UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 15, 2003
NATIONAL PROPERTY INVESTORS 6
(Exact name of registrant as specified in its charter)
California 0-11864 13-3140364
(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 May 15, 2003, the Registrant sold one of its investment properties, Ski Lodge
Apartments, located in Montgomery, Alabama. The Registrant sold Ski Lodge
Apartments to Mullins Properties, LLC, an unrelated party, for $14,550,000. The
sale price was determined based on the fair market value of the investment
property.
In accordance with the Amended Limited Partnership Agreement of the Registrant,
the Registrant's general partner is evaluating the cash requirements of the
Registrant to determine whether any portion of the net proceeds will be
distributed to the Registrant's partners.
Item 7. Financial Statements and Exhibits
(b) Pro forma financial information.
The following unaudited pro forma consolidated balance sheet and statements of
operations reflect the operations of National Property Investors 6 as if Ski
Lodge Apartments had been sold on January 1, 2002.
The pro forma consolidated financial statements do not project the Partnership's
results of operations at any future date or for any future period. This pro
forma information should be read in conjunction with the Partnership's 2002
Annual Report on Form 10-KSB.
PRO FORMA CONSOLIDATED BALANCE SHEET
(in thousands)
March 31, 2003
All other assets $ 5,635
Investment properties, net 8,794
Total Assets $14,429
All other liabilities $ 993
Mortgage notes payable 27,233
Partners' deficit (13,797)
Total Liabilities and Equity $14,429
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit data)
Three Months
Ended Year Ended
March 31, December 31,
2003 2002
Total revenues $ 2,126 $ 8,215
Total expenses 2,446 8,718
Net loss $ (320) $ (503)
Net loss per limited partnership unit $ (2.89) $ (4.54)
(c) Exhibits.
The following exhibits are filed with this report (1):
10.34 Purchase and Sale Contract between Registrant and Mullins
Properties, LLC, dated November 6, 2002.
10.35 Reinstatement and Amendment to Purchase and Sale Contract between
Registrant and Mullins Properties, LLC dated December 2, 2002.
10.36 Reinstatement and Second Amendment to Purchase and Sale Contract
between Registrant and Mullins Properties, LLC, dated February 12,
2003.
10.37 Third Amendment to Purchase and Sale Contract between Registrant and
Mullins Properties, LLC, dated February 27, 2003.
10.38 Reinstatement and Fourth Amendment to Purchase and Sale Contract
between Registrant and Mullins Properties, LLC, dated May 2, 2003.
(1) Schedules and supplemental materials to the exhibits have been omitted but
will be provided to the Securities and Exchange Commission upon request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NATIONAL PROPERTY INVESTORS 6
By: NPI Equity Investments, Inc.
Its Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
Date: May 30, 2003
EXHIBIT 10.34
PURCHASE AND SALE CONTRACT
BETWEEN
NATIONAL PROPERTY INVESTORS 6,
a California limited partnership
AS SELLER
AND
MULLINS PROPERTIES, LLC,
an Alabama limited liability company
AS PURCHASER
SKI LODGE APARTMENTS
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as of
the 6th day of November, 2002 (the "Effective Date") by and between NATIONAL
PROPERTY INVESTORS 6, a California limited partnership, having an address at
2000 South Colorado Boulevard, Tower Two, Suite 2-1000, Denver, Colorado 80222
("Seller") and MULLINS PROPERTIES, LLC, an Alabama limited liability company,
having a principal address at 8101 Seaton Place, Suite C, Montgomery, Alabama
36116 ("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 the Ski Lodge 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 left blank].
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 [Intentionally left blank].
1.1.6 [Intentionally left blank].
1.1.7 [Intentionally left blank].
1.1.8 "Broker" shall refer to either Seller's Broker or Purchaser's Broker, as
such terms are defined in Section 9.1 and in Section 9.5, respectively.
1.1.9 "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.
1.1.10 "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.
1.1.11 "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.
1.1.12 "Code" shall have the meaning set forth in Section 2.3.6.
1.1.13 "Consent Contract" shall have the meaning set forth in Section 14.2.
1.1.14 "Consultants" shall have the meaning set forth in Section 3.1.
1.1.15 "Damage Notice" shall have the meaning set forth in Section 11.1.
1.1.16 "Deed" shall have the meaning set forth in Section 5.2.1.
1.1.16.5 "Deed of Trust" shall have the meaning set forth in Section 4.5.
1.1.17 "Deposit" shall have the meaning set forth in Section 2.2.1.
1.1.18 "Escrow Agent" shall have the meaning set forth in Section 2.2.1.
1.1.19 "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 1.1.19.
1.1.20 "Feasibility Period" shall have the meaning set forth in Section 3.1.
1.1.21 "Fixtures and Tangible Personal Property" means all fixtures, furniture,
furnishings, fittings, equipment, machinery, apparatus, appliances and other
articles of tangible personal property located on the Land or in the
Improvements as of the Effective Date and used or usable in connection with the
occupation or operation of all or any part of the Property, but only to the
extent transferable. The term "Fixtures and Tangible Personal Property" does not
include (a) equipment leased by Seller and the interest of Seller in any
equipment provided to the Property for use, but not owned or leased by Seller,
or (b) property owned or leased by any Tenant or guest, employee or other person
furnishing goods or services to the Property, or (c) property and equipment
owned by Seller, which in the ordinary course of business of the Property is not
used exclusively for the business, operation or management of the Property, or
(d) the property and equipment, if any, expressly identified in Schedule 1.1.21.
1.1.22 "General Assignment" shall have the meaning set forth in Section 5.2.3.
1.1.23 "Good Funds" shall have the meaning set forth in Section 2.2.1.
1.1.24 "Improvements" means all buildings and improvements located on the Land
taken "as is."
1.1.25 [Intentionally left blank].
1.1.26 "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.
1.1.27 "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.
1.1.28 "Leases Assignment" shall have the meaning set forth in Section 5.2.4.
1.1.29 "Lender" means Lehman Brothers Holdings Inc. whose servicer is
Standard Mortgage.
1.1.29. [Intentionally left blank].
1.1.30 "Loan" means the indebtedness owing to Lender evidenced by the
Note.
1.1.31 [Intentionally left blank].
1.1.32 [Intentionally left blank].
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 unless otherwise set forth herein, 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 "Ski Lodge 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 Amended and Restated Multifamily Note in the
original principal amount of $6,800,000.00, dated November 1, 1996, executed by
Seller and payable to the order of Lehman Brothers Holdings Inc. d/b/a Lehman
Capital, a division of Lehman Brothers Holdings Inc.
1.1.38 "Objection Deadline" shall have the meaning set forth in Section 4.3.
1.1.39 "Objection Notice" shall have the meaning set forth in Section 4.3.
1.1.40 "Objections" shall have the meaning set forth in Section 4.3.
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 used in its operation of the Property.
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 "Property Contracts Notice" shall have the meaning set forth in Section
3.6.
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 "Regional Property Manager" shall have the meaning set forth in Section
6.4.
1.1.50 "Remediation" shall have the meaning set forth in Section 14.2.
1.1.51 [Intentionally left blank].
1.1.52 "Response Deadline" shall have the meaning set forth in
Section 4.3.
1.1.53 "Response Notice" shall have the meaning set forth in Section 4.3.
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 "Terminated Contracts" shall have the meaning set forth in
Section 3.6.
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 "Vendor Terminations" shall have the meaning set forth in Section
5.2.5.
ARTICLE 2
PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT
2.1 Purchase and Sale. Seller agrees to sell and convey the Property to
Purchaser and Purchaser agrees to purchase the Property from Seller, all in
accordance with the terms and conditions set forth in this Contract.
2.2 Purchase Price and Deposit. The total purchase price ("Purchase Price") for
the Property shall be an amount equal to $15,100,000.00, which amount shall be
paid by Purchaser, as follows:
2.2.1 On the Effective Date, Purchaser shall deliver to Fidelity National Title
Company, c/o Lolly Avant, National Commercial Closing Specialist, 1900 West Loop
South, Suite 650, Houston, TX 77027, 800-879-1677 ("Escrow Agent" or "Title
Insurer") an initial deposit (the "Deposit") of $100,000.00 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 left blank].
2.2.3 [Intentionally left blank].
2.2.4 The balance of the Purchase Price for the Property shall be paid to and
received by Escrow Agent by wire transfer of Good Funds no later than 11:00 a.m.
(in the time zone in which Escrow Agent is located) on the Closing Date (or such
earlier time as required by Seller's lender).
2.3 Escrow Provisions Regarding Deposit.
2.3.1 Escrow Agent shall hold the Deposit and make delivery of the Deposit to
the party entitled thereto under the terms of this Contract. Escrow Agent shall
invest the Deposit in such short-term, high-grade securities, interest-bearing
bank accounts, money market funds or accounts, bank certificates of deposit or
bank repurchase contracts as Escrow Agent, in its discretion, deems suitable,
and all interest and income thereon shall become part of the Deposit and shall
be remitted to the party entitled to the Deposit pursuant to this Contract.
2.3.2 Escrow Agent shall hold the Deposit until the earlier occurrence of (i)
the Closing Date, at which time the Deposit shall be applied against the
Purchase Price, or (ii) the date on which Escrow Agent shall be authorized to
disburse the Deposit as set forth in Section 2.3.3. The tax identification
numbers of the parties shall be furnished to Escrow Agent upon request.
2.3.3 If the Deposit has not been released earlier in accordance with Section
2.3.2, and either party makes a written demand upon Escrow Agent for payment of
the Deposit, Escrow Agent shall give written notice to the other party of such
demand. If Escrow Agent does not receive a written objection from the other
party to the proposed payment within 5 Business Days after the giving of such
notice, Escrow Agent is hereby authorized to make such payment. If Escrow Agent
does receive such written objection within such 5-Business Day period, Escrow
Agent shall continue to hold such amount until otherwise directed by written
instructions from the parties to this Contract or a final judgment or
arbitrator's decision. However, Escrow Agent shall have the right at any time to
deposit the Deposit and interest thereon, if any, with a court of competent
jurisdiction in the state in which the Property is located. Escrow Agent shall
give written notice of such deposit to Seller and Purchaser. Upon such deposit,
Escrow Agent shall be relieved and discharged of all further obligations and
responsibilities hereunder.
2.3.4 The parties acknowledge that Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that Escrow Agent shall
not be deemed to be the agent of either of the parties for any act or omission
on its part unless taken or suffered in bad faith in willful disregard of this
Contract or involving gross negligence. Seller and Purchaser jointly and
severally shall indemnify and hold Escrow Agent harmless from and against all
costs, claims and expenses, including reasonable attorney's fees, incurred in
connection with the performance of Escrow Agent's duties hereunder, except with
respect to actions or omissions taken or suffered by Escrow Agent in bad faith,
in willful disregard of this Contract or involving gross negligence on the part
of the Escrow Agent.
2.3.5 The parties shall deliver to Escrow Agent an executed copy of this
Contract, which shall constitute the sole instructions to Escrow Agent. Escrow
Agent shall execute the signature page for Escrow Agent attached hereto with
respect to the provisions of this Section 2.3; provided, however, that (a)
Escrow Agent's signature hereon shall not be a prerequisite to the binding
nature of this Contract on Purchaser and Seller, and the same shall become fully
effective upon execution by Purchaser and Seller, and (b) the signature of
Escrow Agent will not be necessary to amend any provision of this Contract other
than this Section 2.3.
2.3.6 Escrow Agent, as the person responsible for closing the transaction within
the meaning of Section 6045(e)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code"), shall file all necessary information, reports, returns,
and statements regarding the transaction required by the Code including, but not
limited to, the tax reports required pursuant to Section 6045 of the Code.
Further, Escrow Agent agrees to indemnify and hold Purchaser, Seller, and their
respective attorneys and brokers harmless from and against any Losses resulting
from Escrow Agent's failure to file the reports Escrow Agent is required to file
pursuant to this section.
2.3.7 The provisions of this Section 2.3 shall survive the termination of this
Contract, and if not so terminated, the Closing and delivery of the Deed to
Purchaser.
ARTICLE 3
FEASIBILITY PERIOD
3.1 Feasibility Period. Subject to the terms of Section 3.3 and 3.4 and the
right of Tenants under the Leases, from the Effective Date to and including
November 11, 2002 (the "Feasibility Period"), Purchaser, and its agents,
contractors, engineers, surveyors, attorneys, and employees (collectively,
"Consultants") shall have the right from time to time to enter onto the
Property:
3.1.1 To conduct and make any and all customary studies, tests, examinations,
inquiries, and inspections, or investigations (collectively, the "Inspections")
of or concerning the Property (including, without limitation, engineering and
feasibility studies, evaluation of drainage and flood plain, soil tests for
bearing capacity and percolation and surveys, including topographical surveys);
3.1.2 To confirm any and all matters which Purchaser may reasonably
desire to confirm with respect to the Property;
3.1.3 To ascertain and confirm the suitability of the property for
Purchaser's intended use of the Property; and
3.1.4 To review the Materials at Purchaser's sole cost and expense.
3.2 Expiration of Feasibility Period. If the results of any of the matters
referred to in Section 3.1 appear unsatisfactory to Purchaser for any reason or
if Purchaser elects not to proceed with the transaction contemplated by this
Contract for any other reason, or for no reason whatsoever, in Purchaser's sole
and absolute discretion, then Purchaser shall have the right to terminate this
Contract by giving written notice to that effect to Seller and Escrow Agent on
or before 5:00 p.m. (in the time zone in which the Escrow Agent is located) on
the date of expiration of the Feasibility Period. If Purchaser exercises such
right to terminate, this Contract shall terminate and be of no further force and
effect subject to and except for Purchaser's liability pursuant to Section 3.3
and any other provision of this Contract which survives such termination, and
Escrow Agent shall forthwith return the Deposit to Purchaser. If Purchaser fails
to provide Seller with written notice of termination prior to the expiration of
the Feasibility Period in strict accordance with the notice provisions of this
Contract, Purchaser's right to terminate under this Section 3.2 shall be
permanently waived and this Contract shall remain in full force and effect, the
Deposit shall be non-refundable, and Purchaser's obligation to purchase the
Property shall be non-contingent and unconditional except only for satisfaction
of the conditions expressly stated in Section 8.1.
3.3 Conduct of Investigation. Purchaser shall not permit any mechanic's or
materialmen's liens or any other liens to attach to the Property by reason of
the performance of any work or the purchase of any materials by Purchaser or any
other party in connection with any Inspections conducted by or for Purchaser.
Purchaser shall give notice to Seller a reasonable time prior to entry onto the
Property and shall permit Seller to have a representative present during all
Inspections conducted at the Property. All information made available by Seller
to Purchaser in accordance with this Contract or obtained by Purchaser in the
course of its Inspections shall be treated as confidential information by
Purchaser, and, prior to the purchase of the Property by Purchaser, Purchaser
shall use its best efforts to prevent its Consultants from divulging such
information to any unrelated third parties except as reasonably necessary to
third parties engaged by Purchaser for the limited purpose of analyzing and
investigating such information for the purpose of consummating the transaction
contemplated by this Contract. The provisions of this Section 3.3 shall survive
the termination of this Contract, and if not so terminated shall survive (except
for the confidentiality provisions of this Section 3.3) the Closing and delivery
of the Deed to Purchaser.
3.4 Purchaser Indemnification.
3.4.1 Purchaser shall indemnify, hold harmless and, if requested by Seller (in
Seller's sole discretion), defend (with counsel approved by Seller) Seller,
together with Seller's affiliates, parent and subsidiary entities, successors,
assigns, partners, managers, members, employees, officers, directors, trustees,
shareholders, counsel, representatives, agents, Property Manager, Regional
Property Manager, and AIMCO (collectively, including Seller, "Seller's
Indemnified Parties"), from and against any and all damages, mechanics' liens,
liabilities, losses, demands, actions, causes of action, claims, costs and
expenses (including reasonable attorneys' fees, including the cost of in-house
counsel and appeals) (collectively, "Losses") arising from or related to
Purchaser's or its Consultant's entry onto the Property, and any Inspections or
other matters performed by Purchaser with respect to the Property during the
Feasibility Period or otherwise. Purchaser shall, however, not be liable for any
damages incurred by Seller resulting from the mere discovery by Purchaser of a
pre-existing condition at or with regard to the Property; provided, however,
that, if Purchaser proceeds with acquisition of the Property after the
acquisition of the Feasibility Period, Purchaser shall accept the Property with
such pre-existing condition and assume any liabilities associated therewith.
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 (other than a Phase I environmental
study) 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 (to the extent any change in
the condition of the Property is attributable to the Purchaser or its
Consultants' activities thereon). Purchaser shall maintain or 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 $1,000,000.00 for each occurrence 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 Purchaser and Seller agree that, to the extent the same exist and are in
Seller's possession or reasonable control (subject to Section 3.5.2), Seller has
made 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, or, alternatively has either (a) delivered the Materials to Purchaser,
or (b) made 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).
3.5.2 In providing such information and Materials to Purchaser, Seller makes no
representation or warranty (except as specificially set forth in Section 6.1),
express, written, oral, statutory, or implied, and all such representations and
warranties are hereby expressly excluded and disclaimed. Any information and
Materials provided by Seller to Purchaser under the terms of this Contract is
for informational purposes only and shall be returned by Purchaser to Seller as
a condition to return of the Deposit to Purchaser (if Purchaser is otherwise
entitled to such Deposit pursuant to the terms of this Contract) if this
Contract is terminated for any reason. Purchaser shall not in any way be
entitled to rely upon the accuracy of such information and Materials. Purchaser
recognizes and agrees that the Materials and other documents and information
delivered or made available by Seller pursuant to this Contract may not be
complete or constitute all of such documents which are in Seller's possession or
control, but are those that are readily available to Seller after reasonable
inquiry to ascertain their availability. Purchaser understands that, although
Seller will use commercially reasonable efforts to locate and make available the
Materials and other documents required to be delivered or made available by
Seller pursuant to this Contract, Purchaser will not rely on such Materials or
other documents as being a complete and accurate source of information with
respect to the Property, and will instead in all instances rely exclusively on
its own Inspections and Consultants with respect to all matters which it deems
relevant to its decision to acquire, own and operate the Property.
3.5.3 The provisions of this Section 3.5 shall survive the Closing and delivery
of the Deed to Purchaser.
3.6 Property Contracts. On or before the expiration of the Feasibility Period,
Purchaser may deliver written notice to Seller (the "Property Contracts Notice")
specifying any Property Contracts with respect to which Purchaser desires to
have Seller deliver notices of termination at the Closing (the "Terminated
Contracts"); provided that (a) the effective date of such termination after
Closing shall be subject to the express terms of such Terminated Contracts, (b)
if any such Property Contract cannot by its terms be terminated, it shall be
assumed by Purchaser and not be a Terminated Contract, and (c) to the extent
that any such Terminated Contract requires payment of a penalty or premium for
cancellation, Purchaser shall be solely responsible for the payment of any such
cancellation fees or penalties. If Purchaser fails to deliver the Property
Contracts Notice on or before the expiration of the Feasibility Period, there
shall be no Terminated Contracts and Purchaser shall assume all Property
Contracts at the Closing.
3.7 Inventory of Fixtures and Tangible Personal Property. During the Feasibility
Period, Seller will generate and deliver to Purchaser an inventory of Fixtures
and Tangible Personal Property located within the management office (and
including a list of maintenance vehicles and equipment) to be conveyed to
Purchaser pursuant to this Contract, but such inventory will not include any
Fixtures and Tangible Personal Property located within the units which are
leased at the Property. On or before the expiration of the Feasibility Period,
Purchaser shall be responsible for (a) reviewing the inventory of Fixtures and
Tangible Personal Property, (b) inspecting the Property for accuracy of such
inventory, and (c) inspecting the units which are leased at the Property to
determine the Fixtures and Tangible Personal Property located therein.
ARTICLE 4
TITLE
4.1 Title Documents. Purchaser and Seller agree that Seller has delivered to
Purchaser a standard form commitment for title insurance ("Title Commitment")
for the Property insuring Purchaser's title to the property in the amount of the
Purchase Price, subject only to the Permitted Exceptions, 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. Seller agrees to deliver to Purchaser, at Seller's expense, promptly
upon receipt by Seller, a survey for the Property ("Survey").
4.3 Objection and Response Process. On or before the date which is five (5) days
after Purchaser's receipt of the Survey (the "Receipt Date") (the "Objection
Deadline"), Purchaser shall give written notice (the "Objection Notice") to the
attorneys for Seller of any matter set forth in the Title Documents or the
Survey to which Purchaser has a reasonable objection (the "Objections"). If
Purchaser fails to tender an Objection Notice on or before the Objection
Deadline, Purchaser shall be deemed to have approved and irrevocably waived any
objections to any matters covered by the Title Documents and the Survey. On or
before ten (10) days after the Receipt Date (the "Response Deadline"), Seller
may, in Seller's sole discretion, give Purchaser notice (the "Response Notice")
of those Objections which Seller is willing to cure, if any. Seller shall be
entitled to reasonable adjournments of the Closing Date to cure the Objections.
If Seller fails to deliver a Response Notice by the Response Deadline, Seller
shall be deemed to have elected not to cure or otherwise resolve any matter set
forth in the Objection Notice. If Purchaser is dissatisfied with the Response
Notice or lack thereof, Purchaser may, as its exclusive remedy, elect by written
notice given to Seller within five (5) days of the date upon which the Response
is due, either (a) to accept the Title Documents and Survey with resolution, if
any, of the Objections as set forth in the Response Notice (or if no Response
Notice is tendered, without any resolution of the Objections) and without any
reduction or abatement of the Purchase Price, or (b) to terminate this Contract,
in which event the Deposit shall be returned to Purchaser. If Purchaser fails to
give notice to terminate this Contract in accordance with this Section,
Purchaser shall be deemed to have elected to approve and irrevocably waived any
objections to any matters covered by the Title Documents and the Survey, subject
only to resolution, if any, of the Objections as set forth in the Response
Notice (or if no Response Notice is tendered, without any resolution of the
Objections).
4.4 Permitted Exceptions. The Deed delivered pursuant to this Contract shall be
subject to the following, all of which shall be deemed "Permitted Exceptions":
4.4.1 All matters shown in the Title Documents and the Survey, other than (a)
those Objections, if any, which Seller has agreed to cure pursuant to the
Response Notice, (b) mechanics' liens and taxes due and payable with respect to
the period preceding Closing, (c) the standard exception regarding the rights of
parties in possession which shall be limited to those parties in possession
pursuant to the Leases, and (d) the standard exception pertaining to taxes which
shall be limited to taxes and assessments payable in the year in which the
Closing occurs and subsequent taxes and assessments;
4.4.2 All Leases;
4.4.3 [Intentionally left blank];
4.4.4 Applicable zoning and governmental regulations and ordinances;
4.4.5 Any defects in or objections to title to the Property, or title
exceptions or encumbrances, arising by, through or under Purchaser; and
4.4.6 The terms and conditions of this Contract.
4.5 Existing Deed of Trust. It is understood and agreed that, whether or not
Purchaser gives an Objection Notice with respect thereto, any deeds of trust
and/or mortgages (including any and all mortgages which secure the Note) against
the Property (whether one or more, the "Deed of Trust ") shall not be deemed
Permitted Exceptions, whether Purchaser gives written notice of such or not, and
shall be paid off, satisfied, discharged and/or cured by Seller at Closing.
ARTICLE 5
CLOSING
5.1 Closing Date. The Closing shall occur on the earlier to occur of (a) 30 days
following the expiration of the Feasibility Period, or (b) December 31, 2002
(the earlier of the foregoing (a) and (b) referred to herein as the "Closing
Date") through an escrow with Escrow Agent, whereby the Seller, Purchaser and
their attorneys need not be physically present at the Closing and may deliver
documents by overnight air courier or other means. Notwithstanding the foregoing
to the contrary, Seller shall have the option, by delivering written notice to
Purchaser, to extend the Closing Date to the last Business Day of the month in
which the Closing Date otherwise would occur pursuant to the preceding sentence,
or to such other date (either in the same month or the next) as Seller
reasonably determines is desirable in connection with the Loan Payoff. Further,
the Closing Date may be extended without penalty at the option of Seller to a
date not later than 30 days following the Closing Date specified in the first
sentence of this paragraph above (or, if applicable, as extended by Seller
pursuant to the second sentence of this paragraph) to satisfy a condition to be
satisfied by Seller, or such later date as is mutually acceptable to Seller and
Purchaser.
5.2 Seller Closing Deliveries. No later than 1 Business Day prior to the Closing
Date, Seller shall deliver to Escrow Agent (for disbursement at Closing to
Purchaser or as otherwise appropriate), each of the following items:
5.2.1 Limited Warranty Deed (the "Deed") in the form attached as Exhibit B to
Purchaser, subject to the Permitted Exceptions.
5.2.2 A Bill of Sale in the form attached as Exhibit C.
5.2.3 A General Assignment in the form attached as Exhibit D (the
"General Assignment").
5.2.4 An Assignment of Leases and Security Deposits in the form attached as
Exhibit E (the "Leases Assignment").
5.2.5 A letter prepared by Purchaser and countersigned by Seller to each of the
vendors under the Terminated Property Contracts informing them of the
termination of such Terminated Property Contract as of the Closing Date (subject
to any delay in the effectiveness of such termination pursuant to the express
terms of each applicable Terminated Property Contract) (the "Vendor
Terminations").
5.2.6 A closing statement executed by Seller.
5.2.7 A title affidavit or at Seller's option an indemnity, as applicable, in
the customary form reasonably acceptable to Seller to enable Title Insurer to
delete the standard exceptions to the title insurance policy set forth in this
Contract (other than matters constituting any Permitted Exceptions and matters
which are to be completed or performed post-Closing) to be issued pursuant to
the Title Commitment; provided that such affidavit does not subject Seller to
any greater liability, or impose any additional obligations, other than as set
forth in this Contract; and
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 A rent roll for the Property certified by Seller, listing the monthly base
rent payable, lease expiration date and unapplied security deposit as of the
Closing Date.
5.2.10 Resolutions, certificates of good standing, and such other organizational
documents as Title Insurer shall reasonably require evidencing Seller's
authority to consummate this transaction.
5.2.11 Such other instruments, documents or certificates as are required to be
delivered or made available by Seller to Purchaser in accordance with any of the
other provisions of this Contract which have not already been provided to
Purchaser.
5.2.12 A complete set of architectural, structural, mechanical and electrical
plans and specifications for the Property, to the extent in Seller's possession
or control and not already received by Purchaser.
5.2.13 Proof that the property management agreement has been terminated and is
of no further force and effect.
5.3 Purchaser Closing Deliveries. No later than 1 Business Day prior to the
Closing Date (except for the balance of the Purchase Price which is to be
delivered at the time specified in Section 2.2.4), Purchaser shall deliver to
the Escrow Agent (for disbursement to Seller upon the Closing) the following
items with respect to the Property being conveyed at such Closing:
5.3.1 The full Purchase Price (with credit for the Deposit), plus or minus the
adjustments or prorations required by this Contract.
5.3.2 A title affidavit or at Purchaser's option an indemnity, as applicable, in
the customary form reasonably acceptable to Purchaser to enable Title Insurer to
delete the standard exceptions to the title insurance policy set forth in this
Contract (other than matters constituting any Permitted Exceptions and matters
which are to be completed or performed post-Closing) to be issued pursuant to
the Title Commitment; provided that such affidavit does not subject Purchaser to
any greater liability, or impose any additional obligations, other than as set
forth in this Contract.
5.3.3 Any declaration or other statement which may be required to be submitted
to the local assessor with respect to the terms of the sale of the Property.
5.3.4 A closing statement executed by Purchaser.
5.3.5 A countersigned counterpart of the General Assignment.
5.3.6 A countersigned counterpart of the Leases Assignment.
5.3.7 Notification letters to all Tenants prepared and executed by
Purchaser in the form attached hereto as Exhibit F.
5.3.8 The Vendor Terminations.
5.3.9 Any cancellation fees or penalties due to any vendor under any Terminated
Property Contract as a result of the termination thereof.
5.3.10 Resolutions, certificates of good standing, and such other organizational
documents as Title Insurer shall reasonably require evidencing Purchaser's
authority to consummate this transaction.
5.3.11 [Intentionally deleted].
5.3.12 [Intentionally deleted].
5.3.13 Such other instruments, documents or certificates as are required to be
delivered by Purchaser to Seller in accordance with any of the other provisions
of this Contract.
5.4 Closing Prorations and Adjustments.
5.4.1 General. All normal and customarily proratable items, including, without
limitation, collected rents, operating expenses, personal property taxes, other
operating expenses and fees, shall be prorated as of the Closing Date, Seller
being charged or credited, as appropriate, for all of same attributable to the
period up to the Closing Date (and credited for any amounts paid by Seller
attributable to the period on or after the Closing Date, if assumed by
Purchaser) and Purchaser being responsible for, and credited or charged, as the
case may be, for all of same attributable to the period on and after the Closing
Date. Seller shall prepare a proration schedule (the "Proration Schedule") of
the adjustments described in this Section 5.4 prior to Closing. Such adjustments
shall be paid by Purchaser to Seller (if the prorations result in a net credit
to Seller) or by Seller to Purchaser (if the prorations result in a net credit
to Purchaser), by increasing or reducing the cash to be paid by Purchaser at
Closing.
5.4.2 Operating Expenses. All of the operating, maintenance, taxes (other than
real estate taxes, such as rental taxes), and other expenses incurred in
operating the Property that Seller customarily pays, and any other costs
incurred in the ordinary course of business for the management and operation of
the Property, shall be prorated on an accrual basis. Seller shall pay all such
expenses that accrue prior to Closing and Purchaser shall pay all such expenses
that accrue from and after the Closing Date.
5.4.3 Utilities. The final readings and final billings for utilities will be
made if possible as of the Closing Date, in which case Seller shall pay all such
bills as of the Closing Date and no proration shall be made at the Closing with
respect to utility bills. Otherwise, a proration shall be made based upon the
parties' reasonable good faith estimate and a readjustment made within 30 days
after the Closing, if necessary. Seller shall be entitled to the return of any
deposit(s) posted by it with any utility company, and Seller shall notify each
utility company serving the Property to terminate Seller's account, effective as
of noon on the Closing Date.
5.4.4 Real Estate Taxes. Any real estate ad valorem or similar taxes for the
Property, or any installment of assessments payable in installments which
installment is payable in the calendar year of Closing, shall be prorated to the
date of Closing, based upon actual days involved. The proration of real property
taxes or installments of assessments shall be based upon the assessed valuation
and tax rate figures for the year in which the Closing occurs to the extent the
same are available; provided, that in the event that actual figures (whether for
the assessed value of the Property or for the tax rate) for the year of Closing
are not available at the Closing Date, the proration shall be made using figures
from the preceding year. The proration of real property taxes or installments of
assessments shall be final and not subject to re-adjustment after Closing.
5.4.5 Property Contracts. Purchaser shall assume at Closing the obligations
under the Property Contracts assumed by Purchaser, subject to proration of
operating expenses under Section 5.4.2.
5.4.6 Leases.
5.4.6.1 All collected rent (whether fixed monthly rentals, additional rentals,
escalation rentals, retroactive rentals, operating cost pass-throughs or other
sums and charges payable by Tenants under the Leases), income and expenses from
any portion of the Property shall be prorated as of the Closing Date (prorated
for any partial month). Purchaser shall receive all collected rent and income
attributable to dates from and after the Closing Date. Seller shall receive all
collected rent and income attributable to dates prior to the Closing Date.
Notwithstanding the foregoing, no prorations shall be made in relation to either
(a) non-delinquent rents which have not been collected as of the Closing Date,
or (b) delinquent rents existing, if any, as of the Closing Date (the foregoing
(a) and (b) referred to herein as the "Uncollected Rents"). In adjusting for
Uncollected Rents, no adjustments shall be made in Seller's favor for rents
which have accrued and are unpaid as of the Closing, but Purchaser shall pay
Seller such accrued Uncollected Rents as and when collected by Purchaser.
Purchaser agrees to bill Tenants of the Property for all Uncollected Rents and
to take reasonable actions to collect Uncollected Rents. After the Closing,
Seller shall continue to have the right, but not the obligation, in its own
name, to demand payment of and to collect Uncollected Rents owed to Seller by
any Tenant, which right shall include, without limitation, the right to continue
or commence legal actions or proceedings against any Tenant and the delivery of
the Leases Assignment shall not constitute a waiver by Seller of such right.
Purchaser agrees to cooperate with Seller in connection with all efforts by
Seller to collect such Uncollected Rents and to take all steps, whether before
or after the Closing Date, as may be necessary to carry out the intention of the
foregoing, including, without limitation, the delivery to Seller, within 7 days
after a written request, of any relevant books and records (including, without
limitation, rent statements, receipted bills and copies of tenant checks used in
payment of such rent), the execution of any and all consents or other documents,
and the undertaking of any act reasonably necessary for the collection of such
Uncollected Rents by Seller; provided, however, that Purchaser's obligation to
cooperate with Seller pursuant to this sentence shall not obligate Purchaser to
terminate any Tenant lease with an existing Tenant or evict any existing Tenant
from the Property, or institute any lawsuit or collection proceedings against
any Tenant. Seller and Purchaser agree that any sums received by Purchaser from
any Tenant owing delinquent rentals will first be applied to current rent, then
to Uncollected Rents, and then to future rent.
5.4.6.2 At Closing, Purchaser shall receive a credit against the Purchase Price
in an amount equal to the received and unapplied balance of all cash (or cash
equivalent) Tenant Deposits, including, but not limited to, security, damage or
other refundable deposits or required to be paid by any of the Tenants to secure
their respective obligations under the Leases, together, in all cases, with any
interest payable to the Tenants thereunder as may be required by their
respective Tenant Lease or state law (the "Tenant Security Deposit Balance").
Any cash (or cash equivalents) held by Seller which constitute the Tenant
Security Deposit Balance shall be retained by Seller in exchange for the
foregoing credit against the Purchase Price and shall not be transferred by
Seller pursuant to this Contract (or any of the documents delivered at Closing),
but the obligation with respect to the Tenant Security Deposit Balance
nonetheless shall be assumed by Purchaser. The Tenant Security Deposit Balance
shall not include any non-refundable deposits or fees paid by Tenants to Seller,
either pursuant to the Leases or otherwise.
5.4.6.3 With respect to operating expenses, taxes, utility charges, other
operating cost pass-throughs, retroactive rental escalations, sums or charges
payable by Tenants under the Tenant Leases, to the extent that Seller has
received as of the Closing payments allocable to periods subsequent to Closing,
the same shall be properly prorated with an adjustment in favor of Purchaser,
and Purchaser shall reserve a credit therefor at Closing. With respect to any
payments received by Purchaser after the Closing allocable to Seller prior to
Closing, Purchaser shall promptly pay the same to Seller.
5.4.7 Existing Loan. On the Closing Date, Seller shall pay (which payment may be
made by Seller out of the proceeds of the Purchase Price) the outstanding
principal balance of the Note together with all interest accrued under the Note
prior to the Closing Date (the "Loan Payoff"). Seller shall pay all pre-payment
penalties in connection with the Loan Payoff. 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.
Purchaser shall not be responsible for the payment of any wages, taxes or other
benefits of Seller's employees which may accrue up to the Closing Date.
5.4.10 Closing Costs. Purchaser shall pay any transfer, sales, use, gross
receipts or similar taxes, the cost of recording the Deed, 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, the cost of recording the release of the mortgage securing
repayment of the Note, and one-half of the customary closing costs of the Escrow
Agent.
5.4.11 Survival. The provisions of this Section 5.4 shall survive the Closing
and delivery of the Deed to Purchaser.
5.4.12 Possession. Possession of the Property, subject to the Leases, Property
Contracts which are not identified as Terminated Contracts during the
Feasibility Period (subject to the limitations of Section 3.6), and Permitted
Exceptions, shall be delivered to Purchaser at the Closing upon release from
escrow of all items to be delivered by Purchaser pursuant to Section 5.3,
including, without limitation, the Purchase Price. To the extent reasonably
available to Seller, originals or copies of the Leases and Property Contracts,
lease files, warranties, guaranties, operating manuals, keys to the property,
and Seller's books and records (other than proprietary information) regarding
the Property shall be made available to Purchaser at the Property after the
Closing.
5.5 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 120 days after
Closing, or (b) subject to such 120-day period, unless such items exceed
$5,000.00 in magnitude (either individually or in the aggregate). The provisions
of this Section 5.6 shall survive the Closing and delivery of the Deed to
Purchaser.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER
6.1 Seller's Representations. Except, in all cases, for any fact, information or
condition disclosed in the Title Documents, the Permitted Exceptions, the
Property Contracts, or the Materials, or which is otherwise known by Purchaser
prior to the Closing, Seller represents and warrants to Purchaser the following
(collectively, the "Seller's Representations") as of the Effective Date and as
of the Closing Date (provided that Purchaser's remedies if any such Seller's
Representations are untrue as of the Closing Date are limited to those set forth
in Section 8.1):
6.1.1 Seller is duly organized, validly existing and in good standing under the
laws of the state of its formation set forth in the initial paragraph of this
Contract; 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, to
Seller's knowledge, there are no actions, proceedings, arbitration, litigation
or governmental investigations or condemnation actions either pending or
threatened against the Property or in which Seller is a plaintiff or defendant;
6.1.5 To Seller's knowledge, Seller has not received any written notice of any
uncured material violations of any federal, state, county or municipal law,
ordinance, order, regulation or requirement affecting the Property; and
6.1.6 To Seller's knowledge, Seller has not received any written notice of any
material default by Seller under any of the Property Contracts that will not be
terminated on the Closing Date.
6.1.7 To Seller's knowledge: (A) no hazardous or toxic materials or other
substances regulated by applicable federal or state environmental laws are
stored by Seller on, in or under the Property in quantities which violate
applicable laws governing such materials or substances, and (B) the Property is
not used by Seller for the storage, treatment, generation or manufacture of any
hazardous or toxic materials or other substances in a manner which would
constitute a violation of applicable federal or state environmental laws.
6.1.8 Seller agrees to maintain its existing insurance policies (or replacement
policies on comparable terms) covering the Property in full force and effect
through the Closing Date.
6.1.9 The rent roll delivered by Seller to Buyer is accurate in all material
respects.
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 Seller's 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. Seller and Purchaser agree that the provisions of this
Section 6.2 are not intended to supercede Seller's Representations, and are
subject to Seller's Representations, but only to the extent specifically set
forth in Section 6.1.
6.3 Survival of Seller's Representations. Seller and Purchaser agree that
Seller's Representations shall survive Closing for a period of 12 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 $100,000 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 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 Alabama.
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 Seller's 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 Seller's
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 6.6 shall survive the Closing and delivery
of the Deed to Purchaser.
ARTICLE 7
OPERATION OF THE PROPERTY
7.1 Leases and Property Contracts. During the period of time from the Effective
Date to the Closing Date, in the ordinary course of business Seller may enter
into new Property Contracts, new Leases, renew existing Leases or modify,
terminate or accept the surrender or forfeiture of any of the Leases, modify any
Property Contracts, or institute and prosecute any available remedies for
default under any Lease or Property Contract without first obtaining the written
consent of Purchaser; provided, however, Seller agrees that (i) any such new
Property Contracts or any new or renewed Leases shall not have a term in excess
of 1 year (or such longer period of time for which such Property Contracts or
Leases are entered into by Seller in the ordinary course of its operation of the
Property), and (ii) any such new Property Contracts shall be terminable on 30 or
less days notice, unless, with respect to either (i) or (ii), Purchaser consents
in writing, which consent shall not be unreasonably withheld, conditioned or
delayed. After the expiration of the Feasibility Period, if Seller shall enter
into a new permitted Property Contract or a new Lease, or shall renew, modify,
terminate or accept the surrender of any Lease, or modify any Property Contract
during such time period, Seller shall provide Purchaser with written notice of
such event and a copy of any new Lease or new Property Contract, or any
modification of any Lease or Property Contract within 5 Business Days after
executing same.
7.2 General Operation of Property. Except as specifically set forth in this
Article 7, Seller shall operate the Property after the Effective Date in the
ordinary course of business, and except as necessary in the Seller's sole
discretion to address (a) any life or safety issue at the Property or (b) any
other matter which in Seller's reasonable discretion materially adversely
affecting the use, operation or value of the Property, Seller will not make any
material alterations to the Property or remove any material Fixtures and
Tangible Personal Property without the prior written consent of Purchaser which
consent shall not be unreasonably withheld, denied or delayed.
7.3 Liens. Other than utility easements and temporary construction easements
granted by Seller in the ordinary course of business, Seller covenants that it
will not voluntarily create or cause any lien or encumbrance to attach to the
Property between the Effective Date and the Closing Date (other than Leases and
Property Contracts as provided in Section 7.1) unless Purchaser approves such
lien or encumbrance, which approval shall not be unreasonably withheld or
delayed. If Purchaser approves any such subsequent lien or encumbrance, the same
shall be deemed a Permitted Encumbrance for all purposes hereunder.
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING
8.1 Purchaser's Conditions to Closing. Purchaser's obligation to close
under this Contract, shall be subject to and conditioned upon the fulfillment
of each and all of the following conditions precedent:
8.1.1 All of the documents required to be delivered by Seller to
Purchaser at the Closing pursuant to the terms and conditions hereof shall
have been delivered;
8.1.2 Each of the representations, warranties and covenants of Seller
contained herein shall be true in all material respects as of the Closing
Date;
8.1.3 Seller shall have complied with, fulfilled and performed in all material
respects each of the covenants, terms and conditions to be complied with,
fulfilled or performed by Seller hereunder; and
8.1.4 Neither Seller nor Seller's general partner shall be a debtor in any
bankruptcy proceeding nor shall have been in the last 6 months a debtor in any
bankruptcy proceeding.
Notwithstanding anything to the contrary, there are no other conditions on
Purchaser's obligation to Close except as expressly set forth in this Section
8.1. If any condition set forth in Sections 8.1.1, 8.1.3 or 8.1.4 is not met,
Purchaser may (a) waive any of the foregoing conditions and proceed to Closing
on the Closing Date with no offset or deduction from the Purchase Price, or (b)
if such failure constitutes a default by Seller, exercise any of its remedies
pursuant to Section 10.2. If the condition set forth in Section 8.1.2 is not
met, Purchaser may, as its sole and exclusive remedy, (i) notify Seller of
Purchaser's election to terminate this Contract and receive a return of the
Deposit from the Escrow Agent, or (ii) waive such condition and proceed to
Closing on the Closing Date with no offset or deduction from the Purchase Price.
8.2 Seller's Obligations. 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 deleted]
8.2.5 [Intentionally deleted].
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 Regarding Seller's Broker. Seller represents and warrants to
Purchaser that it has dealt only with The Apartment Group, 3300 One Atlantic
Center, 1201 W. Peachtree Street, Atlanta, Georgia 30309 ("Seller's Broker") in
connection with this Contract. Seller and Purchaser each represents and warrants
to the other that, other than Seller's Broker and Purchaser's 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 Payment of Seller's Broker. Seller agrees to pay Seller's Broker a
commission according to the terms of a separate Contract. Seller's Broker shall
not be deemed a party or third party beneficiary of this Contract.
9.3 Seller's Broker Signature Page. Seller's Broker shall execute the signature
page for Seller's Broker attached hereto solely for purposes of confirming the
matters set forth therein; provided, however, that (a) Seller's 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 Seller's Broker will
not be necessary to amend any provision of this Contract.
9.4 Indemnity Regarding Purchaser's Broker. Purchaser represents and warrants to
Seller that it has dealt only with Mullins Services, LLC, ("Purchaser's Broker")
in connection with this Contract. Purchaser represents and warrants to Seller
that, other than Purchaser's Broker and Seller's 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 Purchaser 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 Seller from and
against all Losses relating to brokerage commissions and finder's fees arising
from or attributable to the acts or omissions of the Purchaser. The provisions
of this Section 9.4 shall survive the termination of this Contract, and if not
so terminated, the Closing and delivery of the Deed to Purchaser.
9.5 Payment of Purchaser's Broker. Seller agrees to pay Purchaser's Broker a
commission in the amount set forth in Section 9.7 below, but only if the Closing
occurs in accordance with this Contract. Purchaser's Broker shall not be deemed
a party or third party beneficiary of this Contract.
9.6 Purchaser's Broker Signature Page. Purchaser's Broker shall execute the
signature page for Purchaser's Broker attached hereto solely for purposes of
confirming the matters set forth therein; provided, however, that (a)
Purchaser's 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
Purchaser's Broker will not be necessary to amend any provision of this
Contract.
9.7 Payment of Purchaser's Broker. Seller and Purchaser agree that the
commission of Two Hundred Fifty Thousand and 00/00 Dollars ($250,000.00) due
Purchaser's Broker shall be paid out of the Purchase Price at Closing.
ARTICLE 10
DEFAULTS AND REMEDIES
10.1 Purchaser Default. If Purchaser defaults in its obligations hereunder to
(a) deliver the Deposit, (b) deliver to the Seller the deliveries specified
under Section 5.3 on the date required thereunder, or (c) deliver the Purchase
Price at the time required by Section 2.2.4 and close on the purchase of the
Property on the Closing Date, then, immediately and without notice or cure,
Purchaser shall forfeit the Deposit, and the Escrow Agent shall deliver the
Deposit to Seller, and neither party shall be obligated to proceed with the
purchase and sale of the Property. If, Purchaser defaults in any of its other
representations, warranties or obligations under this Contract, and such default
continues for more than 10 days after written notice from Seller, then Purchaser
shall forfeit the Deposit, and the Escrow Agent shall deliver the Deposit to
Seller, and neither party shall be obligated to proceed with the purchase and
sale of the Property. The Deposit is liquidated damages and recourse to the
Deposit is, except for Purchaser's indemnity obligations hereunder, Seller's
sole and exclusive remedy for Purchaser's failure to perform its obligation to
purchase the Property or breach of a representation or warranty. Seller
expressly waives the remedies of specific performance and additional damages for
such default by Purchaser. SELLER AND PURCHASER ACKNOWLEDGE THAT SELLER'S
DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND THAT THE DEPOSIT IS A REASONABLE
ESTIMATE OF SELLER'S DAMAGES RESULTING FROM A DEFAULT BY PURCHASER IN ITS
OBLIGATION TO PURCHASE THE PROPERTY. SELLER AND PURCHASER FURTHER AGREE THAT
THIS SECTION 10.1.1 IS INTENDED TO AND DOES LIQUIDATE THE AMOUNT OF DAMAGES DUE
SELLER, AND SHALL BE SELLER'S EXCLUSIVE REMEDY AGAINST PURCHASER, BOTH AT LAW
AND IN EQUITY, ARISING FROM OR RELATED TO A BREACH BY PURCHASER OF ITS
OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS CONTRACT, OTHER
THAN WITH RESPECT TO PURCHASER'S INDEMNITY OBLIGATIONS HEREUNDER.
10.2 Seller Default. If Seller, prior to the Closing, defaults in its
representations, warranties, covenants, or obligations under this Contract,
including to sell the Property as required by this Contract and such default
continues for more than 10 days after written notice from Purchaser, then, at
Purchaser's election and as Purchaser's sole and exclusive remedy, either (A)
this Contract shall terminate, and all payments and things of value, including
the Deposit, provided by Purchaser hereunder shall be returned to Purchaser and
Purchaser may recover, as its sole recoverable damages (but without limiting its
right to receive a refund of the Deposit), its direct and actual out-of-pocket
expenses and costs (documented by paid invoices to third parties) in connection
with this transaction, which damages shall not exceed $30,000 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 (EXCEPT AS SET FORTH IN SECTION
6.3), 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.
10.3 Nothing contained in Section 10.1 and 10.2 shall affect the survival of
Seller's Representations, or the right of Purchaser to bring an action for a
breach thereof during the Survival Period subject to the limitations of Section
6.3.
ARTICLE 11
RISK OF LOSS OR CASUALTY
11.1 Major Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to Closing, and the cost of repair is more than
$300,000, then Seller shall have no obligation to repair such damage or
destruction and shall notify Purchaser in writing of such damage or destruction
(the "Damage Notice"). Within 10 days after Purchaser's receipt of the Damage
Notice, Purchaser may elect at its option to terminate this Contract by
delivering written notice to Seller. In the event Purchaser fails to terminate
this Contract within the foregoing 10-day period, this transaction shall be
closed in accordance with the terms of this Contract for the full Purchaser
Price notwithstanding any such damage or destruction and Purchaser shall receive
all insurance proceeds pertaining thereto (plus a credit against the Purchase
Price in the amount of any deductible payable by Seller in connection therewith)
at Closing.
11.2 Minor Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to the Closing, and the cost of repair is less than
$300,000, this transaction shall be closed in accordance with the terms of this
Contract, notwithstanding the damage or destruction; provided, however, Seller
shall make such repairs to the extent of any recovery from insurance carried on
the Property if they can be reasonably effected before the Closing. Subject to
Section 11.3, if Seller is unable to effect such repairs, then Purchaser shall
receive all insurance proceeds pertaining thereto (plus a credit against the
Purchase Price in the amount of any deductible payable by Seller in connection
therewith) at Closing.
11.3 Repairs. To the extent that Seller elects to commence any repair,
replacement or restoration of the Property prior to Closing, then Seller shall
be entitled to receive and apply available insurance proceeds to any portion of
such repair, replacement or restoration completed or installed prior to Closing,
with Purchaser being responsible for completion of such repair, replacement or
restoration after Closing from the balance of any available insurance proceeds.
The provisions of this Section 11.3 shall survive the Closing and delivery of
the Deed to Purchaser.
ARTICLE 12
EMINENT DOMAIN
12.1 Eminent Domain. In the event that, at the time of Closing, any material
part of the Property is (or previously has been) acquired, or is about to be
acquired, by any governmental agency by the powers of eminent domain or transfer
in lieu thereof (or in the event that at such time there is any notice of any
such acquisition or intent to acquire by any such governmental agency),
Purchaser shall have the right, at Purchaser's option, to terminate this
Contract by giving written notice within 10 days after Purchaser's receipt from
Seller of notice of the occurrence of such event, and if Purchaser so terminates
this Contract shall recover the Deposit hereunder. If Purchaser fails to
terminate this Contract within such 10-day period, this transaction shall be
closed in accordance with the terms of this Contract for the full Purchase Price
and Purchaser shall receive the full benefit of any condemnation award. It is
expressly agreed between the parties hereto that this section shall in no way
apply to customary dedications for public purposes which may be necessary for
the development of the Property.
ARTICLE 13
MISCELLANEOUS
13.1 Binding Effect of Contract. This Contract shall not be binding on either
party until executed by both Purchaser and Seller. As provided in Section 2.3.5
and Section 9.3 above, neither the Escrow Agent's nor the Broker's execution of
this Contract shall be a pre-requisite to its effectiveness.
13.2 Exhibits And Schedules. All Exhibits and Schedules, whether or
not annexed hereto, are a part of this Contract for all purposes.
13.3 Assignability. This Contract is not assignable by Purchaser without first
obtaining the prior written approval of the Seller, except that Purchaser may
assign this Contract to one or more entities so long as (a) Purchaser is an
affiliate of the purchasing entity(ies), (b) Purchaser is not released from its
liability hereunder, and (c) Seller consents thereto (which consent shall not be
unreasonably withheld or delayed). As used herein, an affiliate is a person or
entity controlled by, under common control with, or controlling another person
or entity.
13.4 Binding Effect. Subject to Section 13.3, this Contract shall be binding
upon and inure to the benefit of Seller and Purchaser, and their respective
successors, heirs and permitted assigns.
13.5 Captions. The captions, headings, and arrangements used in this Contract
are for convenience only and do not in any way affect, limit, amplify, or modify
the terms and provisions hereof.
13.6 Number And Gender Of Words. Whenever herein the singular number is used,
the same shall include the plural where appropriate, and words of any gender
shall include each other gender where appropriate.
13.7 Notices. All notices, demands, requests and other communications required
or permitted hereunder shall be in writing, and shall be (a) personally
delivered with a written receipt of delivery; (b) sent by a nationally
recognized overnight delivery service requiring a written acknowledgement of
receipt or providing a certification of delivery or attempted delivery; or (c)
sent by certified or registered mail, return receipt requested. All notices
shall be deemed effective when actually delivered as documented in a delivery
receipt; provided, however, that if the notice was sent by overnight courier or
mail as aforesaid and is affirmatively refused or cannot be delivered during
customary business hours by reason of the absence of a signatory to acknowledge
receipt, or by reason of a change of address with respect to which the addressor
did not have either knowledge or written notice delivered in accordance with
this paragraph, then the first attempted delivery shall be deemed to constitute
delivery. Each party shall be entitled to change its address for notices from
time to time by delivering to the other party notice thereof in the manner
herein provided for the delivery of notices. All notices shall be sent to the
addressee at its address set forth following its name below:
To Purchaser:
801 Seaton Place, Suite C
Montgomery, Alabama 36117
Attn: Charles F. Mullins, Jr.
Telephone: (334) 279-6444
Facsimile: (334) 279-5886
To Seller:
c/o AIMCO
2000 S. Colorado Blvd.
Tower Two, Suite 2-1000
Denver, Colorado 80222
Attention: Mr. Patrick Slavin
Telephone: 303-691-4340
Facsimile: 303-300-3282
And:
c/o AIMCO
2000 S. Colorado Blvd.
Tower Two, Suite 2-1000
Denver, Colorado 80222
Attention: Mr. Harry Alcock
Telephone: 303-691-4344
Facsimile: 303-300-3282
with copy to:
Chad Asarch, Esq.
Vice President and Assistant General Counsel
AIMCO
2000 S. Colorado Blvd.
Tower Two, Suite 2-1000
Denver, Colorado 80222
Telephone: 303-691-4303
Facsimile: 303-300-3297
and a copy to:
Argent Real Estate
1401 Brickell Avenue, Suite 520
Miami, Florida 33131
Attention: Mr. David Marquette
Telephone: 305-371-9299
Facsimile: 305-371-6898
and a copy to:
Brownstein Hyatt & Farber, P.C.
410 17th Street, 22nd Floor
Denver, Colorado 80202
Attention: Gary M. Reiff, Esq.
Telephone: 303-223-1100
Facsimile: 303-223-1111
Any notice required hereunder to be delivered to the Escrow Agent shall be
delivered in accordance with above provisions as follows:
Fidelity National Title Company
c/o Lolly Avant
National Commercial Closing Specialist
1900 West Loop South, Suite 650
Houston, TX 77027
Telephone: 800-879-1677
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 substantially
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
substantially prevailing party and charge the cost of arbitration to the party
which is not the substantially 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. Each party acknowledges and agrees that the transactions and activities
related to the transactions contemplated herein and any other document executed
in connection herewith involve, affect, or have a direct impact upon, interstate
commerce, and that the party voluntarily has entered into this agreement to
arbitrate.
13.26 AIMCO Marks. Purchaser agrees that Seller, the Property Manager or AIMCO,
or their respective affiliates, are the sole owners of all right, title and
interest in and to the AIMCO Marks (or have the right to use such AIMCO Marks
pursuant to license agreements with third parties) and that no right, title or
interest in or to the AIMCO Marks is granted, transferred, assigned or conveyed
as a result of this Contract. Purchaser further agrees that Purchaser will not
use the AIMCO Marks for any purpose.
13.27 Non-Solicitation of Employees. Purchaser acknowledges and agrees that,
without the express written consent of Seller, neither Purchaser nor any of
Purchaser's employees, affiliates or agents shall solicit any of Seller's
employees or any employees located at the Property for potential employment.
13.28 Survival. Except for (a) all of the provisions of this Article 13 (other
than Section 13.19, 13.21 and 13.23), and (b) any provision of this Contract
which expressly states that it shall so survive (the foregoing (a) and (b)
referred to herein as the "Survival Provisions"), none of the terms and
provisions of this Contract shall survive the termination of this Contract, and,
if the Contract is not so terminated, all of the terms and provisions of this
Contract (other than the Survival Provisions) shall be merged into the Closing
documents and shall not survive Closing.
ARTICLE 14
LEAD-BASED PAINT DISCLOSURE
14.1 Disclosure. Seller and Purchaser hereby acknowledge delivery of the Lead
Based Paint Disclosure attached as Exhibit G hereto. The provisions of this
Section 14.1 shall survive the Closing and delivery of the Deed to Purchaser.
14.2 Consent Agreement. Using reasonable and customary efforts, Seller shall (a)
perform any testing (the "Testing") required at the Property with respect to
lead-based paint in accordance with the requirements of the Consent Contract
(the "Consent Contract") by and among the United States Environmental Protection
Agency, the United States Department of Housing and Urban Development, and
Apartment Investment and Management Company ("AIMCO"), and (b) if required under
the Consent Contract, as determined by Seller and its counsel in their sole and
absolute discretion, remediate or abate (the "Remediation") any lead-based paint
condition at the Property prior to the Closing using reasonable and customary
efforts. In the event that Seller does not complete such Testing or Remediation,
if any is required under the Consent Contract, prior to the Closing, Seller
shall initiate, continue or complete such Testing or Remediation, if any is
required under the Consent Contract, promptly after Closing. Purchaser shall
provide Seller with full and unimpeded access to the Property, including,
without limitation, access to all units located thereon, for the purposes of
completing such Testing or Remediation, if any is required under the Consent
Contract, and Purchaser shall fully cooperate with Seller regarding and allow
Seller to perform such Testing or Remediation, if any is required under the
Consent Contract, as determined by Seller and its counsel in their sole and
absolute discretion, including, without limitation, allowing any alterations to
the Property, to comply with the Consent Contract, until such time as such
Testing or Remediation, if any is required under the Consent Contract, has been
completed. Seller shall provide 24 hours' notice to Purchaser in the event that
access to a unit is required to perform such Testing or Remediation, if any is
required under the Consent Contract; provided, however, Seller's obligations
hereunder after Closing shall be contingent on Purchaser's compliance herewith,
and Seller shall be relieved of all liability and obligations regarding such
Testing or Remediation or otherwise under the Consent Contract, if any is
required under the Consent Contract, as a result of any failure by Purchaser to
comply with this Section 14.2. Purchaser acknowledges and agrees that (1) after
Closing, the Purchaser and the Property shall be subject to the Consent Contract
and the provisions contained herein related thereto; (2) after Closing,
Purchaser agrees to undertake the obligations required by the Consent Agreement;
(3) that Seller will need necessary access to the Property to comply with the
requirements of the Consent Contract; (4) that Purchaser will provide such
access to the Property after Closing so that Seller can comply with the
requirements of the Consent Contract; and (5) that Purchaser shall not be deemed
to be a third party beneficiary to the Consent Contract. By execution hereof,
Purchaser further acknowledges receipt of notice in writing of the existence of
the Consent Contract and receipt of a copy thereof. The provisions of this
Section 14.2 shall survive the termination of this Contract, and if not so
terminated, the Closing and delivery of the Deed to Purchaser.
[Remainder of Page Intentionally Left Blank]
NOW, THEREFORE, the parties hereto have executed this Contract as of the
date first set forth above.
Seller:
NATIONAL PROPERTY INVESTORS 6,
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
Purchaser:
MULLINS PROPERTIES, LLC,
an Alabama limited liability company
By: /s/Charles F. Mullins, Jr.
Name: Charles F. Mullins, Jr.
Title: Manager
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 November 6, 2002 as of the date of opening of
escrow and designates 02-192661 as the escrow number assigned to this escrow.
ESCROW AGENT:
FIDELITY NATIONAL TITLE INSURANCE
By:/s/Lolly Avant
Name: Lolly Avant
Title: Vice President
SELLER'S BROKER SIGNATURE PAGE
The undersigned Seller's Broker hereby executes this Seller's Broker
Signature Page solely to confirm the following: (a) Seller's Broker represents
only the Seller in the transaction described in the Contract to which this
signature page is attached, (b) Seller's Broker acknowledges that the only
compensation due to Seller's 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 Seller's Broker at
the Closing, and (c) Seller's Broker represents and warrants to Seller that
Seller's 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 Seller's Broker or any of its
affiliates any right or option to acquire any direct or indirect legal,
beneficial, economic or voting interest in Purchaser, and (d) Seller's Broker
shall at Closing execute and deliver any waivers or lien releases required by
Seller, Purchaser or the Title Company to waive and release any right of
Seller's Broker to claim any lien pursuant to Ala. Code ss. 35-11-450 et seq.
SELLER'S BROKER:
THE APARTMENT GROUP
By: /s/Walter Knoechel
Name: Walter Knoechel
Title: Vice President
PURCHASER'S BROKER SIGNATURE PAGE
The undersigned Purchaser's Broker hereby executes this Purchaser's Broker
Signature Page solely to confirm the following: (a) Purchaser's Broker
represents only the Purchaser in the transaction described in the Contract to
which this signature page is attached, (b) Purchaser's Broker acknowledges that
the only compensation due to Purchaser's 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 Purchaser and
Purchaser's Broker at the Closing and that no compensation shall be due unless
and until the Closing occurs, and (c) Purchaser's Broker shall at Closing
execute and deliver any waivers or lien releases required by Seller, Purchaser
or the Title Company to waive and release any right of Purchaser's Broker to
claim any lien pursuant to Ala. Code ss. 35-11-450 et seq.
PURCHASER'S BROKER:
MULLINS SERVICES, LLC
By: /s/Charles F. Mullins
Name: Charles F. Mullins, Jr.
Title: Manager
EXHIBIT 10.35
REINSTATEMENT AND AMENDMENT TO
PURCHASE AND SALE CONTRACT
THIS REINSTATEMENT AND AMENDMENT TO PURCHASE AND SALE CONTRACT (the
"Amendment") is made and entered into as of this the 2nd day of December, 2002,
by and between NATIONAL PROPERTY INVESTORS 6, a California limited partnership
(the "Seller"), and MULLINS PROPERTIES, L.L.C., an Alabama limited liability
company (the "Purchaser"), as follows:
W I T N E S S E T H
WHEREAS, Seller and Purchaser previously entered into that certain
Purchase and Sale Contract (the "Agreement") dated the 6th day of November 2002;
WHEREAS, Purchaser, pursuant to Article 3.2 thereof, terminated the
Agreement by written notice dated November 11, 2002; and,
WHEREAS, Seller and Purchaser desire to reinstate and ratify the Agreement
and amend certain terms contained therein as set forth in this Amendment.
NOW, THEREFORE, for and in consideration the foregoing and of the mutual
covenants and agreements herein contained, the parties agree as follows:
1. Reinstatement. The Agreement is hereby reinstated, as amended herein,
ratified and affirmed and effective as if the termination pursuant to Article
3.2 had not occurred.
2. Purchase Price. The Purchase Price under Section 2.2 of the Agreement
is hereby reduced by $450,000.00 to $14,650,000.00 instead of $15,100,000.00.
3. Feasibility Period. Purchaser hereby agrees that it has completed its
review of the Property and, with the sole exception of the Termite Inspection
and Assessment (defined below), agrees that it has approved all aspects of the
Property and hereby waives its right to object (pursuant to Section 3.6 or 4.3
of the Agreement or otherwise) to any matter concerning the Title Documents, the
Survey, the Property Contracts, the Leases, the physical condition of the
Property, or otherwise with respect to the Property. Purchaser agrees that
Seller has made all required deliveries and performed all of Seller's required
obligations under the Agreement through the date hereof. With the sole exception
of the Termite Inspection and Assessment, Purchaser agrees that Purchaser's
right to terminate the Agreement is permanently waived, the Deposit is
non-refundable, and Purchaser's obligation to purchase the Property is
non-contingent and unconditional except only for satisfaction of the conditions
expressly stated in Section 8.1 of the Agreement.
4. Termite Inspection and Assessment. Seller agrees that Purchaser shall
have the right to conclude its inspection and assessment of the Property with
respect to the presence of termites and damage, if any, to the Property as a
result of the such presence (the "Termite Inspection and Assessment") in strict
accordance with the following conditions, restrictions and limitations: (a) the
only persons permitted to enter the Property to conduct the Termite Inspection
and Assessment are the Purchaser and the following Consultants each of whom must
be approved specifically in advance and in writing by Seller (which approval
shall not be unreasonably withheld by Seller): (i) a private, certified termite
inspector, (ii) a construction contractor, and (iii) a structural engineer (to
the extent approved by Seller, each of the foregoing Consultants in (i) through
(iii) referred to herein as the "Approved Consultants"), (b) each of the
foregoing Approved Consultants shall be required to sign (as condition to their
entry onto the Property, conduct of any testing, or review any data collected in
connection with the Termite Inspection and Assessment) separate confidentiality
and indemnity agreements which are reasonably acceptable to Seller's counsel and
contain substantially similar provisions to those contained with respect to
Purchaser under Section 3.4 and Section 13.14 of the Agreement, (c) Purchaser
and the Approved Consultants shall coordinate their Termite Inspection and
Assessment with Seller, shall receive Seller's prior written approval of all
tests to be performed on the Property, and shall provide copies of the results
of such tests to Seller promptly after the same are available, and (d) Purchaser
and the Approved Consultants shall coordinate with Seller's Director of
Technical Services for the Regional Operating Center to which the Property
reports (the "Director") and will insure that the Director is present at all
times during the conduct of any testing on the Property associated with the
Termite Inspection and Assessment. Without limiting the generality of the
foregoing or the generality of Section 13.14 of the Agreement, Purchaser agrees
that it shall keep, and cause its Consultants to keep, the results of the
Termite Inspection and Assessment in the strictest confidence and shall not
disclose the results thereof without the prior written approval of Seller, which
approval may be withheld or denied in Seller's sole discretion. If the results
of the Termite Inspection and Assessment are unacceptable to Purchaser in its
reasonable discretion, Purchaser shall have the right to terminate this Contract
on or before December 13, 2002 (the "Termite Contingency Deadline") based solely
on the results of the Termite Inspection and Assessment. If Purchaser terminates
this Contract based on the results of the Termite Inspection and Assessment,
Seller agrees to reimburse Purchaser up to a maximum of $7,000.00 for fees
actually paid by Purchaser to the Approved Consultants in connection with the
Termite Inspection and Assessment. Upon any payment by Seller pursuant to the
foregoing sentence, Purchaser shall assign (or cause the Approved Consultants to
assign) to Seller all work product, including reports, generated by the Approved
Consultant or Purchaser in connection with the Termite Inspection and
Assessment. If Purchaser fails to terminate this Contract on or before the
Termite Contingency Deadline, (x) Purchaser shall be deemed to have approved and
irrevocably waived any objections based on the presence of termites on the
Property, damage, if any, caused by such presence, and any matters that would be
disclosed by the Termite Inspection and Assessment, (y) Purchaser's right to
terminate the Agreement based on the Termite Inspection and Assessment shall be
permanently waived, and (z) the Deposit shall be non-refundable and Purchaser's
obligation to purchase the Property shall be non-contingent and unconditional
except only for satisfaction of the conditions expressly stated in Section 8.1
of the Agreement.
5. Closing Date. The first sentence of Section 5.1 of the Agreement is
hereby amended and restated in its entirety as follows: "The Closing shall occur
no later than December 31, 2002 (the "Closing Date") through an escrow with
Escrow Agent, whereby the Seller, Purchaser and their attorneys need not be
physically present at the Closing and may deliver documents by overnight air
courier or other means."
6. Ratification of Agreement. All terms and provisions of the Agreement
not specifically modified or amended by this Amendment shall remain in full
force and effect, and the Agreement, as expressly modified herein, is hereby
ratified, confirmed and approved in all respects by the parties hereto.
7. General. This Amendment shall be effective upon the execution of all of
the parties hereto and shall inure to the benefit of said parties and their
respective heirs, legal representatives, successors and permitted assigns.
[SIGNATURES APPEAR ON IMMEDIATELY FOLLOWING PAGE]
IN WITNESS WHEREOF, the Purchaser and Seller have executed this
Reinstatement and Amendment to Purchase and Sale Contract as of the day and year
first above written.
PURCHASER:
MULLINS PROPERTIES, L.L.C.
an Alabama limited liability company
BY:/s/Charles F. Mullins, Jr.
CHARLES F. MULLINS, JR.
Its Manager
SELLER:
NATIONAL PROPERTY INVESTORS 6
a California limited partnership
BY: NPI Equity Investments, Inc.,
a Florida corporation,
Its General Partner
By: /s/Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
EXHIBIT 10.36
REINSTATEMENT AND SECOND AMENDMENT TO
PURCHASE AND SALE CONTRACT
THIS REINSTATEMENT AND AMENDMENT TO PURCHASE AND SALE CONTRACT (the
"Amendment") is made and entered into as of this the 12th day of February, 2003
(the "Amendment Effective Date"), by and between NATIONAL PROPERTY INVESTORS 6,
a California limited partnership (the "Seller"), and MULLINS PROPERTIES, L.L.C.,
an Alabama limited liability company (the "Purchaser"), as follows:
W I T N E S S E T H
WHEREAS, Seller and Purchaser previously entered into that certain
Purchase and Sale Contract dated the 6th day of November 2002, and amended by
that certain Reinstatement and Amendment to Purchase and Sale Contract (the
"First Reinstatement") on December 2, 2002 (collectively, as amended, the
"Agreement");
WHEREAS, Purchaser, pursuant to Section 4 of the First Reinstatement,
terminated the Agreement by written notice dated December 13, 2002; and,
WHEREAS, Seller and Purchaser desire to reinstate and ratify the Agreement
and amend certain terms contained therein as set forth in this Amendment.
NOW, THEREFORE, for and in consideration the foregoing and of the mutual
covenants and agreements herein contained, the parties agree as follows:
1. Reinstatement. The Agreement is hereby reinstated, as amended herein,
ratified and affirmed and effective as if the termination pursuant to Article
3.2 had not occurred.
2. Additional Termite Inspection and Assessment. Seller agrees that
Purchaser shall have the right to conclude an additional inspection and
assessment of the Property with respect to the presence of termites and damage,
if any, to the Property as a result of the such presence (the "Termite
Inspection and Assessment") in strict accordance with the following conditions,
restrictions and limitations: (a) the scope of the Termite Inspection and
Assessment shall be as set forth in the letter attached hereto as Exhibit A, (b)
the only persons permitted to enter the Property to conduct the Termite
Inspection and Assessment are the Purchaser and the following Consultants each
of whom must be approved specifically in advance and in writing by Seller (which
approval shall not be unreasonably withheld by Seller): (i) a private, certified
termite inspector, (ii) Dwight Spivey ("Spivey"), a construction contractor, and
(iii) a structural engineer (to the extent approved by Seller, each of the
foregoing Consultants in (i) through (iii) referred to herein as the "Approved
Consultants"), (c) each of the foregoing Approved Consultants shall be required
to sign (as condition to their entry onto the Property, conduct of any testing,
or review any data collected in connection with the Termite Inspection and
Assessment) separate confidentiality and indemnity agreements which are
reasonably acceptable to Seller's counsel and contain substantially similar
provisions to those contained with respect to Purchaser under Section 3.4 and
Section 13.14 of the Agreement, (d) Purchaser and the Approved Consultants shall
coordinate their Termite Inspection and Assessment with Seller, shall receive
Seller's prior written approval of all tests to be performed on the Property,
and shall provide copies of the results of such tests to Seller promptly after
the same are available, and (e) Purchaser and the Approved Consultants shall
coordinate with (I) Christopher Weller, Esq. ("Weller"), 334-241-8066, and (II)
Seller's Director of Technical Services for the Regional Operating Center to
which the Property reports (the "Director") prior to conducting the Termite
Inspection, and will insure that Weller (or a designee or designees of Weller)
and the Director (or a designee or designees of the Director) is present at all
times during and as a pre-condition to the conduct of any testing on the
Property associated with the Termite Inspection and Assessment. Without limiting
the generality of the foregoing or the generality of Section 13.14 of the
Agreement, Purchaser agrees that it shall keep, and cause its Consultants to
keep, the results of the Termite Inspection and Assessment in the strictest
confidence and shall not disclose the results thereof without the prior written
approval of Seller, which approval may be withheld or denied in Seller's sole
discretion. If the results of the Termite Inspection and Assessment are
unacceptable to Purchaser in its reasonable discretion, Purchaser shall have the
right to terminate the Agreement on or before 20 days after the Amendment
Effective Date (the "Termite Contingency Deadline") based solely on the results
of the Termite Inspection and Assessment (in which event Escrow Agent shall
forthwith return the Deposit to Purchaser). Seller agrees to reimburse
Purchaser, up to a maximum payment by Seller of $1,350.00, for 1/2 of the costs
charged by Spivey for repairs to the Property made in connection with the
Termite Inspection and Assessment (this amount shall be in addition to, and not
in lieu of, the $7,000.00 which Seller agreed to pay to Purchaser for fees
actually paid by Purchaser to the Approved Consultants (as defined in the First
Reinstatement) in connection with the Termite Inspection and Assessment (as
defined in the First Reinstatement)). If Purchaser fails to terminate the
Agreement on or before the Termite Contingency Deadline, (x) Purchaser shall be
deemed to have approved and irrevocably waived any objections based on the
presence of termites on the Property, damage, if any, caused by such presence,
and any matters that would be disclosed by the Termite Inspection and
Assessment, (y) Purchaser's right to terminate the Agreement based on the
Termite Inspection and Assessment shall be permanently waived, and (z) the
Deposit shall be non-refundable and Purchaser's obligation to purchase the
Property shall be non-contingent and unconditional except only for satisfaction
of the conditions expressly stated in Section 8.1 of the Agreement.
3. Closing Date. The first sentence of Section 5.1 of the Agreement is
hereby amended and restated in its entirety as follows: "The Closing shall occur
30 days after the Termite Contingency Deadline (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." Provided that Purchaser is not in default under the
terms of the Agreement, Purchaser shall be permitted one 30-day extension of the
Closing Date as required under the first sentence of Section 5.1 of the
Agreement (to a total of 60 days after the Termite Contingency Deadline). In
order to exercise such 30-day extension Purchaser must (A) deliver written
notice of such extension to Seller no later than 5 days prior to the scheduled
Closing Date, and (B) simultaneously with such notice to Seller, deliver to the
Escrow Agent the amount of $100,000.00, which amount when received by the Escrow
Agent shall be added to the Deposit under the Agreement, shall be non-refundable
(except as otherwise expressly provided in the Agreement with respect to the
Deposit), and shall be held, credited and disbursed in the same manner as
provided in the Agreement with respect to the Deposit.
4. Ratification of Agreement. All terms and provisions of the Agreement
not specifically modified or amended by this Amendment shall remain in full
force and effect, and the Agreement, as expressly modified herein, is hereby
ratified, confirmed and approved in all respects by the parties hereto.
5. General. This Amendment shall be effective upon the execution of all of
the parties hereto and shall inure to the benefit of said parties and their
respective heirs, legal representatives, successors and permitted assigns.
[SIGNATURES APPEAR ON IMMEDIATELY FOLLOWING PAGE]
IN WITNESS WHEREOF, the Purchaser and Seller have executed this
Reinstatement and Amendment to Purchase and Sale Contract as of the day and year
first above written.
PURCHASER:
MULLINS PROPERTIES, L.L.C.
an Alabama limited liability company
BY: /s/Charles F. Mullins, Jr.
CHARLES F. MULLINS, JR.
Its Manager
SELLER:
NATIONAL PROPERTY INVESTORS 6
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
EXHIBIT 10.37
THIRD AMENDMENT TO
PURCHASE AND SALE CONTRACT
THIS THIRD AMENDMENT TO PURCHASE AND SALE CONTRACT (this "Amendment") is
made and entered into as of this the 27th day of February, 2003, by and between
NATIONAL PROPERTY INVESTORS 6, a California limited partnership (the "Seller"),
and MULLINS PROPERTIES, L.L.C., an Alabama limited liability company (the
"Purchaser"), as follows:
W I T N E S S E T H
WHEREAS, Seller and Purchaser previously entered into that certain
Purchase and Sale Contract dated the 6th day of November 2002, and amended by
that certain Reinstatement and Amendment to Purchase and Sale Contract (the
"First Reinstatement") on December 2, 2002, and as further amended by that
certain Reinstatement and Second Amendment to Purchase and Sale Contract (the
"Second Reinstatement") on February 12, 2003 (collectively, as amended, the
"Agreement");
WHEREAS, pursuant to the Second Reinstatement, Purchaser was given
the right to perform an additional Termite Inspection and Assessment and to
terminate the Agreement on or before the Termite Contingency Deadline (as
defined therein).
WHEREAS, Seller and Purchaser desire to amend certain terms of the
Agreement as set forth in this Amendment.
NOW, THEREFORE, for and in consideration the foregoing and of the mutual
covenants and agreements herein contained, the parties agree as follows:
1. Purchase Price. The Purchase Price, as reduced in the First
Reinstatement to $14,650,000.00, is hereby further reduced by $100,000.00 to
$14,550,000.00.
2. Waiver of Termite Contingency and all other Due Diligence. Purchaser
has completed the additional Termite Inspection and Assessment permitted
pursuant to the Second Reinstatement. Notwithstanding the fact that the Termite
Contingency Deadline has not yet passed, Purchaser desires, by its execution of
this Amendment, to approve and irrevocably waive any objections based on the
presence of termites on the Property, damage, if any, caused by such presence,
and any matters that would be disclosed by the Termite Inspection and
Assessment. Purchaser agrees that its right to terminate the Agreement based on
the Termite Inspection and Assessment is hereby permanently waived. Moreover,
Purchaser hereby agrees that it has completed its review of the Property and
agrees that it has approved all aspects of the Property and hereby waives its
right to object (pursuant to Section 3.6 or 4.3 of the Agreement or otherwise)
to any matter concerning the Title Documents, the Survey, the Property
Contracts, the Leases, the physical condition of the Property (including,
without limitation, the presence of termites on the Property, damage, if any,
caused by such presence, and any matters that would be disclosed by the Termite
Inspection and Assessment), or otherwise with respect to the Property. Purchaser
agrees that Seller has made all required deliveries and performed all of
Seller's required obligations under the Agreement through the date hereof.
Purchaser agrees that Purchaser's right to terminate the Agreement is
permanently waived, the Deposit is non-refundable, and Purchaser's obligation to
purchase the Property is non-contingent and unconditional except only for
satisfaction of the conditions expressly stated in Section 8.1 of the Agreement.
3. Termite Bonds. Seller presently is a party to the Terminix Termite
Protection Plans attached hereto as Exhibit A with respect to the Property (the
"Termite Agreements"). Seller and Purchaser agree that, at the Closing, Seller
shall assign to Purchaser its rights and obligations under the Termite
Agreements to Purchaser, and Purchaser shall assume the same, subject to the
following conditions: (i) Seller's assignment shall be "as-is" and without
representation or warranty of any kind, and shall be limited to the extent of
Seller's interest, if any, in such Termite Agreements, (ii) Purchaser shall be
solely responsible for delivering all necessary notices and requests to Terminix
required in connection with the assignment, (iii) Purchaser shall be solely
responsible for the payment of any transfer, assumption or other fees required
by Terminix to effectuate the assignment, (iv) Seller shall be obligated to
assign such Termite Agreements only to the extent such Termite Agreements are
assignable by their terms, and (v) such assignment shall be limited to those
rights and obligations under the Termite Agreements which specifically pertain
to the Property and not any rights or obligations pertaining to any other
properties owned by Seller or Seller's affiliates. Purchaser represents and
warrants that it has read and understands the terms, conditions, and limitations
of the Termite Agreements, including, without limitation, the following: "Upon
transfer of ownership of the identified property, protection against
subterranean termite damage can be continued upon the request of the new owner
and upon payment of a contract transfer fee of $135.00. In the event the new
owner fails to request continued coverage, this Termite Protection Plan will
terminate automatically as of the date of change of ownership." Purchaser
recognizes and agrees that Purchaser must deliver a request and pay the
appropriate transfer fee for each of the Termite Agreements.
4. Closing Date. The first sentence of Section 5.1 of the Agreement is
hereby amended and restated in its entirety as follows: "The Closing shall occur
on or before March 31, 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." The second and third sentences of paragraph 3 of the Second
Reinstatement are hereby amended and restated in their entirety as follows:
"Provided that Purchaser is not in default under the terms of the Agreement,
Purchaser shall be permitted one 30-day extension of the Closing Date as
required under the first sentence of Section 5.1 of the Agreement (to April 30,
2003). In order to exercise such 30-day extension Purchaser must (A) deliver
written notice of such extension to Seller no later than 5 days prior to the
scheduled Closing Date, and (B) simultaneously with such notice to Seller,
deliver to the Escrow Agent the amount of $50,000.00, which amount when received
by the Escrow Agent shall be added to the Deposit under the Agreement, shall be
non-refundable (except as otherwise expressly provided in the Agreement with
respect to the Deposit), and shall be held, credited and disbursed in the same
manner as provided in the Agreement with respect to the Deposit."
5. Ratification of Agreement. All terms and provisions of the Agreement
not specifically modified or amended by this Amendment shall remain in full
force and effect, and the Agreement, as expressly modified herein, is hereby
ratified, confirmed and approved in all respects by the parties hereto.
6. General. This Amendment shall be effective upon the execution of all of
the parties hereto and shall inure to the benefit of said parties and their
respective heirs, legal representatives, successors and permitted assigns. This
Amendment may be executed by counterparts or facsimile signatures, both of which
shall be binding as originals on the parties hereto.
[SIGNATURES APPEAR ON IMMEDIATELY FOLLOWING PAGE]
IN WITNESS WHEREOF, the Purchaser and Seller have executed this Third
Amendment to Purchase and Sale Contract as of the day and year first above
written.
PURCHASER:
MULLINS PROPERTIES, L.L.C.
an Alabama limited liability company
BY: /s/Charles F. Mullins, Jr.
CHARLES F. MULLINS, JR.
Its Manager
SELLER:
NATIONAL PROPERTY INVESTORS 6
a California limited partnership
BY: NPI Equity Investments, Inc.,
a Florida corporation,
Its General Partner
By: /s/Lisa R. Cohn
Name: Lisa R. Cohn
Title: Vice President
EXHIBIT 10.38
REINSTATEMENT AND FOURTH AMENDMENT TO
PURCHASE AND SALE CONTRACT
THIS REINSTATEMENT AND FOURTH AMENDMENT TO PURCHASE AND SALE CONTRACT (the
"Amendment") is made and entered into as of this the 2nd day of May, 2003, by
and between NATIONAL PROPERTY INVESTORS 6, a California limited partnership (the
"Seller"), and MULLINS PROPERTIES, L.L.C., an Alabama limited liability company
(the "Purchaser"), as follows:
W I T N E S S E T H
WHEREAS, Seller and Purchaser previously entered into that certain
Purchase and Sale Contract (the "Agreement") dated the 6th day of November 2002,
and amended by that certain Reinstatement and Amendment to Purchase and Sale
Contract (the "First Reinstatement") on December 2, 2002, as further amended by
that certain Reinstatement and Second Amendment to Purchase and Sale Contract
(the "Second Reinstatement") on February 12, 2003, and as further amended by
that certain Third Amendment to Purchase and Sale Contract dated February 27,
2003 (the "Third Amendment") (collectively, as amended, the "Agreement");
WHEREAS, the Agreement terminated as of April 30, 2003 by virtue of
Purchaser's failure to deliver the Purchase Price and close on the purchase of
the Property on the Closing Date in breach of the Agreement; and,
WHEREAS, Seller and Purchaser desire to reinstate and ratify the Agreement
and amend certain terms contained therein as set forth in this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual covenants and agreements herein contained, the parties agree as follows:
AGREEMENT:
1. Reinstatement. The Agreement is hereby reinstated, as amended herein,
ratified and affirmed and effective as if the termination had not occurred.
2. Deposit. Purchaser and Seller hereby jointly direct Escrow Agent to
release the existing Deposit of $150,000.00 (hereinafter referred to as the
"Original Deposit") to Seller pursuant to the wiring instructions attached
hereto as Exhibit A. Purchaser acknowledges and agrees that, pursuant to Section
10.1(c) of the Agreement, it has forfeited any and all rights in and to the
Original Deposit and that Seller is entitled to receipt of the Original Deposit.
Provided that Purchaser is not otherwise in default under the terms of the
Agreement, as amended by this Amendment, then Purchaser shall receive a credit
at Closing in an amount equal to the Original Deposit.
3. Reinstatement Deposit. As of the date hereof, Purchaser shall deliver
to Escrow Agent an additional deposit of $75,000.00 (the "Reinstatement
Deposit") by wire transfer of Good Funds. The Original Deposit shall be held and
disbursed in accordance with the escrow provisions set forth in Section 2.3 of
the Agreement. Purchaser acknowledges and agrees that the Reinstatement Deposit
is a material consideration for Seller's execution of this Amendment. In the
event that Purchaser fails to deliver the Reinstatement Deposit in accordance
with this paragraph 3, then this Reinstatement shall be deemed null and void
(except that the provisions of paragraph 2 of this Amendment shall remain in
force and effect).
4. Closing Date. The first sentence of Section 5.1 of the Agreement is
hereby deleted in its entirety and the following is inserted in lieu thereof:
The Closing shall occur on May 15, 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 anything in the Agreement or this
Amendment to the contrary, Purchaser shall have no rights to extend the Closing
Date. In the event that Purchaser fails to deliver the Purchase Price and close
on the Property on the Closing Date, then Purchaser shall forfeit the
Reinstatement Deposit in the same manner as the Deposit and pursuant to the
provisions of Secion 10.1 of the Agreement.
5. Purchaser's Conditions to Closing. Sections 8.1.1, 8.1.3 and 8.1.4 of
the Agreement are hereby deleted in their entirety and all references to any of
them are hereby deleted from the Agreement. In the event that the condition set
forth in Section 8.1.2 of the Agreement is not met and Purchaser terminates the
Agreement pursuant to its remedy set forth in Section 8.1(i) of the Agreement,
then Purchaser shall receive a refund of the Reinstatement Deposit (but not the
Original Deposit).
6. Ratification of Agreement. All terms and provisions of the Agreement
not specifically modified or amended by this Amendment shall remain in full
force and effect, and the Agreement, as expressly modified herein, is hereby
ratified, confirmed and approved in all respects by the parties hereto.
7. General. This Amendment shall be effective upon the execution of all of
the parties hereto and shall inure to the benefit of said parties and their
respective heirs, legal representatives, successors and permitted assigns.
[SIGNATURES APPEAR ON IMMEDIATELY FOLLOWING PAGE]
IN WITNESS WHEREOF, the Purchaser and Seller have executed this
Reinstatement and Amendment to Purchase and Sale Contract as of the day and year
first above written.
PURCHASER:
MULLINS PROPERTIES, L.L.C.
an Alabama limited liability company
BY:/s/Charles F. Mullins, Jr.
CHARLES F. MULLINS, JR.
Its Manager
SELLER:
NATIONAL PROPERTY INVESTORS 6
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