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) June 27, 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 June 27, 2003, the Registrant sold one of its investment properties, Alpine
Village Apartments, located in Birmingham, Alabama. The Registrant sold Alpine
Village Apartments to Alpine Village Gardens Associates, LLC, an unrelated
party, for $4,575,000. 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 Alpine
Village 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 $ 2,110
Investment properties, net 10,638
Total Assets $12,748
All other liabilities $ 919
Mortgage notes payable 25,133
Partners' deficit (13,304)
Total Liabilities and Equity $12,748
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 $ 1,877 $ 7,235
Total expenses 2,179 7,754
Net loss $ (302) $ (519)
Net loss per limited partnership unit $ (2.76) $ (4.74)
(c) Exhibits.
The following exhibits are filed with this report (1):
10.39 Purchase and Sale Contract between Registrant and Harbor Group
International, LLC dated April 28, 2003.
10.40 Assignment of Purchase Agreement between Harbor Group International,
LLC and Alpine Village Gardens Associates, LLC dated June 25, 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: July 9, 2003
Exhibit 10.39
PURCHASE AND SALE CONTRACT
BETWEEN
NATIONAL PROPERTY INVESTORS 6,
a California limited partnership
AS SELLER
AND
HARBOR GROUP INTERNATIONAL, LLC,
a Virginia limited liability company
AS PURCHASER
ALPINE VILLAGE APARTMENTS
BIRMINGHAM, ALABAMA
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as of
the 28th day of April, 2003 (the "Effective Date") by and between NATIONAL
PROPERTY INVESTORS 6, a California limited partnership, having an address at
4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237 ("Seller")
and HARBOR GROUP INTERNATIONAL, LLC, a Virginia limited liability company,
having a principal address at 55 East Main Street, Suite 1700, Norfolk, Virginia
23510 and its permitted assigns ("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 Jefferson County, Alabama, as
more particularly described in Exhibit A attached hereto and made a part hereof,
and the improvements thereon, commonly known as Alpine Village 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 have the meaning set forth in Section 9.1.
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" means, to the extent actually deposited by Purchaser with
Escrow Agent, the Initial Deposit.
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 "Existing Survey" shall have the meaning set forth in Section 4.2.
1.1.21 "Feasibility Period" shall have the meaning set forth in Section 3.1.
1.1.22 "Final Response Deadline" shall have the meaning set forth in Section
4.3.
1.1.23 "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 1.1.23.
1.1.24 "General Assignment" shall have the meaning set forth in Section 5.2.3.
1.1.25 "Good Funds" shall have the meaning set forth in Section 2.2.1.
1.1.26 "Improvements" means all buildings and improvements located on the Land
taken "as is."
1.1.27 "Initial Deposit" shall have the meaning set forth in Section 2.2.1.
1.1.28 "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.
1.1.29 "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.
1.1.30 "Leases Assignment" shall have the meaning set forth in Section 5.2.4.
1.1.31 "Lender" means Federal National Mortgage Corporation, as assignee
of Lehman Brothers, Inc.
1.1.31.5 "Lender Fees" shall mean all fees and expenses (including,
without limitation, all prepayment penalties and pay-off fees) imposed or
charged by Lender or its counsel in connection with the Loan Payoff, and, to the
extent that the Loan Payoff occurs on a date other than as permitted under the
Note and Deed of Trust, any amounts of interest charged by Lender for the period
from the Closing Date to the permitted prepayment date, the amount of the
Lender's Fees to be determined as of the Closing Date.
1.1.32 "Loan" means the indebtedness owing to Lender evidenced by the
Note.
1.1.33 [Intentionally left blank].
1.1.34 "Loan Balance" shall have the meaning set forth in Section 2.2.3.
1.1.35 "Loan Payoff" shall have the meaning set forth in Section 5.4.7.
1.1.36 "Losses" shall have the meaning set forth in Section 3.4.1.
1.1.37 "Materials" shall have the meaning set forth in Section 3.5.
1.1.38 "Miscellaneous Property Assets" means all contract rights, leases,
concessions, warranties, plans, drawings and other items of intangible personal
property relating to the ownership or operation of the Property and owned by
Seller, excluding, however, (a) receivables, (b) Property Contracts, (c) Leases,
(d) Permits, (e) cash or other funds, whether in petty cash or house "banks," or
on deposit in bank accounts or in transit for deposit, (f) refunds, rebates or
other claims, or any interest thereon, for periods or events occurring prior to
the Closing Date, (g) utility and similar deposits, (h) insurance or other
prepaid items, (i) Seller's proprietary books and records, or (j) any right,
title or interest in or to the AIMCO Marks. The term "Miscellaneous Property
Assets" also shall include all of Seller's rights, if any, in and to the name
"Alpine Village" 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).
1.1.38.5 "Monetary Exceptions" shall have the meaning set forth in
Section 4.3.1.
1.1.39 "Note" means that certain Amended and Restated Multifamily Note with the
stated principal amount of $2,100,000, dated November 1, 1996, executed by
Seller and payable to the order of Lehman Brothers Holdings, Inc., as assigned
to Federal Home Loan Mortgage Corporation.
1.1.40 "Objection Deadline" shall have the meaning set forth in Section 4.3.
1.1.41 "Objection Notice" shall have the meaning set forth in Section 4.3.
1.1.42 "Objections" shall have the meaning set forth in Section 4.3.
1.1.43 "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.
1.1.44 "Permitted Exceptions" shall have the meaning set forth in Section 4.4.
1.1.45 "Property" means (a) the Land and Improvements and all rights of Seller,
if any, in and to all of the easements, rights, privileges, and appurtenances
belonging or in any way appertaining to the Land and Improvements, (b) the
right, if any and only to the extent transferable, of Seller in the Property
Contracts, Leases, Permits (other than Excluded Permits), and the Fixtures and
Tangible Personal Property, and (c) the Miscellaneous Property Assets owned by
Seller which are located on the Property and used in its operation.
1.1.46 "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.
1.1.47 "Property Contracts Notice" shall have the meaning set forth in Section
3.6.
1.1.48 "Property Manager" means the current property manager of the Property.
1.1.49 "Proration Schedule" shall have the meaning set forth in Section 5.4.1.
1.1.50 "Purchase Price" means the consideration to be paid by Purchaser to
Seller for the purchase of the Property pursuant to Section 2.2.
1.1.51 "Regional Property Manager" shall have the meaning set forth in Section
6.4.
1.1.52 "Remediation" shall have the meaning set forth in Section 14.2.
1.1.53 [Intentionally left blank].
1.1.54 "Response Deadline" shall have the meaning set forth in
Section 4.3.
1.1.55 "Response Notice" shall have the meaning set forth in Section 4.3.
1.1.56 "Seller's Indemnified Parties" shall have the meaning set forth
in Section 3.4.1
1.1.57 "Seller's Representations" shall have the meaning set forth in
Section 6.1.
1.1.58 "Survey" shall have the meaning ascribed thereto in Section 4.2.
1.1.59 "Survival Period" shall have the meaning set forth in Section 6.3.
1.1.60 "Survival Provisions" shall have the meaning set forth in Section
13.28.
1.1.61 "Tenant" means any person or entity entitled to occupy any portion of the
Property under a Lease.
1.1.62 "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.
1.1.63 "Tenant Security Deposit Balance" shall have the meaning set forth in
Section 5.4.6.2.
1.1.64 "Terminated Contracts" shall have the meaning set forth in
Section 3.6.
1.1.65 "Testing" shall have the meaning set forth in Section 14.2.
1.1.66 [Intentionally Left Blank]
1.1.67 "Title Commitment" shall have the meaning ascribed thereto in
Section 4.1.
1.1.68 "Title Documents" shall have the meaning set forth in Section
4.1.
1.1.69 "Title Insurer" shall have the meaning set forth in Section 2.2.1.
1.1.70 "Title Policy" shall have the meaning set forth in Section 4.1.
1.1.71 "Uncollected Rents" shall have the meaning set forth in Section
5.4.6.1.
1.1.72 "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 $4,800,000.00, less the Lender Fees,
which amount shall be paid by Purchaser, as follows:
2.2.1 Within 1 Business Day after 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, Telephone
1-800-879-1677 ("Escrow Agent" or "Title Insurer") an initial deposit (the
"Initial Deposit") of $100,000.00 by wire transfer of immediately available
funds ("Good Funds"). The Initial 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 during regular banking
hours 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. Notwithstanding anything in this section to the contrary,
if Purchaser terminates this Contract prior to the expiration of the Feasibility
Period, the Deposit shall be immediately returned to Purchaser. 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 the
date which is 30 days after the Effective Date (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 and Purchaser's lender for the transaction
contemplated by this Contract. The provisions of this Section 3.3 shall survive
the termination of this Contract, and if not so terminated shall survive (except
for the confidentiality provisions of this Section 3.3) the Closing and delivery
of the Deed to Purchaser.
3.4 Purchaser Indemnification.
3.4.1 Purchaser shall indemnify, hold harmless and, if requested by Seller (in
Seller's sole discretion), defend (with counsel approved by Seller) Seller,
together with Seller's affiliates, parent and subsidiary entities, successors,
assigns, partners, managers, members, employees, officers, directors, trustees,
shareholders, counsel, representatives, agents, Property Manager, Regional
Property Manager, and AIMCO (collectively, including Seller, "Seller's
Indemnified Parties"), from and against any and all damages, mechanics' liens,
liabilities, losses, demands, actions, causes of action, claims, costs and
expenses (including reasonable attorneys' fees, including the cost of in-house
counsel and appeals) (collectively, "Losses") arising from or related to
Purchaser's or its Consultant's entry onto the Property, and any Inspections or
other matters performed by Purchaser with respect to the Property during the
Feasibility Period or otherwise.
3.4.2 Notwithstanding anything in this Contract to the contrary, Seller shall
have the right, without limitation, to disapprove any and all invasive or
destructive entries, surveys, tests (including, without limitation, a Phase II
environmental study of the Property), investigations and other matters that in
Seller's reasonable judgment could result in any injury to the Property or
breach of any contract, or expose Seller to any Losses or violation of
applicable law, or otherwise adversely affect the Property or Seller's interest
therein. Purchaser shall use best efforts to minimize disruption to Tenants in
connection with Purchaser's or its Consultants' activities pursuant to this
Section. No consent by the Seller to any such activity shall be deemed to
constitute a waiver by Seller or assumption of liability or risk by Seller.
Purchaser hereby agrees to restore, at Purchaser's sole cost and expense, the
Property to the same condition existing immediately prior to Purchaser's
exercise of its rights pursuant to this Article 3. Purchaser shall maintain and
cause its third party consultants to maintain (a) casualty insurance and
comprehensive public liability insurance with coverages of not less than
$1,000,000.00 for injury or death to any one person and $3,000,000.00 for injury
or death to more than one person and $500,000.00 with respect to property
damage, by water or otherwise, and (b) worker's compensation insurance for all
of their respective employees in accordance with the law of the state in which
the Property is located. Purchaser shall deliver proof of the insurance coverage
required pursuant to this Section 3.4.2 to Seller (in the form of a certificate
of insurance) prior to the earlier to occur of (i) Purchaser's or Purchaser's
Consultants' entry onto the Property, or (ii) the expiration of 5 days after the
Effective Date. The provisions of this Section 3.4 shall survive the termination
of this Contract, and if not so terminated, the Closing and delivery of the Deed
to Purchaser.
3.5 Property Materials.
3.5.1 Within 5 days after the Effective Date, and to the extent the same exist
and are in Seller's possession or reasonable control (subject to Section 3.5.2),
Seller agrees to make the documents set forth on Schedule 3.5 (the "Materials")
available at the Property for review and copying by Purchaser at Purchaser's
sole cost and expense. In addition, Seller may also make some or all of the
Materials available to Purchaser on a secure web site (Purchaser agrees that any
item to be delivered by Seller under this Contract shall be deemed delivered to
the extent available to Purchaser on such secured web site). To the extent that
Purchaser determines that any of the Materials have not been made available or
delivered to Purchaser pursuant to this Section 3.5.1, Purchaser shall notify
Seller and Seller shall use commercially reasonable efforts to deliver the same
to Purchaser within 5 Business Days after such notification is received by
Seller; provided, however, that under no circumstances will the Feasibility
Period be extended and Buyer's sole remedy will be to terminate this Contract
pursuant to Section 3.2.
3.5.2 In providing such information and Materials to Purchaser, other than
Seller's Representations, Seller makes no representation or warranty, express,
written, oral, statutory, or implied, and all such representations and
warranties are hereby expressly excluded and disclaimed. Any information and
Materials provided by Seller to Purchaser under the terms of this Contract is
for informational purposes only. 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 In addition to the items set forth on Schedule 3.5, no later than 5
Business Days after the Effective Date, Seller shall deliver to Purchaser (or
otherwise make available to Purchaser as provided under Section 3.5.1) a rent
roll for the Property listing the move-in date, monthly base rent payable, lease
expiration date and unapplied security deposit for each Lease (the "Rent Roll").
The Rent Roll shall be part of the Materials for all purposes under this
Contract and Seller makes no representations or warranties regarding the Rent
Roll other than the express representation set forth in Section 6.1.8. Seller
shall update the Rent Roll in accordance with Section 5.2.10.
3.5.4 The provisions of this Section 3.5 shall survive the Closing and delivery
of the Deed to Purchaser.
3.6 Property Contracts. On or before the expiration of the Feasibility Period,
Purchaser may deliver written notice to Seller (the "Property Contracts Notice")
specifying any Property Contracts with respect to which Purchaser desires to
have Seller deliver notices of termination at the Closing (the "Terminated
Contracts"); provided that (a) the effective date of such termination after
Closing shall be subject to the express terms of such Terminated Contracts, (b)
if any such Property Contract cannot by its terms be terminated, it shall be
assumed by Purchaser and not be a Terminated Contract, and (c) to the extent
that any such Terminated Contract requires payment of a penalty or premium for
cancellation, Purchaser shall be solely responsible for the payment of any such
cancellation fees or penalties. If Purchaser fails to deliver the Property
Contracts Notice on or before the expiration of the Feasibility Period, there
shall be no Terminated Contracts and Purchaser shall assume all Property
Contracts at the Closing.
ARTICLE 4
TITLE
4.1 Title Documents. Within 10 calendar days after the Effective Date, Seller
shall cause to be delivered to Purchaser a standard form commitment for title
insurance ("Title Commitment") for the Property in an amount equal to the
Purchase Price from Title Insurer for an owner's title insurance policy (the
"Title Policy") on the most recent standard American Land Title Association
form, together with copies of all instruments identified as exceptions therein
(together with the Title Commitment, referred to herein as the "Title
Documents"). 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. Within 3 Business Days after the Effective Date, Seller shall
deliver to Purchaser or make available at the Property the existing survey of
the Property (the "Existing Survey") which to Seller's knowledge is in Seller's
possession or reasonable control (subject to Section 3.5.2); provided, however,
in the event that such Existing Survey was prepared in connection with the sale
of the Property, then Seller shall deliver the same to Purchaser and Purchaser
shall pay the costs thereof. To the extent that Purchaser desires that a new
survey of the Property be prepared (or that the Existing Survey be updated),
Purchaser shall request the same in writing to Seller no later than 5 Business
Days after the Effective Date, in which event Seller shall order such new or
updated survey (together with the Existing Survey, referred to herein as the
"Survey") from the surveyor who prepared the Existing Survey (or from such other
surveyor as Seller determines in its reasonable discretion). Purchaser shall be
solely responsible for the cost and expense of the preparation of any new or
updated survey requested pursuant to the terms of this Section 4.2. Seller shall
instruct the surveyor to communicate freely with Purchaser with respect to the
Existing Survey and Survey and consider reasonable comments made by Purchaser.
4.3 Objection and Response Process. On or before the date which is 20 days after
the Effective 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 objects (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 25 days after the Effective 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; provided, however, that all such aggregate adjournments shall not
exceed 10 Business Days. 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, Purchaser may, as its exclusive remedy,
elect by written notice given to Seller on or before the expiration of the
Feasibility Period (the "Final Response Deadline") 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 on or before the Final Response Deadline, Purchaser shall be
deemed to have elected to approve and irrevocably waived any objections to any
matters covered by the Title Documents or 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).
4.3.1 Seller shall pay or otherwise arrange to remove from the Title Commitment
(by payment, bonding over or otherwise, at Seller's sole discretion) any
exceptions arising from monies due any third party, including any liens or
judgments (but excluding assessments or other similar levies, or ad valorem or
similar taxes not yet due and payable) (any such exception, a "Monetary
Exception"); provided, however, that Seller shall not be obligated to pay or
otherwise remove any such Monetary Exceptions which, individually or in the
aggregate, require the payment of an amount greater than $10,000. In the event
that any such Monetary Exception(s) is greater than $10,000 and Seller refuses
to cure the same after written notice from Purchaser, Purchaser may, as its sole
and exclusive remedy, elect by written notice given to Seller by the Final
Response Deadline (or 10 days after first receiving an updated Title Commitment
showing such Monetary Exception, if applicable) either (a) to accept the Title
Documents, as updated or supplemented, and Survey 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 Seller refuses to cure any
such Monetary Exception after written notice from Purchaser of such Monetary
Exception, and Purchaser thereafter fails to give notice to terminate this
Contract on or before the Final Response Deadline or 10 days after first
receiving an updated Title Commitment showing such Monetary Exception, whichever
is applicable, Purchaser shall be deemed to have elected to approve and
irrevocably waived any and all Monetary Exceptions.
4.4 Permitted Exceptions. The Deed delivered pursuant to this Contract shall be
subject to the following, all of which shall be deemed "Permitted Exceptions":
4.4.1 All matters shown in the Title Documents and the Survey, other than (a)
those Objections, if any, which Seller has agreed to cure pursuant to the
Response Notice under Section 4.3, (b) mechanics' liens and taxes due and
payable with respect to the period preceding Closing, (c) the standard exception
regarding the rights of parties in possession which shall be limited to those
parties in possession pursuant to the Leases, and (d) the standard exception
pertaining to taxes which shall be limited to taxes and assessments payable in
the year in which the Closing occurs and subsequent taxes and assessments;
4.4.2 All Leases;
4.4.3 [Intentionally 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,
provided that the Lender's Fees due in connection with the Loan Payoff shall be
paid by Purchaser.
ARTICLE 5
CLOSING
5.1 Closing Date. The Closing shall occur 30 days following the expiration of
the Feasibility Period (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. In the event that
Closing cannot occur (including the actual wire transfer of money) because of an
act of war, terrorism or similar act, then Closing shall be continued until such
time as such act no longer prevents such Closing; provided, however, Closing
shall not be extended more than 30 days without the consent of Purchaser and
Seller.
5.2 Seller Closing Deliveries. Prior to the Closing Date, Seller shall deliver
to Escrow Agent, each of the following items:
5.2.1 Limited Warranty Deed (the "Deed") in the form attached as Exhibit B to
Purchaser, subject to the Permitted Exceptions.
5.2.2 A Bill of Sale in the form attached as Exhibit C.
5.2.3 A General Assignment in the form attached as Exhibit D (the
"General Assignment").
5.2.4 An Assignment of Leases and Security Deposits in the form attached as
Exhibit E (the "Leases Assignment").
5.2.5 A letter prepared by Purchaser and countersigned by Seller to each of the
vendors under the Terminated Contracts informing them of the termination of such
Terminated 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 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 Resolutions, certificates of good standing, and such other organizational
documents as Title Insurer shall reasonably require evidencing Seller's
authority to consummate this transaction.
5.2.10 An updated Rent Roll reflecting the information required in Section
3.5.3; provided, however, that the content of such updated Rent Roll shall in no
event expand or modify the conditions to Purchaser's obligation to close as
specified under Section 8.1.
5.3 Purchaser Closing Deliveries. No later than 1 Business Day prior to the
Closing Date (except for the balance of the Purchase Price which is to be
delivered at the time specified in Section 2.2.4), Purchaser shall deliver to
the Escrow Agent (for disbursement to Seller upon the Closing) the following
items with respect to the Property being conveyed at such Closing:
5.3.1 The full Purchase Price (with credit for the Deposit), plus or minus the
adjustments or prorations required by this Contract.
5.3.2 A title affidavit (or at Purchaser's option an indemnity) pertaining to
Purchaser's activity on the Property prior to Closing, in the customary form
reasonably acceptable to Purchaser, 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 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 The Lender Fees (subject to reduction from the Purchase Price in
accordance with Section 2.2).
5.4 Closing Prorations and Adjustments.
5.4.1 General. All normal and customarily proratable items, including, without
limitation, collected rents, operating expenses, personal property taxes, other
operating expenses and fees, shall be prorated as of the Closing Date, Seller
being charged or credited, as appropriate, for all of same attributable to the
period up to the Closing Date (and credited for any amounts paid by Seller
attributable to the period on or after the Closing Date, if assumed by
Purchaser) and Purchaser being responsible for, and credited or charged, as the
case may be, for all of same attributable to the period on and after the Closing
Date. Seller shall prepare a proration schedule (the "Proration Schedule") of
the adjustments described in this Section 5.4 prior to Closing. 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 readjustment after Closing, except
as set forth in Section 5.5.
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 use reasonable efforts 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. Notwithstanding anything in this
provision to the contrary but subject to Seller's right to demand payment of and
to collect Uncollected Rents in accordance with this Section, Purchaser's
obligation to collect Uncollected Rents shall be limited to Uncollected Rents of
not more than 60 days past due and Purchaser's collection of rents shall be
applied, first, towards current rent due and owing under the Leases, and,
second, to Uncollected Rents.
5.4.6.2 At Closing, Purchaser shall receive a credit against the Purchase Price
in an amount equal to the received and unapplied balance of all cash (or cash
equivalent) Tenant Deposits, including, but not limited to, security, damage or
other refundable deposits or required to be paid by any of the Tenants to secure
their respective obligations under the Leases, together, in all cases, with any
interest payable to the Tenants thereunder as may be required by their
respective Tenant Lease or state law (the "Tenant Security Deposit Balance").
Any cash (or cash equivalents) held by Seller which constitute the Tenant
Security Deposit Balance shall be retained by Seller in exchange for the
foregoing credit against the Purchase Price and shall not be transferred by
Seller pursuant to this Contract (or any of the documents delivered at Closing),
but the obligation with respect to the Tenant Security Deposit Balance
nonetheless shall be assumed by Purchaser. The Tenant Security Deposit Balance
shall not include any non-refundable deposits or fees paid by Tenants to Seller,
either pursuant to the Leases or otherwise.
5.4.6.3 With respect to operating expenses, taxes, utility charges, other
operating cost pass-throughs, retroactive rental escalations, sums or charges
payable by Tenants under the Tenant Leases, to the extent that Seller has
received as of the Closing payments allocable to periods subsequent to Closing,
the same shall be properly prorated with an adjustment in favor of Purchaser,
and Purchaser shall reserve a credit therefor at Closing. With respect to any
payments received by Purchaser after the Closing allocable to Seller prior to
Closing, Purchaser shall promptly pay the same to Seller.
5.4.7 Existing Loan. On the Closing Date, Seller shall pay (which payment may be
made by Seller out of the proceeds of the Purchase Price) the outstanding
principal balance of the Note together with all interest accrued under the Note
prior to the Closing Date (the "Loan Payoff"). Purchaser shall pay all Lender
Fees (subject to reduction from the Purchase Price in accordance with Section
2.2). Any existing reserves, impounds and other accounts maintained in
connection with the Loan shall be released in Good Funds to Seller at the
Closing unless credited by Lender against the amount due from Seller under the
Note.
5.4.8 Insurance. No proration shall be made in relation to insurance premiums
and insurance policies will not be assigned to Purchaser.
5.4.9 Employees. All of Seller's and Seller's manager's on-site employees shall
have their employment at the Property terminated as of the Closing Date.
5.4.10 Closing Costs. Purchaser shall pay any transfer, sales, use, gross
receipts or similar taxes and the cost of recording any instruments required to
discharge any liens or encumbrances against the Property, any premiums or fees
required to be paid by Purchaser with respect to the Title Policy pursuant to
Section 4.1, and one-half of the customary closing costs of the Escrow Agent.
Seller shall pay the base premium for the Title Policy to the extent required by
Section 4.1, and one-half of the customary closing costs of the Escrow Agent.
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 60 days after
Closing, or (b) subject to such 60-day period, unless such items exceed
$2,500.00 in magnitude (either individually or in the aggregate); provided,
further, however, for purposes of readjustment of solely real estate ad valorem
or similar taxes, neither party shall have any obligation to readjust any items
(i) after the expiration of 6 months after Closing, or (ii) subject to such
6-month period, unless such tax readjustment exceeds $1,000.00 in magnitude
(either individually or in the aggregate). The provisions of this Section 5.5
shall survive the Closing and delivery of the Deed to Purchaser.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER
6.1 Seller's Representations. Except, in all cases, for any fact, information or
condition disclosed in the Title Documents, the Permitted Exceptions, the
Property Contracts, or the Materials, or which is otherwise known by Purchaser
prior to the Closing, Seller represents and warrants to Purchaser the following
(collectively, the "Seller's Representations") as of the Effective Date and as
of the Closing Date (provided that Purchaser's remedies if any such Seller's
Representations are untrue as of the Closing Date are limited to those set forth
in Section 8.1):
6.1.1 Seller is duly organized, validly existing and in good standing under the
laws of the state of its formation set forth in the initial paragraph of this
Contract; and, subject to Section 8.2.4, has or at the Closing shall have the
entity power and authority to sell and convey the Property and to execute the
documents to be executed by Seller and prior to the Closing will have taken as
applicable, all corporate, partnership, limited liability company or equivalent
entity actions required for the execution and delivery of this Contract, and the
consummation of the transactions contemplated by this Contract. The compliance
with or fulfillment of the terms and conditions hereof will not conflict with,
or result in a breach of, the terms, conditions or provisions of, or constitute
a default under, any contract to which Seller is a party or by which Seller is
otherwise bound, which conflict, breach or default would have a material adverse
affect on Seller's ability to consummate the transaction contemplated by this
Contract or on the Property. Subject to Section 8.2.4, this Contract is a valid,
binding and enforceable agreement against Seller in accordance with its terms;
6.1.2 Other than the Leases, the Property is not subject to any written lease
executed by Seller or, to Seller's knowledge, any other possessory interests of
any person;
6.1.3 Seller is not a "foreign person," as that term is used and defined in the
Internal Revenue Code, Section 1445, as amended;
6.1.4 Except for any actions by Seller to evict Tenants under the Leases, to
Seller's knowledge, there are no actions, proceedings, litigation or
governmental investigations or condemnation actions either pending or threatened
against the Property;
6.1.5 Seller has not received any written notice from a governmental agency of
any uncured material violations of any federal, state, county or municipal law,
ordinance, order, regulation or requirement affecting the Property; and
6.1.6 To Seller's knowledge, Seller has not received any written notice of any
material default by Seller under any of the Property Contracts that will not be
terminated on the Closing Date.
6.1.7 To Seller's knowledge, no pending or threatened litigation exists which
would adversely affect the sale contemplated by or Seller's obligations to
Purchaser under this Contract.
6.1.8 To the knowledge of Seller, the Rent Roll (as updated pursuant to Section
5.2.10) is accurate in all material respects.
6.1.9 To the knowledge of Seller, the operating statements for the Property
provided to Purchaser as part of the Materials are 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 Broker, Purchaser and Seller agree that Seller has done
so or shall do so only for the convenience of both parties, Purchaser shall not
rely thereon and the reliance by Purchaser upon any such documents, summaries,
opinions or work product shall not create or give rise to any liability of or
against Seller's Indemnified Parties. Purchaser shall rely only upon any title
insurance obtained by Purchaser with respect to title to the Property. Purchaser
acknowledges and agrees that no representation has been made and no
responsibility is assumed by Seller with respect to current and future
applicable zoning or building code requirements or the compliance of the
Property with any other laws, rules, ordinances or regulations, the financial
earning capacity or expense history of the Property, the continuation of
contracts, continued occupancy levels of the Property, or any part thereof, or
the continued occupancy by tenants of any Leases or, without limiting any of the
foregoing, occupancy at Closing. Prior to Closing, Seller shall have the right,
but not the obligation, to enforce its rights against any and all Property
occupants, guests or tenants. Purchaser agrees that the departure or removal,
prior to Closing, of any of such guests, occupants or tenants shall not be the
basis for, nor shall it give rise to, any claim on the part of Purchaser, nor
shall it affect the obligations of Purchaser under this Contract in any manner
whatsoever; and Purchaser shall close title and accept delivery of the Deed with
or without such tenants in possession and without any allowance or reduction in
the Purchase Price under this Contract. Purchaser hereby releases Seller from
any and all claims and liabilities relating to the foregoing matters. The
provisions of this Section 6.2 shall survive the Closing and delivery of the
Deed to Purchaser.
6.3 Survival of Seller's Representations. Seller and Purchaser agree that
Seller's Representations shall survive Closing for a period of 9 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 requested arbitration 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 a 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") and Brandon Boyington, the Community Manager
for the Property.
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 Virginia.
6.5.2 Purchaser, acting through any of its or their duly empowered and
authorized officers or members, has all necessary entity power and authority to
own and use its properties and to transact the business in which it is engaged,
and has full power and authority to enter into this Contract, to execute and
deliver the documents and instruments required of Purchaser herein, and to
perform its obligations hereunder; and no consent of any of Purchaser's
partners, directors, officers or members are required to so empower or authorize
Purchaser. The compliance with or fulfillment of the terms and conditions hereof
will not conflict with, or result in a breach of, the terms, conditions or
provisions of, or constitute a default under, any contract to which Purchaser is
a party or by which Purchaser is otherwise bound, which conflict, breach or
default would have a material adverse affect on Purchaser's ability to
consummate the transaction contemplated by this Contract. This Contract is a
valid, binding and enforceable agreement against Purchaser in accordance with
its terms.
6.5.3 No pending or, to the knowledge of Purchaser, threatened litigation exists
which if determined adversely would restrain the consummation of the
transactions contemplated by this Contract or would declare illegal, invalid or
non-binding any of Purchaser's obligations or covenants to Seller.
6.5.4 Other than Seller's Representations, Purchaser has not relied on any
representation or warranty made by Seller or any representative of Seller
(including, without limitation, Broker) in connection with this Contract and the
acquisition of the Property.
6.5.5 The Broker and its affiliates do not, and will not at the Closing, have
any direct or indirect legal, beneficial, economic or voting interest in
Purchaser (or in an assignee of Purchaser, which pursuant to Section 13.3,
acquires the Property at the Closing), nor has Purchaser or any affiliate of
Purchaser granted (as of the Effective Date or the Closing Date) the Broker or
any of its affiliates any right or option to acquire any direct or indirect
legal, beneficial, economic or voting interest in Purchaser.
The provisions of this Section 6.6 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 any such new or
renewed Leases shall not have a term in excess of 1 year (or such longer period
of time for which such Leases are entered into by Seller in the ordinary course
of its operation of the Property) and that any such new Property Contracts are
terminable upon 30 days prior written notice, without the prior written consent
of Purchaser, which consent shall not be unreasonably withheld, conditioned or
delayed.
7.2 General Operation of Property. Except as specifically set forth in this
Article 7, Seller shall operate the Property after the Effective Date in the
ordinary course of business, and except as necessary in the Seller's sole
discretion to address (a) any life or safety issue at the Property or (b) any
other matter which in Seller's reasonable discretion materially adversely
affecting the use, operation or value of the Property, Seller will not make any
material alterations to the Property or remove any material Fixtures and
Tangible Personal Property without the prior written consent of Purchaser which
consent shall not be unreasonably withheld, denied or delayed.
7.3 Liens. Other than utility easements and temporary construction easements
granted by Seller in the ordinary course of business which do not materially
adversely affect the use of the Property, Seller covenants that it will not
voluntarily create or cause any lien or encumbrance to attach to the Property
between the Effective Date and the Closing Date (other than Leases and Property
Contracts as provided in Section 7.1) unless Purchaser approves such lien or
encumbrance, which approval shall not be unreasonably withheld or delayed. If
Purchaser approves any such subsequent lien or encumbrance, the same shall be
deemed a Permitted Encumbrance for all purposes hereunder.
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING
8.1 Purchaser's Conditions to Closing. Purchaser's obligation to close
under this Contract, shall be subject to and conditioned upon the fulfillment
of each and all of the following conditions precedent:
8.1.1 All of the documents required to be delivered by Seller to
Purchaser at the Closing pursuant to the terms and conditions hereof shall
have been delivered;
8.1.2 Each of the representations, warranties and covenants of Seller
contained herein shall be true in all material respects as of the Closing
Date;
8.1.3 Seller shall have complied with, fulfilled and performed in all material
respects each of the covenants, terms and conditions to be complied with,
fulfilled or performed by Seller hereunder; and
8.1.4 Neither Seller nor Seller's general partner shall be a debtor in any
bankruptcy proceeding nor shall have been in the last 6 months a debtor in any
bankruptcy proceeding.
Notwithstanding anything to the contrary, there are no other conditions on
Purchaser's obligation to Close except as expressly set forth in this Section
8.1. If any condition set forth in Sections 8.1.1, 8.1.3 or 8.1.4 is not met,
Purchaser may (a) waive any of the foregoing conditions and proceed to Closing
on the Closing Date with no offset or deduction from the Purchase Price, or (b)
if such failure constitutes a default by Seller, exercise any of its remedies
pursuant to Section 10.2. If the condition set forth in Section 8.1.2 is not
met, Purchaser may, as its sole and exclusive remedy, (i) notify Seller of
Purchaser's election to terminate this Contract and receive a return of the
Deposit from the Escrow Agent, or (ii) waive such condition and proceed to
Closing on the Closing Date with no offset or deduction from the Purchase Price.
8.2 Without limiting any of the rights of Seller elsewhere provided for in this
Contract, Seller's obligation to close with respect to conveyance of the
Property under this Contract shall be subject to and conditioned upon the
fulfillment of each and all of the following conditions precedent:
8.2.1 All of the documents and funds required to be delivered by Purchaser to
Seller at the Closing pursuant to the terms and conditions hereof shall have
been delivered;
8.2.2 Each of the representations, warranties and covenants of
Purchaser contained herein shall be true in all material respects as of the
Closing Date;
8.2.3 Purchaser shall have complied with, fulfilled and performed in all
material respects each of the covenants, terms and conditions to be complied
with, fulfilled or performed by Purchaser hereunder; and
8.2.4 Seller shall have received all consents and approvals to the consummation
of the transactions contemplated hereby that are required by law.
If any of the foregoing conditions to Seller's obligation to close with
respect to conveyance of the Property under this Contract are not met, Seller
may (a) waive any of the foregoing conditions and proceed to Closing on the
Closing Date, or (b) terminate this Contract, and, if such failure constitutes a
default by Purchaser, exercise any of its remedies under Section 10.1.
ARTICLE 9
BROKERAGE
9.1 Indemnity. Seller represents and warrants to Purchaser that it has dealt
only with The Apartment Group, 3300 One Atlantic Center, 101 W. Peachtree
Street, Atlanta, Georgia 30309 ("Broker") in connection with this Contract.
Seller and Purchaser each represents and warrants to the other that, other than
Broker, it has not dealt with or utilized the services of any other real estate
broker, sales person or finder in connection with this Contract, and each party
agrees to indemnify, hold harmless, and, if requested in the sole and absolute
discretion of the indemnitee, defend (with counsel approved by the indemnitee)
the other party from and against all Losses relating to brokerage commissions
and finder's fees arising from or attributable to the acts or omissions of the
indemnifying party. The provisions of this Section 9.1 shall survive the
termination of this Contract, and if not so terminated, the Closing and delivery
of the Deed to Purchaser.
9.2 Broker Commission. Seller agrees to pay Broker a commission according to the
terms of a separate Contract. Broker shall not be deemed a party or third party
beneficiary of this Contract.
9.3 Broker Signature Page. Broker shall execute the signature page for Broker
attached hereto solely for purposes of confirming the matters set forth therein;
provided, however, that (a) Broker's signature hereon shall not be a
prerequisite to the binding nature of this Contract on Purchaser and Seller, and
the same shall become fully effective upon execution by Purchaser and Seller,
and (b) the signature of Broker will not be necessary to amend any provision of
this Contract.
ARTICLE 10
DEFAULTS AND REMEDIES
10.1 Purchaser Default. If Purchaser defaults in its obligations hereunder to
(a) deliver the Deposit, (b) deliver to the Seller the deliveries specified
under Section 5.3 on the date required thereunder, or (c) deliver the Purchase
Price at the time required by Section 2.2.4 and close on the purchase of the
Property on the Closing Date, then, immediately and without notice or cure,
Purchaser shall forfeit the Deposit, and the Escrow Agent shall deliver the
Deposit to Seller, and neither party shall be obligated to proceed with the
purchase and sale of the Property. If, Purchaser defaults in any of its other
representations, warranties or obligations under this Contract, and such default
continues for more than 10 days after written notice from Seller, then Purchaser
shall forfeit the Deposit, and the Escrow Agent shall deliver the Deposit to
Seller, and neither party shall be obligated to proceed with the purchase and
sale of the Property. The Deposit is liquidated damages and recourse to the
Deposit is, except for Purchaser's indemnity obligations hereunder, Seller's
sole and exclusive remedy for Purchaser's failure to perform its obligation to
purchase the Property or breach of a representation or warranty. Seller
expressly waives the remedies of specific performance and additional damages for
such default by Purchaser. SELLER AND PURCHASER ACKNOWLEDGE THAT SELLER'S
DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND THAT THE DEPOSIT IS A REASONABLE
ESTIMATE OF SELLER'S DAMAGES RESULTING FROM A DEFAULT BY PURCHASER IN ITS
OBLIGATION TO PURCHASE THE PROPERTY. SELLER AND PURCHASER FURTHER AGREE THAT
THIS SECTION 10.1.1 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 $50,000 in aggregate, or
(B) Purchaser may seek specific performance of Seller's obligation to deliver
the Deed pursuant to this Contract (but not damages). Purchaser agrees that it
shall promptly deliver to Seller an assignment of all of Purchaser's right,
title and interest in and to (together with possession of) all plans, studies,
surveys, reports, and other materials paid for with the out-of-pocket expenses
reimbursed by Seller pursuant to the foregoing sentence. SELLER AND PURCHASER
FURTHER AGREE THAT THIS SECTION 10.2 IS INTENDED TO AND DOES LIMIT THE AMOUNT OF
DAMAGES DUE PURCHASER AND THE REMEDIES AVAILABLE TO PURCHASER, AND SHALL BE
PURCHASER'S EXCLUSIVE REMEDY AGAINST SELLER, BOTH AT LAW AND IN EQUITY ARISING
FROM OR RELATED TO A BREACH BY SELLER OF ITS REPRESENTATIONS, WARRANTIES, OR
COVENANTS OR ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS
CONTRACT. UNDER NO CIRCUMSTANCES MAY PURCHASER SEEK OR BE ENTITLED TO RECOVER
ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR INDIRECT DAMAGES, ALL OF
WHICH PURCHASER SPECIFICALLY WAIVES, FROM SELLER FOR ANY BREACH BY SELLER, OF
ITS REPRESENTATIONS, WARRANTIES OR COVENANTS OR ITS OBLIGATIONS UNDER THIS
CONTRACT. PURCHASER SPECIFICALLY WAIVES THE RIGHT TO FILE ANY LIS PENDENS OR ANY
LIEN AGAINST THE PROPERTY UNLESS AND UNTIL IT HAS IRREVOCABLY ELECTED TO SEEK
SPECIFIC PERFORMANCE OF THIS CONTRACT AND HAS FILED AN ACTION SEEKING SUCH
REMEDY.
ARTICLE 11
RISK OF LOSS OR CASUALTY
11.1 Major Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to Closing, and the cost of repair is more than
$150,000, then Seller shall have no obligation to repair such damage or
destruction and shall notify Purchaser in writing of such damage or destruction
(the "Damage Notice"). Within 10 days after Purchaser's receipt of the Damage
Notice, Purchaser may elect at its option to terminate this Contract by
delivering written notice to Seller. In the event Purchaser fails to terminate
this Contract within the foregoing 10-day period, this transaction shall be
closed in accordance with the terms of this Contract for the full Purchase Price
notwithstanding any such damage or destruction and Purchaser shall receive all
insurance proceeds pertaining thereto (plus a credit against the Purchase Price
in the amount of any deductible payable by Seller in connection therewith) at
Closing.
11.2 Minor Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to the Closing, and the cost of repair is less than
$150,000, 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 (including any property that materially and significantly
deprives the Property of access) 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), and (b) Purchaser is not released from
its liability hereunder until after the occurrence of the Closing of the
transactions contemplated hereby. 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; (c) sent
by certified or registered mail, return receipt requested, or (d) sent by
confirmed facsimile transmission with an original copy thereof transmitted to
the recipient by one of the means described in subsections (a) through (c) no
later than 3 Business Days thereafter. All notices shall be deemed effective
when actually delivered as documented in a delivery receipt; provided, however,
that if the notice was sent by overnight courier or mail as aforesaid and is
affirmatively refused or cannot be delivered during customary business hours by
reason of the absence of a signatory to acknowledge receipt, or by reason of a
change of address with respect to which the addressor did not have either
knowledge or written notice delivered in accordance with this paragraph, then
the first attempted delivery shall be deemed to constitute delivery. Each party
shall be entitled to change its address for notices from time to time by
delivering to the other party notice thereof in the manner herein provided for
the delivery of notices. All notices shall be sent to the addressee at its
address set forth following its name below:
To Purchaser:
Harbor Group International, LLC
555 East Main Street, Suite 1700
Norfolk, VA 23510
Attention: Jeff Stein and Charles Patty
Telephone: 757-640-0800
Facsimile: 757-640-0817
with copy to:
LeClair Ryan, a Professional Corporation
999 Waterside Drive, Suite 515
Norfolk, VA 23510
Attention: Ray King, Esq.
Telephone: 757-441-8929
Facsimile: 757-624-3773
To Seller:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Patrick Slavin
Telephone: 303-691-4340
Facsimile: 303-300-3282
And:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Mr. Harry Alcock
Telephone: 303-691-4344
Facsimile: 303-300-3282
with copy to:
Chad Asarch, Esq.
Vice President and Assistant General Counsel
AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Telephone: 303-691-4303
Facsimile: 303-300-3297
and a copy to:
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
1900 West Loop South, Suite 650
Houston, Texas 77027
Attention: Lolly Avant, National Commercial Closing Specialist
Telephone: 800-879-1677
Facsimile: 713-623-4406
Unless specifically required to be delivered to the Escrow Agent pursuant
to the terms of this Contract, no notice hereunder must be delivered to the
Escrow Agent in order to be effective so long as it is delivered to the other
party in accordance with the above provisions.
13.8 Governing Law And Venue. The laws of the State of Alabama shall govern the
validity, construction, enforcement, and interpretation of this Contract, unless
otherwise specified herein except for the conflict of laws provisions thereof.
Subject to Section 13.25, all claims, disputes and other matters in question
arising out of or relating to this Contract, or the breach thereof, shall be
decided by proceedings instituted and litigated in a court of competent
jurisdiction in the state in which the Property is situated, and the parties
hereto expressly consent to the venue and jurisdiction of such court.
13.9 Entire Agreement. This Contract embodies the entire Contract between the
parties hereto concerning the subject matter hereof and supersedes all prior
conversations, proposals, negotiations, understandings and Contracts, whether
written or oral.
13.10 Amendments. This Contract shall not be amended, altered, changed,
modified, supplemented or rescinded in any manner except by a written contract
executed by all of the parties; provided, however, that, (a) as provided in
Section 2.3.5 above, the signature of the Escrow Agent shall not be required as
to any amendment of this Contract other than an amendment of Section 2.3, and
(b) as provided in Section 9.3 above, the signature of the Broker shall not be
required as to any amendment of this Contract
13.11 Severability. In the event that any part of this Contract shall be held to
be invalid or unenforceable by a court of competent jurisdiction, such provision
shall be reformed, and enforced to the maximum extent permitted by law. If such
provision cannot be reformed, it shall be severed from this Contract and the
remaining portions of this Contract shall be valid and enforceable.
13.12 Multiple Counterparts/Facsimile Signatures. This Contract may be executed
in a number of identical counterparts. This Contract may be executed by
facsimile signatures which shall be binding on the parties hereto, with original
signatures to be delivered as soon as reasonably practical thereafter.
13.13 Construction. No provision of this Contract shall be construed in favor
of, or against, any particular party by reason of any presumption with respect
to the drafting of this Contract; both parties, being represented by counsel,
having fully participated in the negotiation of this instrument.
13.14 Confidentiality. Purchaser shall not disclose the terms and conditions
contained in this Contract and shall keep the same confidential, provided that
Purchaser may disclose the terms and conditions of this Contract (a) as required
by law, (b) to consummate the terms of this Contract, or any financing relating
thereto, or (c) to Purchaser's or Seller's lenders, attorneys, agents,
consultants 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 (a) prior to the expiration of
the Feasibility Period, solicit any of Seller's employees or any employees
located at the Property for potential employment, or (b) at any time, solicit
any of Seller's affiliates' employees located at any property owned by such
affiliates for potential employment.
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, and (c) any payment obligation
of Purchaser under this Contract (the foregoing (a), (b) and (c) referred to
herein as the "Survival Provisions"), none of the terms and provisions of this
Contract shall survive the termination of this Contract, and, if the Contract is
not so terminated, all of the terms and provisions of this Contract (other than
the Survival Provisions) shall be merged into the Closing documents and shall
not survive Closing.
13.29 Multiple Purchasers. As used in this Contract, the term "Purchaser" means
all entities acquiring any interest in the Property at the Closing, including,
without limitation, any assignee(s) of the original Purchaser pursuant to
Section 13.3 of this Contract. In the event that "Purchaser" has any obligations
or makes any covenants, representations or warranties under this Agreement, the
same shall be made jointly and severally by all entities being a Purchaser
hereunder. In the event that Seller receives notice from any entity being a
Purchaser hereunder, the same shall be deemed to constitute notice from all
entities being a Purchaser hereunder. In the event that any entity being a
Purchaser hereunder takes any action, breaches any obligation or otherwise acts
pursuant to the terms of this Contract, the same shall be deemed to be the
action of the other entity(ies) being a Purchaser hereunder and the action of
"Purchaser" under this Contract. In the event that Seller is required to give
notice or take action with respect to Purchaser under this Contract, notice to
any entity being a Purchaser hereunder or action with respect to any entity
being a Purchaser hereunder shall be a notice or action to all entities being a
Purchaser hereunder. In the event that any entity being a Purchaser hereunder
desires to bring an action or arbitration against Seller, such action must be
joined by all entities being a Purchaser hereunder in order to be effective. In
the event that there is any agreement by Seller to pay any amount pursuant to
this Contract to Purchaser under any circumstance, that amount shall be deemed
maximum aggregate amount to be paid to all parties being a Purchaser hereunder
and not an amount that can be paid to each party being a Purchaser hereunder. In
the event that Seller is required to return the Deposit or other amount to
Purchaser, Seller shall return the same to any entity being a Purchaser
hereunder and, upon such return, shall have no further liability to any other
entity being a Purchaser hereunder for such amount. The foregoing provisions
also shall apply to any documents, including, without limitation, the General
Assignment and Assumption and the Assignment and Assumption of Leases and
Security Deposits, executed in connection with this Contract and the
transaction(s) contemplated hereby.
13.30 Return of Materials. If this Contract is terminated for any reason,
Purchaser shall promptly return to Seller all Materials and other information
delivered or made available by Seller and also shall deliver to Seller copies of
all non-proprietary information developed by Purchaser with respect to the
Property (excluding delivery of reports paid for by Purchaser).
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:Executive Vice President
Purchaser:
HARBOR GROUP INTERNATIONAL, LLC
a Virginia limited liability company
By:/s/Jordan E. Slone
Name:Jordan El Slone
Title: Chairman
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 April 28, 2003 as the date of opening of escrow
and designates 192946 as the escrow number assigned to this escrow.
ESCROW AGENT:
FIDELITY NATIONAL TITLE COMPANY
By:/s/Lolly Avant
Name:Lolly Avant
Title: Vice President
BROKER SIGNATURE PAGE
The undersigned Broker hereby executes this Broker Signature Page solely
to confirm the following: (a) Broker represents only the Seller in the
transaction described in the Contract to which this signature page is attached,
(b) Broker acknowledges that the only compensation due to Broker in connection
with the Closing of the transaction described in the Contract to which this
signature page is attached is as set forth in a separate agreement between
Seller and Broker at the Closing, (c) Broker represents and warrants to Seller
that Broker and its affiliates has not and will not receive any compensation
(cash or otherwise) from or on behalf of Purchaser or any affiliate thereof in
connection with the transaction, and do not, and will not at the Closing, have
any direct or indirect legal, beneficial, economic or voting interest in
Purchaser (or in an assignee of Purchaser, which pursuant to Section 13.3 of the
Contract, acquires the Property at the Closing) nor has Purchaser granted (as of
the Effective Date or the Closing Date) the Broker or any of its affiliates any
right or option to acquire any direct or indirect legal, beneficial, economic or
voting interest in Purchaser, and (d) 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 Broker to claim any lien pursuant to
Ala. Code ss.35-11-450 et seq.
BROKER:
THE APARTMENT GROUP
By: /s/Walt Knoechel
Name: Walt Knoechel
Title: Senior Operating Executive
Exhibit 10.40
ASSIGNMENT OF PURCHASER'S INTEREST
IN PURCHASE AND SALE CONTRACT
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged,
Harbor Group International, LLC, Virginia limited liability company
("Assignor"), hereby assigns and transfers to Alpine Village Gardens Associates,
LLC, a Virginia limited liability company, RSAV, LLC, a Virginia limited
liability company, and BSF, LLC, a Virginia limited liability company, as
tenants in common (hereinafter collectively "Assignee"), all of Assignor's right
and interest in and to that certain Purchase and Sale Contract entered into as
of April 28, 2003, between National Property Investors 6, a California limited
partnership, as Seller, and Assignor, as Purchaser, as reinstated and amended by
that certain Reinstatement and Amendment to Purchase and Sale Contract dated
June 16, 2003, and as further amended by that certain Second Amendment to
Purchase and Sale Contract dated June 23, 2003 (collectively the "Contract"),
which relates to the real property commonly known as Alpine Village Apartments
located in the City of Hoover, Alabama, together with all of Assignor's right
and interest in and to the real property described in the Contract.
Assignor and Assignee hereby certify to Seller, pursuant to Section 13.3
of the Contract, that each Assignee is an affiliate of Assignor.
Assignee hereby assumes and agrees to be responsible for all the
obligations of the Purchaser under the Contract; provided that such assumption
by Assignee shall not relieve Assignor of its obligations to Seller under the
Contract, unless and until Closing occurs as stated in Section 13.3 of the
Contract.
This Assignment may be executed by the parties signing different
counterparts of this Assignment, which counterparts together shall constitute
the agreement of the parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Date: June 25, 2003
ASSIGNOR:
HARBOR GROUP INTERNATIONAL, LLC,
a Virginia limited liability company
By:/s/Jordan E. Slone
Jordan E. Slone, Manager
ASSIGNEE:
ALPINE VILLAGE GARDENS ASSOCIATES, LLC,
a Virginia limited liability company
By: ALPINE VILLAGE MANAGING CO., LLC,
a Virginia limited liability company
its Manger
By:/s/Jordan E. Slone
Jordan E. Slone, Manager
[SIGNATURES CONTINUED ON NEXT PAGE]
ASSIGNEE:
RSAV, LLC, a Virginia limited liability company
By:/s/Robert M. Stein
Robert M. Stein, Manager
[SIGNATURES CONTINUED ON NEXT PAGE]
ASSIGNEE:
BSF, LLC, a Virginia limited liability company
By:/s/Barbara S. Fischer
Barbara S. Fischer, Manager
File No. NOX-03-000070-00
Notice of Assignment of Purchase Agreement
June 17, 2003
National Property Investors 6
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Re: Assignment of Purchase Agreement
Dear National Property Investors 6:
This letter is written to inform you that we have assigned all of our
right, title and interest in and to, but not the obligations under the Purchase
and Sale Contract dated April 28, 2003, as assigned, by and between Alpine
Village Gardens Associates, LLC, RSAV, LLC, whose sole member is Robert M. Stein
and BSF, LLC, whose sole member is Barbara F. Fischer and National Property
Investors 6 to LandAmerica Exchange Company in order to facilitate a like-kind
exchange under Section 1031 of the Internal Revenue Code of 1986, as amended.
Very truly yours,
RSAV, LLC,
a Virginia limited liability company
By:/s/Robert M. Stein
Robert M. Stein, Manager
BSF, LLC,
a Virginia limited liability company
By:/s/Barbara S. Fischer
Barbara S. Fischer, Manager
Receipt Acknowledged:
National Property Investors 6
By: NPI Equity Investments, Inc., a Florida corporation, its General Partner
Signed: /s/Patrick F. Slavin Date: June 25, 2003