing the transactions
contemplated by this Contract. 4.4 Permitted Exceptions. The Deed delivered
pursuant to this Contract shall be subject to the following, all of which shall
be deemed "Permitted Exceptions":
4.4.1 All matters shown in the Title Documents and the Survey, other than (a)
those Objections, if any, which Seller has agreed to cure pursuant to the
Response Notice under Section 4.3, (b) mechanics' liens and taxes due and
payable with respect to the period preceding Closing, (c) the standard exception
regarding the rights of parties in possession which shall be limited to those
parties in possession pursuant to the Leases, and (d) the standard exception
pertaining to taxes which shall be limited to taxes and assessments payable in
the year in which the Closing occurs and subsequent taxes and assessments; 4.4.2
All Leases; 4.4.3 Intentionally Omitted; 4.4.4 Applicable zoning and
governmental regulations and ordinances; 4.4.5 Any defects in or objections to
title to the Property, or title exceptions or encumbrances, arising by, through
or under Purchaser; and 4.4.6 The terms and conditions of this Contract. 4.5
Existing Deed of Trust. It is understood and agreed that, whether or not
Purchaser gives an Objection Notice with respect thereto, any deeds of trust
and/or mortgages (including any and all mortgages which secure the Note) against
the Property (whether one or more, the "Deed of Trust") shall not be deemed
Permitted Exceptions, whether Purchaser gives written notice of such or not, and
shall be paid off, satisfied, discharged and/or cured by Seller at Closing,
provided that the Lender Fees due in connection with the Loan Payoff shall be
paid by Purchaser. ARTICLE 5
CLOSING
5.1 Closing Date. The Closing shall occur on December 30, 2002 (the "Closing
Date") through an escrow with Escrow Agent, whereby the Seller, Purchaser and
their attorneys need not be physically present at the Closing and may deliver
documents by overnight air courier or other means. Notwithstanding the foregoing
to the contrary, Seller shall have the option, by delivering written notice to
Purchaser to extend the Closing Date to the last Business Day of the month in
which the Closing Date otherwise would occur pursuant to the preceding sentence,
or to such other date (either in the same month or the next) as Seller
reasonably determines is desirable in connection with the Loan Payoff. Further,
the Closing Date may be extended without penalty at the option of Seller to a
date not later than 30 days following the Closing Date specified in the first
sentence of this paragraph above (or, if applicable, as extended by Seller
pursuant to the second sentence of this paragraph) to satisfy a condition to be
satisfied by Seller, or such later date as is mutually acceptable to Seller and
Purchaser. 5.2 Seller Closing Deliveries. No later than 1 Business Day prior to
the Closing Date, Seller shall deliver to Escrow Agent, each of the following
items:
5.2.1 Limited Warranty Deed (the "Deed") in the form attached as Exhibit B to
Purchaser, subject to the Permitted Exceptions. 5.2.2 A Bill of Sale in the form
attached as Exhibit C. 5.2.3 A General Assignment in the form attached as
Exhibit D (the "General Assignment").
5.2.4 An Assignment of Leases and Security Deposits in the form attached as
Exhibit E (the "Leases Assignment"). 5.2.5 A letter prepared by Purchaser and
countersigned by Seller to each of the vendors under the Terminated Property
Contracts informing them of the termination of such Terminated Property Contract
as of the Closing Date (subject to any delay in the effectiveness of such
termination pursuant to the express terms of each applicable Terminated Property
Contract) (the "Vendor Terminations").
5.2.6 A closing statement executed by Seller.
5.2.7 A title affidavit or at Seller's option an indemnity, as applicable, in
the customary form reasonably acceptable to Seller to enable Title Insurer to
delete the standard exceptions to the title insurance policy set forth in this
Contract (other than matters constituting any Permitted Exceptions and matters
which are to be completed or performed post-Closing) 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 Contract.
5.2.8 A certification of Seller's non-foreign status pursuant to Section 1445 of
the Internal Revenue Code of 1986, as amended, and Section 48-7-128 of the
Official Code of Georgia Annotated, or if such duty to withhold taxes exists,
such withholding shall be performed by Escrow Agent.
5.2.9 A rent roll for the Property certified by Seller, but limited to Seller's
knowledge, listing the monthly base rent payable, lease expiration date and
unapplied security deposit as of the Closing Date. 5.2.10 Resolutions,
certificates of good standing, and such other organizational documents as Title
Insurer shall reasonably require evidencing Seller's authority to consummate
this transaction.
5.2.11 If applicable, an Affidavit of Seller's Gain executed by Seller pursuant
to the withholding requirement of Section 48-7-128 of the Official Code of
Georgia Annotated.
5.3 Purchaser Closing Deliveries. No later than 1 Business Day prior to the
Closing Date (except for the balance of the Purchase Price which is to be
delivered at the time specified in Section 2.2.4), Purchaser shall deliver to
the Escrow Agent (for disbursement to Seller upon the Closing) the following
items with respect to the Property being conveyed at such Closing: 5.3.1 The
full Purchase Price (with credit for the Deposit), plus or minus the adjustments
or prorations required by this Contract. 5.3.2 A title affidavit or at
Purchaser's option an indemnity, as applicable, in the customary form reasonably
acceptable to Purchaser to enable Title Insurer to delete the standard
exceptions to the title insurance policy set forth in this Contract (other than
matters constituting any Permitted Exceptions and matters which are to be
completed or performed post-Closing) to be issued pursuant to the Title
Commitment; provided that such affidavit does not subject Purchaser to any
greater liability, or impose any additional obligations, other than as set forth
in this Contract.
5.3.3 Any declaration or other statement which may be required to be submitted
to the local assessor with respect to the terms of the sale of the Property.
5.3.4 A closing statement executed by Purchaser.
5.3.5 A countersigned counterpart of the General Assignment.
5.3.6 A countersigned counterpart of the Leases Assignment.
5.3.7 Notification letters to all Tenants prepared and executed by Purchaser
in the form attached hereto as Exhibit F.
5.3.8 The Vendor Terminations.
5.3.9 Any cancellation fees or penalties due to any vendor under any Terminated
Property Contract as a result of the termination thereof. 5.3.10 Resolutions,
certificates of good standing, and such other organizational documents as Title
Insurer shall reasonably require evidencing Purchaser's authority to consummate
this transaction.
5.3.11 Intentionally Omitted.
5.3.12 The Lender Fees.
5.3.13 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 Contract.
5.4 Closing Prorations and Adjustments.
5.4.1 General. All normal and customarily proratable items, including, without
limitation, collected rents, operating expenses, personal property taxes, other
operating expenses and fees, shall be prorated as of the Closing Date, Seller
being charged or credited, as appropriate, for all of same attributable to the
period up to the Closing Date (and credited for any amounts paid by Seller
attributable to the period on or after the Closing Date, if assumed by
Purchaser) 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 the Closing
Date. Seller shall prepare a proration schedule (the "Proration Schedule") of
the adjustments described in this Section 5.4 prior to Closing. Such adjustments
shall be paid by Purchaser to Seller (if the prorations result in a net credit
to Seller) or by Seller to Purchaser (if the prorations result in a net credit
to Purchaser), by increasing or reducing the cash to be paid by Purchaser at
Closing. 5.4.2 Operating Expenses. All of the operating, maintenance, taxes
(other than real estate taxes, such as rental taxes), and other expenses
incurred in operating the Property that Seller customarily pays, and any other
costs incurred in the ordinary course of business for the management and
operation of the Property, shall be prorated on an accrual basis. Seller shall
pay all such expenses that accrue prior to Closing and Purchaser shall pay all
such expenses that accrue from and after the Closing Date.
5.4.3 Utilities. The final readings and final billings for utilities will be
made if possible as of the Closing Date, in which case Seller shall pay all such
bills as of the Closing Date and no proration shall be made at the Closing with
respect to utility bills. Otherwise, a proration shall be made based upon the
parties' reasonable good faith estimate and a readjustment made within 30 days
after the Closing, if necessary. Seller shall be entitled to the return of any
deposit(s) posted by it with any utility company, and Seller shall notify each
utility company serving the Property to terminate Seller's account, effective as
of noon on the Closing Date. 5.4.4 Real Estate Taxes. 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 calendar year of Closing, shall
be prorated to 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. The proration of
real property taxes or installments of assessments shall be final and not
subject to re-adjustment after Closing.
5.4.5 Property Contracts. Purchaser shall assume at Closing the obligations
under the Property Contracts assumed by Purchaser, subject to proration of
operating expenses under Section 5.4.2.
5.4.6 Leases.
5.4.6.1 All collected rent (whether fixed monthly rentals, additional rentals,
escalation rentals, retroactive rentals, operating cost pass-throughs or other
sums and charges payable by Tenants under the Leases), income and expenses from
any portion of the Property shall be prorated as of the Closing Date (prorated
for any partial month). Purchaser shall receive all collected rent and income
attributable to dates from and after the Closing Date. Seller shall receive all
collected rent and income attributable to dates prior to the Closing Date.
Notwithstanding the foregoing, no prorations shall be made in relation to either
(a) non-delinquent rents which have not been collected as of the Closing Date,
or (b) delinquent rents existing, if any, as of the Closing Date (the foregoing
(a) and (b) referred to herein as the "Uncollected Rents"). In adjusting for
Uncollected Rents, no adjustments shall be made in Seller's favor for rents
which have accrued and are unpaid as of the Closing, but Purchaser shall pay
Seller such accrued Uncollected Rents as and when collected by Purchaser.
Purchaser agrees to bill Tenants of the Property for all Uncollected Rents and
to take reasonable actions to collect Uncollected Rents. After the Closing,
Seller shall continue to have the right, but not the obligation, in its own
name, to demand payment of and to collect Uncollected Rents owed to Seller by
any Tenant, which right shall include, without limitation, the right to continue
or commence legal actions or proceedings against any Tenant and the delivery of
the Leases Assignment shall not constitute a waiver by Seller of such right.
Purchaser agrees to cooperate with Seller in connection with all efforts by
Seller to collect such Uncollected Rents and to take all steps, whether before
or after the Closing Date, as may be necessary to carry out the intention of the
foregoing, including, without limitation, the delivery to Seller, within 7 days
after a written request, of any relevant books and records (including, without
limitation, rent statements, receipted bills and copies of tenant checks used in
payment of such rent), the execution of any and all consents or other documents,
and the undertaking of any act reasonably necessary for the collection of such
Uncollected Rents by Seller; provided, however, that Purchaser's obligation to
cooperate with Seller pursuant to this sentence shall not obligate Purchaser to
terminate any Tenant lease with an existing Tenant or evict any existing Tenant
from the Property.
5.4.6.2 At Closing, Purchaser shall receive a credit against the Purchase Price
in an amount equal to the received and unapplied balance of all cash (or cash
equivalent) Tenant Deposits, 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 Tenant Lease or state law (the "Tenant Security Deposit Balance").
Any cash (or cash equivalents) held by Seller which constitute the Tenant
Security Deposit Balance shall be retained by Seller in exchange for the
foregoing credit against the Purchase Price and shall not be transferred by
Seller pursuant to this Contract (or any of the documents delivered at Closing),
but the obligation with respect to the Tenant Security Deposit Balance
nonetheless shall be assumed by Purchaser. The Tenant Security Deposit Balance
shall not include any non-refundable deposits or fees paid by Tenants to Seller,
either pursuant to the Leases or otherwise.
5.4.6.3 With respect to operating expenses, taxes, utility charges, other
operating cost pass-throughs, retroactive rental escalations, sums or charges
payable by Tenants under the Tenant Leases, to the extent that Seller has
received as of the Closing payments allocable to periods subsequent to Closing,
the same shall be properly prorated with an adjustment in favor of Purchaser,
and Purchaser shall reserve a credit therefor at Closing. With respect to any
payments received by Purchaser after the Closing allocable to Seller prior to
Closing, Purchaser shall promptly pay the same to Seller. 5.4.7 Existing Loan.
On the Closing Date, Seller shall pay (which payment may be made by Seller out
of the proceeds of the Purchase Price) the outstanding principal balance of the
Note, together with all interest accrued under the Note prior to the Closing
Date (the "Loan Payoff"). Purchaser shall pay all Lender Fees. Any existing
reserves, impounds and other accounts maintained in connection with the Loan
shall be released in Good Funds to Seller at the Closing unless credited by
Lender against the amount due from Seller under the Note.
5.4.8 Insurance. No proration shall be made in relation to insurance premiums
and insurance policies will not be assigned to Purchaser. 5.4.9 Employees. All
of Seller's and Seller's manager's on-site employees shall have their employment
at the Property terminated as of the Closing Date. 5.4.10 Closing Costs.
Purchaser shall pay the cost of recording any instruments required to discharge
any liens or encumbrances against the Property, any premiums or fees required to
be paid by Purchaser with respect to the Title Policy pursuant to Section 4.1,
and one-half of the customary closing costs of the Escrow Agent. Seller shall
pay any transfer, mortgage assumption, sales, use, gross receipts or similar
taxes and one-half of the customary closing costs of the Escrow Agent.
5.4.11 Survival. The provisions of this Section 5.4 shall survive the Closing
and delivery of the Deed to Purchaser. 5.4.12 Possession. Possession of the
Property, subject to the Leases, Property Contracts which are not identified as
Terminated Contracts during the Feasibility Period (subject to the limitations
of Section 3.6), and Permitted Exceptions, shall be delivered to Purchaser at
the Closing upon release from escrow of all items to be delivered by Purchaser
pursuant to Section 5.3, including, without limitation, the Purchase Price. To
the extent reasonably available to Seller, originals or copies of the Leases and
Property Contracts, lease files, warranties, guaranties, operating manuals, keys
to the property, and Seller's books and records (other than proprietary
information) regarding the Property shall be made available to Purchaser at the
Property after the Closing.
5.4.13 Post Closing Adjustments. In general, and except as provided in this
Contract or the Closing Documents, Seller shall be entitled to all income, and
shall pay all expenses, relating to the operation of the Property for the period
prior to the Closing Date and Purchaser shall be entitled to all income, and
shall pay all expenses, relating to the operation of the Property for the period
commencing on and after the Closing Date. Purchaser or Seller may request that
Purchaser and Seller undertake to re-adjust any item on the Proration Schedule
(or any item omitted therefrom) in accordance with the provisions of Section 5.4
of this Contract; provided, however, that neither party shall have any
obligation to re-adjust any items (a) after the expiration of 60 days after
Closing, or (b) subject to such 60-day period, unless such items exceed
$5,000.00 in magnitude (either individually or in the aggregate). The provisions
of this Section 5.6 shall survive the Closing and delivery of the Deed to
Purchaser.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER 6.1 Seller's
Representations. Except, in all cases, for any fact, information or condition
disclosed in the Title Documents, the Permitted Exceptions, the Property
Contracts, or the Materials, or which is otherwise known by Purchaser prior to
the Closing, Seller represents and warrants to Purchaser the following
(collectively, the "Seller's Representations") as of the Effective Date and as
of the Closing Date (provided that Purchaser's remedies if any such Seller's
Representations are untrue as of the Closing Date are limited to those set forth
in Section 8.1):
6.1.1 Seller is duly organized, validly existing and in good standing under the
laws of the state of its formation set forth in the initial paragraph of this
Contract; and, subject to Section 8.2.4, has or at the Closing shall have the
entity power and authority to sell and convey the Property and to execute the
documents to be executed by Seller and prior to the Closing will have taken as
applicable, all corporate, partnership, limited liability company or equivalent
entity actions required for the execution and delivery of this Contract, and the
consummation of the transactions contemplated by this 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 contract to which Seller is a party or by which Seller is
otherwise bound, which conflict, breach or default would have a material adverse
affect on Seller's ability to consummate the transaction contemplated by this
Contract or on the Property. Subject to Section 8.2.4, this Contract is a valid,
binding and enforceable agreement against Seller in accordance with its terms;
6.1.2 Other than the Leases, the Property is not subject to any written lease
executed by Seller or, to Seller's knowledge, any other possessory interests of
any person; 6.1.3 Seller is not a "foreign person," as that term is used and
defined in the Internal Revenue Code, Section 1445, as amended; 6.1.4 Except for
any actions by Seller to evict Tenants under the Leases, to Seller's knowledge,
there are no actions, proceedings, litigation or governmental investigations or
condemnation actions either pending or threatened against the Property; 6.1.5 To
Seller's knowledge, Seller has not received any written notice of any uncured
material violations of any federal, state, county or municipal law, ordinance,
order, regulation or requirement affecting the Property; and 6.1.6 To Seller's
knowledge, Seller has not received any written notice of any material default by
Seller under any of the Property Contracts that will not be terminated on the
Closing Date. 6.1.7 To Seller's knowledge: (A) no hazardous or toxic materials
or other substances regulated by applicable federal or state environmental laws
are stored by Seller on, in or under the Property in quantities which violate
applicable laws governing such materials or substances, and (B) the Property is
not used by Seller for the storage, treatment, generation or manufacture of any
hazardous or toxic materials or other substances in a manner which would
constitute a violation of applicable federal or state environmental laws. 6.2
AS-IS. Except for Seller's Representations, 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
not relying upon, any information provided by Seller or Broker or statements,
representations or warranties, express or implied, made by or enforceable
directly against Seller or Broker, including, without limitation, any relating
to the value of the Property, the physical or environmental condition of the
Property, any state, federal, county or local law, ordinance, order or permit;
or the 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 conveying the Property
and Seller's Representations). Purchaser agrees that Seller shall not be
responsible or liable to Purchaser for any defects, errors or omissions, or on
account of any conditions affecting the Property. Purchaser, its successors and
assigns, and anyone claiming by, through or under Purchaser, hereby fully
releases Seller's Indemnified Parties from, and irrevocably waives its right to
maintain, any and all claims and causes of action that it or they may now have
or hereafter acquire against Seller's Indemnified Parties with respect to any
and all Losses arising from or related to any defects, errors, omissions or
other conditions affecting the Property. Purchaser represents and warrants that,
as of the date hereof and as of the Closing Date, it has and shall have reviewed
and conducted such independent analyses, studies (including, without limitation,
environmental studies and analyses concerning the presence of lead, asbestos,
PCBs and radon in and about the Property), reports, investigations and
inspections as it deems appropriate in connection with the Property. If Seller
provides or has provided any documents, summaries, opinions or work product of
consultants, surveyors, architects, engineers, title companies, governmental
authorities or any other person or entity with respect to the Property,
including, without limitation, the offering prepared by Broker, Purchaser and
Seller agree that Seller has done so or shall do so only for the convenience of
both parties, Purchaser shall not rely thereon and the reliance by Purchaser
upon any such documents, summaries, opinions or work product shall not create or
give rise to any liability of or against Seller's Indemnified Parties. Purchaser
shall rely only upon any title insurance obtained by Purchaser with respect to
title to the Property. Purchaser acknowledges and agrees that no representation
has been made and no responsibility is assumed by Seller with respect to current
and future applicable zoning or building code requirements or the compliance of
the Property with any other 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. Prior to Closing, Seller shall have the
right, but not the obligation, to enforce its rights against any and all
Property occupants, guests or tenants. Purchaser agrees that the departure or
removal, prior to Closing, of any of such guests, occupants or tenants shall not
be the basis for, nor shall it give rise to, any claim on the part of Purchaser,
nor shall it affect the obligations of Purchaser under this Contract in any
manner whatsoever; and Purchaser shall close title and accept delivery of the
Deed with or without such tenants in possession and without any allowance or
reduction in the Purchase Price under this Contract. Purchaser hereby releases
Seller from any and all claims and liabilities relating to the foregoing
matters. The provisions of this Section 6.2 shall survive the Closing and
delivery of the Deed to Purchaser. 6.3 Survival of Seller's Representations.
Seller and Purchaser agree that Seller's Representations shall survive Closing
for a period of 6 months (the "Survival Period"). Seller shall have no liability
after the Survival Period with respect to Seller's Representations contained
herein except to the extent that Purchaser has filed a lawsuit against Seller
during the Survival Period for breach of any of Seller's Representations. Under
no circumstances shall Seller be liable to Purchaser for more than $50,000 in
any individual instance or in the aggregate for all breaches of Seller's
Representations, nor shall Purchaser be entitled to bring any claim for a breach
of Seller's Representations unless the claim for damage (either in the aggregate
or as to any individual claim) by Purchaser exceeds $5,000. In the event that
Seller breaches any representation contained in Section 6.1 and Purchaser had
knowledge of such breach prior to the Closing Date, Purchaser shall be deemed to
have waived any right of recovery, and Seller shall not have any liability in
connection therewith. 6.4 Definition of Seller's Knowledge. Any representations
and warranties made "to the knowledge of Seller" shall not be deemed to imply
any duty of inquiry. For purposes of this Contract, the term Seller's
"knowledge" shall mean and refer only to actual knowledge of the Designated
Representative of the Seller and shall not be construed to refer to the
knowledge of any other partner, officer, director, agent, employee or
representative of the Seller, or any affiliate of the Seller, or to impose upon
such Designated Representative any duty to investigate the matter to which such
actual knowledge or the absence thereof pertains, or to impose upon such
Designated Representative any individual personal liability. As used herein, the
term Designated Representative shall refer to Melissa Clayton who is the
Regional Property Manager handling this Property (the "Regional Property
Manager"). 6.5 Representations And Warranties Of Purchaser. For the purpose of
inducing Seller to enter into this 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: 6.5.1 Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of Georgia. 6.5.2 Purchaser, acting through any of
its or their duly empowered and authorized officers or members, has all
necessary entity 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 Contract, to execute and deliver the documents and
instruments required of Purchaser herein, and to perform its obligations
hereunder; and no consent of any of Purchaser's partners, directors, officers or
members are required to so empower or authorize Purchaser. 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 contract to which Purchaser is a party or by which Purchaser
is otherwise bound, which conflict, breach or default would have a material
adverse affect on Purchaser's ability to consummate the transaction contemplated
by this Contract. This Contract is a valid, binding and enforceable agreement
against Purchaser in accordance with its terms. 6.5.3 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 Contract or would declare illegal, invalid or non-binding any of
Purchaser's obligations or covenants to Seller. 6.5.4 Other than Seller's
Representations, Purchaser has not relied on any representation or warranty made
by Seller or any representative of Seller (including, without limitation,
Broker) in connection with this Contract and the acquisition of the Property.
6.5.5 The Broker and its affiliates do not, and will not at the Closing, have
any direct or indirect legal, beneficial, economic or voting interest in
Purchaser (or in an assignee of Purchaser, which pursuant to Section 13.3,
acquires the Property at the Closing), nor has Purchaser or any affiliate of
Purchaser granted (as of the Effective Date or the Closing Date) the Broker or
any of its affiliates any right or option to acquire any direct or indirect
legal, beneficial, economic or voting interest in Purchaser.
The provisions of this Section 6.5 shall survive the Closing and delivery
of the Deed to Purchaser.
ARTICLE 7
OPERATION OF THE PROPERTY
7.1 Leases and Property Contracts. 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 or Property Contract without first obtaining the written
consent of Purchaser; provided, however, Seller agrees that any such new
Property Contracts or any new or renewed Leases shall not have a term in excess
of 1 year (or such longer period of time for which such Property Contracts or
Leases are entered into by Seller in the ordinary course of its operation of the
Property) without the prior written consent of Purchaser, which consent shall
not be unreasonably withheld, conditioned or delayed.
7.2 General Operation of Property. Except as specifically set forth in this
Article 7, Seller shall operate the Property after the Effective Date in the
ordinary course of business, and except as necessary in the Seller's sole
discretion to address (a) any life or safety issue at the Property or (b) any
other matter which in Seller's reasonable discretion materially adversely
affecting the use, operation or value of 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. 7.3 Liens. Other
than utility easements and temporary construction easements granted by Seller in
the ordinary course of business, Seller covenants that it will not voluntarily
create or cause any lien or encumbrance to attach to the Property between the
Effective Date and the Closing Date (other than Leases and Property Contracts as
provided in Section 7.1) unless Purchaser approves such lien or encumbrance,
which approval shall not be unreasonably withheld or delayed. If Purchaser
approves any such subsequent lien or encumbrance, the same shall be deemed a
Permitted Encumbrance for all purposes hereunder.
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING
8.1 Purchaser's Conditions to Closing. Purchaser's obligation to close
under this Contract, shall be subject to and conditioned upon the fulfillment
of each and all of the following conditions precedent:
8.1.1 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; 8.1.2 Each of the representations, warranties and covenants of Seller
contained herein shall be true in all material respects as of the Closing Date;
8.1.3 Seller shall have complied with, fulfilled and performed in all material
respects each of the covenants, terms and conditions to be complied with,
fulfilled or performed by Seller hereunder; and 8.1.4 Neither Seller nor
Seller's general partner shall be a debtor in any bankruptcy proceeding nor
shall have been in the last 6 months a debtor in any bankruptcy proceeding.
Notwithstanding anything to the contrary, there are no other conditions on
Purchaser's obligation to Close except as expressly set forth in this Section
8.1. If any condition set forth in Sections 8.1.1, 8.1.3 or 8.1.4 is not met,
Purchaser may (a) waive any of the foregoing conditions and proceed to Closing
on the Closing Date with no offset or deduction from the Purchase Price, or (b)
if such failure constitutes a default by Seller, exercise any of its remedies
pursuant to Section 10.2. If the condition set forth in Section 8.1.2 is not
met, Purchaser may, as its sole and exclusive remedy, (i) notify Seller of
Purchaser's election to terminate this Contract and receive a return of the
Deposit from the Escrow Agent, or (ii) waive such condition and proceed to
Closing on the Closing Date with no offset or deduction from the Purchase Price.
8.2 Without limiting any of the rights of Seller elsewhere provided for in this
Contract, Seller's obligation to close with respect to conveyance of the
Property under this Contract shall be subject to and conditioned upon the
fulfillment of each and all of the following conditions precedent: 8.2.1 All of
the documents and funds required to be delivered by Purchaser to Seller at the
Closing pursuant to the terms and conditions hereof shall have been delivered;
8.2.2 Each of the representations, warranties and covenants of Purchaser
contained herein shall be true in all material respects as of the Closing Date;
8.2.3 Purchaser shall have complied with, fulfilled and performed in all
material respects each of the covenants, terms and conditions to be complied
with, fulfilled or performed by Purchaser hereunder; and 8.2.4 Seller shall have
received all consents and approvals to the consummation of the transactions
contemplated hereby (a) of Seller's partners, members, managers, shareholders or
directors to the extent required by Seller's organizational documents, or (b)
that are required by law.
If any of the foregoing conditions to Seller's obligation to close with
respect to conveyance of the Property under this Contract are not met, Seller
may (a) waive any of the foregoing conditions and proceed to Closing on the
Closing Date, or (b) terminate this Contract, and, if such failure constitutes a
default by Purchaser, exercise any of its remedies under Section 10.1.
ARTICLE 9
BROKERAGE
9.1 Indemnity. Seller represents and warrants to Purchaser that it has dealt
only with The Apartment Group, 3300 One Atlantic Center, 1201 W. Peachtree
Street, Atlanta, Georgia 30309 ("Broker") in connection with this Contract.
Seller and Purchaser each represents and warrants 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 Contract, and each party
agrees to indemnify, hold harmless, and, if requested in the sole and absolute
discretion of the indemnitee, defend (with counsel approved by the indemnitee)
the other party from and against all Losses relating to brokerage commissions
and finder's fees arising from or attributable to the acts or omissions of the
indemnifying party. The provisions of this Section 9.1 shall survive the
termination of this Contract, and if not so terminated, the Closing and delivery
of the Deed to Purchaser.
9.2 Survival. Seller agrees to pay Broker a commission according to the terms of
a separate Contract. Broker shall not be deemed a party or third party
beneficiary of this Contract.
9.3 Broker Signature Page. Broker shall execute the signature page for Broker
attached hereto solely for purposes of confirming the matters set forth therein;
provided, however, that (a) Broker's signature hereon shall not be a
prerequisite to the binding nature of this Contract on Purchaser and Seller, and
the same shall become fully effective upon execution by Purchaser and Seller,
and (b) the signature of Broker will not be necessary to amend any provision of
this Contract.
ARTICLE 10
DEFAULTS AND REMEDIES
10.1 Purchaser Default. If Purchaser defaults in its obligations hereunder to
(a) deliver the Deposit, (b) deliver to the Seller the deliveries specified
under Section 5.3 on the date required thereunder, or (c) deliver the Purchase
Price at the time required by Section 2.2.4 and close on the purchase of the
Property on the Closing Date, then, immediately and without notice or cure,
Purchaser shall forfeit the Deposit, and the Escrow Agent shall deliver the
Deposit to Seller, and neither party shall be obligated to proceed with the
purchase and sale of the Property. If, Purchaser defaults in any of its other
representations, warranties or obligations under this Contract, and such default
continues for more than 10 days after written notice from Seller, then Purchaser
shall forfeit the Deposit, and the Escrow Agent shall deliver the Deposit to
Seller, and neither party shall be obligated to proceed with the purchase and
sale of the Property. The Deposit is liquidated damages and recourse to the
Deposit is, except for Purchaser's indemnity obligations hereunder, Seller's
sole and exclusive remedy for Purchaser's failure to perform its obligation to
purchase the Property or breach of a representation or warranty. Seller
expressly waives the remedies of specific performance and additional damages for
such default by Purchaser. SELLER AND PURCHASER ACKNOWLEDGE THAT SELLER'S
DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND THAT THE DEPOSIT IS A REASONABLE
ESTIMATE OF SELLER'S DAMAGES RESULTING FROM A DEFAULT BY PURCHASER IN ITS
OBLIGATION TO PURCHASE THE PROPERTY. SELLER AND PURCHASER FURTHER AGREE THAT
THIS SECTION 10.1 IS INTENDED TO AND DOES LIQUIDATE THE AMOUNT OF DAMAGES DUE
SELLER, AND SHALL BE SELLER'S EXCLUSIVE REMEDY AGAINST PURCHASER, BOTH AT LAW
AND IN EQUITY, ARISING FROM OR RELATED TO A BREACH BY PURCHASER OF ITS
OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS CONTRACT, OTHER
THAN WITH RESPECT TO PURCHASER'S INDEMNITY OBLIGATIONS HEREUNDER. 10.2 Seller
Default. If Seller, prior to the Closing, defaults in its representations,
warranties, covenants, or obligations under this Contract, including to sell the
Property as required by this Contract and such default continues for more than
10 days after written notice from Purchaser, then, at Purchaser's election and
as Purchaser's sole and exclusive remedy, either (A) this Contract shall
terminate, and all payments and things of value, including the Deposit, provided
by Purchaser hereunder shall be returned to Purchaser and Purchaser may recover,
as its sole recoverable damages (but without limiting its right to receive a
refund of the Deposit), its direct and actual out-of-pocket expenses and costs
(documented by paid invoices to third parties) in connection with this
transaction, which damages shall not exceed $20,000 in aggregate, or (B)
Purchaser may seek specific performance of Seller's obligation to deliver the
Deed pursuant to this Contract (but not damages). Purchaser agrees that it shall
promptly deliver to Seller an assignment of all of Purchaser's right, title and
interest in and to (together with possession of) all plans, studies, surveys,
reports, and other materials paid for with the out-of-pocket expenses reimbursed
by Seller pursuant to the foregoing sentence. SELLER AND PURCHASER FURTHER AGREE
THAT THIS SECTION 10.2 IS INTENDED TO AND DOES LIMIT THE AMOUNT OF DAMAGES DUE
PURCHASER AND THE REMEDIES AVAILABLE TO PURCHASER, AND SHALL BE PURCHASER'S
EXCLUSIVE REMEDY AGAINST SELLER, BOTH AT LAW AND IN EQUITY ARISING FROM OR
RELATED TO A BREACH BY SELLER OF ITS REPRESENTATIONS, WARRANTIES, OR COVENANTS
OR ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS CONTRACT.
UNDER NO CIRCUMSTANCES MAY PURCHASER SEEK OR BE ENTITLED TO RECOVER ANY SPECIAL,
CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR INDIRECT DAMAGES, ALL OF WHICH PURCHASER
SPECIFICALLY WAIVES, FROM SELLER FOR ANY BREACH BY SELLER, OF ITS
REPRESENTATIONS, WARRANTIES OR COVENANTS OR ITS OBLIGATIONS UNDER THIS CONTRACT.
PURCHASER SPECIFICALLY WAIVES THE RIGHT TO FILE ANY LIS PENDENS OR ANY LIEN
AGAINST THE PROPERTY UNLESS AND UNTIL IT HAS IRREVOCABLY ELECTED TO SEEK
SPECIFIC PERFORMANCE OF THIS CONTRACT AND HAS FILED AN ACTION SEEKING SUCH
REMEDY.
ARTICLE 11
RISK OF LOSS OR CASUALTY
11.1 Major Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to Closing, and the cost of repair is more than
$300,000, then Seller shall have no obligation to repair such damage or
destruction and shall notify Purchaser in writing of such damage or destruction
(the "Damage Notice"). Within 10 days after Purchaser's receipt of the Damage
Notice, Purchaser may elect at its option to terminate this Contract by
delivering written notice to Seller. In the event Purchaser fails to terminate
this Contract within the foregoing 10-day period, this transaction shall be
closed in accordance with the terms of this Contract for the full Purchase Price
notwithstanding any such damage or destruction and Purchaser shall receive all
insurance proceeds pertaining thereto (plus a credit against the Purchase Price
in the amount of any deductible payable by Seller in connection therewith) at
Closing.
11.2 Minor Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to the Closing, and the cost of repair is less than
$300,000, this transaction shall be closed in accordance with the terms of this
Contract, notwithstanding the damage or destruction; provided, however, Seller
shall make such repairs to the extent of any recovery from insurance carried on
the Property if they can be reasonably effected before the Closing. Subject to
Section 11.3, if Seller is unable to effect such repairs, then Purchaser shall
receive all insurance proceeds pertaining thereto (plus a credit against the
Purchase Price in the amount of any deductible payable by Seller in connection
therewith) at Closing. 11.3 Repairs. To the extent that Seller elects to
commence any repair, replacement or restoration of the Property prior to
Closing, then Seller shall be entitled to receive and apply available insurance
proceeds to any portion of such repair, replacement or restoration completed or
installed prior to Closing, with Purchaser being responsible for completion of
such repair, replacement or restoration after Closing from the balance of any
available insurance proceeds. The provisions of this Section 11.3 shall survive
the Closing and delivery of the Deed to Purchaser.
ARTICLE 12
EMINENT DOMAIN
12.1 Eminent Domain. In the event that, at the time of Closing, any material
part of the Property is (or previously has been) acquired, or is about to be
acquired, by any governmental agency by the powers of eminent domain or transfer
in lieu thereof (or in the event that at such time there is any notice of any
such acquisition or intent to acquire by any such governmental agency),
Purchaser shall have the right, at Purchaser's option, to terminate this
Contract by giving written notice within 10 days after Purchaser's receipt from
Seller of notice of the occurrence of such event, and if Purchaser so terminates
this Contract shall recover the Deposit hereunder. If Purchaser fails to
terminate this Contract within such 10-day period, this transaction shall be
closed in accordance with the terms of this Contract for the full Purchase Price
and Purchaser shall receive the full benefit of any condemnation award. It is
expressly agreed between the parties hereto that this section shall in no way
apply to customary dedications for public purposes which may be necessary for
the development of the Property.
ARTICLE 13
MISCELLANEOUS
13.1 Binding Effect of Contract. This Contract shall not be binding on either
party until executed by both Purchaser and Seller. As provided in Section 2.3.5
and Section 9.3 above, neither the Escrow Agent's nor the Broker's execution of
this Contract shall be a pre-requisite to its effectiveness.
13.2 Exhibits And Schedules. All Exhibits and Schedules, whether or not annexed
hereto, are a part of this Contract for all purposes. 13.3 Assignability. This
Contract is not assignable by Purchaser without first obtaining the prior
written approval of the Seller, except that Purchaser may assign this Contract
to one or more entities so long as (a) Purchaser is an affiliate of the
purchasing entity(ies), (b) Purchaser is not released from its liability
hereunder, and (c) Seller consents thereto (which consent shall not be
unreasonably withheld or delayed). As used herein, an affiliate is a person or
entity controlled by, under common control with, or controlling another person
or entity.
13.4 Binding Effect. Subject to Section 13.3, this Contract shall be binding
upon and inure to the benefit of Seller and Purchaser, and their respective
successors, heirs and permitted assigns.
13.5 Captions. The captions, headings, and arrangements used in this Contract
are for convenience only and do not in any way affect, limit, amplify, or modify
the terms and provisions hereof.
13.6 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. 13.7 Notices. All notices,
demands, requests and other communications required or permitted hereunder shall
be in writing, and shall be (a) personally delivered with a written receipt of
delivery; (b) sent by a nationally recognized overnight delivery service
requiring a written acknowledgement of receipt or providing a certification of
delivery or attempted delivery; or (c) sent by certified or registered mail,
return receipt requested. All notices shall be deemed effective when actually
delivered as documented in a delivery receipt; provided, however, that if the
notice was sent by overnight courier or mail as aforesaid and is affirmatively
refused or cannot be delivered during customary business hours by reason of the
absence of a signatory to acknowledge receipt, or by reason of a change of
address with respect to which the addressor did not have either knowledge or
written notice delivered in accordance with this paragraph, then the first
attempted delivery shall be deemed to constitute delivery. Each party shall be
entitled to change its address for notices from time to time by delivering to
the other party notice thereof in the manner herein provided for the delivery of
notices. All notices shall be sent to the addressee at its address set forth
following its name below:
To Purchaser:
J&J Construction Group, Inc.
6642 Clubview Court
Flowery Branch, Georgia 30542
Attention: Mr. Fred Zohouri
Facsimile: (770) 454-9734
and a copy to:
Burr & Forman
600 West Peachtree Street, Suite 1200
Atlanta, Georgia 30308
Attention: George F. Maynard, Esq.
Telephone: 404-815-3000
Facsimile: 404-817-3244
To Seller:
c/o AIMCO
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: 305-675-2998
and a copy to:
Loeb & Loeb LLP
1000 Wilshire Boulevard, Suite 1800
Los Angeles, California 90017
Attention: Andrew S. Clare, Esq., and
Karen N. Higgins, Esq.
Facsimile: 213-688-3460
Any notice required hereunder to be delivered to the Escrow Agent shall be
delivered in accordance with above provisions as follows:
Fidelity National Title Insurance Company
1900 West Loop South, Suite 650
Houston, Texas 77027
Attention: Lolly Avant
Telephone: 800-879-1677 x 204
Unless specifically required to be delivered to the Escrow Agent pursuant
to the terms of this Contract, no notice hereunder must be delivered to the
Escrow Agent in order to be effective so long as it is delivered to the other
party in accordance with the above provisions. 13.8 Governing Law And Venue. The
laws of the State of Georgia shall govern the validity, construction,
enforcement, and interpretation of this Contract, unless otherwise specified
herein except for the conflict of laws provisions thereof. Subject to Section
13.25, all claims, disputes and other matters in question arising out of or
relating to this Contract, or the breach thereof, shall be decided by
proceedings instituted and litigated in a court of competent jurisdiction in the
state in which the Property is situated, and the parties hereto expressly
consent to the venue and jurisdiction of such court.
13.9 Entire Agreement. This Contract embodies the entire Contract between the
parties hereto concerning the subject matter hereof and supersedes all prior
conversations, proposals, negotiations, understandings and Contracts, whether
written or oral.
13.10 Amendments. This Contract shall not be amended, altered, changed,
modified, supplemented or rescinded in any manner except by a written contract
executed by all of the parties; provided, however, that, (a) as provided in
Section 2.3.5 above, the signature of the Escrow Agent shall not be required as
to any amendment of this Contract other than an amendment of Section 2.3, and
(b) as provided in Section 9.3 above, the signature of the Broker shall not be
required as to any amendment of this Contract 13.11 Severability. In the event
that any part of this Contract shall be held to be invalid or unenforceable by a
court of competent jurisdiction, such provision shall be reformed, and enforced
to the maximum extent permitted by law. If such provision cannot be reformed, it
shall be severed from this Contract and the remaining portions of this Contract
shall be valid and enforceable.
13.12 Multiple Counterparts/Facsimile Signatures. This Contract may be executed
in a number of identical counterparts. This Contract may be executed by
facsimile signatures which shall be binding on the parties hereto, with original
signatures to be delivered as soon as reasonably practical thereafter.
13.13 Construction. No provision of this Contract shall be construed in favor
of, or against, any particular party by reason of any presumption with respect
to the drafting of this Contract; both parties, being represented by counsel,
having fully participated in the negotiation of this instrument. 13.14
Confidentiality. Purchaser shall not disclose the terms and conditions contained
in this Contract and shall keep the same confidential, provided that Purchaser
may disclose the terms and conditions of this Contract (a) as required by law,
(b) to consummate the terms of this Contract, or any financing relating thereto,
or (c) to Purchaser's or Seller's lenders, attorneys and accountants. Any
information and Materials provided by Seller to Purchaser hereunder are
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. 13.15 Time Of The Essence. It is
expressly agreed by the parties hereto that time is of the essence with respect
to this Contract.
13.16 Waiver. 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 Contract shall
be established by conduct, custom, or course of dealing and all waivers must be
in writing and signed by the waiving party. 13.17 Attorneys Fees. In the event
either party hereto commences litigation or arbitration 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 and arbitration, including the cost of
in-house counsel and any appeals.
13.18 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.
13.19 1031 Exchange. Seller and Purchaser acknowledge and agree that the
purchase and sale of the Property may be part of a tax-free exchange under
Section 1031 of the Code for either Purchaser or Seller. Each party hereby
agrees to take all reasonable steps on or before the Closing Date to facilitate
such exchange if requested by the other party, provided that (a) no party making
such accommodation shall be required to acquire any substitute property, (b)
such exchange shall not affect the representations, warranties, liabilities and
obligations of the parties to each other under this Contract, (c) no party
making such accommodation shall incur any additional cost, expense or liability
in connection with such exchange, and (d) no dates in this Contract will be
extended as a result thereof. 13.20 No Personal Liability of Officers, Trustees
or Directors of Seller's Partners. Purchaser acknowledges that this Contract is
entered into by Seller which is a South Carolina limited partnership, and
Purchaser agrees that none of Seller's Indemnified Parties shall have any
personal liability under this Contract or any document executed in connection
with the transactions contemplated by this Contract.
13.21 No Exclusive Negotiations. Seller shall have the right, at all times prior
to the expiration of the Feasibility Period, to solicit backup offers and enter
into discussions, negotiations, or any other communications concerning or
related to the sale of the Property with any third-party; provided, however,
that such communications are subject to the terms of this Contract, and that
Seller shall not enter into any contract or binding Contract with a third-party
for the sale of the Property unless such Contract is contingent on the
termination of this Contract without the Property having been conveyed to
Purchaser.
13.22 ADA Disclosure. Purchaser acknowledges that the Property may be subject to
the federal Americans With Disabilities Act (the "ADA"), which requires, among
other matters, that tenants and/or owners of "public accommodations" remove
barriers in order to make the Property accessible to disabled persons and
provide auxiliary aids and services for hearing, vision or speech impaired
persons. Seller makes no warranty, representation or guarantee of any type or
kind with respect to the Property's compliance with the ADA (or any similar
state or local law), and Seller expressly disclaims any such representation.
13.23 No Recording. Purchaser shall not cause or allow this Contract or any
contract or other document related hereto, nor any memorandum or other evidence
hereof, to be recorded or become a public record without Seller's prior written
consent, which consent may be withheld at Seller's sole discretion. If the
Purchaser records this Contract or any other memorandum or evidence thereof,
Purchaser shall be in default of its obligations under this Contract. Purchaser
hereby appoints the Seller as Purchaser's attorney-in-fact to prepare and record
any documents necessary to effect the nullification and release of the Contract
or other memorandum or evidence thereof from the public records. This
appointment shall be coupled with an interest and irrevocable.
13.24 Relationship of Parties. Purchaser and Seller acknowledge and agree that
the relationship established between the parties pursuant to this Contract is
only that of a seller and a purchaser of property. Neither Purchaser nor Seller
is, nor shall either hold itself out to be, the agent, employee, joint venturer
or partner of the other party. 13.25 Dispute Resolution. Any controversy,
dispute, or claim of any nature arising out of, in connection with, or in
relation to the interpretation, performance, enforcement or breach of this
Contract (and any closing document executed in connection herewith), including
any claim based on contract, tort or statute, shall be resolved at the written
request of any party to this Contract by binding arbitration. The arbitration
shall be administered in accordance with the then current Commercial Arbitration
Rules of the American Arbitration Association. Any matter to be settled by
arbitration shall be submitted to the American Arbitration Association in the
state in which the Property is located. The parties shall attempt to designate
one arbitrator from the American Arbitration Association. If they are unable to
do so within 30 days after written demand therefor, then the American
Arbitration Association shall designate an arbitrator. The arbitration shall be
final and binding, and enforceable in any court of competent jurisdiction. The
arbitrator shall award attorneys' fees (including those of in-house counsel) and
costs to the prevailing party and charge the cost of arbitration to the party
which is not the prevailing party. Notwithstanding anything herein to the
contrary, this Section 13.25 shall not prevent Purchaser or Seller from seeking
and obtaining equitable relief on a temporary or permanent basis, including,
without limitation, a temporary restraining order, a preliminary or permanent
injunction or similar equitable relief, from a court of competent jurisdiction
located in the state in which the Property is located (to which all parties
hereto consent to venue and jurisdiction) by instituting a legal action or other
court proceeding in order to protect or enforce the rights of such party under
this Contract or to prevent irreparable harm and injury. The court's
jurisdiction over any such equitable matter, however, shall be expressly limited
only to the temporary, preliminary, or permanent equitable relief sought; all
other claims initiated under this Contract between the parties hereto shall be
determined through final and binding arbitration in accordance with this Section
13.25. 13.26 AIMCO Marks. Purchaser agrees that Seller, the Property Manager or
AIMCO, or their respective affiliates, are the sole owners of all right, title
and interest in and to the AIMCO Marks (or have the right to use such AIMCO
Marks pursuant to license agreements with third parties) and that no right,
title or interest in or to the AIMCO Marks is granted, transferred, assigned or
conveyed as a result of this Contract. Purchaser further agrees that Purchaser
will not use the AIMCO Marks for any purpose. 13.27 Non-Solicitation of
Employees. Purchaser acknowledges and agrees that, without the express written
consent of Seller, neither Purchaser nor any of Purchaser's employees,
affiliates or agents shall solicit any of Seller's employees or any employees
located at the Property for potential employment. 13.28 Survival. Except for (a)
all of the provisions of this Article 13 (other than Section 13.19, 13.21 and
13.23), and (b) any provision of this Contract which expressly states that it
shall so survive (the foregoing (a) and (b) referred to herein as the "Survival
Provisions"), none of the terms and provisions of this Contract shall survive
the termination of this Contract, and, if the Contract is not so terminated, all
of the terms and provisions of this Contract (other than the Survival
Provisions) shall be merged into the Closing documents and shall not survive
Closing.
ARTICLE 14
LEAD-BASED PAINT DISCLOSURE
14.1 Disclosure. Seller and Purchaser hereby acknowledge delivery of the Lead
Based Paint Disclosure attached as Exhibit G hereto. The provisions of this
Section 14.1 shall survive the Closing and delivery of the Deed to Purchaser.
14.2 Consent Agreement. Using reasonable and customary efforts, Seller shall (a)
perform any testing (the "Testing") required at the Property with respect to
lead-based paint in accordance with the requirements of the Consent Contract
(the "Consent Contract") by and among the United States Environmental Protection
Agency, the United States Department of Housing and Urban Development, and
Apartment Investment and Management Company ("AIMCO"), and (b) if required under
the Consent Contract, as determined by Seller and its counsel in their sole and
absolute discretion, remediate or abate (the "Remediation") any lead-based paint
condition at the Property prior to the Closing using reasonable and customary
efforts. In the event that Seller does not complete such Testing or Remediation,
if any is required under the Consent Contract, prior to the Closing, Seller
shall initiate, continue or complete such Testing or Remediation, if any is
required under the Consent Contract, promptly after Closing. Purchaser shall
provide Seller with full and unimpeded access to the Property, including,
without limitation, access to all units located thereon, for the purposes of
completing such Testing or Remediation, if any is required under the Consent
Contract, and Purchaser shall fully cooperate with Seller regarding and allow
Seller to perform such Testing or Remediation, if any is required under the
Consent Contract, as determined by Seller and its counsel in their sole and
absolute discretion, including, without limitation, allowing any alterations to
the Property, to comply with the Consent Contract, until such time as such
Testing or Remediation, if any is required under the Consent Contract, has been
completed. Seller shall provide 24 hours' notice to Purchaser in the event that
access to a unit is required to perform such Testing or Remediation, if any is
required under the Consent Contract; provided, however, Seller's obligations
hereunder after Closing shall be contingent on Purchaser's compliance herewith,
and Seller shall be relieved of all liability and obligations regarding such
Testing or Remediation or otherwise under the Consent Contract, if any is
required under the Consent Contract, as a result of any failure by Purchaser to
comply with this Section 14.2. Purchaser acknowledges and agrees that (1) after
Closing, the Purchaser and the Property shall be subject to the Consent Contract
and the provisions contained herein related thereto; (2) after Closing,
Purchaser agrees to undertake the obligations required by the Consent Agreement;
(3) that Seller will need necessary access to the Property to comply with the
requirements of the Consent Contract; (4) that Purchaser will provide such
access to the Property after Closing so that Seller can comply with the
requirements of the Consent Contract; and (5) that Purchaser shall not be deemed
to be a third party beneficiary to the Consent Contract. By execution hereof,
Purchaser further acknowledges receipt of notice in writing of the existence of
the Consent Contract and receipt of a copy thereof. The provisions of this
Section 14.2 shall survive the termination of this Contract, and if not so
terminated, the Closing and delivery of the Deed to Purchaser.
[Remainder of Page Intentionally Left Blank]
NOW, THEREFORE, the parties hereto have executed this Contract as of the
date first set forth above.
Seller:
SHELTER PROPERTIES I LIMITED PARTNERSHIP,
a South Carolina
limited partnership
By: Shelter Realty Corporation,
a South Carolina corporation,
its corporate general partner
By: /s/Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
Purchaser:
J&J CONSTRUCTION GROUP, INC.,
a Georgia corporation
By: /s/Habib Jahargard
Name: Habib Jahargard
Title: President
ESCROW AGENT SIGNATURE PAGE
The undersigned executes the Contract to which this signature page is
attached for the purpose of agreeing to the provisions of Section 2.3 of the
Contract, and hereby establishes October __, 2002 as the date of opening of
escrow and designates ___________________________________ as the escrow number
assigned to this escrow.
ESCROW AGENT:
FIDELITY NATIONAL TITLE INSURANCE COMPANY
By: /s/Lolly Avant
Name: Lolly Avant
Title: Vice President
BROKER SIGNATURE PAGE
The undersigned Broker hereby executes this Broker Signature Page solely
to confirm the following: (a) Broker represents only the Seller in the
transaction described in the Contract to which this signature page is attached,
(b) Broker acknowledges that the only compensation due to Broker in connection
with the Closing of the transaction described in the Contract to which this
signature page is attached is as set forth in a separate agreement between
Seller and Broker, and (c) Broker represents and warrants to Seller that Broker
and its affiliates has not and will not receive any compensation (cash or
otherwise) from or on behalf of Purchaser or any affiliate thereof in connection
with the transaction, and do not, and will not at the Closing, have any direct
or indirect legal, beneficial, economic or voting interest in Purchaser (or in
an assignee of Purchaser, which pursuant to Section 13.3 of the Contract,
acquires the Property at the Closing) nor has Purchaser granted (as of the
Effective Date or the Closing Date) the Broker or any of its affiliates any
right or option to acquire any direct or indirect legal, beneficial, economic or
voting interest in Purchaser.
BROKER:
THE APARTMENT GROUP
By: /s/Walter Knoechel
Name: Walter Knoechel
Title: Vice President
Exhibit 10(i)(l)
ASSIGNMENT AND ASSUMPTION OF SALE CONTRACT
This Assignment ("Assignment"), made as of the 16th day of December,
2002, by and between J&J CONSTRUCTION GROUP, INC., a Georgia corporation
("Assignor") and STONE MOUNTAIN TOWNHOMES, INC., a Georgia corporation
("Assignee").
WITNESSETH:
WHEREAS, Assignor holds the "Purchaser's" interest in and to that certain
Sale and Purchase Agreement, as more particularly described on Exhibit A and
incorporated by this reference (the "Agreement"); whereby Assignor has agreed to
purchase certain "property" from the "Seller" as described therein;
WHEREAS, Assignor and Assignee wish to execute this Assignment to provide
for assignment of all of Assignor's right, title and interest in and to the
Agreement from Assignor to Assignee; and
WHEREAS, Assignee wishes to assume the Assignor's obligations under the
Agreement;
NOW THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
1. Assignor has sold, conveyed, transferred and assigned, and by this
Assignment does hereby sell, convey, transfer and assign unto
Assignee, its successors and assigns forever, all of Assignor's
right, title and interest in, to and under the Agreement, and any
and all deposits or earnest monies thereunder.
2. Assignee hereby assumes all obligations of Assignor under the
Agreement, and agrees to duly and punctually perform and discharge
all duties of Assignor created by or arising under or with respect
to the Agreement, and agrees to be bound by the terms, conditions
and provisions of the Agreement beginning on the date hereof.
3. By execution hereof, Assignor acknowledges and agrees that the
Agreement is in full force and effect as of the date hereof, and
Assignor and the Purchaser under the Agreement have performed any
and all obligations with respect thereto through the date hereof.
4. The Assignor remains primarily liable to the Seller under the
Agreement. The Assignee is an affiliated entity to the Assignor, and
pursuant to Paragraph 13.3 of the Agreement, Assignor is not
released from its liability under the Agreement.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to
be executed under seal on the date and year first above written.
Signed, sealed and delivered ASSIGNOR:
in the presence of:
J&J CONSTRUCTION GROUP, INC.
a Georgia corporation
/s/Diane Suzan Miller By:/s/Habib Jahargard
Unofficial Witness Habib Jahargard, President
/s/George F. Maynard
Notary Public
My Commission Expires: (CORPORATE SEAL)
(Notary Seal)
Signed, sealed and delivered ASSIGNEE:
in the presence of:
STONE MOUNTAIN TOWNHOMES, INC.
a Georgia corporation
/s/Diane Suzan Miller By: /s/Fred S. Zohouri
Unofficial Witness Fred S. Zohouri, President
/s/George F. Maynard
Notary Public
My Commission Expires: (CORPORATE SEAL)
(Notary Public)
Seller's Consent: The undersigned Seller under the Agreement hereby consents
to this Assignment pursuant to Paragraph 13.3 of the Agreement.
SHELTER PROPERTIES I LIMITED
PARTNERSHIP, a South Carolina limited
partnership
By: Shelter Realty Corporation, a Georgia
corporation, a corporate general
partner
By: /s/Patrick Slavin
Patrick Slavin
Senior Vice President
EXHIBIT A
1. Real Estate Purchase and Sale Agreement dated October 28, 2002
between J&J Construction Group, Inc., a Georgia corporation and
Shelter Properties I Limited Partnership, dated October 28, 2002, as
assigned herein.