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) April 21, 2003
NATIONAL PROPERTY INVESTORS 5
(Exact name of registrant as specified in its charter)
California 0-11095 22-2385051
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Registrant's telephone number)
Item 2. Acquisition or Disposition of Assets.
On April 21, 2003, the Registrant sold one of its investment properties,
Palisades Apartments, located in Montgomery, Alabama. The Registrant sold
Palisades Apartments to Palisades Apartments, L.L.C., an unrelated party, for
$4,687,500. The sale price was determined based on the fair market value of the
investment property.
The Registrant expects that substantially all of the net proceeds will be used
to repay certain debt obligations of the Registrant and that no net proceeds
will be distributed to the Registrant's partners.
Item 7. Financial Statements and Exhibits
(b) Pro forma financial information.
The following unaudited pro forma consolidated balance sheet and statements of
operations reflect the operations of National Property Investors 5 (the
"Partnership" or "Registrant") as if Palisades Apartments had been sold January
1, 2001.
The pro forma consolidated financial statements do not project the Registrant's
results of operations at any future date or for any future period. This pro
forma information should be read in conjunction with the Registrant's 2002
Annual Report on Form 10-KSB.
PRO FORMA CONSOLIDATED BALANCE SHEET
(in thousands)
December 31, 2002
All other assets $ 488
Investment properties, net 3,222
Total Assets $ 3,710
All other liabilities $ 743
Mortgage notes payable 10,441
Partners' deficit (7,474)
Total Liabilities and Deficit $ 3,710
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit data)
Year Ended Year Ended
December 31, December 31,
2002 2001
Total revenues $ 3,486 $ 3,553
Total expenses 3,592 3,643
Net loss $ (106) $ (90)
Net loss per limited partnership unit $ (1.25) $ (1.06)
(c) Exhibits.
Contracts related to the sale of the property:
10.19Purchase and Sale Contract between National Property Investors 5, as Seller
and Palisades Apartments, L.L.C., as Purchaser, effective March 20, 2003.
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.
NATIONAL PROPERTY INVESTORS 5
(a California Limited Partnership)
By: NPI Equity Investments, Inc.
General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
Date: April 25, 2003
PURCHASE AND SALE CONTRACT
BETWEEN
NATIONAL PROPERTY INVESTORS 5,
a California limited partnership
AS SELLER
AND
PALISADES APARTMENTS, L.L.C.,
an Illinois limited liability company
AS PURCHASER
PALISADES APARTMENTS
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as of
the 20th day of March, 2003 (the "Effective Date") by and between NATIONAL
PROPERTY INVESTORS 5, a California limited partnership, having an address at
2000 South Colorado Boulevard, Tower Two, Suite 2-1000, Denver, Colorado 80222
("Seller") and PALISADES APARTMENTS, L.L.C., an Illinois limited liability
company, having a principal address at 800 Baronne Street, New Orleans,
Louisiana 70113 ("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 Montgomery County, Alabama, as
more particularly described in Exhibit A attached hereto and made a part hereof,
and the improvements thereon, commonly known as PALISADES 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 Alabama, or any
day on which Lender is not open for business.
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 "Existing Survey" shall have the meaning set forth in Section 4.2.
1.1.19 Intentionally Omitted.
1.1.20 Intentionally Omitted.
1.1.21 Intentionally Omitted.
1.1.22 "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 (or hereafter acquired by Seller prior to
the Closing Date and located on the Land or in the Improvements) 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 used exclusively for the business, operation or
management of the Property, or (d) the property and equipment, if any, expressly
identified in Schedule 1.1.22.
1.1.23 "General Assignment" shall have the meaning set forth in Section 5.2.3.
1.1.24 "Good Funds" shall have the meaning set forth in Section 2.2.1.
1.1.25 "Improvements" means all buildings and improvements located on
the Land taken "as is."
1.1.26 Intentionally Omitted.
1.1.27 "Land" means all of those certain tracts of land located in the State of
Alabama described on Exhibit A, and all rights, privileges and appurtenances
pertaining thereto.
1.1.28 "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.
1.1.29 "Leases Assignment" shall have the meaning set forth in
Section 5.2.4.
1.1.30 "Lender" means Collateral Mortgage, Ltd.
1.1.31 "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.
1.1.32 "Loan" means the indebtedness owing to Lender evidenced by the
Note.
1.1.33 "Loan Payoff" shall have the meaning set forth in Section 5.4.7.
1.1.34 "Losses" shall have the meaning set forth in Section 3.4.1.
1.1.35 "Materials" shall have the meaning set forth in Section 3.5.
1.1.36 "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
"PALISADES APARTMENTS" 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).
1.1.37 "Note" means that certain Note in the original principal amount of
$5,200,000.00, dated June 29, 1993, executed by Seller and payable to the order
of Collateral Mortgage, Ltd.
1.1.38 Intentionally Omitted.
1.1.39 Intentionally Omitted.
1.1.40 Intentionally Omitted.
1.1.41 "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.
1.1.42 "Permitted Exceptions" shall have the meaning set forth in
Section 4.4.
1.1.43 "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.
1.1.44 "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.
1.1.45 Intentionally Omitted.
1.1.46 "Property Manager" means the current property manager of the
Property.
1.1.47 "Proration Schedule" shall have the meaning set forth in
Section 5.4.1.
1.1.48 "Purchase Price" means the consideration to be paid by Purchaser
to Seller for the purchase of the Property pursuant to Section 2.2.
1.1.49 "Purchaser's Closing Extension Option" shall have the meaning set
forth in Section 5.1.
1.1.50 "Regional Property Manager" shall have the meaning set forth in
Section 6.4.
1.1.51 "Report" shall have the meaning set forth in Section 14.2.
1.1.52 Intentionally Omitted.
1.1.53 Intentionally Omitted.
1.1.54 "Seller's Indemnified Parties" shall have the meaning set forth
in Section 3.4.1
1.1.55 "Seller's Representations" shall have the meaning set forth in
Section 6.1.
1.1.56 "Survey" shall have the meaning ascribed thereto in Section 4.2.
1.1.57 "Survival Period" shall have the meaning set forth in Section 6.3.
1.1.58 "Survival Provisions" shall have the meaning set forth in Section
13.28.
1.1.59 "Tenant" means any person or entity entitled to occupy any
portion of the Property under a Lease.
1.1.60 "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.
1.1.61 "Tenant Security Deposit Balance" shall have the meaning set forth in
Section 5.4.6.2.
1.1.62 Intentionally Omitted.
1.1.63 "Testing" shall have the meaning set forth in Section 14.2.
1.1.64 "Title Commitment" shall have the meaning ascribed thereto in
Section 4.1.
1.1.65 "Title Documents" shall have the meaning set forth in Section
4.1.
1.1.66 "Title Insurer" shall have the meaning set forth in Section 2.2.1.
1.1.67 "Title Policy" shall have the meaning set forth in Section 4.1.
1.1.68 "Uncollected Rents" shall have the meaning set forth in Section
5.4.6.1.
1.1.69 Intentionally Omitted.
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 Four Million Six Hundred Eighty Seven
Thousand Five Hundred Dollars ($4,687,500.00). The Purchase Price shall be
reduced by the Lender Fees which shall be paid by Purchaser in the manner
provided in this Section 2.2.
2.2.1 On the Effective Date, Purchaser shall deliver to Fidelity National Title
Insurance Company, c/o Lolly Avant, National Commercial Manager, 3D
International Tower, 1900 West Loop South, Suite 650, Houston, Texas 77027,
800-879-1677 ("Escrow Agent" or "Title Insurer") a deposit (the "Deposit") of
$200,000.00 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 (subject to
Purchaser's obligation under Section 3.5.2 to return all information and
Materials provided to Purchaser as a pre-condition to the return of the Deposit
to Purchaser). 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 both 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
3.1 Feasibility. Purchaser, and its agents, contractors, engineers, surveyors,
attorneys, and employees (collectively, "Consultants") have had the opportunity
to enter onto the Property pursuant to that certain Limited Access Agreement
entered into by Seller and Purchaser dated as of February 18, 2003, as amended
by that certain Reinstatement and Amendment to Limited Access Agreement dated as
of March 6, 2003 (collectively, the "Limited Access Agreement"):
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 Completion of Investigation. Notwithstanding anything to the contrary
contained in this Contract, Purchaser hereby acknowledges that (1) Purchaser has
completed its review of all matters set forth in Section 3.1, Section 3.3 and
Section 3.5 (2) Purchaser approves of all matters reviewed and (3) Purchaser
agrees that Purchaser's obligation to purchase the Property shall be
non-contingent and unconditional except only for satisfaction of the conditions
expressly stated in this Contract as conditioning Purchaser's obligation to
close.
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. Purchaser shall conduct and shall cause
its Consultants to conduct any and all investigations and inspections in such a
manner as to avoid any disruption or disturbance of Tenants' occupancy of the
Property. All information made available by Seller to Purchaser in accordance
with this Contract or obtained by Purchaser in the course of its investigations
and 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 investigations
and inspections or other matters performed by Purchaser with respect to the
Property during the term of this Contract 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 $3,000,000.00 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.
3.5.2 In providing such information and Materials to Purchaser, other than
Seller's Representations, 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 investigations and 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. Purchaser shall assume at Closing the obligations
under the Property Contracts.
ARTICLE 4
TITLE
4.1 Title Documents. Purchaser hereby acknowledges that Purchaser has received 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"). Seller shall be responsible only for
payment of the basic premium for the Title Policy. Purchaser shall be solely
responsible for payment of all other costs relating to procurement of the Title
Commitment, the Title Policy, and any requested endorsements.
4.2 Survey. Purchaser hereby acknowledges that Seller has delivered to Purchaser
that certain survey of the Property prepared by Barton F. Carr, AL PLS No.
16685, bearing Job No. 02-2957 for Landco, L.P., and dated as of December 5,
2002 (the "Existing Survey") (subject to Section 3.5.2). Purchaser shall be
responsible for $6,000 of the cost thereof, and Seller shall be responsible for
the balance of the cost, including the cost of any updates thereto. To the
extent that Purchaser desires that a new survey of the Property be prepared (or
that the Existing Survey be updated), Purchaser shall request the same in
writing to Seller no later than 5 Business Days after the Effective Date, in
which event Seller shall order such new or updated survey (together with the
Existing Survey, referred to herein as the "Survey") from the surveyor who
prepared the Existing Survey (or from such other surveyor as Seller determines
in its reasonable discretion). Purchaser shall be solely responsible for the
cost and expense of the new survey requested pursuant to the terms of this
Section 4.2.
4.3 Approval of Title and Survey. As of the Effective Date of this Contract,
Purchaser hereby agrees and acknowledges that Purchaser has had the opportunity
to review the Title Documents and Existing Survey, and except for those items
set forth in Section 4.4.1 below, Purchaser has approved and irrevocably waived
any objections to any matters covered by the Title Documents and the Survey.
Notwithstanding anything to the contrary contained herein, Seller hereby agrees
and acknowledges that Seller shall either obtain a bond or establish a
post-Closing escrow with Escrow Agent for that certain Notice of Judgment styled
as "James Lee dba Lee Glass Co. Inc. vs. Palisades Apartments", recorded October
31, 2001 in RLPY 2316, Page 707 of the Official Records of Montgomery County,
Alabama, as more particularly shown as an exception Schedule B, Section 1 of the
current Title Commitment, if required by Title Insurer and to the extent said
judgment remains unpaid as of the Closing Date, in order to enable Title Insurer
to delete said exception.
4.4 Permitted Exceptions. The Deed delivered pursuant to this Contract shall be
subject only to the following, all of which shall be deemed "Permitted
Exceptions":
4.4.1 All matters shown on Schedule B Section 2 of the Title Commitment and the
Survey, other than (a) mechanics' liens and taxes due and payable with respect
to the period preceding Closing, (b) the standard exception regarding the rights
of parties in possession which shall be limited to those parties in possession
pursuant to the Leases, and (c) 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 any deeds of trust
and/or mortgages and security documents executed in connection therewith
(including any and all mortgages, assignments of rents and financing statements
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 April 21, 2003 (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 not later than 2 Business Days prior to the scheduled Closing Date 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 by delivering written notice to Purchaser no later than 2
Business Days prior to the scheduled Closing Date 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. Provided that Purchaser is not in default under the terms
of this Contract, Purchaser shall be permitted a one-time extension of the
Closing Date for up to 30 days by (i) delivering written notice to Seller no
later than 10 Business Days prior to the scheduled Closing Date ("Purchaser's
Closing Extension Option"), and (ii) simultaneously with such notice to Seller,
delivering to Escrow Agent an amount equal to $2,500.00 for each requested day
of the extension, which amount when received by Escrow Agent shall be (a) added
to the Deposit hereunder and (b) added to the Purchase Price, and shall be
non-refundable (except as otherwise expressly provided herein with respect to
the Deposit), and shall be held, credited and disbursed in the same manner as
provided hereunder with respect to the Deposit. Purchaser acknowledges that the
Purchase Price shall be increased by the aggregate amount paid by Purchaser for
its exercise of Purchaser's Closing Extension Option. In the event Seller has
elected to extend the Closing Date to the last Business Day of the month
pursuant to this Section 5.1 because Lender will not permit Seller to repay the
Loan on a date other than the last Business Day of the month, then Purchaser
shall only be permitted to extend the Closing Date for a full 30 day period.
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 Statutory Warranty Deed (the "Deed") in the form attached as Exhibit B to
Purchaser, subject only 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 Intentionally Omitted.
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 and Title Insurer 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.
5.2.8 A certification of Seller's non-foreign status pursuant to Section 1445 of
the Internal Revenue Code of 1986, as amended.
5.2.9 Notification letters to all Tenants prepared and executed by Seller in the
form attached hereto as Exhibit F.
5.2.10 Evidence that the contract with the management company of the Property
has been terminated at Seller's sole cost and expense.
5.2.11 Resolutions, certificates of good standing, and such other organizational
documents as Title Insurer shall reasonably require evidencing Seller's
authority to consummate this transaction.
5.3 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 pertaining to
Purchaser's activity on the Property prior to Closing, in the customary form
reasonably acceptable to Purchaser and Title Insurer 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.
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 A countersigned counterpart of the Notification letters in the form
attached hereto as Exhibit F.
5.3.8 Intentionally Omitted.
5.3.9 Intentionally Omitted.
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 (which fees shall be subtracted from the Purchase Price
in accordance with Section 2.2).
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, which schedule
shall be reasonably acceptable to both Seller and Purchaser. 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 45 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, 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 tax 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 tax year. For purposes
of this Contract, the term "tax year" shall mean the period from October 1 until
September 30 of each calendar 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 its share of such accrued Uncollected Rents as and when collected by
Purchaser, and Seller shall pay Purchaser its share of collected rent
attributable to dates from and after the Closing Date as and when collected by
Seller. 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 reasonably
cooperate with Seller in connection with all efforts by Seller to collect such
Uncollected Rents and to take all reasonable 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, written copies 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 spend a material amount of money or 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. Notwithstanding anything to the
contrary contained herein, subject to any and all applicable laws, Seller agrees
that as of the Closing Date it shall not apply the Tenant Deposit against any
Uncollected Rent which is past due less than 30 days. The foregoing restriction
shall not apply if any Tenant Lease is the subject of a pending eviction
proceeding.
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, and the Purchase Price shall be reduced by the amount of the Lender Fees
in accordance with Section 2.2. 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 any transfer, sales, use, gross
receipts or similar taxes, 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 the base premium
for the Title Policy to the extent required by Section 4.1, and one-half of the
customary closing costs of the Escrow Agent, and the cost of recording any
instruments required to discharge any liens or encumbrances against the
Property.
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, 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. At Closing, Seller shall make available to Purchaser
copies of all Tenant-related reports and records which (a) can be generated from
Seller's existing software and (b) have been maintained by Seller in the
ordinary course of business.
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 on a one-time basis only, unless
such items exceed $2,500.00 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 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. 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 and for
that certain Complaint styled as "Checkers Carpet Professionals, Inc. an Alabama
corporation vs. Palisades Apartments and National Property Investors 5, a
California limited partnership", filed on February 18, 2003 in the Circuit Court
of Montgomery County, Alabama, as Case No. CV-03-436, to Seller's knowledge (a)
there are no actions, proceedings, litigation or governmental investigations or
condemnation actions either pending or threatened against the Property, and (b)
Seller has not received any written notice from any governmental entity of any
intent by such entity to condemn the Property or any portion thereof;
6.1.5 To Seller's knowledge, Seller has not received any written notice from a
governmental agency 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.
6.2 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 Ann Porter, telephone (256) 739-6516, facsimile
(775) 251-8205 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 limited liability company duly organized, validly existing
and in good standing under the laws of Illinois.
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 and in accordance
with its past practices at the Property, 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 as of the Effective Date hereof any such
new or modified Property Contracts (a) shall not in the case of a new Property
Contract have a term in excess of 1 year, and in the case of any modified
Property Contract shall not be modified to extend the term thereof in excess of
1 year, (b) shall be executed in the ordinary course of Seller's business and in
accordance with Seller's past practices at the Property and (c) in the case of
new Property Contracts shall be terminable upon thirty (30) days or less notice
without penalty or cost and in the case of any modified Property Contract shall
not be modified to revise the termination provisions thereof without Purchaser's
prior written consent; and provided further any new or renewed Leases shall not
have a term in excess of 1 year (or such longer period of time for which such
Leases are entered into by Seller in the ordinary course of its operation of the
Property and in accordance with its past practices at 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. Seller agrees to
take reasonable efforts to maintain its existing insurance policies (or
replacement policies on comparable terms) covering the Property in full force
and effect until the Closing Date.
7.3 Liens. Purchaser hereby acknowledges that the Property is currently
undergoing construction for the repair and renovation of the Property. Other
than utility easements and temporary construction easements granted by Seller in
the ordinary course of business and pursuant to any current ongoing
construction, 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. Notwithstanding the foregoing, Seller
hereby agrees that Seller shall not grant any such utility easement(s) which
materially interfere with the continued operations of the Property. 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;
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; and
8.1.5 Title Insurer is willing to issue at Closing a Title Policy insuring
Purchaser's fee simple title to the Property in the amount of the Purchase
Price, subject only to the Permitted Exceptions.
Except as expressly set forth elsewhere in this Contract, 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,
8.1.4 or 8.1.5 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, (b) notify Seller of Purchaser's election to
terminate this Contract and receive a return of the Deposit from Escrow Agent,
or (c) 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 Intentionally Omitted.
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 Mr. Paul Davis of Marcus & Millichap ("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 is delivered to Purchaser
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 is delivered from Purchaser
to Seller, 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 (subject to Purchaser's obligation under Section 3.5.2 to return
all information and Materials provided to Purchaser as a pre-condition to the
return of the Deposit) 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 promptly 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, Seller shall
conduct such repair, replacement or restoration in a manner consistent with
Lender's past practices, and 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 any time prior to 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 there is any notice of any such
acquisition or intent to acquire by any such governmental agency), Seller shall
promptly (but in any event prior to the Closing Date) notify Purchaser and
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 Purchaser shall recover the Deposit hereunder (subject to
Purchaser's obligation under Section 3.5.2 to return all information and
Materials provided to Purchaser as a pre-condition to the return of the
Deposit). 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 mail, return receipt requested, or (d) sent by confirmed
facsimile transmission with an original copy thereof transmitted to the
recipient by one of the means described in subsections (a) through (c) no later
than 3 Business Days thereafter. 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:
Palisades Apartments, L.L.C.
800 Baronne Street
New Orleans, Louisiana 70113
Atttention: Roland Von Kurnatowski
Telephone: 504-558-0204
Facsimile: 504-523-3527
And to:
Michael D. Aufrecht
3924 W. Devon, Suite 202
Lincolnwood, Illinois 60712
Telephone: 847-324-4850
Facsimile: 847-324-4852
With a copy to :
David Aufrecht, Esq.
55 W. Monroe, Suite #3550
Chicago, Illinois 60603
Telephone: 312-460-8870
Facsimile: 312-460-8872
To Seller:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Patrick Slavin
Telephone: 303-691-4340
Facsimile: 303-300-3282
And:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
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
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Telephone: 303-691-4303
Facsimile: 303-300-3297
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
3D International Tower
1900 West Loop South, Suite 650
Houston, Texas 77027
Attention: Lolly Avant, National Commercial Manager
Telephone: 800-879-1677
Facsimile: 713-623-4406
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 Alabama 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 California 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 (a) prior to the Effective
Date hereof, solicit any of Seller's employees or any employees located at the
Property for potential employment, or (b) at any time, solicit any of Seller's
affiliates' employees located at any property owned by such affiliates for
potential employment. Purchaser hereby agrees and acknowledges that Purchaser
shall not hire any of Seller's employees or any employees located at the
Property or any of Seller's affiliates' employees located at any property owned
by such affiliates until after Closing.
13.28 Survival. Except for (a) all of the provisions of this Article 13 (other
than Section 13.19, 13.21, 13.23 and 13.27), 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.
13.29 Multiple Purchasers. As used in this Contract, the term "Purchaser" means
all entities acquiring any interest in the Property at the Closing, including,
without limitation, any assignee(s) of the original Purchaser pursuant to
Section 13.3 of this Contract. In the event that "Purchaser" has any obligations
or makes any covenants, representations or warranties under this Agreement, the
same shall be made jointly and severally by all entities being a Purchaser
hereunder. In the event that Seller receives notice from any entity being a
Purchaser hereunder, the same shall be deemed to constitute notice from all
entities being a Purchaser hereunder. In the event that any entity being a
Purchaser hereunder takes any action, breaches any obligation or otherwise acts
pursuant to the terms of this Contract, the same shall be deemed to be the
action of the other entity(ies) being a Purchaser hereunder and the action of
"Purchaser" under this Contract. In the event that Seller is required to give
notice or take action with respect to Purchaser under this Contract, notice in
compliance with Section 13.7 to any entity being a Purchaser hereunder or action
with respect to any entity being a Purchaser hereunder shall be a notice or
action to all entities being a Purchaser hereunder. In the event that any entity
being a Purchaser hereunder desires to bring an action or arbitration against
Seller, such action must be joined by all entities being a Purchaser hereunder
in order to be effective. In the event that there is any agreement by Seller to
pay any amount pursuant to this Contract to Purchaser under any circumstance,
that amount shall be deemed maximum aggregate amount to be paid to all parties
being a Purchaser hereunder and not an amount that can be paid to each party
being a Purchaser hereunder. In the event that Seller is required to return the
Deposit or other amounts to Purchaser, Seller shall return the same to any
entity being a Purchaser hereunder and, upon such return, shall have no further
liability to any other entity being a Purchaser hereunder for such amount. The
foregoing provisions also shall apply to any documents, including, without
limitation, the General Assignment and Assumption and the Assignment and
Assumption of Leases and Security Deposits, executed in connection with this
Contract and the transaction(s) contemplated hereby.
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 Contract. Testing (the "Testing"") has been performed at the
Property with respect to lead-based paint. Law Engineering and Environmental
Services, Inc. performed the Testing and reported its findings in the Report of
Findings dated May 14, 2001, a copy of which is attached hereto as Exhibit H
(the "Report"). The Report certifies the Property as lead based paint free. By
execution hereof, Purchaser acknowledges receipt of a copy of the Report, the
Lead-Based Paint Disclosure Statement attached hereto as Exhibit G, and
acknowledges receipt of that certain Consent Contract (the "Consent Contract")
by and among the United States Environmental Protection Agency (executed
December 19, 2001), the United States Department of Housing and Urban
Development (executed January 2, 2002), and Apartment Investment and Management
Company ("AIMCO") (executed December 18, 2001). Because the Property has been
certified as lead based paint free, Seller is not required under the Consent
Contract to remediate or abate any lead-based paint condition at the Property
prior to the Closing. 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 and (2) that Purchaser shall not be
deemed to be a third party beneficiary to the Consent Contract.
[Remainder of Page Intentionally Left Blank]
NOW, THEREFORE, the parties hereto have executed this Contract as of the
date first set forth above.
Seller:
NATIONAL PROPERTY INVESTORS 5,
a California limited partnership
By: NPI Equity Investments, Inc.,
a Florida corporation,
Its General Partner
By: /s/ Chad Asarch
Name: Chad Asarch
Title: Vice President
Purchaser:
PALISADES APARTMENTS, L.L.C.,
an Illinois limited liability company
By: /s/ Michael D. Aufrecht
Name: Michael D. Aufrecht
Title: Member
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 March 21, 2003 as the date of opening of escrow
and designates 142660 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 - Manager
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 at the Closing, 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:
MARCUS & MILLICHAP
By: /s/ Paul D. Davis
Name: Paul D. Davis
Title: Associate Broker
EXHIBIT A
LEGAL DESCRIPTION FOR THE PALISADES APARTMENTS
Montgomery Alabama
All that real property located in Montgomery County, Alabama, and being more
particularly described as follows:
Commence at the Southwest Corner of the NW-1/4 of Section 33, T16N, R18E,
Montgomery County, Alabama, and run N 00(degree) 44' W, along the West line of
said Section 33, 502.56 feet to the POINT OF BEGINNING of the parcel of land
herein described; thence from said point of beginning continue N 00(degree) 44'
W, 209.20 feet; thence N 56(degree) 00' E, 551.09 feet; thence N 56(degree) 44'
E, 603.72 feet to a point on the South right-of-way of South Boulevard; thence N
88(degree) 52' E, along said South right-of-way, 592.0 feet; thence S 01(degree)
06' E, 745.95 feet; thence S 88(degree) 49' W, 374.98 feet; thence S 88(degree)
36' W, 670.56 feet; thence S 01(degree) 32' E, 212.62 feet to a point on the
South right-of-way of Elsmeade Drive; thence N 76(degree) 55' W, 539.76 feet to
the point of beginning.
Said described property lies in the NW-1/4 of Section 33, T16N, R18E, Montgomery
County, Alabama, and contains 21.75 acres, more or less.
SAID PROPERTY BEING ALSO DESCRIBED AS FOLLOWS:
UNIT "1"
Block "A" according to Map of Woodley Square Subdivision in the Northwest
Quarter (NW 1/4) of Section 33, Township 16 North, Range 18 East, Montgomery
County, Alabama, as said Map appears of record in the Office of the Judge of
Probate of Montgomery County, Alabama in Plat Book 21, Page 33.
UNIT "2"
Lot 1, Block "B" according to the Map of subdivision of Block "B", Woodley
Square Subdivision, which map is recorded in Plat Book 22, Page 38 as corrected
by Map recorded in Plat Book 22, Page 290, both in the Office of the Judge of
Probate of Montgomery County, Alabama.
UNIT "3"
Lot 2, Block "B" according to the Map of subdivision of Block "B" Woodley Square
Subdivision, which map is recorded in Plat Book 22, Page 38 as corrected by Map
recorded in Plat Book 22, Page 290, both in the Office of the Judge of Probate
of Montgomery County, Alabama
UNIT "4"
Commencing at the Southwest corner of the Northwest Quarter of Section 33,
Township 16 North, Range 18 East, Montgomery County, Alabama, running
Northwardly along the West line of said Northwest Quarter a distance of 564.35
feet to the point of beginning of the property herein described, thence
continuing Northwardly along said West line of Northwest Quarter run a distance
of 15 feet to a point on the Southern Boundary of a Subdivision of Block "B",
Woodley Square Subdivision as corrected by plat recorded in Plat Book 22, Page
290 of the Probate Court Records of Montgomery County, Alabama, thence with an
interior angle of 90 degrees, 44 minutes, 30 seconds run Eastwardly along said
Southern boundary of subdivision of Block "B", Woodley Square, a distance of
521.18 feet to a point on the Western boundary of Lot 1 Elsmeade No. 4 as per
plat recorded in Plat Book 18, Page 216 of the aforesaid Probate Court Records
of Montgomery County, Alabama, thence with an interior angle of 90 degrees, 04
minutes, 50 seconds run Southwardly along said Western boundary of Lot 1,
Elsmeade No. 4 a distance of 150.38 feet to a point on the North right of way
line of Elsmeade Drive, thence with an interior angle of 75 degrees, 22 minutes,
10 seconds run Northwestwardly a distance of 538.87 feet to the point of
beginning.
Together with a non-exclusive easement for ingress and egress and recreational
use over Phase III of Woodley Square Apartments, said Phase III described as
follows:
Lot 2, in Block "B" according to the Map of Subdivision of Block "B", Woodley
Square Subdivision, which map is recorded in Plat Book 22, page 38, as corrected
by Map recorded in Plat Book 22, Page 290, both in the Office of the Judge of
Probate of Montgomery County, Alabama.
EXHIBIT B
FORM OF STATUTORY WARRANTY DEED
STATE OF ALABAMA
MONTGOMERY COUNTY
STATUTORY WARRANTY DEED
KNOW ALL MEN BY THESE PRESENTS, that in consideration of One Hundred and
no/100 Dollars and other valuable considerations to the undersigned NATIONAL
PROPERTY INVESTORS 5, a California limited partnership (herein referred to as
GRANTOR), in hand paid by the GRANTEE herein, the receipt and sufficiency of
which are hereby acknowledged, the said GRANTOR does by these presents, GRANT,
BARGAIN, SELL and CONVEY unto PALISADES APARTMENTS, L.L.C., an Illinois limited
liability company (hereinafter referred to as "Grantee"), its successors and
assigns, the following described real estate, situated in the County of
Montgomery and State of Alabama, to-wit:
See Exhibit "A" attached hereto and, by this reference, made a part
hereof.
This conveyance is made subject to any and all easements, restrictions,
reservations, and rights-of-way appearing of record affecting the
above-described property.
For purposes of ad valorem tax appraisal only, the mailing address of
the property herein is: 2230 Woodley Square West, Montgomery, Alabama. The
mailing address of GRANTEE herein is: 800 Baronne Street, New Orleans,
Louisiana 70113.
TO HAVE AND TO HOLD, the aforementioned premises, together with
improvements, easements and appurtenances thereunto appertaining, unto the said
GRANTEE, its successors and assigns forever.
IN WITNESS WHEREOF, NPI Equity Investments, a Florida corporation, has
caused this instrument to be executed in its corporate name and behalf by
Patrick F. Slavin its duly authorized Senior Vice President, this the 21st day
of April, 2003.
GRANTOR NAME
NATIONAL PROPERTY INVESTORS 5,
a California limited partnership
By: NPI Equity Investments, Inc.,
a Florida corporation,
Its General Partner
_ By: /s/ Patrick F. Slavin
_ Name: Patrick F. Slavin
_ Title: Senior Vice
President
[CORPORATE SEAL]
STATE OF COLORADO
COUNTY OF DENVER
I, the undersigned, a Notary Public in and for said State at Large,
hereby certify that Patrick F. Slavin, whose name as SVP of NPI Equity
Investments, Inc., a Florida corporation acting in its capacity as General
Partner of National Property Investors 5, a California limited partnership is
signed to the foregoing instrument, and who is known to me, acknowledged before
me on this day that, being informed of the contents of said instrument, as such
SVP, and with full authority, executed the same voluntarily for and as the act
of said corporation, acting in its capacity as General Partner of said limited
partnership as of the date of this acknowledgment.
Given under my hand and official seal this the 14th day of April,
2003.
/s/ Marcey K. Anderson
Notary Public
My Commission Expires:7/27/2006
THIS INSTRUMENT PREPARED BY:
Loretta Thompson, Esq.
Loeb & Loeb LLP
1000 Wilshire Boulevard, Suite 1800
Los Angeles, California 90017
(213) 688-3400
EXHIBIT "A"
LEGAL DESCRIPTION FOR THE PALISADES APARTMENTS
All that real property located in Montgomery County, Alabama, and being more
particularly described as follows:
Commence at the Southwest Corner of the NW-1/4 of Section 33, T16N, R18E,
Montgomery County, Alabama, and run N 00(degree) 44' W, along the West line of
said Section 33, 502.56 feet to the POINT OF BEGINNING of the parcel of land
herein described; thence from said point of beginning continue N 00(degree) 44'
W, 209.20 feet; thence N 56(degree) 00' E, 551.09 feet; thence N 56(degree) 44'
E, 603.72 feet to a point on the South right-of-way of South Boulevard; thence N
88(degree) 52' E, along said South right-of-way, 592.0 feet; thence S 01(degree)
06' E, 745.95 feet; thence S 88(degree) 49' W, 374.98 feet; thence S 88(degree)
36' W, 670.56 feet; thence S 01(degree) 32' E, 212.62 feet to a point on the
South right-of-way of Elsmeade Drive; thence N 76(degree) 55' W, 539.76 feet to
the point of beginning.
Said described property lies in the NW-1/4 of Section 33, T16N, R18E, Montgomery
County, Alabama, and contains 21.75 acres, more or less.
SAID PROPERTY BEING ALSO DESCRIBED AS FOLLOWS:
UNIT "1"
Block "A" according to Map of Woodley Square Subdivision in the Northwest
Quarter (NW 1/4) of Section 33, Township 16 North, Range 18 East, Montgomery
County, Alabama, as said Map appears of record in the Office of the Judge of
Probate of Montgomery County, Alabama in Plat Book 21, Page 33.
UNIT "2"
Lot 1, Block "B" according to the Map of subdivision of Block "B", Woodley
Square Subdivision, which map is recorded in Plat Book 22, Page 38 as corrected
by Map recorded in Plat Book 22, Page 290, both in the Office of the Judge of
Probate of Montgomery County, Alabama.
UNIT "3"
Lot 2, Block "B" according to the Map of subdivision of Block "B" Woodley Square
Subdivision, which map is recorded in Plat Book 22, Page 38 as corrected by Map
recorded in Plat Book 22, Page 290, both in the Office of the Judge of Probate
of Montgomery County, Alabama
UNIT "4"
Commencing at the Southwest corner of the Northwest Quarter of Section 33,
Township 16 North, Range 18 East, Montgomery County, Alabama, running
Northwardly along the West line of said Northwest Quarter a distance of 564.35
feet to the point of beginning of the property herein described, thence
continuing Northwardly along said West line of Northwest Quarter run a distance
of 15 feet to a point on the Southern Boundary of a Subdivision of Block "B",
Woodley Square Subdivision as corrected by plat recorded in Plat Book 22, Page
290 of the Probate Court Records of Montgomery County, Alabama, thence with an
interior angle of 90 degrees, 44 minutes, 30 seconds run Eastwardly along said
Southern boundary of subdivision of Block "B", Woodley Square, a distance of
521.18 feet to a point on the Western boundary of Lot 1 Elsmeade No. 4 as per
plat recorded in Plat Book 18, Page 216 of the aforesaid Probate Court Records
of Montgomery County, Alabama, thence with an interior angle of 90 degrees, 04
minutes, 50 seconds run Southwardly along said Western boundary of Lot 1,
Elsmeade No. 4 a distance of 150.38 feet to a point on the North right of way
line of Elsmeade Drive, thence with an interior angle of 75 degrees, 22 minutes,
10 seconds run Northwestwardly a distance of 538.87 feet to the point of
beginning.
Together with a non-exclusive easement for ingress and egress and recreational
use over Phase III of Woodley Square Apartments, said Phase III described as
follows:
Lot 2, in Block "B" according to the Map of Subdivision of Block "B", Woodley
Square Subdivision, which map is recorded in Plat Book 22, page 38, as corrected
by Map recorded in Plat Book 22, Page 290, both in the Office of the Judge of
Probate of Montgomery County, Alabama.
EXHIBIT C
FORM OF BILL OF SALE
THIS BILL OF SALE ("Bill of Sale") is made this 21st day of April, 2003 by
NATIONAL PROPERTY INVESTORS 5, a California limited partnership ("Seller"), in
favor of PALISADES APARTMENTS, L.L.C., an Illinois limited liability company
("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller and Purchaser entered into that certain Purchase and Sale
Contract dated as of March 20, 2003 (the "Contract") with respect to the sale of
certain the Real Property identified on Exhibit A attached thereto and the
Improvements located thereon. (Any term with its initial letter capitalized and
not otherwise defined herein shall have the meaning set forth in the Contract.)
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller does hereby absolutely and
unconditionally give, grant, bargain, sell, transfer, set over, assign, convey,
release, confirm and deliver to Purchaser all of the Fixtures and Tangible
Personal Property, without representation or warranty of any kind whatsoever
except as set forth in and subject to the terms of the Contract.
WITH RESPECT TO ALL MATTERS TRANSFERRED, WHETHER TANGIBLE OR INTANGIBLE,
PERSONAL OR REAL, SELLER EXPRESSLY DISCLAIMS A WARRANTY OF MERCHANTABILITY AND
WARRANTY FOR FITNESS FOR A PARTICULAR USE OR ANY OTHER WARRANTY EXPRESSED OR
IMPLIED THAT MAY ARISE BY OPERATION OF LAW OR UNDER THE UNIFORM COMMERCIAL CODE
FOR THE STATE IN WHICH THE PROPERTY IS LOCATED (OR FOR ANY OTHER STATE).
This Bill of Sale shall be binding upon and inure to the benefit of the
successors, assigns, personal representatives, heirs and legatees of Purchaser
and Seller.
This Bill of Sale shall be governed by, interpreted under, and construed
and enforceable in accordance with, the laws of the State of Alabama.
EXECUTED as of the 21st day of April, 2003.
Seller:
NATIONAL PROPERTY INVESTORS 5,
a California limited partnership
By: NPI Equity Investments, Inc.,
a Florida corporation,
Its General Partner
By: /s/ Patrick F. Slavin
Name: Patrick F. Slavin
Title: SVP
EXHIBIT A
LEGAL DESCRIPTION FOR THE PALISADES APARTMENTS
Montgomery Alabama
All that real property located in Montgomery County, Alabama, and being more
particularly described as follows:
Commence at the Southwest Corner of the NW-1/4 of Section 33, T16N, R18E,
Montgomery County, Alabama, and run N 00(degree) 44' W, along the West line of
said Section 33, 502.56 feet to the POINT OF BEGINNING of the parcel of land
herein described; thence from said point of beginning continue N 00(degree) 44'
W, 209.20 feet; thence N 56(degree) 00' E, 551.09 feet; thence N 56(degree) 44'
E, 603.72 feet to a point on the South right-of-way of South Boulevard; thence N
88(degree) 52' E, along said South right-of-way, 592.0 feet; thence S 01(degree)
06' E, 745.95 feet; thence S 88(degree) 49' W, 374.98 feet; thence S 88(degree)
36' W, 670.56 feet; thence S 01(degree) 32' E, 212.62 feet to a point on the
South right-of-way of Elsmeade Drive; thence N 76(degree) 55' W, 539.76 feet to
the point of beginning.
Said described property lies in the NW-1/4 of Section 33, T16N, R18E, Montgomery
County, Alabama, and contains 21.75 acres, more or less.
SAID PROPERTY BEING ALSO DESCRIBED AS FOLLOWS:
UNIT "1"
Block "A" according to Map of Woodley Square Subdivision in the Northwest
Quarter (NW 1/4) of Section 33, Township 16 North, Range 18 East, Montgomery
County, Alabama, as said Map appears of record in the Office of the Judge of
Probate of Montgomery County, Alabama in Plat Book 21, Page 33.
UNIT "2"
Lot 1, Block "B" according to the Map of subdivision of Block "B", Woodley
Square Subdivision, which map is recorded in Plat Book 22, Page 38 as corrected
by Map recorded in Plat Book 22, Page 290, both in the Office of the Judge of
Probate of Montgomery County, Alabama.
UNIT "3"
Lot 2, Block "B" according to the Map of subdivision of Block "B" Woodley Square
Subdivision, which map is recorded in Plat Book 22, Page 38 as corrected by Map
recorded in Plat Book 22, Page 290, both in the Office of the Judge of Probate
of Montgomery County, Alabama
UNIT "4"
Commencing at the Southwest corner of the Northwest Quarter of Section 33,
Township 16 North, Range 18 East, Montgomery County, Alabama, running
Northwardly along the West line of said Northwest Quarter a distance of 564.35
feet to the point of beginning of the property herein described, thence
continuing Northwardly along said West line of Northwest Quarter run a distance
of 15 feet to a point on the Southern Boundary of a Subdivision of Block "B",
Woodley Square Subdivision as corrected by plat recorded in Plat Book 22, Page
290 of the Probate Court Records of Montgomery County, Alabama, thence with an
interior angle of 90 degrees, 44 minutes, 30 seconds run Eastwardly along said
Southern boundary of subdivision of Block "B", Woodley Square, a distance of
521.18 feet to a point on the Western boundary of Lot 1 Elsmeade No. 4 as per
plat recorded in Plat Book 18, Page 216 of the aforesaid Probate Court Records
of Montgomery County, Alabama, thence with an interior angle of 90 degrees, 04
minutes, 50 seconds run Southwardly along said Western boundary of Lot 1,
Elsmeade No. 4 a distance of 150.38 feet to a point on the North right of way
line of Elsmeade Drive, thence with an interior angle of 75 degrees, 22 minutes,
10 seconds run Northwestwardly a distance of 538.87 feet to the point of
beginning.
Together with a non-exclusive easement for ingress and egress and recreational
use over Phase III of Woodley Square Apartments, said Phase III described as
follows:
Lot 2, in Block "B" according to the Map of Subdivision of Block "B", Woodley
Square Subdivision, which map is recorded in Plat Book 22, page 38, as corrected
by Map recorded in Plat Book 22, Page 290, both in the Office of the Judge of
Probate of Montgomery County, Alabama.
EXHIBIT D
GENERAL ASSIGNMENT AND ASSUMPTION
This General Assignment and Assumption (this "Assignment") is executed by
NATIONAL PROPERTY INVESTORS 5, a California limited partnership ("Seller"), in
favor of PALISADES APARTMENTS, L.L.C., an Illinois limited liability company
("Purchaser") as of April 21, 2003 (the "Effective Date").
WHEREAS, Seller and Purchaser have entered into that certain Purchase and
Sale Contract dated as of March 20, 2003 ("Contract"), in which Seller has
agreed to sell and Purchaser has agreed to purchase the real property described
in Exhibit A attached thereto and the improvements located thereon collectively,
the "Project"). Capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in the Contract.
Pursuant to the Contract, Seller has agreed to assign, without recourse or
warranty, to Purchaser all of Seller's right, title and interest, if any, in and
to the Miscellaneous Property Assets, the Permits (other than the Excluded
Permits), and the Property Contracts.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser agree as
follows:
1. Assignment. As of the Effective Date, Seller hereby assigns, sells and
transfers, without recourse or warranty, to Purchaser all of Seller's right,
title and interest, if any, in and to the Miscellaneous Property Assets, the
Permits (other than the Excluded Permits), and the Property Contracts.
2. Assumption. As of the Effective Date, Purchaser expressly agrees to
assume and hereby assumes all liabilities and obligations of the Seller in
connection with the Miscellaneous Property Assets, the Permits (other than the
Excluded Permits), and the Property Contracts.
3. Counterparts. This Assignment may be executed in counterparts, each of
which shall be deemed an original, and both of which together shall constitute
one and the same instrument.
4. Attorneys' Fees. If any action or proceeding is commenced by either
party to enforce its rights under this Assignment, the prevailing party in such
action or proceeding shall be awarded all reasonable costs and expenses incurred
in such action or proceeding, including reasonable attorneys' fees and costs
(including the cost of in-house counsel and appeals), in addition to any other
relief awarded by the court.
5. Applicable Law. This Assignment shall be governed by and interpreted in
accordance with the laws of the State of Alabama.
6. Binding Effect. This Assignment shall be binding upon and inure to the
benefit of the parties hereto and their respective transferees, successors, and
assigns.
WITH RESPECT TO ALL MATTERS TRANSFERRED, WHETHER TANGIBLE OR INTANGIBLE,
PERSONAL OR REAL, SELLER EXPRESSLY DISCLAIMS A WARRANTY OF MERCHANTABILITY AND
WARRANTY FOR FITNESS FOR A PARTICULAR USE OR ANY OTHER WARRANTY EXPRESSED OR
IMPLIED THAT MAY ARISE BY OPERATION OF LAW OR UNDER THE UNIFORM COMMERCIAL CODE
FOR THE STATE IN WHICH THE PROPERTY IS LOCATED (OR ANY OTHER STATE).
[Remainder of Page Intentionally Left Blank]
WITNESS the signatures of the undersigned.
Dated: April 21, 2003
Seller:
NATIONAL PROPERTY INVESTORS 5,
a California limited partnership
By: NPI Equity Investments, Inc.,
a Florida corporation,
Its General Partner
By: /s/ Patrick F. Slavin
Name: Patrick F. Slavin
Title: SVP
Purchaser:
PALISADES APARTMENTS, L.L.C., an Illinois
limited liability company
By: /s/ Michael D. Aufrecht
Name: Michael D. Aufrecht
Title: Manager
EXHIBIT E
ASSIGNMENT AND ASSUMPTION OF LEASES AND SECURITY DEPOSITS
This Assignment and Assumption of Leases and Security Deposits (this
"Assignment") is executed by and between NATIONAL PROPERTY INVESTORS 5, a
California limited partnership ("Assignor"), and PALISADES APARTMENTS, L.L.C.,
an Illinois limited liability company ("Assignee"), as of April 21, 2003 (the
"Effective Date").
Assignee and Assignor have entered into that certain Purchase and Sale
Contract, dated March 20, 2003 ("Purchase Contract"), in which Assignor has
agreed to sell and Assignee has agreed to purchase the real property described
on Exhibit A hereto and the improvements located thereon (collectively, the
Project).
Assignor, as landlord, has entered into certain leases for the use of the
Project by tenants (collectively, together with all amendments, modifications,
supplements, restatements and guarantees thereof, the "Leases") for the Project.
The Purchase Contract requires Assignor and Assignee to execute this
Assignment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree
as follows:
1. Capitalized Terms. Unless the context otherwise requires, all
capitalized terms used, but not otherwise defined herein, shall have the
meanings set forth for the same in the Purchase Contract.
2. Assignment and Assumption. As of the Effective Date, Assignor hereby
irrevocably assigns, sets over, transfers and conveys to Assignee all of
Assignor's right, title and interest in and to (a) the Leases and (b) the Tenant
Security Deposit Balance. Assignee hereby accepts this Assignment and the rights
granted herein, and Assignee hereby expressly assumes, for itself and its
successors, assigns and legal representatives, the Leases and the Tenant
Security Deposit Balance and all of the obligations and liabilities, fixed and
contingent, of Assignor thereunder accruing from and after the date hereof with
respect to the Leases and the Tenant Security Deposit Balance and agrees to (I)
be fully bound by all of the terms, covenants, agreements, provisions,
conditions, obligations and liability of Assignor thereunder, which accrue from
and after the date hereof, and (ii) keep, perform and observe all of the
covenants and conditions contained therein on the part of Assignor to be kept,
performed and observed, from and after the date hereof.
3. Indemnification. Assignee shall indemnify, protect, defend and hold
harmless Assignor from and against any and all claims incurred by Assignor with
respect to the Security Deposits assigned herein.
4. General Provisions.
a. Successors. This Assignment shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors and assigns.
b. Counterparts. This Assignment may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument.
c. Governing Law. This Assignment and the legal relations between
the parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State wherein the Project is located, without reference to
the conflict of law provisions thereof.
d. Attorney's Fees. If any action or proceeding is commenced by
either party to enforce its rights under this Assignment, the prevailing party
in such action or proceeding shall be awarded all reasonable costs and expenses
incurred in such action or proceeding, including reasonable attorneys' fees and
costs (including the cost of in-house counsel and appeals), in addition to any
other relief awarded by the court.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, this Assignment was made and executed as of the date
first above written.
ASSIGNOR:
NATIONAL PROPERTY INVESTORS 5,
a California limited partnership
By: NPI Equity Investments, Inc.,
a Florida corporation,
Its General Partner
By: /s/ Patrick Slavin
Name: Patrick Slavin
Title: SVP
ASSIGNEE:
PALISADES APARTMENTS, L.L.C., an Illinois
limited liability company
By: /s/ Michael D. Aufrecht
Name: Michael D. Aufrecht
Title: Manager
EXHIBIT A
LEGAL DESCRIPTION FOR THE PALISADES APARTMENTS
Montgomery Alabama
All that real property located in Montgomery County, Alabama, and being more
particularly described as follows:
Commence at the Southwest Corner of the NW-1/4 of Section 33, T16N, R18E,
Montgomery County, Alabama, and run N 00(degree) 44' W, along the West line of
said Section 33, 502.56 feet to the POINT OF BEGINNING of the parcel of land
herein described; thence from said point of beginning continue N 00(degree) 44'
W, 209.20 feet; thence N 56(degree) 00' E, 551.09 feet; thence N 56(degree) 44'
E, 603.72 feet to a point on the South right-of-way of South Boulevard; thence N
88(degree) 52' E, along said South right-of-way, 592.0 feet; thence S 01(degree)
06' E, 745.95 feet; thence S 88(degree) 49' W, 374.98 feet; thence S 88(degree)
36' W, 670.56 feet; thence S 01(degree) 32' E, 212.62 feet to a point on the
South right-of-way of Elsmeade Drive; thence N 76(degree) 55' W, 539.76 feet to
the point of beginning.
Said described property lies in the NW-1/4 of Section 33, T16N, R18E, Montgomery
County, Alabama, and contains 21.75 acres, more or less.
SAID PROPERTY BEING ALSO DESCRIBED AS FOLLOWS:
UNIT "1"
Block "A" according to Map of Woodley Square Subdivision in the Northwest
Quarter (NW 1/4) of Section 33, Township 16 North, Range 18 East, Montgomery
County, Alabama, as said Map appears of record in the Office of the Judge of
Probate of Montgomery County, Alabama in Plat Book 21, Page 33.
UNIT "2"
Lot 1, Block "B" according to the Map of subdivision of Block "B", Woodley
Square Subdivision, which map is recorded in Plat Book 22, Page 38 as corrected
by Map recorded in Plat Book 22, Page 290, both in the Office of the Judge of
Probate of Montgomery County, Alabama.
UNIT "3"
Lot 2, Block "B" according to the Map of subdivision of Block "B" Woodley Square
Subdivision, which map is recorded in Plat Book 22, Page 38 as corrected by Map
recorded in Plat Book 22, Page 290, both in the Office of the Judge of Probate
of Montgomery County, Alabama
UNIT "4"
Commencing at the Southwest corner of the Northwest Quarter of Section 33,
Township 16 North, Range 18 East, Montgomery County, Alabama, running
Northwardly along the West line of said Northwest Quarter a distance of 564.35
feet to the point of beginning of the property herein described, thence
continuing Northwardly along said West line of Northwest Quarter run a distance
of 15 feet to a point on the Southern Boundary of a Subdivision of Block "B",
Woodley Square Subdivision as corrected by plat recorded in Plat Book 22, Page
290 of the Probate Court Records of Montgomery County, Alabama, thence with an
interior angle of 90 degrees, 44 minutes, 30 seconds run Eastwardly along said
Southern boundary of subdivision of Block "B", Woodley Square, a distance of
521.18 feet to a point on the Western boundary of Lot 1 Elsmeade No. 4 as per
plat recorded in Plat Book 18, Page 216 of the aforesaid Probate Court Records
of Montgomery County, Alabama, thence with an interior angle of 90 degrees, 04
minutes, 50 seconds run Southwardly along said Western boundary of Lot 1,
Elsmeade No. 4 a distance of 150.38 feet to a point on the North right of way
line of Elsmeade Drive, thence with an interior angle of 75 degrees, 22 minutes,
10 seconds run Northwestwardly a distance of 538.87 feet to the point of
beginning.
Together with a non-exclusive easement for ingress and egress and recreational
use over Phase III of Woodley Square Apartments, said Phase III described as
follows:
Lot 2, in Block "B" according to the Map of Subdivision of Block "B", Woodley
Square Subdivision, which map is recorded in Plat Book 22, page 38, as corrected
by Map recorded in Plat Book 22, Page 290, both in the Office of the Judge of
Probate of Montgomery County, Alabama.
EXHIBIT F
TENANT NOTIFICATION
April 21, 2003
(Date)
To Tenants of Palisades Apartments
Ladies and Gentlemen:
This is to advise you that, effective this date, Palisades Apartments has
been sold to PALISADES APARTMENTS, L.L.C., an Illinois limited liability company
("Purchaser").
Effective immediately, please make all rent checks payable to Palisades
Apartments and make all rental payments to the on-site management office. Any
security deposit you made at the time of signing your lease has also been
transferred to Purchaser, and Purchaser is solely responsible for returning any
security deposit to which you are entitled at the termination of your lease.
Additionally, effective immediately, OP Property Management, LP, is no
longer the manager of Palisades Apartments. The new manager of Palisades
Apartments is Palisades Apartments, L.L.C.
Please contact the on-site management office if you have any questions
regarding this transfer.
Very truly yours,
NATIONAL PROPERTY INVESTORS 5,
a California limited partnership
By:
NPI
Equity
Investments,
Inc.,
a
Florida
corporation,
Its
General
Partner
By: /s/ Patrick F. Slavin
Name: Patrick F. Slavin
Title: SVP
Purchaser:
PALISADES APARTMENTS, L.L.C., an
Illinois limited liability company
By: /s/ Michael D. Aufrecht
Name: Michael D. Aufrecht
Title: Manager
EXHIBIT G
LEAD-BASED PAINT DISCLOSURE
EVERY PURCHASER OF ANY INTEREST IN RESIDENTIAL REAL PROPERTY ON WHICH A
RESIDENTIAL DWELLING WAS BUILT PRIOR TO 1978 IS NOTIFIED THAT SUCH PROPERTY MAY
PRESENT EXPOSURE TO LEAD FROM LEAD-BASED PAINT THAT MAY PLACE YOUNG CHILDREN AT
RISK OF DEVELOPING LEAD POISONING. LEAD POISONING IN YOUNG CHILDREN MAY PRODUCE
PERMANENT NEUROLOGICAL DAMAGE, INCLUDING LEARNING DISABILITIES, REDUCED
INTELLIGENCE QUOTIENT, BEHAVIORAL PROBLEMS, AND IMPAIRED MEMORY. LEAD POISONING
ALSO POSES A PARTICULAR RISK TO PREGNANT WOMEN. THE SELLER OF ANY INTEREST IN
RESIDENTIAL REAL PROPERTY IS REQUIRED TO PROVIDE THE PURCHASER WITH ANY
INFORMATION ON LEAD-BASED PAINT HAZARDS FROM RISK ASSESSMENTS OR INSPECTIONS IN
THE SELLER'S POSSESSION, IF ANY, AND NOTIFY THE PURCHASER OF ANY KNOWN
LEAD-BASED PAINT HAZARDS. A RISK ASSESSMENT OR INSPECTION FOR POSSIBLE
LEAD-BASED PAINT HAZARDS IS RECOMMENDED PRIOR TO PURCHASE.
EXHIBIT H
REPORT OF LEAD BASED PAINT FINDINGS
[Attached]
SCHEDULE 1.1.17
LIST OF EXCLUDED PERMITS
To Be Inserted, If Any
SCHEDULE 1.1.22
LIST OF EXCLUDED FIXTURES AND TANGIBLE PERSONAL PROPERTY
1. Buyer's Access Computer Hardware and Software;
2. AIMCO Benchmark Series Books; 3. Connect: Remote Horizon Software; and
4. All of the items set forth in Section 1.1.22 (a) through (c) of the
Contract.
SCHEDULE 3.5
LIST OF MATERIALS
(a) Seller's form of residential lease agreement used at the Property
(b) all Property Contracts and any equipment leases
(c) any property locator or similar agreements (other than agreements with the
Property Manager), if any, pertaining to the marketing and advertisement
of the Property for leasing (and payment of commissions in connection
therewith), but only to the extent the same will remain in effect after
the Closing
(d) all engineering studies, environmental reports, architectural, mechanical,
electrical, plumbing drainage, construction and similar plans,
specifications and blueprints of the improvements, termite inspections or
warranties, to the extent such are available and in Seller's possession
(subject to Section 3.5.2), which relate to the Property and were prepared
for Seller by third parties
(e) to the extent in Seller's possession (subject to Section 3.5.2), ad
valorem and personal property tax statements for the current year, and the
status of any pending appeal
(f) current operating statements for the Property, and to the extent available
and in Seller's possession (subject to Section 3.5.2), for the three years
prior to the year in which the Effective Date occurs
(g) a summary of pending insurance claims and pending litigation, if any,
provided that such summary shall be prepared to Seller's knowledge (as
defined in Section 6.4 of the Contract) and Seller makes no
representations or warranties regarding the outcome of such claims or
litigation
(h) to the extent available and in Seller's possession (subject to Section
3.5.2), guaranties or warranties with respect to the roof of the Property,
if any
(i) Seller's ACM plan, lead in water O&M, and other O&M plans, if any
(j) copies of any certificates of occupancy and/or other Permits, to the
extent available and in Seller's possession (subject to Section 3.5.2)
(k) Current rent roll and copies of the Leases and Tenant files