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) July 29, 2003
CONSOLIDATED CAPITAL GROWTH FUND
(Exact name of registrant as specified in its charter)
California 0-8639 94-2382571
(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 July 29, 2003, the Registrant sold one of its investment properties,
Churchill Park Apartments, located in Louisville, Kentucky. The Registrant sold
Churchill Park Apartments to Churchill Park Investors, LLC, an unrelated party,
for $13,100,000. The sale price was determined based on the fair market value of
the investment property.
In accordance with the 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 Consolidated Capital Growth Fund as if
Churchill Park Apartments had been sold on January 1, 2002.
The unaudited pro forma consolidated financial statements are presented for
illustrative purposes only and are not necessarily indicative of the operating
results or financial position that would have resulted had the sale been
consummated on the date indicated, nor do they represent a forecast thereof 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
(Unaudited)
(in thousands)
March 31, 2003
All other assets $ 1,294
Investment properties, net 9,811
Total Assets $11,105
All other liabilities $ 924
Mortgage notes payable 22,618
Partners' deficit (12,437)
Total Liabilities and Equity $11,105
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months
Ended Year Ended
March 31, December 31,
2003 2002
Total revenues $ 1,567 $ 7,026
Total expenses 1,704 7,022
Net (loss) income $ (137) $ 4
Net (loss) income per limited partnership unit $ (2.78) $ 0.08
(c) Exhibits.
The following exhibits are filed with this report (1):
10.36 Purchase and Sale Contract between Registrant and Churchill Park
Investors, LLC, dated May 7, 2003.
10.37 Reinstatement and Amendment to Purchase and Sale Contract between
Registrant and Churchill Park Investors, LLC dated June 24, 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.
CONSOLIDATED CAPITAL GROWTH FUND
By: ConCap Equities, Inc.
Its General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
Date: August 13, 2003
Exhibit 10.36
PURCHASE AND SALE CONTRACT
BETWEEN
CONSOLIDATED CAPITAL GROWTH FUND,
a California limited partnership
AS SELLER
AND
CHURCHILL PARK INVESTMENTS, LLC, a Michigan limited liability company
AS PURCHASER
CHURCHILL PARK
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as of
the 8th day of May, 2003 (the "Effective Date") by and between CONSOLIDATED
CAPITAL GROWTH FUND, a California limited partnership, having an address at 4582
South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237 ("Seller") and
CHURCHILL PARK INVESTMENTS LLC, a Michigan limited liability company, having a
principal address at 1025 East Maple Road, Suite 230, Birmingham, Michigan 48009
("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, Kentucky, as
more particularly described in Exhibit A attached hereto and made a part hereof,
and the improvements thereon, commonly known as "Churchill Park".
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 "Additional Deposit" shall have the meaning set forth in Section 2.2.2.
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 by Seller, the Property Manager, or AIMCO and used
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), subject to
the terms set forth in Section 3.5.4 and Section 13.26.
1.1.5 "Broker" shall have the meaning set forth in Section 9.1.
1.1.6 "Business Day" means any day other than a Saturday or Sunday or Federal
holiday or legal holiday in the States of Colorado, Texas, or Kentucky, or any
day on which Lender is not open for business.
1.1.7 "Closing" means the consummation of the purchase and sale and related
transactions contemplated by this Contract in accordance with the terms and
conditions of this Contract.
1.1.8 "Closing Date" means the date on which date the Closing of the conveyance
of the Property is required to be held pursuant to Section 5.1.
1.1.9 "Code" shall have the meaning set forth in Section 2.3.6.
1.1.10 "Consent Contract" shall have the meaning set forth in Section 14.2.
1.1.11 "Consultants" shall have the meaning set forth in Section 3.1.
1.1.12 "Damage Notice" shall have the meaning set forth in Section 11.1.
1.1.13 "Deed" shall have the meaning set forth in Section 5.2.1.
1.1.14 "Deed of Trust" shall have the meaning set forth in Section 4.5.
1.1.15 "Deposit" means, to the extent actually deposited by Purchaser with
Escrow Agent, the Initial Deposit and the Additional Deposit.
1.1.16 "Escrow Agent" shall have the meaning set forth in Section 2.2.1.
1.1.17 "Estimated Repair Cost" shall have the meaning set forth in Section 7.2.
1.1.18 "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 1.1.18.
1.1.19 "Existing Survey" shall have the meaning set forth in Section 4.2.
1.1.20 "Feasibility Period" shall have the meaning set forth in Section 3.1.
1.1.21 "Final Response Deadline" shall have the meaning set forth in Section
4.3.
1.1.22 "Fixtures and Tangible Personal Property" means all fixtures, furniture,
furnishings, fittings, equipment, machinery, apparatus, appliances and other
articles of tangible personal property located on the Land or in the
Improvements as of the Effective Date 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,
unless the equipment is covered by a Property Contract which is assigned to
Purchaser at Closing, or (b) property owned or leased by any Tenant or guest,
employee or other person furnishing goods or services to the Property, or (c)
property and equipment owned by Seller, which in the ordinary course of business
of the Property is not used exclusively for the business, operation or
management of the Property, or (d) the property and equipment, if any, expressly
identified in Schedule
1.1.22. During the Feasibility Period, Seller shall assemble a schedule of
Fixtures and Tangible Personal Property, excluding unit interior fixtures and
appliances, certified to Seller's knowledge to be the list of such Fixtures and
Tangible Personal Property to be transferred to Purchaser at the Closing.
1.1.23 "General Assignment" shall have the meaning set forth in Section 5.2.3.
1.1.24 "Good Funds" shall have the meaning set forth in Section 2.2.1.
1.1.25 "Improvements" means all buildings and improvements located on the Land
taken "as is."
1.1.26 "Initial Deposit" shall have the meaning set forth in Section 2.2.1.
1.1.27 "Land" means all of those certain tracts of land located in the State of
Kentucky described on Exhibit A, and all rights, privileges and appurtenances
pertaining thereto.
1.1.28 "Lease(s)" means the interest of Seller in and to all leases, subleases
and other occupancy contracts, whether or not of record, which provide for the
use or occupancy of space or facilities on or relating to the Property and which
are in force as of the Closing Date for the applicable Property.
1.1.29 "Leases Assignment" shall have the meaning set forth in Section 5.2.4.
1.1.30 "Lender" means Federal Home Loan Mortgage Corporation, assignee of Lehman
Brothers Holdings, Inc..
1.1.31 "Lender Fees" shall mean all fees and expenses (including, without
limitation, all prepayment penalties and pay-off fees) imposed or charged by
Lender or its counsel in connection with the Loan Payoff, and, to the extent
that the Loan Payoff occurs on a date other than as permitted under the Note and
Deed of Trust, any amounts of interest charged by Lender for the period from the
Closing Date to the permitted prepayment date, the amount of the Lender Fees to
be determined as of the Closing Date.
1.1.32 "Loan" means the indebtedness owing to Lender evidenced by the Note.
1.1.33 "Loan Payoff" shall have the meaning set forth in Section 5.4.7.
1.1.34 "Losses" shall have the meaning set forth in Section 3.4.1.
1.1.35 "Materials" shall have the meaning set forth in Section 3.5.
1.1.36 "Miscellaneous Property Assets" means all contract rights, leases,
concessions, warranties, plans, drawings and other items of intangible personal
property relating to the ownership or operation of the Property and owned by
Seller, excluding, however, (a) receivables, (b) Property Contracts, (c) Leases,
(d) Permits, (e) cash or other funds, whether in petty cash or house "banks," or
on deposit in bank accounts or in transit for deposit, (f) refunds, rebates or
other claims, or any interest thereon, for periods or events occurring prior to
the Closing Date, (g) utility and similar deposits, (h) insurance or other
prepaid items, (i) Seller's proprietary books and records, or (j) any right,
title or interest in or to the AIMCO Marks. The term "Miscellaneous Property
Assets" also shall include all of Seller's rights, if any, in and to the name
"CHURCHILL PARK" 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), and the existing telephone
number for the Property (to the extent transferable and at Purchaser's sole cost
and expense).
1.1.37 "Note" means that certain Multifamily Note in the original principal
amount of $6,450,000.00, dated as of November 30, 1995, executed by Seller and
payable to the order of Lehman Brothers Holdings, Inc., as assigned to Federal
Home Loan Mortgage Corporation.
1.1.38 "Objection Deadline" shall have the meaning set forth in Section 4.3.
1.1.39 "Objection Notice" shall have the meaning set forth in Section 4.3.
1.1.40 "Objections" shall have the meaning set forth in Section 4.3.
1.1.41 "Permits" means all licenses and permits granted by any governmental
authority having jurisdiction over the Property owned by Seller and required in
order to own and operate the Property.
1.1.42 "Permitted Exceptions" shall have the meaning set forth in Section 4.4.
1.1.43 "Property" means (a) the Land and Improvements and all rights of Seller,
if any, in and to all of the easements, rights, privileges, and appurtenances
belonging or in any way appertaining to the Land and Improvements, (b) the
right, if any and only to the extent transferable, of Seller in the Property
Contracts, Leases, Permits (other than Excluded Permits), and the Fixtures and
Tangible Personal Property, and (c) the Miscellaneous Property Assets owned by
Seller which are located on the Property and used in its operation.
1.1.44 "Property Contracts" means all contracts, agreements, equipment leases,
purchase orders, maintenance, service, or utility contracts and similar
contracts, excluding Leases, which relate to the ownership, maintenance,
construction or repair and/or operation of the Property, but only to the extent
the assignment of such contract to Purchaser is permitted pursuant to the
express terms of such contract, and not including (a) any national contracts
entered into by Seller, Property Manager, or AIMCO with respect to the Property
(i) which terminate automatically upon transfer of the Property by Seller, or
(ii) which Seller, in Seller's sole discretion, elects to terminate with respect
to the Property effective as of the Closing Date, or (b) any property management
contract for the Property.
1.1.45 "Property Contracts Notice" shall have the meaning set forth in Section
3.6.
1.1.46 "Property Manager" means the current property manager of the Property.
1.1.47 "Proration Schedule" shall have the meaning set forth in Section 5.4.1.
1.1.48 "Purchase Price" means the consideration to be paid by Purchaser to
Seller for the purchase of the Property pursuant to Section 2.2.
1.1.49 "Purchaser's Representations" shall have the meaning set forth in Section
6.5.
1.1.50 "Regional Property Manager" shall have the meaning set forth in
Section 6.4.
1.1.51 Intentionally Omitted.
1.1.52 "Response Deadline" shall have the meaning set forth in Section 4.3.
1.1.53 "Response Notice" shall have the meaning set forth in Section 4.3.
1.1.54 "Seller's Indemnified Parties" shall have the meaning set forth in
Section 3.4.1
1.1.55 "Seller's Representations" shall have the meaning set forth in
Section 6.1.
1.1.56 "Seller's Work" shall have the meaning set forth in Section 7.2.
1.1.57 "Survey" shall have the meaning ascribed thereto in Section 4.2.
1.1.58 "Survival Period" shall have the meaning set forth in Section 6.3.
1.1.59 "Survival Provisions" shall have the meaning set forth in Section 13.28.
1.1.60 "Tenant" means any person or entity entitled to occupy any portion of
the Property under a Lease.
1.1.61 "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 other than prepaid
rentals applicable to periods after the Closing Date.
1.1.62 "Tenant Security Deposit Balance" shall have the meaning set forth in
Section 5.4.6.2.
1.1.63 "Terminated Contracts" shall have the meaning set forth
in Section 3.6.
1.1.64 "Testing" shall have the meaning set forth in Section 14.2.
1.1.65 "Third-Party Reports" means any reports, studies or other information
prepared or compiled for Purchaser by any Consultant or other third-party in
connection with Purchaser's investigation of the Property.
1.1.66 "Title Commitment" shall have the meaning ascribed thereto in Section
4.1.
1.1.67 "Title Documents" shall have the meaning set forth in Section 4.1.
1.1.68 "Title Insurer" shall have the meaning set forth in Section 2.2.1.
1.1.69 "Title Policy" shall have the meaning set forth in Section 4.1.
1.1.70 "Uncollected Rents" shall have the meaning set forth in Section 5.4.6.1.
1.1.71 "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 Thirteen Million One Hundred Thousand
and No/100 Dollars ($13,100,000.00) less the Lender Fees which amount shall be
paid by Purchaser, as follows:
2.2.1 On the Effective Date, Purchaser shall deliver to Stewart Title Guaranty
Company, c/o Wendy Howell, National Commercial Closing Specialist, 1980 Post Oak
Boulevard, Suite 610, Houston, TX 77056, 800-729-1906 ("Escrow Agent" or "Title
Insurer") an initial deposit (the "Initial Deposit") of $50,000.00 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 On the day that the Feasibility Period expires, Purchaser shall deliver to
Escrow Agent an additional deposit (the "Additional Deposit") of $100,000.00 by
wire transfer of Good Funds. The Additional Deposit shall be held and disbursed
in accordance with the escrow provisions set forth in Section 2.3.
2.2.3 Intentionally Omitted.
2.2.4 The balance of the Purchase Price for the Property shall be paid to and
received by Escrow Agent by wire transfer of Good Funds no later than 11:00 a.m.
(in the time zone in which Escrow Agent is located) on the Closing Date (or such
earlier time as required by Seller's lender).
2.3 Escrow Provisions Regarding Deposit.
2.3.1 Escrow Agent shall hold the Deposit and make delivery of the Deposit to
the party entitled thereto under the terms of this Contract. Escrow Agent shall
invest the Deposit in such short-term, high-grade securities, interest-bearing
bank accounts, money market funds or accounts, bank certificates of deposit or
bank repurchase contracts as Escrow Agent, in its discretion, deems suitable,
and all interest and income thereon shall become part of the Deposit and shall
be remitted to the party entitled to the Deposit pursuant to this Contract.
2.3.2 Escrow Agent shall hold the Deposit until the earlier occurrence of (i)
the Closing Date, at which time the Deposit shall be applied against the
Purchase Price, or (ii) the date on which Escrow Agent shall be authorized to
disburse the Deposit as set forth in Section 2.3.3. The tax identification
numbers of the parties shall be furnished to Escrow Agent upon request.
2.3.3 If the Deposit has not been released earlier in accordance with Section
2.3.2, and either party makes a written demand upon Escrow Agent for payment of
the Deposit, Escrow Agent shall give written notice to the other party of such
demand. If Escrow Agent does not receive a written objection from the other
party to the proposed payment within 5 Business Days after the giving of such
notice, Escrow Agent is hereby authorized to make such payment (subject to
Purchaser's obligation under Section 3.5.2 to return all Third-Party Reports and
information and Materials provided to Purchaser upon the return of the Deposit
to Purchaser). If Escrow Agent does receive such written objection within such
5-Business Day period, Escrow Agent shall continue to hold such amount until
otherwise directed by written instructions from the parties to this Contract or
a final judgment or arbitrator's decision. However, Escrow Agent shall have the
right at any time to deposit the Deposit and interest thereon, if any, with a
court of competent jurisdiction in the state in which the Property is located.
Escrow Agent shall give written notice of such deposit to Seller and Purchaser.
Upon such deposit, Escrow Agent shall be relieved and discharged of all further
obligations and responsibilities hereunder.
2.3.4 The parties acknowledge that Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that Escrow Agent shall
not be deemed to be the agent of either of the parties for any act or omission
on its part unless taken or suffered in bad faith in willful disregard of this
Contract or involving gross negligence. Seller and Purchaser jointly and
severally shall indemnify and hold Escrow Agent harmless from and against all
costs, claims and expenses, including reasonable attorney's fees, incurred in
connection with the performance of Escrow Agent's duties hereunder, except with
respect to actions or omissions taken or suffered by Escrow Agent in bad faith,
in willful disregard of this Contract or involving gross negligence on the part
of the Escrow Agent, or failure to perform its duties under Section 2.3.6.
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 (other than the obligation to
make the Deposit which need not be made until Escrow Agent has signed this
Contract and delivered a copy of the signature page to Purchaser), 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. The period from the Effective Date to and including the
date which is 45 days after the Effective Date shall be the "Feasibility
Period". Subject to the terms of Section 3.3 and 3.4 and the right of Tenants
under the Leases, 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 make inquiries of Seller (and Seller agrees to respond in a timely
manner) and 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, Leases, Property Contracts and other documents
and instruments related to the Property 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 Initial Deposit to Purchaser (subject to
Purchaser's obligation under Section 3.5.2 to return all Third-Party Reports and
information and Materials provided to Purchaser upon the return of the Initial
Deposit). 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 (including both the Initial
Deposit and, when delivered in accordance with Section 2.2.2, the Additional
Deposit) shall be non-refundable (except as provided in Section 8.1), 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. Prior to the Closing, Purchaser shall not permit
any mechanic's or materialmen's liens or any other liens to attach to the
Property by reason of the performance of any work or the purchase of any
materials by Purchaser or any other party in connection with any Inspections
conducted by or for Purchaser. Purchaser shall give notice to Seller a
reasonable time prior to entry onto the Property and shall permit Seller to have
a representative present during all Inspections conducted at the Property.
Purchaser shall use its best efforts to conduct and shall cause its Consultants
to conduct any and all Inspections in such a manner as to avoid any unnecessary
disruption or disturbance of Tenants' occupancy of the Property. All information
made available by Seller to Purchaser in accordance with this Contract or
obtained by Purchaser in the course of its Inspections shall be treated as
confidential information by Purchaser, and, prior to the purchase of the
Property by Purchaser, Purchaser shall use its best efforts to prevent its
Consultants from divulging such information to any unrelated third parties
except as reasonably necessary to third parties engaged by Purchaser for the
limited purpose of analyzing and investigating such information for the purpose
of consummating the transaction contemplated by this Contract. The provisions of
this Section 3.3 shall survive the termination of this Contract, and if not so
terminated shall survive (except for the confidentiality provisions of this
Section 3.3) the Closing and delivery of the Deed to Purchaser.
3.4 Purchaser Indemnification.
3.4.1 Purchaser shall indemnify, hold harmless and, if requested by Seller (in
Seller's sole discretion), defend (with counsel approved by Seller) Seller,
together with Seller's affiliates, parent and subsidiary entities, successors,
assigns, partners, managers, members, employees, officers, directors, trustees,
shareholders, counsel, representatives, agents, Property Manager, Regional
Property Manager, and AIMCO (collectively, including Seller, "Seller's
Indemnified Parties"), from and against any and all damages, mechanics' liens,
liabilities, losses, demands, actions, causes of action, claims, costs and
expenses (including reasonable attorneys' fees, including appeals)
(collectively, "Losses") arising from or related to Purchaser's or its
Consultant's entry onto the Property, and any Inspections performed by Purchaser
with respect to the Property prior to the Closing Date.
3.4.2 Notwithstanding anything in this Contract to the contrary, Seller shall
have the right, without limitation, to disapprove any unreasonably intrusive
entries, surveys, tests (including, without limitation, a Phase II environmental
study of the Property), investigations and other matters that in Seller's
reasonable judgment could result in any injury to the Property or breach of any
contract, or expose Seller to any Losses or violation of applicable law, or
otherwise adversely affect the Property or Seller's interest therein. Purchaser
shall use best efforts to minimize disruption to Tenants in connection with
Purchaser's or its Consultants' activities pursuant to this Section. No consent
by the Seller to any such activity shall be deemed to constitute a waiver by
Seller or assumption of liability or risk by Seller. Purchaser hereby agrees to
restore, at Purchaser's sole cost and expense, the Property to the same
condition existing immediately prior to Purchaser's exercise of its rights
pursuant to this Article 3. Purchaser shall maintain and cause its third party
consultants to maintain (a) casualty insurance and comprehensive public
liability insurance with coverages of not less than $1,000,000.00 for injury or
death to any one person and $3,000,000.00 for injury or death to more than one
person and $500,000.00 with respect to property damage, by water or otherwise,
and (b) worker's compensation insurance for all of their respective employees in
accordance with the law of the state in which the Property is located. Purchaser
shall deliver proof of the insurance coverage required pursuant to this Section
3.4.2 to Seller (in the form of a certificate of insurance) prior to the earlier
to occur of (i) Purchaser's or Purchaser's Consultants' entry onto the Property,
or (ii) the expiration of 5 days after the Effective Date. The provisions of
this Section 3.4 shall survive the termination of this Contract, and if not so
terminated, the Closing and delivery of the Deed to Purchaser.
3.5 Property Materials.
3.5.1 Within 10 days after the Effective Date, and to the extent the same exist
and are in Seller's possession or reasonable control (subject to Section 3.5.2),
Seller agrees to make the documents set forth on Schedule 3.5 (the "Materials")
available at the Property for review and copying by Purchaser at Purchaser's
sole cost and expense. In the alternative, at Seller's option and within the
foregoing 10-day period, Seller may deliver some or all of the Materials to
Purchaser, or make the same available to Purchaser on a secure web site
(Purchaser agrees that any item to be delivered by Seller under this Contract
shall be deemed delivered to the extent available to Purchaser on such secured
web site). To the extent that Purchaser determines that any of the Materials
have not been made available or delivered to Purchaser pursuant to this Section
3.5.1, Purchaser shall notify Seller and Seller shall use commercially
reasonable efforts to deliver the same to Purchaser within 5 Business Days after
such notification is received by Seller. In the event Seller has failed to
deliver or make available to Purchaser the Materials within the 10 day period,
upon receipt of written notice from Purchaser, the Feasibility Period shall be
extended for a period of time equal to the number of days from the required
delivery date of each such item to the actual date of delivery of all such
items; provided, however, that under no circumstances will the Feasibility
Period be extended by more than 5 days hereunder and Purchaser's sole remedy
will be to terminate this Contract pursuant to Section 3.2.
3.5.2 In providing such information and Materials to Purchaser, other than
Seller's Representations, Seller makes no representation or warranty, express,
written, oral, statutory, or implied, and all such representations and
warranties are hereby expressly excluded and disclaimed. Any information and
Materials provided by Seller to Purchaser under the terms of this Contract is
for informational purposes only and, together with all Third-Party Reports,
shall be returned by Purchaser to Seller within 5 days after the return of the
Deposit to Purchaser (if Purchaser is otherwise entitled to such Deposit
pursuant to the terms of this Contract) if this Contract is terminated for any
reason. Purchaser shall not in any way be entitled to rely upon the accuracy of
such information and Materials. Purchaser recognizes and agrees that the
Materials and other documents and information delivered or made available by
Seller pursuant to this Contract may not be complete or constitute all of such
documents which are in Seller's possession or control, but are those that are
readily available to Seller after reasonable inquiry to ascertain their
availability. Purchaser understands that, although Seller will use commercially
reasonable efforts to locate and make available the Materials and other
documents required to be delivered or made available by Seller pursuant to this
Contract, Purchaser will not rely exclusively on such Materials or other
documents as being a complete and accurate source of information with respect to
the Property, and will rely 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 10 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 a 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 6.1.7. Seller shall update the
Rent Roll in accordance with Section 5.2.10.
3.5.4 No later than 25 days after the Effective Date Purchaser shall provide to
Seller a list identifying AIMCO Marks likely to be retained by Seller in
accordance with the terms set forth in this Contract. On or prior to the
expiration of the Feasibility Period Seller shall indicate which AIMCO Marks set
forth on the listing provided by Purchaser (if any) will require removal by
Purchaser after Closing at Purchaser's sole cost and expense. Notwithstanding
the foregoing, Seller hereby reserves the right to remove any such AIMCO Marks
identified for removal prior to Closing, at Seller's sole cost and expense.
Nothing contained in this Section 3.5.4 or in Purchaser's proposed listing of
AIMCO Marks shall be deemed to be a waiver of Seller's rights with respect to
the AIMCO Marks, as more particularly described in this Contract.
3.5.5 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. Seller shall deliver to Purchaser, at least ten (10)
days prior to the expiration of the Feasibility Period, a list certified to
Seller's knowledge, of all Property Contracts in existence relating to the
ownership and operation of the Property.
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 legible 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 any 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 Seller and
Purchaser shall each pay 1/2 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 delivery of the Existing Survey, 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
Existing Survey (or from such other surveyor as Seller determines in its
reasonable discretion). Purchaser and Seller shall share equally in the cost and
expense of the preparation of any new or updated survey requested pursuant to
the terms of this Section 4.2.
4.3 Objection and Response Process. On or before the date which is 15 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 20 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 (which adjournments shall not exceed 30 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 25 days after the Effective Date (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 (subject to Purchaser's
obligation under Section 3.5.2 to return all Third-Party Reports and information
and Materials provided to Purchaser upon the return of the Deposit). 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
and the Survey, subject only to resolution, if any, of the Objections as set
forth in the Response Notice (or if no Response Notice is tendered, without any
resolution of the Objections).
4.4 Permitted Exceptions. The Deed delivered pursuant to this Contract shall be
subject to the following, all of which shall be deemed "Permitted Exceptions":
4.4.1 All matters shown in the Title Documents and the Survey, other than (a)
those Objections, if any, which Seller has agreed to cure pursuant to the
Response Notice under Section 4.3, (b) mechanics' liens and taxes due and
payable with respect to the period preceding Closing, (c) the standard exception
regarding the rights of parties in possession which shall be limited to those
parties in possession pursuant to the Leases, and (d) the standard exception
pertaining to taxes which shall be limited to taxes and assessments payable in
the year in which the Closing occurs and subsequent taxes and assessments;
4.4.2 All Leases;
4.4.3 Intentionally Omitted;
4.4.4 Applicable zoning and governmental regulations and ordinances;
4.4.5 Any defects in or objections to title to the Property, or title exceptions
or encumbrances, arising by, through or under Purchaser; and
4.4.6 The terms and conditions of this Contract.
4.5 Existing Deed of Trust. It is understood and agreed that, whether or not
Purchaser gives an Objection Notice with respect thereto, any deeds of trust
and/or mortgages (including any and all mortgages which secure the Note) against
the Property (whether one or more, the "Deed of Trust") shall not be deemed
Permitted Exceptions, whether Purchaser gives written notice of such or not, and
shall be paid off, satisfied, discharged and/or cured by Seller at Closing,
provided that the Lender Fees due in connection with the Loan Payoff shall be
paid by Purchaser, to the extent such Lender Fees do not exceed the Purchase
Price. In no event shall Purchaser be liable for any Lender Fees asserted to be
payable to Lender after the Closing (for which Purchaser did not receive a
credit against the Purchase Price at Closing).
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 at least 4 days prior to the
originally scheduled Closing Date, to extend the Closing Date to the last
Business Day of the month in which the Closing Date otherwise would occur
pursuant to the preceding sentence, or to such other date (either in the same
month or the next) not to exceed 30 days 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. Provided that
Purchaser is not in default under the terms of this Contract, Purchaser shall be
permitted a one-time 30-day extension of the originally scheduled Closing Date
specified in the first sentence of this Section 5.1 to accommodate the
requirements of Purchaser's lender by (i) delivering written notice to Seller no
later than 5 days prior to the scheduled Closing Date, and (ii) simultaneously
with such notice to Seller, delivering to Escrow Agent the amount of
$262,000.00, which amount when received by Escrow Agent shall be added to the
Deposit hereunder, shall be non-refundable (except as otherwise expressly
provided herein with respect to the Deposit), and shall be held, credited and
disbursed in the same manner as provided hereunder with respect to the Deposit.
5.2 Seller Closing Deliveries. No later than 1 Business Day prior to the Closing
Date, Seller shall deliver to Escrow Agent, each of the following items:
5.2.1 Special 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.
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 in Seller's standard form; provided, however, that
the content of such 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 Omitted.
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 re-adjustment after Closing.
5.4.5 Property Contracts. Purchaser shall assume at Closing the obligations
under the Property Contracts assumed by Purchaser, subject to proration of
operating expenses under Section 5.4.2.
5.4.6 Leases.
5.4.6.1 All collected rent (whether fixed monthly rentals, additional rentals,
escalation rentals, retroactive rentals, operating cost pass-throughs or other
sums and charges payable by Tenants under the Leases), income and expenses from
any portion of the Property shall be prorated as of the Closing Date (prorated
for any partial month). Purchaser shall receive all collected rent and income
attributable to dates from and after the Closing Date. Seller shall receive all
collected rent and income attributable to dates prior to the Closing Date.
Notwithstanding the foregoing, no prorations shall be made in relation to either
(a) non-delinquent rents which have not been collected as of the Closing Date,
or (b) delinquent rents existing, if any, as of the Closing Date (the foregoing
(a) and (b) referred to herein as the "Uncollected Rents"). In adjusting for
Uncollected Rents, no adjustments shall be made in Seller's favor for rents
which have accrued and are unpaid as of the Closing, but Purchaser shall pay
Seller such accrued Uncollected Rents as and when collected by Purchaser after
first applying any collected rent to current and delinquent rent for periods
after the Closing. Purchaser agrees to bill Tenants of the Property for all
Uncollected Rents and to take reasonable actions to collect Uncollected Rents.
After the Closing, Seller shall continue to have the right, but not the
obligation, in its own name, to demand payment of and to collect Uncollected
Rents owed to Seller by any Tenant, which right shall include, without
limitation, the right to continue or commence legal actions or proceedings
against any Tenant and the delivery of the Leases Assignment shall not
constitute a waiver by Seller of such right. Purchaser agrees to cooperate with
Seller in connection with all efforts by Seller to collect such Uncollected
Rents and to take all steps, whether before or after the Closing Date, as may be
necessary to carry out the intention of the foregoing, including, without
limitation, the delivery to Seller, within 7 days after a written request, of
any relevant books and records (including, without limitation, rent statements,
receipted bills and copies of tenant checks used in payment of such rent), the
execution of any and all consents or other documents, and the undertaking of any
act reasonably necessary for the collection of such Uncollected Rents by Seller;
provided, however, that Purchaser's obligation to cooperate with Seller pursuant
to this sentence shall not obligate Purchaser to terminate any Tenant lease with
an existing Tenant or to sue or evict any existing Tenant from the Property.
5.4.6.2 At Closing, Purchaser shall receive a credit against the Purchase Price
in an amount equal to the received and unapplied balance of all cash (or cash
equivalent) Tenant Deposits, including, but not limited to, security, damage or
other refundable deposits or required to be paid by any of the Tenants to secure
their respective obligations under the Leases, together, in all cases, with any
interest payable to the Tenants thereunder as may be required by their
respective Tenant Lease or state law (the "Tenant Security Deposit Balance").
Any cash (or cash equivalents) held by Seller which constitute the Tenant
Security Deposit Balance shall be retained by Seller in exchange for the
foregoing credit against the Purchase Price and shall not be transferred by
Seller pursuant to this Contract (or any of the documents delivered at Closing),
but the obligation with respect to the Tenant Security Deposit Balance
nonetheless shall be assumed by Purchaser. The Tenant Security Deposit Balance
shall not include any non-refundable deposits or fees paid by Tenants to Seller,
either pursuant to the Leases or otherwise.
5.4.6.3 With respect to operating expenses, taxes, utility charges, other
operating cost pass-throughs, retroactive rental escalations, sums or charges
payable by Tenants under the Tenant Leases, to the extent that Seller has
received as of the Closing payments allocable to periods subsequent to Closing,
the same shall be properly prorated with an adjustment in favor of Purchaser,
and Purchaser shall reserve a credit therefor at Closing. With respect to any
payments received by Purchaser after the Closing allocable to Seller prior to
Closing, Purchaser shall promptly pay the same to Seller.
5.4.7 Existing Loan. On the Closing Date, Seller shall pay (which payment may be
made by Seller out of the proceeds of the Purchase Price) the outstanding
principal balance of the Note, together with all interest accrued under the Note
prior to the Closing Date (the "Loan Payoff"). Purchaser shall pay all Lender
Fees (subject to reduction from the Purchase Price in accordance with Section
2.2). Seller shall cause any existing reserves, impounds and other accounts
maintained in connection with the Loan to be released in Good Funds to Seller at
the Closing unless credited by Lender against the amount due from Seller under
the Note.
5.4.8 Insurance. No proration shall be made in relation to insurance premiums
and insurance policies will not be assigned to Purchaser.
5.4.9 Employees. All of Seller's and Seller's manager's on-site employees shall
have their employment at the Property terminated as of the Closing Date.
5.4.10 Closing Costs. Purchaser shall pay the cost of recording any instruments
required to discharge any liens or encumbrances against the Property, any
premiums or fees required to be paid by Purchaser with respect to the Title
Policy pursuant to Section 4.1, and one-half of the customary closing costs of
the Escrow Agent. Seller shall pay transfer tax and 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 if not available, copies) of the Leases and
Property Contracts, lease files, warranties, guaranties, operating manuals, keys
to the property, and Seller's books and records (other than proprietary
information) regarding the Property shall be made available to Purchaser at the
Property after the Closing.
5.4.13 Post Closing Adjustments. In general, and except as provided in this
Contract or the Closing Documents, Seller shall be entitled to all income, and
shall pay all expenses, relating to the operation of the Property for the period
prior to the Closing Date and Purchaser shall be entitled to all income, and
shall pay all expenses, relating to the operation of the Property for the period
commencing on and after the Closing Date. Purchaser or Seller may request that
Purchaser and Seller undertake to re-adjust any item on the Proration Schedule
(or any item omitted therefrom) in accordance with the provisions of Section 5.4
of this Contract; provided, however, that neither party shall have any
obligation to re-adjust any items (a) after the expiration of 60 days after
Closing, or (b) subject to such 60-day period, unless such items exceed
$5,000.00 in magnitude (either individually or in the aggregate). The provisions
of this Section 5.6 shall survive the Closing and delivery of the Deed to
Purchaser.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER
6.1 Seller's Representations. Except, in all cases, for any fact, information or
condition disclosed in the Title Documents, the Permitted Exceptions, the
Property Contracts, or the Materials, or which is otherwise known by Purchaser
prior to the Closing, Seller represents and warrants to Purchaser the following
(collectively, the "Seller's Representations") as of the Effective Date and as
of the Closing Date (provided that Purchaser's remedies if any such Seller's
Representations are untrue as of the Closing Date are limited to those set forth
in Section 8.1):
6.1.1 Seller is duly organized, validly existing and in good standing under the
laws of the state of its formation set forth in the initial paragraph of this
Contract; and has or at the Closing shall have the entity power and authority to
sell and convey the Property and to execute the documents to be executed by
Seller and prior to the Closing will have taken as applicable, all corporate,
partnership, limited liability company or equivalent entity actions required for
the execution and delivery of this Contract, and the consummation of the
transactions contemplated by this Contract. The compliance with or fulfillment
of the terms and conditions hereof will not conflict with, or result in a breach
of, the terms, conditions or provisions of, or constitute a default under, any
contract to which Seller is a party or by which Seller is otherwise bound, which
conflict, breach or default would have a material adverse affect on Seller's
ability to consummate the transaction contemplated by this Contract or on the
Property. This Contract is a valid, binding and enforceable agreement against
Seller in accordance with its terms;
6.1.2 Other than the Leases, the Property is not subject to any written lease
executed by Seller or, to Seller's knowledge, any other possessory interests of
any person;
6.1.3 Seller is not a "foreign person," as that term is used and defined in the
Internal Revenue Code, Section 1445, as amended;
6.1.4 Except for any actions by Seller to evict Tenants under the Leases, to
Seller's knowledge, there are no actions, proceedings, litigation or
governmental investigations or condemnation actions either pending or threatened
against the Property;
6.1.5 To Seller's knowledge, Seller has not received any written notice from a
governmental agency of, and there is not 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, and
there is not any uncured material default by Seller under any of the Property
Contracts that will not be terminated on the Closing Date.
6.1.7 To the knowledge of Seller, the Rent Roll (as updated pursuant to Section
5.2.11) is accurate in all material respects.
6.1.8 To Seller's knowledge: (A) no hazardous or toxic materials or other
substances regulated by applicable federal or state environmental laws are
stored by Seller on, in or under the Property in quantities which violate
applicable laws governing such materials or substances, and (B) the Property is
not used by Seller for the storage, treatment, generation or manufacture of any
hazardous or toxic materials or other substances in a manner which would
constitute a violation of applicable federal or state environmental laws.
6.2 AS-IS. Except for Seller's Representations, the Property is expressly
purchased and sold "AS IS," "WHERE IS," and "WITH ALL FAULTS." The Purchase
Price and the terms and conditions set forth herein are the result of
arm's-length bargaining between entities familiar with transactions of this
kind, and said price, terms and conditions reflect the fact that Purchaser shall
have the benefit of, and except for Seller's Representations 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). Except for 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 upon any title
insurance obtained by Purchaser and the Deed provided by Seller with respect to
title to the Property. Except for Seller's Representations, 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 12 months (the
"Survival Period"). Seller shall have no liability after the Survival Period
with respect to Seller's Representations contained herein except to the extent
that Purchaser has filed a lawsuit against Seller during the Survival Period for
breach of any of Seller's Representations. Under no circumstances shall Seller
be liable to Purchaser for more than $100,000 in any individual instance or in
the aggregate for all breaches of Seller's Representations, nor shall Purchaser
be entitled to bring any claim for a breach of Seller's Representations unless
the claim for damage (either in the aggregate or as to any individual claim) by
Purchaser exceeds $5,000. In the event that Seller breaches any representation
contained in Section 6.1 and Purchaser had knowledge of such breach prior to the
Closing Date or such breach is disclosed in the Title Documents, the Permitted
Exceptions, the Property Contracts, or the Materials, then Purchaser shall be
deemed to have waived any right of recovery, and Seller shall not have any
liability in connection therewith.
6.4 Definition of Seller's Knowledge. Any representations and warranties made
"to the knowledge of Seller" shall not be deemed to imply any duty of inquiry.
For purposes of this Contract, the term Seller's "knowledge" shall mean and
refer only to actual knowledge of the Designated Representative of the Seller
and shall not be construed to refer to the knowledge of any other partner,
officer, director, agent, employee or representative of the Seller, or any
affiliate of the Seller, or to impose upon such Designated Representative any
duty to investigate the matter to which such actual knowledge or the absence
thereof pertains, or to impose upon such Designated Representative any
individual personal liability. As used herein, the term Designated
Representative shall refer to Nancy Ferrill who is the Regional Property Manager
handling this Property (the "Regional Property Manager") and Carey Self, the
current Property Manager handling this Property (the "Property Manager").
6.5 Representations And Warranties Of Purchaser. For the purpose of inducing
Seller to enter into this Contract and to consummate the sale and purchase of
the Property in accordance herewith, Purchaser represents and warrants to Seller
the following as of the Effective Date and as of the Closing Date:
6.5.1 Purchaser is a limited liability company duly organized, validly existing
and in good standing under the laws of Michigan.
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 CB Richard Ellis (as more particularly described in Article 9 herein) 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) CB Richard Ellis or any of its affiliates
any right or option to acquire any direct or indirect legal, beneficial,
economic or voting interest in Purchaser. Notwithstanding the foregoing,
Purchaser hereby represents and warrants that Purchaser's broker, Hendricks &
Partners (as more particularly described in Article 9 herein), shall make all
the required disclosures and take any other action required by law concerning
the fact that Mr. Paul Dietz with Hendricks & Partners is (a) a principal of the
entity acquiring the Property, and (b) affiliated with the broker for Purchaser.
The provisions of this Section 6.5 shall survive the Closing and delivery of the
Deed to Purchaser.
6.6 Survival of Purchaser's Representations. Seller and Purchaser agree that
Purchaser's Representations shall survive Closing for a period of 12 months (the
"Survival Period"). Purchaser shall have no liability after the Survival Period
with respect to Purchaser's Representations contained herein except to the
extent that Seller has filed a lawsuit against Seller during the Survival Period
for breach of any of Purchaser's Representations. Under no circumstances shall
Purchaser be liable to Seller for more than $100,000 in excess of the Deposit in
any individual instance or in the aggregate for all breaches of Purchaser's
Representations, nor shall Seller be entitled to bring any claim for a breach of
Purchaser's Representations unless the claim for damage (either in the aggregate
or as to any individual claim) by Seller exceeds $5,000. In the event that
Purchaser breaches any representation contained in Section 6.5 and Seller had
knowledge of such breach prior to the Closing Date, then Seller shall be deemed
to have waived any right of recovery, and Purchaser shall not have any liability
in connection therewith.
6.7 Definition of Purchaser's Knowledge. Any representations and warranties made
"to the knowledge of Purchaser" shall not be deemed to imply any duty of
inquiry. For purposes of this Contract, the term Purchaser's "knowledge" shall
mean and refer only to actual knowledge of the Designated Representative of the
Purchaser and shall not be construed to refer to the knowledge of any other
partner, officer, director, agent, employee or representative of the Purchaser,
or any affiliate of the Purchaser, 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 Brian Dietz, who is President of the
manager of Purchaser's managing member.
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, but only in the ordinary course of business Seller may
enter into new Property Contracts, new Leases, renew existing Leases or modify,
terminate or accept the surrender or forfeiture of any of the Leases, modify any
Property Contracts, or institute and prosecute any available remedies for
default under any Lease or Property Contract without first obtaining the written
consent of Purchaser; provided, however, Seller agrees that any such new
Property Contracts or any new or renewed Leases shall not have a term in excess
of 1 year (or such longer period of time for which such Property Contracts or
Leases are entered into by Seller in the ordinary course of its operation of the
Property) without the prior written consent of Purchaser, which consent shall
not be unreasonably withheld, conditioned or delayed.
7.2 General Operation of Property. Except as specifically set forth in this
Article 7, Seller shall operate the Property after the Effective Date in the
ordinary course of business, and except as necessary in the Seller's sole
discretion to address (a) any life or safety issue at the Property or (b) any
other matter which in Seller's reasonable discretion materially adversely
affecting the use, operation or value of the Property, Seller will not make any
material alterations to the Property or remove any material Fixtures and
Tangible Personal Property without the prior written consent of Purchaser which
consent shall not be unreasonably withheld, denied or delayed. Seller hereby
agrees that Seller shall deliver the Property at Closing in the same general
physical condition existing at the time when Purchaser completes its Inspections
at the expiration of the Feasibility Period, general wear and tear excepted.
Furthermore, Seller hereby agrees and acknowledges Seller shall have replaced
the large faulty compressor located in the mechanical room no later than five
days prior to the expiration of the Feasibility Period. Additionally, it is
further understood and agreed that Seller will make the following repairs and/or
replacements ("Seller's Work") on the Property: (a) replacement of carpet, paint
and replacement of mailboxes in 3 hallway areas, (b) replacement of a pool pump
and completion of pool resurfacing, and (c) application of a seal coat and
re-strip of parking lot areas. Purchaser hereby acknowledges that Seller's Work
is estimated to cost $74,700 (the "Estimated Repair Cost"), and that Purchaser
will reimburse Seller in the amount of the actual repair costs, such amount not
to exceed the Estimated Repair Cost, upon the Closing Date. Seller will use
commercially reasonable efforts to complete Seller's Work Prior to the Closing
Date.
7.3 Liens. Other than utility easements and temporary construction easements
granted by Seller in the ordinary course of business, Seller covenants that it
will not voluntarily create or cause any lien or encumbrance to attach to the
Property between the Effective Date and the Closing Date (other than Leases and
Property Contracts as provided in Section 7.1) unless Purchaser approves such
lien or encumbrance, which approval shall not be unreasonably withheld or
delayed. Notwithstanding the foregoing, Seller hereby agrees that Seller shall
not grant any such utility easement(s) and temporary construction easements
which materially interfere with the continued operations of the Property. If
Purchaser approves any such subsequent lien or encumbrance, the same shall be
deemed a Permitted Encumbrance for all purposes hereunder.
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING
8.1 Purchaser's Conditions to Closing. Purchaser's obligation to close under
this Contract, shall be subject to and conditioned upon the fulfillment of each
and all of the following conditions precedent:
8.1.1 All of the documents required to be delivered by Seller to Purchaser at
the Closing pursuant to the terms and conditions hereof shall have been
delivered;
8.1.2 Each of the representations, warranties and covenants of Seller contained
herein shall be true in all material respects as of the Closing Date;
8.1.3 Seller shall have complied with, fulfilled and performed in all material
respects each of the covenants, terms and conditions to be complied with,
fulfilled or performed by Seller hereunder; 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 Intentionally
Omitted.
If any of the foregoing conditions to Seller's obligation to close with
respect to conveyance of the Property under this Contract are not met, Seller
may (a) waive any of the foregoing conditions and proceed to Closing on the
Closing Date, or (b) terminate this Contract, and, if such failure constitutes a
default by Purchaser, exercise any of its remedies under Section 10.1.
ARTICLE 9
BROKERAGE
9.1 Indemnity. Seller represents and warrants to Purchaser that it has dealt
only with Mr. Sean Cunningham of CB Richard Ellis, Seller's broker and Mr. Todd
Stofflet of Hendricks & Partners, Purchaser's broker (collectively "Broker") in
connection with this Contract. Seller and Purchaser each represents and warrants
to the other that, other than Broker, it has not dealt with or utilized the
services of any other real estate broker, sales person or finder in connection
with this Contract, and each party agrees to indemnify, hold harmless, and, if
requested in the sole and absolute discretion of the indemnitee, defend (with
counsel approved by the indemnitee) the other party from and against all Losses
relating to brokerage commissions and finder's fees arising from or attributable
to the acts or omissions of the indemnifying party. The provisions of this
Section 9.1 shall survive the termination of this Contract, and if not so
terminated, the Closing and delivery of the Deed to Purchaser.
9.2 Survival. Seller agrees to pay CB Richard Ellis a commission according to
the terms of a separate contract, and CB Richard Ellis shall cooperate with
Hendricks & Partners regarding same, in accordance with the terms of a separate
contract. Broker shall not be deemed a party or third party beneficiary of this
Contract.
9.3 CB Richard Ellis Signature Page. CB Richard Ellis shall execute the
signature page for Broker attached hereto solely for purposes of confirming the
matters set forth therein; provided, however, that (a) their 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.
9.4 Disclosure of Affiliation with Purchaser. Notwithstanding anything to the
contrary contained herein, Purchaser and Seller acknowledge that Mr. Paul Dietz
with Hendricks and Partners has an affiliation to the purchasing entity as a
principal in the entity acquiring the Property.
ARTICLE 10
DEFAULTS AND REMEDIES
10.1 Purchaser Default. If Purchaser defaults in its obligations hereunder to
(a) deliver the Initial Deposit or Additional Deposit, (b) deliver to the Seller
the deliveries specified under Section 5.3 on the date required thereunder, or
(c) deliver the Purchase Price at the time required by Section 2.2.4 and close
on the purchase of the Property on the Closing Date, then, immediately and
without notice or cure, Purchaser shall forfeit the Deposit, and the Escrow
Agent shall deliver the Deposit to Seller, and neither party shall be obligated
to proceed with the purchase and sale of the Property. If, Purchaser defaults in
any of its other representations, warranties or obligations under this Contract,
and such default continues for more than 10 days after written notice from
Seller, then Purchaser shall forfeit the Deposit, and the Escrow Agent shall
deliver the Deposit to Seller, and neither party shall be obligated to proceed
with the purchase and sale of the Property. The Deposit is liquidated damages
and recourse to the Deposit is, except for Purchaser's indemnity obligations
hereunder, Seller's sole and exclusive remedy for Purchaser's failure to perform
its obligation to purchase the Property or breach of a representation or
warranty. Seller expressly waives the remedies of specific performance and
additional damages for such default by Purchaser. SELLER AND PURCHASER
ACKNOWLEDGE THAT SELLER'S DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND THAT THE
DEPOSIT IS A REASONABLE ESTIMATE OF SELLER'S DAMAGES RESULTING FROM A DEFAULT BY
PURCHASER IN ITS OBLIGATION TO PURCHASE THE PROPERTY. SELLER AND PURCHASER
FURTHER AGREE THAT THIS SECTION 10.1 IS INTENDED TO AND DOES LIQUIDATE THE
AMOUNT OF DAMAGES DUE SELLER, AND SHALL BE SELLER'S EXCLUSIVE REMEDY AGAINST
PURCHASER, BOTH AT LAW AND IN EQUITY, ARISING FROM OR RELATED TO A BREACH BY
PURCHASER OF ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS
CONTRACT, OTHER THAN WITH RESPECT TO PURCHASER'S INDEMNITY OBLIGATIONS
HEREUNDER.
10.2 Seller Default. If Seller, prior to the Closing, defaults in its
representations, warranties, covenants, or obligations under this Contract,
including to sell the Property as required by this Contract and such default
continues for more than 10 days after written notice from Purchaser, then, at
Purchaser's election and as Purchaser's sole and exclusive remedy, either (A)
this Contract shall terminate, and all payments and things of value, including
the Deposit, provided by Purchaser hereunder shall be returned to Purchaser
(subject to Purchaser's obligation under Section 3.5.2 to return all Third-Party
Reports and information and Materials provided to Purchaser upon the return of
the Deposit), and Purchaser may recover, as its sole recoverable damages (but
without limiting its right to receive a refund of the Deposit), its direct and
actual out-of-pocket expenses and costs (documented by paid invoices to third
parties) in connection with this transaction, which damages shall not exceed
$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, other
than its direct and actual out-of-pocket expenses and costs as documented by
paid invoices or other evidence of payment to third parties; provided, however,
Seller shall not be responsible for more than $25,000 of such out-of-pocket
expenses and costs) incurred as a result of the delay in the Closing resulting
from Seller's breach. Purchaser agrees that it shall promptly deliver to Seller
an assignment of all of Purchaser's right, title and interest in and to
(together with possession of) all plans, studies, surveys, reports, and other
materials paid for with the out-of-pocket expenses reimbursed by Seller pursuant
to the foregoing sentence. SELLER AND PURCHASER FURTHER AGREE THAT THIS SECTION
10.2 IS INTENDED TO AND DOES LIMIT THE AMOUNT OF DAMAGES DUE PURCHASER AND THE
REMEDIES AVAILABLE TO PURCHASER, AND SHALL BE PURCHASER'S EXCLUSIVE REMEDY
AGAINST SELLER, BOTH AT LAW AND IN EQUITY ARISING FROM OR RELATED TO A BREACH BY
SELLER OF ITS REPRESENTATIONS, WARRANTIES, OR COVENANTS OR ITS OBLIGATION TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS CONTRACT. UNDER NO
CIRCUMSTANCES MAY PURCHASER SEEK OR BE ENTITLED TO RECOVER ANY SPECIAL,
CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR INDIRECT DAMAGES, ALL OF WHICH PURCHASER
SPECIFICALLY WAIVES, FROM SELLER FOR ANY BREACH BY SELLER, OF ITS
REPRESENTATIONS, WARRANTIES OR COVENANTS OR ITS OBLIGATIONS UNDER THIS CONTRACT.
PURCHASER SPECIFICALLY WAIVES THE RIGHT TO FILE ANY LIS PENDENS OR ANY LIEN
AGAINST THE PROPERTY UNLESS AND UNTIL IT HAS IRREVOCABLY ELECTED TO SEEK
SPECIFIC PERFORMANCE OF THIS CONTRACT AND HAS FILED AN ACTION SEEKING SUCH
REMEDY.
ARTICLE 11
RISK OF LOSS OR CASUALTY
11.1 Major Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to Closing, and the cost of repair is more than
$300,000, then Seller shall have no obligation to repair such damage or
destruction and shall notify Purchaser in writing of such damage or destruction
(the "Damage Notice"). Within 10 days after Purchaser's receipt of the Damage
Notice, Purchaser may elect at its option to terminate this Contract by
delivering written notice to Seller. In the event Purchaser fails to terminate
this Contract within the foregoing 10-day period, this transaction shall be
closed in accordance with the terms of this Contract for the full Purchase Price
notwithstanding any such damage or destruction and Purchaser shall receive all
insurance proceeds pertaining thereto (plus a credit against the Purchase Price
in the amount of any deductible or self insured amounts payable by Seller in
connection therewith) at Closing.
11.2 Minor Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to the Closing, and the cost of repair is less than
$300,000, this transaction shall be closed in accordance with the terms of this
Contract, notwithstanding the damage or destruction; provided, however, Seller
shall make such repairs to the extent of any recovery from insurance carried on
the Property if they can be reasonably effected before the Closing. Subject to
Section 11.3, if Seller is unable to effect such repairs, then Purchaser shall
receive all insurance proceeds pertaining thereto (plus a credit against the
Purchase Price in the amount of any deductible payable by Seller in connection
therewith) at Closing.
11.3 Repairs. To the extent that Seller elects to commence any repair,
replacement or restoration of the Property prior to Closing, then Seller shall
be entitled to receive and apply available insurance proceeds to any portion of
such repair, replacement or restoration completed or installed prior to Closing,
with Purchaser being responsible for completion of such repair, replacement or
restoration after Closing from the balance of any available insurance proceeds.
The provisions of this Section 11.3 shall survive the Closing and delivery of
the Deed to Purchaser.
ARTICLE 12
EMINENT DOMAIN
12.1 Eminent Domain. In the event that, at the time of Closing, any material
part of the Property is (or previously has been) acquired, or is about to be
acquired, by any governmental agency by the powers of eminent domain or transfer
in lieu thereof (or in the event that at such time there is any notice of any
such acquisition or intent to acquire by any such governmental agency),
Purchaser shall have the right, at Purchaser's option, to terminate this
Contract by giving written notice within 10 days after Purchaser's receipt from
Seller of notice of the occurrence of such event, and if Purchaser so terminates
this Contract shall recover the Deposit hereunder (subject to Purchaser's
obligation under Section 3.5.2 to return all Third-Party Reports and information
and Materials provided to Purchaser as a pre-condition to the return of the
Deposit). If Purchaser fails to terminate this Contract within such 10-day
period, this transaction shall be closed in accordance with the terms of this
Contract for the full Purchase Price and Purchaser shall receive the full
benefit of any condemnation award. It is expressly agreed between the parties
hereto that this section shall in no way apply to customary dedications for
public purposes which may be necessary for the development of the Property.
ARTICLE 13
MISCELLANEOUS
13.1 Binding Effect of Contract. This Contract shall not be binding on either
party until executed by both Purchaser and Seller. As provided in Section 2.3.5
and Section 9.3 above, neither the Escrow Agent's nor the Broker's execution of
this Contract shall be a pre-requisite to its effectiveness.
13.2 Exhibits And Schedules. All Exhibits and Schedules, whether or not annexed
hereto, are a part of this Contract for all purposes.
13.3 Assignability. This Contract is not assignable by Purchaser or Seller
(other than any assignment in connection with a 1031 exchange pursuant to
Section 13.19), without first obtaining the prior written approval of the other,
except that Purchaser may assign this Contract to one or more entities so long
as (a) Purchaser is an affiliate of the purchasing entity(ies), (b) Purchaser is
not released from its liability hereunder, and (c) Seller is promptly notified
thereof, but in no event later than 10 days prior to Closing. 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:
CHURCHILL PARK INVESTMENTS, LLC
c/o Dietz Holdings LLC
1025 East Maple Road, Suite 230
Birmingham, MI 48009
Attention: Mr. Brian Dietz
Telephone: 248 341-3999
Facsimile: 248 646-3744
and a copy to:
Mark Krysinski, Esq.
Jaffe, Raitt, Heuer and Weiss, P.C.
One Woodward Avenue, Suite 2400
Detroit, MI 48226
Telephone 313 964-8398
Facsimile 313 961-8358
To Seller:
c/o AIMCO
4582 South Ulster Street Parkway, Suite 1100
Denver, Colorado 80237
Attention: Mr. Patrick Slavin
Telephone: 303-691-4340
Facsimile: 303-300-3282
And:
c/o AIMCO
4582 South Ulster Street Parkway, Suite 1100
Denver, Colorado 80237
Attention: Mr. Harry Alcock
Telephone: 303-691-4344
Facsimile: 303-300-3282
with copy to:
Chad Asarch, Esq.
Vice President and Assistant General Counsel
AIMCO
4582 South Ulster Street Parkway, Suite 1100
Denver, Colorado 80237
Telephone: 303 691-4303
Facsimile: 303 300-3297
and a copy to:
Loeb & Loeb LLP
1000 Wilshire Boulevard, Suite 1800
Los Angeles, California 90017
Attention: Andrew S. Clare, Esq., and
Karen N. Higgins, Esq.
Facsimile: 213-688-3460
Any notice required hereunder to be delivered to the Escrow Agent shall be
delivered in accordance with above provisions as follows:
Stewart Title Guaranty Company
1980 Post Oak Boulevard, Suite 610
Houston, Texas 77056
Attention: Wendy Howell, National Commercial Closing Specialist
Telephone: 800-729-1906
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 Kentucky shall govern the
validity, construction, enforcement, and interpretation of this Contract, unless
otherwise specified herein except for the conflict of laws provisions thereof.
Subject to Section 13.25, all claims, disputes and other matters in question
arising out of or relating to this Contract, or the breach thereof, shall be
decided by proceedings instituted and litigated in a court of competent
jurisdiction in the state in which the Property is situated, and the parties
hereto expressly consent to the venue and jurisdiction of such court.
13.9 Entire Agreement. This Contract embodies the entire Contract between the
parties hereto concerning the subject matter hereof and supersedes all prior
conversations, proposals, negotiations, understandings and Contracts, whether
written or oral.
13.10 Amendments. This Contract shall not be amended, altered, changed,
modified, supplemented or rescinded in any manner except by a written contract
executed by all of the parties; provided, however, that, (a) as provided in
Section 2.3.5 above, the signature of the Escrow Agent shall not be required as
to any amendment of this Contract other than an amendment of Section 2.3, and
(b) as provided in Section 9.3 above, the signature of the Broker shall not be
required as to any amendment of this Contract
13.11 Severability. In the event that any part of this Contract shall be held to
be invalid or unenforceable by a court of competent jurisdiction, such provision
shall be reformed, and enforced to the maximum extent permitted by law. If such
provision cannot be reformed, it shall be severed from this Contract and the
remaining portions of this Contract shall be valid and enforceable.
13.12 Multiple Counterparts/Facsimile Signatures. This Contract may be executed
in a number of identical counterparts. This Contract may be executed by
facsimile signatures which shall be binding on the parties hereto, with original
signatures to be delivered as soon as reasonably practical thereafter.
13.13 Construction. No provision of this Contract shall be construed in favor
of, or against, any particular party by reason of any presumption with respect
to the drafting of this Contract; both parties, being represented by counsel,
having fully participated in the negotiation of this instrument.
13.14 Confidentiality. Purchaser shall not disclose the terms and conditions
contained in this Contract and shall keep the same confidential, provided that
Purchaser may disclose the terms and conditions of this Contract (a) as required
by law, (b) to consummate the terms of this Contract, or any financing relating
thereto, or (c) to Purchaser's or Seller's lenders, attorneys and accountants.
Any information and Materials provided by Seller to Purchaser hereunder are
confidential and Purchaser shall be prohibited from making such information
public to any other person or entity other than its agents and legal
representatives, without Seller's prior written authorization, which may be
granted or denied in Seller's sole discretion.
13.15 Time Of The Essence. It is expressly agreed by the parties hereto that
time is of the essence with respect to this Contract.
13.16 Waiver. No delay or omission to exercise any right or power accruing upon
any default, omission, or failure of performance hereunder shall impair any
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient. No waiver, amendment, release, or modification of this Contract shall
be established by conduct, custom, or course of dealing and all waivers must be
in writing and signed by the waiving party.
13.17 Attorneys Fees. In the event either party hereto commences litigation or
arbitration against the other to enforce its rights hereunder, the prevailing
party in such litigation shall be entitled to recover from the other party its
reasonable attorneys' fees and expenses incidental to such litigation and
arbitration, including the cost of in-house counsel and any appeals.
13.18 Time Periods. Should the last day of a time period fall on a weekend or
legal holiday, the next Business Day thereafter shall be considered the end of
the time period.
13.19 1031 Exchange. Seller and Purchaser acknowledge and agree that the
purchase and sale of the Property may be part of a tax-free exchange under
Section 1031 of the Code for either Purchaser or Seller. Each party hereby
agrees to take all reasonable steps on or before the Closing Date to facilitate
such exchange if requested by the other party, provided that (a) no party making
such accommodation shall be required to acquire any substitute property, (b)
such exchange shall not affect the representations, warranties, liabilities and
obligations of the parties to each other under this Contract, (c) no party
making such accommodation shall incur any additional cost, expense or liability
in connection with such exchange, and (d) no dates in this Contract will be
extended as a result thereof.
13.20 No Personal Liability of Officers, Trustees or Directors of Seller's
Partners. Purchaser acknowledges that this Contract is entered into by Seller
which is a California limited partnership, and Purchaser agrees that none of
Seller's Indemnified Parties shall have any personal liability under this
Contract or any document executed in connection with the transactions
contemplated by this Contract.
13.21 No Exclusive Negotiations. Seller shall have the right, at all times prior
to the expiration of the Feasibility Period, to solicit backup offers and enter
into discussions, negotiations, or any other communications concerning or
related to the sale of the Property with any third-party; provided, however,
that such communications are subject to the terms of this Contract, and that
Seller shall not enter into any contract or binding Contract with a third-party
for the sale of the Property unless such Contract is contingent on the
termination of this Contract without the Property having been conveyed to
Purchaser.
13.22 ADA Disclosure. Purchaser acknowledges that the Property may be subject to
the federal Americans With Disabilities Act (the "ADA"), which requires, among
other matters, that tenants and/or owners of "public accommodations" remove
barriers in order to make the Property accessible to disabled persons and
provide auxiliary aids and services for hearing, vision or speech impaired
persons. Seller makes no warranty, representation or guarantee of any type or
kind with respect to the Property's compliance with the ADA (or any similar
state or local law), and Seller expressly disclaims any such representation.
13.23 No Recording. Purchaser shall not cause or allow this Contract or any
contract or other document related hereto, nor any memorandum or other evidence
hereof, to be recorded or become a public record without Seller's prior written
consent, which consent may be withheld at Seller's sole discretion. If the
Purchaser records this Contract or any other memorandum or evidence thereof,
Purchaser shall be in default of its obligations under this Contract. Purchaser
hereby appoints the Seller as Purchaser's attorney-in-fact to prepare and record
any documents necessary to effect the nullification and release of the Contract
or other memorandum or evidence thereof from the public records. This
appointment shall be coupled with an interest and irrevocable.
13.24 Relationship of Parties. Purchaser and Seller acknowledge and agree that
the relationship established between the parties pursuant to this Contract is
only that of a seller and a purchaser of property. Neither Purchaser nor Seller
is, nor shall either hold itself out to be, the agent, employee, joint venturer
or partner of the other party.
13.25 Dispute Resolution. Any controversy, dispute, or claim of any nature
arising out of, in connection with, or in relation to the interpretation,
performance, enforcement or breach of this Contract (and any closing document
executed in connection herewith), including any claim based on contract, tort or
statute, shall be resolved at the written request of any party to this Contract
by binding arbitration. The arbitration shall be administered in accordance with
the then current Commercial Arbitration Rules of the American Arbitration
Association. Any matter to be settled by arbitration shall be submitted to the
American Arbitration Association in the state in which the Property is located.
The parties shall attempt to designate one arbitrator from the American
Arbitration Association. If they are unable to do so within 30 days after
written demand therefor, then the American Arbitration Association shall
designate an arbitrator. The arbitration shall be final and binding, and
enforceable in any court of competent jurisdiction. The arbitrator shall award
attorneys' fees (including those of in-house counsel) and costs to the
prevailing party and charge the cost of arbitration to the party which is not
the prevailing party. Notwithstanding anything herein to the contrary, this
Section 13.25 shall not prevent Purchaser or Seller from seeking and obtaining
equitable relief on a temporary or permanent basis, including, without
limitation, a temporary restraining order, a preliminary or permanent injunction
or similar equitable relief, from a court of competent jurisdiction located in
the state in which the Property is located (to which all parties hereto consent
to venue and jurisdiction) by instituting a legal action or other court
proceeding in order to protect or enforce the rights of such party under this
Contract or to prevent irreparable harm and injury. The court's jurisdiction
over any such equitable matter, however, shall be expressly limited only to the
temporary, preliminary, or permanent equitable relief sought; all other claims
initiated under this Contract between the parties hereto shall be determined
through final and binding arbitration in accordance with this Section 13.25.
13.26 AIMCO Marks. In accordance with the provisions set forth in Section 3.5.4
regarding 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, at any time, solicit any of
Seller's affiliates' employees located at any property within a 100 mile radius
of the Property owned by such affiliates for potential employment. Seller
acknowledges that Purchaser shall be permitted to solicit Seller's employees
located at the Property during the term of this Contract, however, Seller shall
have no obligation to provide Purchaser with any information and employee
benefits with respect to the any of Seller's employees located at the Property
until after the expiration of the Feasibility Period. Any information requested
by Purchaser pursuant to the foregoing sentence shall be made in writing to
Seller and Seller shall use all commercially reasonable efforts to deliver or
make available to Purchaser such information within 10 days of receipt of notice
thereof.
13.28 Survival. Except for (a) all of the provisions of this Article 13 (other
than Section 13.19, 13.21 and 13.23), and (b) any provision of this Contract
which expressly states that it shall so survive (the foregoing (a) and (b)
referred to herein as the "Survival Provisions"), none of the terms and
provisions of this Contract shall survive the termination of this Contract, and,
if the Contract is not so terminated, all of the terms and provisions of this
Contract (other than the Survival Provisions) shall be merged into the Closing
documents and shall not survive Closing.
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 Initial Deposit, Additional
Deposit or other amounts to Purchaser, Seller shall return the same to any
entity being a Purchaser hereunder and, upon such return, shall have no further
liability to any other entity being a Purchaser hereunder for such amount. The
foregoing provisions also shall apply to any documents, including, without
limitation, the General Assignment and Assumption and the Assignment and
Assumption of Leases and Security Deposits, executed in connection with this
Contract and the transaction(s) contemplated hereby.
ARTICLE 14
LEAD-BASED PAINT DISCLOSURE
14.1 Disclosure. Seller and Purchaser hereby acknowledge delivery of the Lead
Based Paint Disclosure attached as Exhibit G hereto. The provisions of this
Section 14.1 shall survive the Closing and delivery of the Deed to Purchaser.
14.2 Consent Agreement. Testing (the "Testing") has been performed at the
Property with respect to lead-based paint. Law Engineering and Environmental
Services, Inc. performed the Testing and reported its findings in the Report of
Findings dated January 1, 2003, a copy of which has been delivered to Purchaser
(the "Report"). The Report certifies the Property as free of (a) lead-based
hazards, (b) dust-lead hazards and (c) soil-lead hazards. By execution hereof,
Purchaser acknowledges receipt of a copy of the Report, the Lead-Based Paint
Disclosure Statement attached hereto as Exhibit G, and acknowledges receipt of
that certain Consent Agreement (the "Consent Agreement") by and among the United
States Environmental Protection Agency (executed December 19, 2001), the United
States Department of Housing and Urban Development (executed January 2, 2002),
and Apartment Investment and Management Company ("AIMCO") (executed December 18,
2001). Because the Property has been certified as free of (a) lead-based
hazards, (b) dust-lead hazards and (c) soil-lead hazards, Seller is not required
under the Consent Agreement to remediate or abate any lead-based paint condition
at the Property prior to the Closing. Purchaser acknowledges and agrees that (1)
after Closing, the Purchaser and the Property shall be subject to the Consent
Agreement and the provisions contained herein related thereto and (2) that
Purchaser shall not be deemed to be a third party beneficiary to the Consent
Agreement. 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:
CONSOLIDATED CAPITAL GROWTH FUND, a California
limited partnership
By: ConCap Equities, Inc.,
a Delaware corporation
its sole general partner
By: /s/Patrick F. Slavin
Name: Patrick F. Slavin
Its: Senior Vice President
Purchaser:
CHURCHILL PARK INVESTMENTS LLC, a Michigan
limited liability company
By: Dietz Holdings, LLC, a Michigan limited
liability company, Its Sole Member
By: Dietz Management Company, a Michigan
corporation, Its Managing Member
By:/s/Brian M. Dietz
Brian M. Dietz, President
ESCROW AGENT SIGNATURE PAGE
The undersigned executes the Contract to which this signature page is
attached for the purpose of agreeing to the provisions of Section 2.3 of the
Contract, and hereby establishes May 8th, 2003 as the date of opening of escrow
and designates 02161028 as the escrow number assigned to this escrow.
ESCROW AGENT:
STEWART TITLE GUARANTY COMPANY
By: /s/Wendy Howell
Name: Wendy Howell
Title: National Commercial Closing Specialist
Exhibit 10.37
REINSTATEMENT AND AMENDMENT OF PURCHASE AND SALE CONTRACT
(Churchill Park Apartments, Kentucky)
THIS REINSTATEMENT AMENDMENT OF PURCHASE AND SALE CONTRACT
("Reinstatement") is entered into as of the 24th day of June, 2003 (the
"Effective Date") by and between CONSOLIDATED CAPITAL GROWTH FUND, a California
limited partnership, having a principal address at 4582 South Ulster Street
Parkway, Suite 1100, Denver, Colorado 80237 ("Seller") and CHURCHILL PARK
INVESTMENTS, LLC, a Michigan limited liability company, having a principal
address at 1025 East Maple Road, Suite 230, Birmingham, Michigan 48009
("Purchaser").
RECITALS
A. Seller and Purchaser entered into a Purchase and Sale Contract dated as of
May 8, 2003 (the "Contract"), pursuant to which Seller agreed to sell to
Purchaser, and Purchaser agreed to buy from Seller the Property (as defined in
the Contract).
B. Pursuant to a letter dated as of June 23, 2003 from Purchaser, Purchaser
terminated the Contract. Seller and Purchaser have agreed to reinstate and
modify the terms of the Contract as set forth in this Reinstatement.
C. Pursuant to the terms of the Contract, Purchaser delivered to Escrow Agent an
Initial Deposit of $50,000, which Initial Deposit continues to be held by Escrow
Agent.
D. All capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Contract.
NOW THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
Seller and Purchaser agree as follows:
AGREEMENTS
1. Reinstatement. The Contract is hereby reinstated as if such Contract had
never been terminated and shall remain in full force and effect and binding on
the parties hereto, subject to the terms and conditions thereof and hereof.
2. Extension of Feasibility Period for Review of Testing Results From
Inspections. Purchaser acknowledges that it has completed all of its physical
inspections of the Property, other than the investigation and analysis of the
environmental conditions related to the individual tenant unit heating and
cooling distribution systems (the "Limited Due Diligence"). For purposes of
completing the Limited Due Diligence and for purposes of determining the Closing
Date under Section 5.1 of the Contract only, the Feasibility Period is hereby
extended from June 23, 2003 to July 7, 2003 (the "Limited Due Diligence
Period"). Purchaser hereby agrees and acknowledges that in the event Purchaser
requires any further inspections of the individual apartment units in connection
with the Limited Due Diligence, other than visual inspection, monitoring of
moisture content in rooms and ductwork, and non-invasive surface sampling,
Purchaser shall obtain advance written approval from Seller to conduct any such
inspections including, without limitation, air sampling, which approval by
Seller may be withheld in Seller's sole and absolute discretion. Any such
inspections made by Purchaser and/or its Consultants shall (a) be subject to the
relevant terms of the Tenant Leases addressing notice to Tenants and entry into
individual Tenant units, (b) require the presence of Seller's authorized
representative, and (c) be subject to the provisions of Section 3.3 and Section
3.4 of the Contract. In the event Purchaser is not satisfied, in its sole and
absolute discretion, with the results of its Limited Due Diligence, Purchaser
shall have the right to terminate the 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 Limited Due
Diligence 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 the
Contract which survives such termination, and Escrow Agent shall forthwith
return the Initial Deposit to Purchaser (subject to Purchaser's obligation under
Section 3.5.2 to return all Third-Party Reports and information and Materials
provided to Purchaser upon the return of the Initial Deposit). If Purchaser
fails to provide Seller with written notice of termination prior to the
expiration of the Limited Due Diligence 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 (including both the Initial Deposit and, when
delivered in accordance with Section 2.2.2 (as hereinafter amended), the
Additional Deposit) shall be non-refundable (except as provided in Section 8.1),
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. Additional Deposit. Section 2.2.2 of the Contract is hereby amended to
require that the Additional Deposit shall be delivered to Escrow Agent upon the
expiration of the Limited Due Diligence Period.
4. Waiver of Feasibility Period Contingencies. Purchaser hereby agrees and
acknowledges that except for the Limited Due Diligence, all other contingencies
relating to the Feasibility Period have been satisfied or waived by Purchaser as
of the Effective Date of this Reinstatement. Additionally, Purchaser hereby
acknowledges and agrees that all contingencies relating to Purchaser's review of
the Title Commitment and Survey, as more particularly set forth in Section 4.1,
Section 4.2 and Section 4.3 of the Contract, have been waived by Purchaser as of
the Effective Date of this Reinstatement.
5. Completion of Seller's Work. Purchaser and Seller hereby agree and
acknowledge that except for the installation hallway carpeting and the mailboxes
in 3 hallway areas, all other Seller's Work (as more particularly set forth in
the Contract) has been completed as of the Effective Date of this Reinstatement.
Seller shall use its commercially reasonable efforts to complete the
installation of the hallway carpeting and mailboxes in 3 hallway areas by the
expiration of the Limited Due Diligence Period; provided, however, that such
work shall not be a contingency to Closing under the Contract.
6. Consent Agreement. The following sentence is hereby appended to Section 14.2
of the Contract: Purchaser and Seller hereby agree and acknowledge that after
the Closing, (a) Seller and the Property shall remain subject to the Consent
Agreement and the provisions contained therein and related thereto, and (b) the
Testing and Remediation has been performed by Seller and Purchaser's only
ongoing obligations after the Closing under the Consent Agreement shall be those
related to maintaining the subject Property in accordance with relevant laws
concerning lead-based paint.
7. Effectiveness of Contract. Except as modified by this Reinstatement, all the
terms of the Contract shall remain unchanged and in full force and effect.
8. Counterparts. This Reinstatement may be executed in counterparts, and all
counterparts together shall be construed as one document.
9. Telecopied Signatures. A counterpart of this Reinstatement signed by one
party to this Reinstatement and telecopied to the other party to this
Reinstatement or its counsel (i) shall have the same effect as an original
signed counterpart of this Reinstatement, and (ii) shall be conclusive proof,
admissible in judicial proceedings, of such party's execution of this
Reinstatement.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, Seller and Purchaser have entered into this
Reinstatement and Amendment of Purchase and Sale Contract as of the date first
above stated.
Seller:
CONSOLIDATED CAPITAL GROWTH FUND, a
California limited partnership
By: ConCap Equities, Inc.,
a Delaware corporation
its sole general partner
By: /s/Patrick F. Slavin
Name: Patrick F. Slavin
Its: Senior Vice President
Purchaser:
CHURCHILL PARK INVESTMENTS LLC, a
Michigan limited liability company
By: Dietz Holdings, LLC, a Michigan limited
liability company, Its Sole Member
By: Dietz Management Company, a
Michigan corporation, Its Managing
Member
By: /s/Brian M. Dietz
Brian M. Dietz, President