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) September 30, 2003
ANGELES PARTNERS VII
(Exact name of registrant as specified in its charter)
California 0-8851 94-3215214
(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 September 30, 2003, the Registrant sold its last remaining investment
property, Cedarwood Apartments, located in Gretna, Louisiana. The Registrant
sold Cedarwood Apartments to REPFund Cedarwood Apartments, LLC, an unrelated
party, for $7,525,000. 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.
Because, as a result of this sale the Registrant no longer holds ownership
interests in any investment properties or in any other assets, the general
partner expects to proceeds with a liquidation of the Registrant in accordance
with the Limited Partnership Agreement of the Registrant and applicable law.
Item 7. Financial Statements and Exhibits
Since Cedarwood Apartments was the last remaining investment property, no
proforma financial information will be presented.
(c) Exhibits.
The following exhibits are filed with this report (1):
10.7 Purchase and Sale Contract between Registrant and Bethany Group,
LLC, dated July 18, 2003.
10.8 Assignment Agreement between the Bethany Group, LLC and REPFund
Cedarwood Apartments, LLC dated September 30, 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.
ANGELES PARTNERS VII
By: Angeles Realty Corporation
General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
Date: October 14, 2003
Exhibit 10.7
PURCHASE AND SALE CONTRACT
BETWEEN
ANGELES PARTNERS VII,
a California limited partnership
AS SELLER
AND
BETHANY GROUP, LLC,
a California limited liability company
and
GTS INVESTMENTS, INC.
a California corporation
AS PURCHASER
CEDARWOOD APARTMENTS
Table of Contents
Page
ARTICLE 1 DEFINED TERMS......................................................1
ARTICLE 2 PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT........................6
2.1. Purchase and Sale................................................6
2.2. Purchase Price and Deposit.......................................6
2.3. Escrow Provisions Regarding Deposit..............................7
ARTICLE 3 FEASIBILITY PERIOD.................................................8
3.1. Feasibility Period...............................................8
3.2. Expiration of Feasibility Period.................................8
3.3. Conduct of Investigation.........................................9
3.4. Purchaser Indemnification........................................9
3.5. Property Materials..............................................10
3.6. Property Contracts..............................................11
ARTICLE 4 TITLE.............................................................11
4.1. Title Documents.................................................11
4.2. Survey..........................................................11
4.3. Objection and Response Process..................................12
4.4. Permitted Exceptions............................................12
4.5. Existing Deed of Trust..........................................13
ARTICLE 5 CLOSING...........................................................13
5.1. Closing Date....................................................13
5.2. Seller Closing Deliveries.......................................13
5.3. Purchaser Closing Deliveries....................................14
5.4. Closing Prorations and Adjustments..............................15
5.5. Post Closing Adjustments........................................18
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER............18
6.1. Seller's Representations........................................18
6.2. AS-IS...........................................................19
6.3. Survival of Seller's Representations............................20
6.4. Definition of Seller's Knowledge................................21
6.5. Representations And Warranties Of Purchaser.....................21
ARTICLE 7 OPERATION OF THE PROPERTY.........................................22
7.1. Leases and Property Contracts...................................22
7.2. General Operation of Property...................................22
7.3. Liens...........................................................22
ARTICLE 8 CONDITIONS PRECEDENT TO CLOSING...................................22
8.1. Purchaser's Conditions to Closing...............................22
8.2. Seller's Conditions to Closing..................................23
ARTICLE 9 BROKERAGE.........................................................24
9.1. Indemnity.......................................................24
9.2. Broker Commission...............................................24
9.3. Broker Signature Page...........................................24
ARTICLE 10 DEFAULTS AND REMEDIES............................................24
10.1. Purchaser Default...............................................24
10.2. Seller Default..................................................25
ARTICLE 11 RISK OF LOSS OR CASUALTY.........................................26
11.1. Major Damage....................................................26
11.2. Minor Damage....................................................26
11.3. Repairs.........................................................26
ARTICLE 12 EMINENT DOMAIN...................................................26
12.1. Eminent Domain..................................................26
ARTICLE 13 MISCELLANEOUS....................................................27
13.1. Binding Effect of Contract......................................27
13.2. Exhibits And Schedules..........................................27
13.3. Assignability...................................................27
13.4. Binding Effect..................................................27
13.5. Captions........................................................27
13.6. Number And Gender Of Words......................................27
13.7. Notices.........................................................27
13.8. Governing Law And Venue.........................................30
13.9. Entire Agreement................................................30
13.10. Amendments................................................30
13.11. Severability..............................................30
13.12. Multiple Counterparts/Facsimile Signatures................30
13.13. Construction..............................................30
13.14. Confidentiality...........................................30
13.15. Time Of The Essence.......................................31
13.16. Waiver....................................................31
13.17. Attorneys Fees............................................31
13.18. Time Periods..............................................31
13.19. 1031 Exchange.............................................31
13.20. No Personal Liability of Officers, Trustees or
Directors of Seller's Partners..................................32
13.21. No Exclusive Negotiations.................................32
13.22. ADA Disclosure............................................32
13.23. No Recording..............................................32
13.24. Relationship of Parties...................................33
13.25. Dispute Resolution........................................33
13.26. AIMCO Marks...............................................33
13.27. Non-Solicitation of Employees.............................33
13.28. Survival..................................................34
13.29. Multiple Purchasers.......................................34
ARTICLE 14 LEAD-BASED PAINT DISCLOSURE......................................34
14.1. Disclosure......................................................34
14.2. Consent Agreement...............................................34
ARTICLE 15 CONTINGENCIES....................................................35
15.1. Portfolio Purchase and Sale Contracts...........................35
15.2. Simultaneous Closing and Release of Cross-Default and
Cross-Collateralization.........................................35
EXHIBIT A LEGAL DESCRIPTION FOR THE CEDARWOODS APARTMENTS.................A-1
EXHIBIT B [INTENTIONALLY DELETED].........................................B-1
EXHIBIT C FORM OF BILL OF SALE............................................C-1
EXHIBIT D GENERAL ASSIGNMENT AND ASSUMPTION...............................D-1
EXHIBIT E ASSIGNMENT AND ASSUMPTION OF LEASES AND SECURITY
DEPOSITS.............................................E-1
EXHIBIT F TENANT NOTIFICATION.............................................F-1
EXHIBIT G LEAD-BASED PAINT DISCLOSURE.....................................G-1
EXHIBIT H LEAD-BASED PAINT FREE HOUSING CERTIFICATE.......................H-1
SCHEDULE 1.1.23 LIST OF EXCLUDED FIXTURES AND TANGIBLE
PERSONAL PROPERTY.....................SCHEDULE 1.1.23
SCHEDULE 3.5 LIST OF MATERIALS...................................SCHEDULE 3.5
SCHEDULE 15.1.1 LIST OF PORTFOLIO PROPERTIES..................SCHEDULE 15.1.1
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as of
the 18th day of July, 2003 (the "Effective Date") by and between ANGELES
PARTNERS VII, a California limited partnership, having an address at 4582 South
Ulster Street Parkway, Suite 1100, Denver, Colorado 80237 ("Seller") and BETHANY
GROUP, LLC, a California limited liability company, having a principal address
at 2424 S.E. Bristol, Suite 330, Newport Beach, California 92660, and GTS
INVESTMENTS, INC., a California corporation, having a principal address at 734
Silver Spur Road, Suite 300, Rolling Hills Estates, California 90274
(collectively, "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 Parish of Jefferson, Louisiana,
as more particularly described in Exhibit A attached hereto and made a part
hereof, and the improvements thereon, commonly known as Cedarwood Apartments.
B. Purchaser desires to purchase, and Seller desires to sell, such land,
improvements and certain associated property, on the terms and conditions set
forth below.
ARTICLE 1
DEFINED TERMS
1.1...Unless otherwise defined herein, any term with its initial letter
capitalized in this Contract shall have the meaning set forth in this ARTICLE 1.
1.1.1. "ADA" shall have the meaning set forth in Section 13.22.
1.1.2. "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 or used by Seller, the Property Manager, or AIMCO in
the marketing, operation or use of the Property (or in the marketing, operation
or use of any other properties managed by the Property Manager or owned by AIMCO
or an affiliate of either Property Manager or AIMCO).
1.1.5. [Intentionally left blank].
1.1.6. [Intentionally left blank].
1.1.7. [Intentionally left blank].
1.1.8. "Broker" shall have the meaning set forth in Section 9.1.
1.1.9. "Business Day" means any day other than a Saturday or Sunday or Federal
holiday or legal holiday in the States of Colorado, Texas, Arizona, California
or Louisiana.
1.1.10. "Closing" means the consummation of the purchase and sale and related
transactions contemplated by this Contract in accordance with the terms and
conditions of this Contract.
1.1.11. "Closing Date" means the date on which date the Closing of the
conveyance of the Property is required to be held pursuant to Section 5.1.
1.1.12. "Code" shall have the meaning set forth in Section 2.3.6.
1.1.13. "Consent Agreement" shall have the meaning set forth in Section 14.2.
1.1.14. "Consultants" shall have the meaning set forth in Section 3.1.
1.1.15. "Damage Notice" shall have the meaning set forth in Section 11.1.
1.1.16. "Deed" shall have the meaning set forth in Section 5.2.1.
1.1.16.5 "Deed of Trust" shall have the meaning set forth in Section 4.5.
1.1.17. "Deposit" means, to the extent actually deposited by Purchaser with
Escrow Agent, the Initial Deposit and the Additional Deposit.
1.1.18. "Escrow Agent" shall have the meaning set forth in Section 2.2.1.
1.1.19. "Excluded Permits" means those Permits which, under applicable law, are
nontransferable and such other Permits, if any, as may be designated as Excluded
Permits during the Feasibility Period.
1.1.20. "Existing Survey" shall have the meaning set forth in Section 4.2.
1.1.21. "Feasibility Period" shall have the meaning set forth in Section 3.1.
1.1.22. "Final Response Deadline" shall have the meaning set forth in Section
4.3.
1.1.23. "Fixtures and Tangible Personal Property" means all fixtures, furniture,
furnishings, fittings, equipment, machinery, apparatus, appliances and other
articles of tangible personal property located on the Land or in the
Improvements as of the Effective Date and used or usable in connection with the
occupation or operation of all or any part of the Property, but only to the
extent transferable. The term "Fixtures and Tangible Personal Property" does not
include (a) equipment leased by Seller and the interest of Seller in any
equipment provided to the Property for use, but not owned or leased by Seller,
or (b) property owned or leased by any Tenant or guest, employee or other person
furnishing goods or services to the Property, or (c) property and equipment
owned by Seller, which in the ordinary course of business of the Property is not
used exclusively for the business, operation or management of the Property, or
(d) the property and equipment, if any, expressly identified in Schedule 1.1.23
and as addition exclusions may be identified during the Feasibility Period.
1.1.24. "General Assignment" shall have the meaning set forth in Section 5.2.3.
1.1.25. "Good Funds" shall have the meaning set forth in Section 2.2.1.
1.1.26. "Improvements" means all buildings and improvements located on the Land
taken "as is."
1.1.27. "Initial Deposit" shall have the meaning set forth in Section 2.2.1.
1.1.28. "Land" means all of those certain tracts of land located in the State of
Louisiana described on Exhibit A, and all rights, privileges and appurtenances
pertaining thereto.
1.1.29. "Lease(s)" means the interest of Seller in and to all leases, subleases
and other occupancy contracts, whether or not of record, which provide for the
use or occupancy of space or facilities on or relating to the Property and which
are in force as of the Closing Date for the applicable Property.
1.1.30. "Leases Assignment" shall have the meaning set forth in Section 5.2.4.
1.1.31. "Lender" means Federal Home Loan Mortgage Corporation ("Freddie Mac"),
whose servicer is GMAC Commercial Mortgage Corporation.
1.1.31.5 "Lender Fees" shall mean all fees and expenses (including, without
limitation, all prepayment penalties and pay-off fees) imposed or charged by
Lender or its counsel in connection with the Loan Payoff, and, to the extent
that the Loan Payoff occurs on a date other than as permitted under the Note and
Deed of Trust, any amounts of interest charged by Lender for the period from the
Closing Date to the permitted prepayment date, the amount of the Lender's Fees
to be determined as of the Closing Date.
1.1.32. "Loan" means the indebtedness owing to Lender evidenced by the Note.
1.1.33. [Intentionally left blank].
1.1.34. "Loan Balance" shall have the meaning set forth in Section 2.2.3.
1.1.35. "Loan Payoff" shall have the meaning set forth in Section 5.4.7.
1.1.36. "Losses" shall have the meaning set forth in Section 3.4.1.
1.1.37. "Materials" shall have the meaning set forth in Section 3.5.
1.1.38. "Miscellaneous Property Assets" means all contract rights, leases,
concessions, warranties, plans, drawings and other items of intangible personal
property relating to the ownership or operation of the Property and owned by
Seller, excluding, however, (a) receivables, (b) Property Contracts, (c) Leases,
(d) Permits, (e) cash or other funds, whether in petty cash or house "banks," or
on deposit in bank accounts or in transit for deposit, (f) refunds, rebates or
other claims, or any interest thereon, for periods or events occurring prior to
the Closing Date, (g) utility and similar deposits, (h) insurance or other
prepaid items, (i) Seller's proprietary books and records, or (j) any right,
title or interest in or to the AIMCO Marks. The term "Miscellaneous Property
Assets" also shall include all of Seller's rights, if any, in and to the name
"Cedarwood Apartments" or "Cedarwood" as it relates solely to use in connection
with the Property (and not with respect to any other property owned or managed
by Seller, Property Manager, AIMCO, or their respective affiliates).
1.1.39. "Note" means that certain Multifamily Note, dated June 19, 1998, as
amended and restated by that certain Amended and Restated Multifamily Note,
dated September 28, 2001 in the original principal amount of $3,395,000.00.
1.1.40. "Objection Deadline" shall have the meaning set forth in Section 4.3.
1.1.41. "Objection Notice" shall have the meaning set forth in Section 4.3.
1.1.42. "Objections" shall have the meaning set forth in Section 4.3.
1.1.43. "Permits" means all licenses and permits granted by any governmental
authority having jurisdiction over the Property owned by Seller and required in
order to own and operate the Property.
1.1.44. "Permitted Exceptions" shall have the meaning set forth in Section 4.4.
1.1.45. "Property" means (a) the Land and Improvements and all rights of Seller,
if any, in and to all of the easements, rights, privileges, and appurtenances
belonging or in any way appertaining to the Land and Improvements, (b) the
right, if any and only to the extent transferable, of Seller in the Property
Contracts, Leases, Permits (other than Excluded Permits), and the Fixtures and
Tangible Personal Property, and (c) the Miscellaneous Property Assets owned by
Seller which are located on the Property and used in its operation.
1.1.46. "Property Contracts" means all contracts, agreements, equipment leases,
purchase orders, maintenance, service, or utility contracts and similar
contracts, excluding Leases, which relate to the ownership, maintenance,
construction or repair and/or operation of the Property, but only to the extent
the assignment of such contract to Purchaser is permitted pursuant to the
express terms of such contract, and not including (a) any national contracts
entered into by Seller, Property Manager, or AIMCO with respect to the Property
(i) which terminate automatically upon transfer of the Property by Seller, or
(ii) which Seller, in Seller's sole discretion, elects to terminate with respect
to the Property effective as of the Closing Date, or (b) any property management
contract for the Property.
1.1.47. "Property Contracts Notice" shall have the meaning set forth in Section
3.6.
1.1.48. "Property Manager" means the current property manager of the Property.
1.1.49. "Proration Schedule" shall have the meaning set forth in Section 5.4.1.
1.1.50. "Purchase Price" means the consideration to be paid by Purchaser to
Seller for the purchase of the Property pursuant to Section 2.2.
1.1.51. "Regional Property Manager" shall have the meaning set forth in Section
6.4.
1.1.52. [Intentionally left blank].
1.1.53. "Report" shall have the meaning set forth in Section 14.2.
1.1.54. "Response Deadline" shall have the meaning set forth in Section 4.3.
1.1.55. "Response Notice" shall have the meaning set forth in Section 4.3.
1.1.56. "Seller's Indemnified Parties" shall have the meaning set forth in
Section 3.4.1
1.1.57. "Seller's Representations" shall have the meaning set forth in Section
6.1.
1.1.58. "Survey" shall have the meaning ascribed thereto in Section 4.2.
1.1.59. "Survival Period" shall have the meaning set forth in Section 6.3.
1.1.60. "Survival Provisions" shall have the meaning set forth in Section 13.28.
1.1.61. "Tenant" means any person or entity entitled to occupy any portion of
the Property under a Lease.
1.1.62. "Tenant Deposits" means all security deposits, prepaid rentals, cleaning
fees and other refundable deposits and fees collected from Tenants, plus any
interest accrued thereon, paid by Tenants to Seller pursuant to the Leases.
Tenant Deposits shall not include any non-refundable deposits or fees paid by
Tenants to Seller, either pursuant to the Leases or otherwise.
1.1.63. "Tenant Security Deposit Balance" shall have the meaning set forth in
Section 5.4.6.2.
1.1.64. "Terminated Contracts" shall have the meaning set forth in Section 3.6.
1.1.65. "Testing" shall have the meaning set forth in Section 14.2.
1.1.66. "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.
1.1.67. "Title Commitment" shall have the meaning ascribed thereto in Section
4.1.
1.1.68. "Title Documents" shall have the meaning set forth in Section 4.1.
1.1.69. "Title Insurer" shall have the meaning set forth in Section 2.2.1.
1.1.70. "Title Policy" shall have the meaning set forth in Section 4.1.
1.1.71. "Uncollected Rents" shall have the meaning set forth in Section 5.4.6.1.
1.1.72. "Vendor Terminations" shall have the meaning set forth in Section 5.2.5.
ARTICLE 2
PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT
2.1. Purchase and Sale. Seller agrees to sell and convey the Property to
Purchaser and Purchaser agrees to purchase the Property from Seller, all in
accordance with the terms and conditions set forth in this Contract.
2.2. Purchase Price and Deposit. The total purchase price ("Purchase Price") for
the Property shall be an amount equal to $7,250,000.00, 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"), with accompanying investment instructions to Escrow Agent pursuant to
Section 2.3.1, an initial deposit (the "Initial Deposit") of $71,400 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. Within 10 days after the Feasibility Period expires, Purchaser shall
deliver to Escrow Agent an additional deposit (the "Additional Deposit") of
$68,600 by wire by 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 left blank].
2.2.4. The balance of the Purchase Price for the Property shall be paid to and
received by Escrow Agent by wire transfer of Good Funds no later than 11:00 a.m.
(in the time zone in which Escrow Agent is located) on the Closing Date (or such
earlier time as required by Seller's lender).
2.3. Escrow Provisions Regarding Deposit.
2.3.1. Escrow Agent shall hold the Deposit and make delivery of the Deposit to
the party entitled thereto under the terms of this Contract. Escrow Agent shall
invest the Deposit in such short-term, high-grade securities, interest-bearing
bank accounts, money market funds or accounts, bank certificates of deposit or
bank repurchase contracts as Escrow Agent, in its discretion, deems suitable,
subject to Purchaser's written consent or ratification, 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 as a pre-condition to the return
of the Deposit to Purchaser). If Escrow Agent does receive such written
objection within such 5-Business Day period, Escrow Agent shall continue to hold
such amount until otherwise directed by written instructions from the parties to
this Contract or a final judgment or arbitrator's decision. However, Escrow
Agent shall have the right at any time to deposit the Deposit and interest
thereon, if any, with a court of competent jurisdiction in the state in which
the Property is located. Escrow Agent shall give written notice of such deposit
to Seller and Purchaser. Upon such deposit, Escrow Agent shall be relieved and
discharged of all further obligations and responsibilities hereunder.
2.3.4. The parties acknowledge that Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that Escrow Agent shall
not be deemed to be the agent of either of the parties for any act or omission
on its part unless taken or suffered in bad faith in willful disregard of this
Contract or involving gross negligence. Seller and Purchaser jointly and
severally shall indemnify and hold Escrow Agent harmless from and against all
costs, claims and expenses, including reasonable attorney's fees, incurred in
connection with the performance of Escrow Agent's duties hereunder, except with
respect to actions or omissions taken or suffered by Escrow Agent in bad faith,
in willful disregard of this Contract or involving gross negligence on the part
of the Escrow Agent.
2.3.5. The parties shall deliver to Escrow Agent an executed copy of this
Contract, which shall constitute the sole instructions to Escrow Agent. Escrow
Agent shall execute the signature page for Escrow Agent attached hereto with
respect to the provisions of this Section 2.3; provided, however, that (a)
Escrow Agent's signature hereon shall not be a prerequisite to the binding
nature of this Contract on Purchaser and Seller, and the same shall become fully
effective upon execution by Purchaser and Seller, and (b) the signature of
Escrow Agent will not be necessary to amend any provision of this Contract other
than this Section 2.3.
2.3.6. Escrow Agent, as the person responsible for closing the transaction
within the meaning of Section 6045(e)(2)(A) of the Internal Revenue Code of
1986, as amended (the "Code"), shall file all necessary information, reports,
returns, and statements regarding the transaction required by the Code
including, but not limited to, the tax reports required pursuant to Section 6045
of the Code. Further, Escrow Agent agrees to indemnify and hold Purchaser,
Seller, and their respective attorneys and brokers harmless from and against any
Losses resulting from Escrow Agent's failure to file the reports Escrow Agent is
required to file pursuant to this section.
2.3.7. The provisions of this Section 2.3 shall survive the termination of this
Contract, and if not so terminated, the Closing and delivery of the Deed to
Purchaser.
ARTICLE 3
FEASIBILITY PERIOD
3.1. Feasibility Period. Subject to the terms of Section 3.3 and 3.4 and the
right of Tenants under the Leases, from the Effective Date to and including
August 8, 2003 (the "Feasibility Period"), Purchaser, and its agents,
contractors, engineers, surveyors, attorneys, and employees (collectively,
"Consultants") shall have the right from time to time to enter onto the
Property:
3.1.1. To conduct and make any and all customary studies, tests, examinations,
inquiries, and inspections, or investigations (collectively, the "Inspections")
of or concerning the Property (including, without limitation, engineering and
feasibility studies, evaluation of drainage and flood plain, soil tests for
bearing capacity and percolation and surveys, including topographical surveys);
3.1.2. To confirm any and all matters which Purchaser may reasonably desire to
confirm with respect to the Property;
3.1.3. To ascertain and confirm the suitability of the property for Purchaser's
intended use of the Property; and
3.1.4. To review the Materials at Purchaser's sole cost and expense.
3.2. Expiration of Feasibility Period. If the results of any of the matters
referred to in Section 3.1 appear unsatisfactory to Purchaser for any reason or
if Purchaser elects not to proceed with the transaction contemplated by this
Contract for any other reason, or for no reason whatsoever, in Purchaser's sole
and absolute discretion, then Purchaser shall have the right to terminate this
Contract by giving written notice to that effect to Seller and Escrow Agent on
or before 5:00 p.m. (in the time zone in which the Escrow Agent is located) on
the date of expiration of the Feasibility Period. If Purchaser exercises such
right to terminate, this Contract shall terminate and be of no further force and
effect subject to and except for Purchaser's liability pursuant to Section 3.3
and any other provision of this Contract which survives such termination, and
Escrow Agent shall forthwith return the 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 as a pre-condition to 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, and Purchaser's obligation to
purchase the Property shall be non-contingent and unconditional except only for
satisfaction of the conditions expressly stated in Section 8.1.
3.3. Conduct of Investigation. Purchaser shall not permit any mechanic's or
materialmen's liens or any other liens to attach to the Property by reason of
the performance of any work or the purchase of any materials by Purchaser or any
other party in connection with any Inspections conducted by or for Purchaser.
Purchaser shall give notice to Seller a reasonable time prior to entry onto the
Property and shall permit Seller to have a representative present during all
Inspections conducted at the Property. All information made available by Seller
to Purchaser in accordance with this Contract or obtained by Purchaser in the
course of its Inspections shall be treated as confidential information by
Purchaser, and, prior to the purchase of the Property by Purchaser, Purchaser
shall use its best efforts to prevent its Consultants from divulging such
information to any unrelated third parties except as reasonably necessary to
third parties engaged by Purchaser for the limited purpose of analyzing and
investigating such information for the purpose of consummating the transaction
contemplated by this Contract. The provisions of this Section 3.3 shall survive
the termination of this Contract, and if not so terminated shall survive (except
for the confidentiality provisions of this Section 3.3) the Closing and delivery
of the Deed to Purchaser.
3.4. Purchaser Indemnification.
3.4.1. Purchaser shall indemnify, hold harmless and, if requested by Seller (in
Seller's sole discretion), defend (with counsel approved by Seller) Seller,
together with Seller's affiliates, parent and subsidiary entities, successors,
assigns, partners, managers, members, employees, officers, directors, trustees,
shareholders, counsel, representatives, agents, Property Manager, Regional
Property Manager, and AIMCO (collectively, including Seller, "Seller's
Indemnified Parties"), from and against any and all damages, mechanics' liens,
liabilities, losses, demands, actions, causes of action, claims, costs and
expenses (including reasonable attorneys' fees, including the cost of in-house
counsel and appeals) (collectively, "Losses") arising from or related to
Purchaser's or its Consultant's entry onto the Property, and any Inspections or
other matters performed by Purchaser with respect to the Property during the
Feasibility Period or otherwise.
3.4.2. Notwithstanding anything in this Contract to the contrary, Seller shall
have the right, without limitation, to disapprove any and all entries, surveys,
tests (including, without limitation, a Phase II environmental study of the
Property), investigations and other matters that in Seller's reasonable judgment
could result in any injury to the Property or breach of any contract, or expose
Seller to any Losses or violation of applicable law, or otherwise adversely
affect the Property or Seller's interest therein. Purchaser shall use best
efforts to minimize disruption to Tenants in connection with Purchaser's or its
Consultants' activities pursuant to this Section. No consent by the Seller to
any such activity shall be deemed to constitute a waiver by Seller or assumption
of liability or risk by Seller. Purchaser hereby agrees to restore, at
Purchaser's sole cost and expense, the Property substantially 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; provided, however, that under no
circumstances will the Feasibility Period be extended and Buyer's sole remedy
will be to terminate this Contract pursuant to Section 3.2.
3.5.2. In providing such information and Materials to Purchaser, other than
Seller's Representations, Seller makes no representation or warranty, express,
written, oral, statutory, or implied, and all such representations and
warranties are hereby expressly excluded and disclaimed. Any information and
Materials provided by Seller to Purchaser under the terms of this Contract is
for informational purposes only and, together with all Third-Party Reports,
shall be returned by Purchaser to Seller as a condition to return of the Deposit
to Purchaser (if Purchaser is otherwise entitled to such Deposit pursuant to the
terms of this Contract) if this Contract is terminated for any reason. Purchaser
shall not in any way be entitled to rely upon the accuracy of such information
and Materials. Purchaser recognizes and agrees that the Materials and other
documents and information delivered or made available by Seller pursuant to this
Contract may not be complete or constitute all of such documents which are in
Seller's possession or control, but are those that are readily available to
Seller after reasonable inquiry to ascertain their availability. Purchaser
understands that, although Seller will use commercially reasonable efforts to
locate and make available the Materials and other documents required to be
delivered or made available by Seller pursuant to this Contract, Purchaser will
not rely on such Materials or other documents as being a complete and accurate
source of information with respect to the Property, and will instead in all
instances rely exclusively on its own Inspections and Consultants with respect
to all matters which it deems relevant to its decision to acquire, own and
operate the Property.
3.5.3. The provisions of this Section 3.5 shall survive the Closing and delivery
of the Deed to Purchaser.
3.6. Property Contracts. On or before the expiration of the Feasibility Period,
Purchaser may deliver written notice to Seller (the "Property Contracts Notice")
specifying any Property Contracts with respect to which Purchaser desires to
have Seller deliver notices of termination at the Closing (the "Terminated
Contracts"); provided that (a) the effective date of such termination after
Closing shall be subject to the express terms of such Terminated Contracts, (b)
if any such Property Contract cannot by its terms be terminated, it shall be
assumed by Purchaser and not be a Terminated Contract, and (c) to the extent
that any such Terminated Contract requires payment of a penalty or premium for
cancellation, Purchaser shall be solely responsible for the payment of any such
cancellation fees or penalties. If Purchaser fails to deliver the Property
Contracts Notice on or before the expiration of the Feasibility Period, there
shall be no Terminated Contracts and Purchaser shall assume all Property
Contracts at the Closing.
ARTICLE 4
TITLE
4.1. Title Documents. Within 5 calendar days after the Effective Date, Seller
shall cause to be delivered to Purchaser a standard form commitment for title
insurance ("Title Commitment") for the Property in an amount equal to the
Purchase Price from Title Insurer for an owner's title insurance policy (the
"Title Policy") on the most recent standard American Land Title Association
form, together with copies of all instruments identified as exceptions therein
(together with the Title Commitment, referred to herein as the "Title
Documents"). Seller shall be responsible only for payment of the basic premium
for the Title Policy. Purchaser shall be solely responsible for payment of all
other costs relating to procurement of the Title Commitment, the Title Policy,
and any requested endorsements.
4.2. Survey. Within 3 Business Days after the Effective Date, Seller shall
deliver to Purchaser or make available at the Property 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 Purchaser
shall pay the costs thereof. Purchaser acknowledges and agrees that delivery of
the Existing Survey is subject to Section 3.5.2. To the extent that Purchaser
desires that a new survey of the Property be prepared (or that the Existing
Survey be updated), Purchaser shall request the same in writing to Seller no
later than 5 Business Days after the Effective Date, in which event Seller shall
order such new or updated survey (together with the Existing Survey, referred to
herein as the "Survey") from the surveyor who prepared the Existing Survey (or
from such other surveyor as Seller determines in its reasonable discretion).
Purchaser shall be solely responsible for the cost and expense of the
preparation of any new or updated survey requested pursuant to the terms of this
Section 4.2.
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. 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 Initial 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 as a pre-condition to the return of the Initial 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 or the
Survey, subject only to resolution, if any, of the Objections as set forth in
the Response Notice (or if no Response Notice is tendered, without any
resolution of the Objections).
4.4. Permitted Exceptions. The Deed delivered pursuant to this Contract shall be
subject to the following, all of which shall be deemed "Permitted Exceptions":
4.4.1. All matters shown in the Title Documents and the Survey, other than (a)
those Objections, if any, which Seller has agreed to cure pursuant to the
Response Notice under Section 4.3, (b) mechanics' liens and taxes due and
payable with respect to the period preceding Closing, (c) the standard exception
regarding the rights of parties in possession which shall be limited to those
parties in possession pursuant to the Leases, and (d) the standard exception
pertaining to taxes which shall be limited to taxes and assessments payable in
the year in which the Closing occurs and subsequent taxes and assessments;
4.4.2. All Leases;
4.4.3. [Intentionally left blank];
4.4.4. Applicable zoning and governmental regulations and ordinances;
4.4.5. Any defects in or objections to title to the Property, or title
exceptions or encumbrances, arising by, through or under Purchaser; and
4.4.6. The terms and conditions of this Contract.
4.5. Existing Deed of Trust. It is understood and agreed that, whether or not
Purchaser gives an Objection Notice with respect thereto, any deeds of trust
and/or mortgages (including any and all mortgages which secure the Note) against
the Property (whether one or more, the "Deed of Trust") shall not be deemed
Permitted Exceptions, whether Purchaser gives written notice of such or not, and
shall be paid off, satisfied, discharged and/or cured by Seller at or before
Closing (including any and all defeasance obligations and expenses required
under the Deed of Trust), provided that the Lender's Fees due in connection with
the Loan Payoff shall be paid by Purchaser.
ARTICLE 5
CLOSING
5.1. Closing Date. The Closing shall occur 30 days following the expiration of
the Feasibility Period (the "Closing Date") through an escrow with Escrow Agent,
whereby the Seller, Purchaser and their attorneys need not be physically present
at the Closing and may deliver documents by overnight air courier or other
means. Notwithstanding the foregoing to the contrary, Seller shall have the
option, by delivering written notice to Purchaser, to extend the Closing Date to
the last Business Day of the month in which the Closing Date otherwise would
occur pursuant to the preceding sentence, or to such other date (either in the
same month or the next) as Seller reasonably determines is desirable in
connection with the Loan Payoff. Further, the Closing Date may be extended
without penalty at the option of Seller to a date not later than 30 days
following the Closing Date specified in the first sentence of this paragraph
above (or, if applicable, as extended by Seller pursuant to the second sentence
of this paragraph) to satisfy a condition to be satisfied by Seller, or such
later date as is mutually acceptable to Seller and Purchaser.
5.2. Seller Closing Deliveries. No later than 1 Business Day prior to the
Closing Date, Seller shall deliver to Escrow Agent, each of the following items:
5.2.1. Limited Warranty Deed (the "Deed") in the form required by the law of the
state in which the Property is located, to Purchaser, subject to the Permitted
Exceptions.
5.2.2. A Bill of Sale in the form attached as Exhibit C.
5.2.3. A General Assignment in the form attached as Exhibit D (the "General
Assignment").
5.2.4. An Assignment of Leases and Security Deposits in the form attached as
Exhibit E (the "Leases Assignment").
5.2.5. A letter prepared by Purchaser and countersigned by Seller to each of the
vendors under the Terminated Contracts informing them of the termination of such
Terminated Contract as of the Closing Date (subject to any delay in the
effectiveness of such termination pursuant to the express terms of each
applicable Terminated Contract) (the "Vendor Terminations").
5.2.6. A closing statement executed by Seller.
5.2.7. A title affidavit or at Seller's option an indemnity, as applicable, in
the customary form reasonably acceptable to Seller to enable Title Insurer to
delete the standard exceptions to the title insurance policy set forth in this
Contract (other than matters constituting any Permitted Exceptions and matters
which are to be completed or performed post-Closing) to be issued pursuant to
the Title Commitment; provided that such affidavit does not subject Seller to
any greater liability, or impose any additional obligations, other than as set
forth in this Contract.
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.
5.3. Purchaser Closing Deliveries. No later than 1 Business Day prior to the
Closing Date (except for the balance of the Purchase Price which is to be
delivered at the time specified in Section 2.2.4), Purchaser shall deliver to
the Escrow Agent (for disbursement to Seller upon the Closing) the following
items with respect to the Property being conveyed at such Closing:
5.3.1. The full Purchase Price (with credit for the Deposit), plus or minus the
adjustments or prorations required by this Contract.
5.3.2. A title affidavit (or at Purchaser's option an indemnity) pertaining to
Purchaser's activity on the Property prior to Closing, in the customary form
reasonably acceptable to Purchaser, to enable Title Insurer to delete the
standard exceptions to the title insurance policy set forth in this Contract
(other than matters constituting any Permitted Exceptions and matters which are
to be completed or performed post-Closing) to be issued pursuant to the Title
Commitment; provided that such affidavit does not subject Purchaser to any
greater liability, or impose any additional obligations, other than as set forth
in this Contract.
5.3.3. Any declaration or other statement which may be required to be submitted
to the local assessor with respect to the terms of the sale of the Property.
5.3.4. A closing statement executed by Purchaser.
5.3.5. A countersigned counterpart of the General Assignment.
5.3.6. A countersigned counterpart of the Leases Assignment.
5.3.7. Notification letters to all Tenants prepared and executed by Purchaser in
the form attached hereto as Exhibit F.
5.3.8. The Vendor Terminations.
5.3.9. Any cancellation fees or penalties due to any vendor under any Terminated
Contract as a result of the termination thereof.
5.3.10. Resolutions, certificates of good standing, and such other
organizational documents as Title Insurer shall reasonably require evidencing
Purchaser's authority to consummate this transaction.
5.3.11. [Intentionally deleted].
5.3.12. The Lender Fees (subject to reduction from the Purchase Price in
accordance with Section 2.2).
5.4. Closing Prorations and Adjustments.
5.4.1. General. All normal and customarily proratable items, including, without
limitation, collected rents, operating expenses, personal property taxes, other
operating expenses and fees, shall be prorated as of the Closing Date, Seller
being charged or credited, as appropriate, for all of same attributable to the
period up to the Closing Date (and credited for any amounts paid by Seller
attributable to the period on or after the Closing Date, if assumed by
Purchaser) and Purchaser being responsible for, and credited or charged, as the
case may be, for all of same attributable to the period on and after the Closing
Date. Seller shall prepare a proration schedule (the "Proration Schedule") of
the adjustments described in this Section 5.4 prior to Closing. Such adjustments
shall be paid by Purchaser to Seller (if the prorations result in a net credit
to Seller) or by Seller to Purchaser (if the prorations result in a net credit
to Purchaser), by increasing or reducing the cash to be paid by Purchaser at
Closing.
5.4.2. Operating Expenses. All of the operating, maintenance, taxes (other than
real estate taxes, such as rental taxes), and other expenses incurred in
operating the Property that Seller customarily pays, and any other costs
incurred in the ordinary course of business for the management and operation of
the Property, shall be prorated on an accrual basis. Seller shall pay all such
expenses that accrue prior to Closing and Purchaser shall pay all such expenses
that accrue from and after the Closing Date.
5.4.3. Utilities. The final readings and final billings for utilities will be
made if possible as of the Closing Date, in which case Seller shall pay all such
bills as of the Closing Date and no proration shall be made at the Closing with
respect to utility bills. Otherwise, a proration shall be made based upon the
parties' reasonable good faith estimate and a readjustment made within 30 days
after the Closing, if necessary. Seller shall be entitled to the return of any
deposit(s) posted by it with any utility company, and Seller shall notify each
utility company serving the Property to terminate Seller's account, effective as
of noon on the Closing Date.
5.4.4. Real Estate Taxes. Any real estate ad valorem or similar taxes for the
Property, or any installment of assessments payable in installments which
installment is payable in the calendar year of Closing, shall be prorated to the
date of Closing, based upon actual days involved. The proration of real property
taxes or installments of assessments shall be based upon the assessed valuation
and tax rate figures for the year in which the Closing occurs to the extent the
same are available; provided, that in the event that actual figures (whether for
the assessed value of the Property or for the tax rate) for the year of Closing
are not available at the Closing Date, the proration shall be made using figures
from the preceding year. The proration of real property taxes or installments of
assessments shall be final and not subject to re-adjustment after Closing,
except regarding supplemental, corrective or amendatory real estate tax
assessments or billings received after the Closing applicable to any period
during Seller's ownership of the Property, as described in the remainder of this
Section 5.4.4. In the event that (a) the Title Insurer will not issue title
insurance for real property taxes and assessments for the time periods before
Closing for which taxes and assessments were due and payable on the Closing Date
and (b) the law in the state where the Property is located permits a
governmental agency to supplement, correct or amend taxes and assessments and
collect them from a bona fide purchaser, Seller shall be liable for such taxes
and assessments if Purchaser provides Seller notice of such supplemental,
corrective or amendatory real estate taxes. Seller's liability for such real
estate taxes shall survive for 3 years and Seller shall have no liability for
such taxes after 3 years. Seller shall have the right to contest the amount and
validity of such real estate taxes.
5.4.5. Property Contracts. Purchaser shall assume at Closing the obligations
under the Property Contracts assumed by Purchaser, subject to proration of
operating expenses under Section 5.4.2.
5.4.6. Leases.
5.4.6.1 All collected rent (whether fixed monthly rentals, additional rentals,
escalation rentals, retroactive rentals, operating cost pass-throughs or other
sums and charges payable by Tenants under the Leases), income and expenses from
any portion of the Property shall be prorated as of the Closing Date (prorated
for any partial month). Purchaser shall receive all collected rent and income
attributable to dates from and after the Closing Date. Seller shall receive all
collected rent and income attributable to dates prior to the Closing Date.
Notwithstanding the foregoing, no prorations shall be made in relation to either
(a) non-delinquent rents which have not been collected as of the Closing Date,
or (b) delinquent rents existing, if any, as of the Closing Date (the foregoing
(a) and (b) referred to herein as the "Uncollected Rents"). In adjusting for
Uncollected Rents, no adjustments shall be made in Seller's favor for rents
which have accrued and are unpaid as of the Closing, but Purchaser shall pay
Seller such accrued Uncollected Rents as and when collected by Purchaser.
Purchaser agrees to bill Tenants of the Property for all Uncollected Rents and
to take reasonable actions (not including lawsuits or other formal proceedings)
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, file any formal actions or proceedings, 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). Any existing reserves, impounds and other accounts maintained in
connection with the Loan shall be released in Good Funds to Seller at the
Closing unless credited by Lender against the amount due from Seller under the
Note.
5.4.8. Insurance. No proration shall be made in relation to insurance premiums
and insurance policies will not be assigned to Purchaser.
5.4.9. Employees. All of Seller's and Seller's manager's on-site employees shall
have their employment at the Property terminated as of the Closing Date.
5.4.10. Closing Costs. Purchaser shall pay any transfer, sales, use, gross
receipts or similar taxes, the cost of recording any instruments required to
discharge any liens or encumbrances against the Property, any premiums or fees
required to be paid by Purchaser with respect to the Title Policy pursuant to
Section 4.1, and one-half of the customary closing costs of the Escrow Agent.
Seller shall pay the base premium for the Title Policy to the extent required by
Section 4.1, and one-half of the customary closing costs of the Escrow Agent.
This Contract was signed prior to the parties verifying the local custom for
closing costs. If local custom is different than what is stated in this Section
5.4.10, this contract shall be amended to provide for closing costs to be
allocated according to local custom.
5.4.11. Survival. The provisions of this Section 5.4 shall survive the Closing
and delivery of the Deed to Purchaser.
5.4.12. Possession. Possession of the Property, subject to the Leases, Property
Contracts which are not identified as Terminated Contracts during the
Feasibility Period (subject to the limitations of Section 3.6), and Permitted
Exceptions, shall be delivered to Purchaser at the Closing upon release from
escrow of all items to be delivered by Purchaser pursuant to Section 5.3,
including, without limitation, the Purchase Price. To the extent reasonably
available to Seller, originals or copies of the Leases and Property Contracts,
lease files, warranties, guaranties, operating manuals, keys (including Tenant's
master keys), access codes and other passwords, plans and specifications for the
Improvements, and Seller's books and records (other than proprietary
information) regarding the Property shall be made available to Purchaser at the
Property after the Closing.
5.5. Post Closing Adjustments. In general, and except as provided in this
Contract or the Closing Documents, Seller shall be entitled to all income, and
shall pay all expenses, relating to the operation of the Property for the period
prior to the Closing Date and Purchaser shall be entitled to all income, and
shall pay all expenses, relating to the operation of the Property for the period
commencing on and after the Closing Date. Purchaser or Seller may request that
Purchaser and Seller undertake to re-adjust any item on the Proration Schedule
(or any item omitted therefrom) in accordance with the provisions of Section 5.4
of this Contract; provided, however, that neither party shall have any
obligation to re-adjust any items (a) after the expiration of 60 days after
Closing, or (b) subject to such 60-day period, unless such items exceed
$5,000.00 in magnitude (either individually or in the aggregate). The provisions
of this Section 5.6 shall survive the Closing and delivery of the Deed to
Purchaser.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER
6.1. Seller's Representations. Except, in all cases, for any fact, information
or condition disclosed in the Title Documents, the Permitted Exceptions, the
Property Contracts, or the Materials, or which is otherwise known by Purchaser
prior to the Closing, Seller represents and warrants to Purchaser the following
(collectively, the "Seller's Representations") as of the Effective Date and as
of the Closing Date (provided that Purchaser's remedies if any such Seller's
Representations are untrue as of the Closing Date are limited to those set forth
in Section 8.1):
6.1.1. Seller is duly organized, validly existing and in good standing under the
laws of the state of its formation set forth in the initial paragraph of this
Contract; and, subject to Section 8.2.4, has or at the Closing shall have the
entity power and authority to sell and convey the Property and to execute the
documents to be executed by Seller and prior to the Closing will have taken as
applicable, all corporate, partnership, limited liability company or equivalent
entity actions required for the execution and delivery of this Contract, and the
consummation of the transactions contemplated by this Contract. The compliance
with or fulfillment of the terms and conditions hereof will not conflict with,
or result in a breach of, the terms, conditions or provisions of, or constitute
a default under, any contract to which Seller is a party or by which Seller is
otherwise bound, which conflict, breach or default would have a material adverse
affect on Seller's ability to consummate the transaction contemplated by this
Contract or on the Property. Subject to Section 8.2.4, this Contract is a valid,
binding and enforceable agreement against Seller in accordance with its terms;
6.1.2. Other than the Leases, the Property is not subject to any written lease
executed by Seller or, to Seller's knowledge, any other possessory interests of
any person;
6.1.3. Seller is not a "foreign person," as that term is used and defined in the
Internal Revenue Code, Section 1445, as amended;
6.1.4. Except for any actions by Seller to evict Tenants under the Leases, to
Seller's knowledge, there are no actions, proceedings, litigation (including
bankruptcy) 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 any uncured material violations of any federal, state,
county or municipal law, ordinance, order, regulation or requirement affecting
the Property; and
6.1.6. To Seller's knowledge, Seller has not received any written notice of any
material default by Seller under any of the Property Contracts that will not be
terminated on the Closing Date.
6.1.7. To Seller's knowledge: (A) no hazardous or toxic materials or other
substances regulated by applicable federal or state environmental laws are
stored by Seller on, in or under the Property in quantities which violate
applicable laws governing such materials or substances, and (B) the Property is
not used by Seller for the storage, treatment, generation or manufacture of any
hazardous or toxic materials or other substances in a manner which would
constitute a violation of applicable federal or state environmental laws.
6.1.8. Seller has not intentionally misstated or misrepresented any information
contained in the Materials delivered pursuant to Section 3.5.1.
6.2. AS-IS. Except for Seller's Representations, the Property is expressly
purchased and sold "AS IS," "WHERE IS," and "WITH ALL FAULTS." The Purchase
Price and the terms and conditions set forth herein are the result of
arm's-length bargaining between entities familiar with transactions of this
kind, and said price, terms and conditions reflect the fact that Purchaser shall
have the benefit of, and is not relying upon, any information provided by Seller
or Broker or statements, representations or warranties, express or implied, made
by or enforceable directly against Seller or Broker, including, without
limitation, any relating to the value of the Property, the physical or
environmental condition of the Property, any state, federal, county or local
law, ordinance, order or permit; or the suitability, compliance or lack of
compliance of the Property with any regulation, or any other attribute or matter
of or relating to the Property (other than any covenants of title contained in
the Deed conveying the Property and Seller's Representations). Purchaser agrees
that Seller shall not be responsible or liable to Purchaser for any defects,
errors or omissions, or on account of any conditions affecting the Property.
Purchaser, its successors and assigns, and anyone claiming by, through or under
Purchaser, hereby fully releases Seller's Indemnified Parties from, and
irrevocably waives its right to maintain, any and all claims and causes of
action that it or they may now have or hereafter acquire against Seller's
Indemnified Parties with respect to any and all Losses arising from or related
to any defects, errors, omissions or other conditions affecting the Property.
Purchaser represents and warrants that, as of the date hereof and as of the
Closing Date, it has and shall have reviewed and conducted such independent
analyses, studies (including, without limitation, environmental studies and
analyses concerning the presence of lead, asbestos, PCBs and radon in and about
the Property), reports, investigations and inspections as it deems appropriate
in connection with the Property. If Seller provides or has provided any
documents, summaries, opinions or work product of consultants, surveyors,
architects, engineers, title companies, governmental authorities or any other
person or entity with respect to the Property, including, without limitation,
the offering prepared by Broker, Purchaser and Seller agree that Seller has done
so or shall do so only for the convenience of both parties, Purchaser shall not
rely thereon and the reliance by Purchaser upon any such documents, summaries,
opinions or work product shall not create or give rise to any liability of or
against Seller's Indemnified Parties. Purchaser shall rely only upon any title
insurance obtained by Purchaser with respect to title to the Property. Purchaser
acknowledges and agrees that no representation has been made and no
responsibility is assumed by Seller with respect to current and future
applicable zoning or building code requirements or the compliance of the
Property with any other laws, rules, ordinances or regulations, the financial
earning capacity or expense history of the Property, the continuation of
contracts, continued occupancy levels of the Property, or any part thereof, or
the continued occupancy by tenants of any Leases or, without limiting any of the
foregoing, occupancy at Closing. Prior to Closing, Seller shall have the right,
but not the obligation, to enforce its rights against any and all Property
occupants, guests or tenants. Purchaser agrees that the departure or removal,
prior to Closing, of any of such guests, occupants or tenants shall not be the
basis for, nor shall it give rise to, any claim on the part of Purchaser, nor
shall it affect the obligations of Purchaser under this Contract in any manner
whatsoever; and Purchaser shall close title and accept delivery of the Deed with
or without such tenants in possession and without any allowance or reduction in
the Purchase Price under this Contract. Excluding environmental claims or
actions brought by unrelated, nongovernmental third-parties relating to events
occurring before Closing, Purchaser hereby releases Seller from any and all
claims and liabilities relating to the foregoing matters. The provisions of this
Section 6.2 shall survive the Closing and delivery of the Deed to Purchaser.
6.3. Survival of Seller's Representations. Seller and Purchaser agree that
Seller's Representations shall survive Closing for a period of 6 months (the
"Survival Period"). Seller shall have no liability after the Survival Period
with respect to Seller's Representations contained herein except to the extent
that Purchaser has requested arbitration against Seller during the Survival
Period for breach of any of Seller's Representations. Under no circumstances
shall Seller be liable to Purchaser for more than $50,000 in any individual
instance or in the aggregate for all breaches of Seller's Representations, nor
shall Purchaser be entitled to bring any claim for a breach of Seller's
Representations unless the claim for damage (either in the aggregate or as to
any individual claim) by Purchaser exceeds $5,000. In the event that Seller
breaches any representation contained in Section 6.1 and Purchaser had knowledge
of such breach prior to the Closing Date, Purchaser shall be deemed to have
waived any right of recovery, and Seller shall not have any liability in
connection therewith.
6.4. Definition of Seller's Knowledge. Any representations and warranties made
"to the knowledge of Seller" shall not be deemed to imply any duty of inquiry.
For purposes of this Contract, the term Seller's "knowledge" shall mean and
refer only to actual knowledge of the Designated Representative of the Seller
and shall not be construed to refer to the knowledge of any other partner,
officer, director, agent, employee or representative of the Seller, or any
affiliate of the Seller, or to impose upon such Designated Representative any
duty to investigate the matter to which such actual knowledge or the absence
thereof pertains, or to impose upon such Designated Representative any
individual personal liability. As used herein, the term Designated
Representative shall refer to Catheryn Collins who is the Regional Property
Manager handling this Property (the "Regional Property Manager").
6.5. Representations And Warranties Of Purchaser. For the purpose of inducing
Seller to enter into this Contract and to consummate the sale and purchase of
the Property in accordance herewith, Purchaser represents and warrants to Seller
the following as of the Effective Date and as of the Closing Date:
6.5.1. Purchaser consists of 1) a limited liability company, and 2) a
corporation both of which are duly organized, validly existing and in good
standing under the laws of California.
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
(including bankruptcy) exists which if determined adversely would restrain the
consummation of the transactions contemplated by this Contract or would declare
illegal, invalid or non-binding any of Purchaser's obligations or covenants to
Seller.
6.5.4. Other than Seller's Representations, Purchaser has not relied on any
representation or warranty made by Seller or any representative of Seller
(including, without limitation, Broker) in connection with this Contract and the
acquisition of the Property.
6.5.5. The Broker and its affiliates do not, and will not at the Closing, have
any direct or indirect legal, beneficial, economic or voting interest in
Purchaser (or in an assignee of Purchaser, which pursuant to Section 13.3,
acquires the Property at the Closing), nor has Purchaser or any affiliate of
Purchaser granted (as of the Effective Date or the Closing Date) the Broker or
any of its affiliates any right or option to acquire any direct or indirect
legal, beneficial, economic or voting interest in Purchaser.
The provisions of this Section 6.5 shall survive the Closing and delivery
of the Deed to Purchaser.
ARTICLE 7
OPERATION OF THE PROPERTY
7.1. Leases and Property Contracts. During the period of time from the Effective
Date to the Closing Date, in the ordinary course of business Seller may enter
into new Property Contracts, new Leases, renew existing Leases or modify,
terminate or accept the surrender or forfeiture of any of the Leases, modify any
Property Contracts, or institute and prosecute any available remedies for
default under any Lease or Property Contract without first obtaining the written
consent of Purchaser; provided, however, Seller agrees that any such new
Property Contracts or any new or renewed Leases shall not have a term in excess
of 1 year (or such longer period of time for which such Property Contracts or
Leases are entered into by Seller in the ordinary course of its operation of the
Property) without the prior written consent of Purchaser, which consent shall
not be unreasonably withheld, conditioned or delayed.
7.2. General Operation of Property. Except as specifically set forth in this
Article 7, Seller shall operate the Property after the Effective Date in the
ordinary course of business, and except as necessary in the Seller's sole
discretion to address (a) any life or safety issue at the Property or (b) any
other matter which in Seller's reasonable discretion materially adversely
affecting the use, operation or value of the Property, Seller will not make any
material alterations to the Property or remove any material Fixtures and
Tangible Personal Property without the prior written consent of Purchaser which
consent shall not be unreasonably withheld, denied or delayed.
7.3. Liens. Other than utility easements and temporary construction easements
granted by Seller in the ordinary course of business, Seller covenants that it
will not voluntarily create or cause any lien or encumbrance to attach to the
Property between the Effective Date and the Closing Date (other than Leases and
Property Contracts as provided in Section 7.1) unless Purchaser approves such
lien or encumbrance, which approval shall not be unreasonably withheld or
delayed. If Purchaser approves any such subsequent lien or encumbrance, the same
shall be deemed a Permitted Encumbrance for all purposes hereunder.
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING
8.1. Purchaser's Conditions to Closing. Purchaser's obligation to close under
this Contract, shall be subject to and conditioned upon the fulfillment of each
and all of the following conditions precedent:
8.1.1. All of the documents required to be delivered by Seller to Purchaser at
the Closing pursuant to the terms and conditions hereof shall have been
delivered;
8.1.2. Each of the representations, warranties and covenants of Seller contained
herein shall be true in all material respects as of the Closing Date;
8.1.3. Seller shall have complied with, fulfilled and performed in all material
respects each of the covenants, terms and conditions to be complied with,
fulfilled or performed by Seller hereunder; and
8.1.4. Neither Seller nor Seller's general partner shall be a debtor in any
bankruptcy proceeding nor shall have been in the last 6 months a debtor in any
bankruptcy proceeding.
Notwithstanding anything to the contrary, there are no other conditions on
Purchaser's obligation to Close except as expressly set forth in this Section
8.1. If any condition set forth in Sections 8.1.1, 8.1.3 or 8.1.4 is not met,
Purchaser may (a) waive any of the foregoing conditions and proceed to Closing
on the Closing Date with no offset or deduction from the Purchase Price, or (b)
if such failure constitutes a default by Seller, exercise any of its remedies
pursuant to Section 10.2. If the condition set forth in Section 8.1.2 is not
met, Purchaser may, as its sole and exclusive remedy, (i) notify Seller of
Purchaser's election to terminate this Contract and receive a return of the
Deposit from the Escrow Agent, or (ii) waive such condition and proceed to
Closing on the Closing Date with no offset or deduction from the Purchase Price.
8.2. Seller's Conditions to Closing. Without limiting any of the rights of
Seller elsewhere provided for in this Contract, Seller's obligation to close
with respect to conveyance of the Property under this Contract shall be subject
to and conditioned upon the fulfillment of each and all of the following
conditions precedent:
8.2.1 All of the documents and funds required to be delivered by
Purchaser to Seller at the Closing pursuant to the terms and conditions hereof
shall have been delivered;
8.2.2 Each of the representations, warranties and covenants
of Purchaser contained herein shall be true in all material respects as of
the Closing Date;
8.2.3 Purchaser shall have complied with, fulfilled and performed in
all material respects each of the covenants, terms and conditions to be complied
with, fulfilled or performed by Purchaser hereunder; and
8.2.4 Seller shall have received all consents and approvals to the
consummation of the transactions contemplated hereby (a) of Seller's partners,
members, managers, shareholders or directors to the extent required by Seller's
(or Seller's affiliates') organizational documents, or (b) that are required by
law.
8.2.5 [Intentionally deleted].
If any of the foregoing conditions to Seller's obligation to close with
respect to conveyance of the Property under this Contract are not met, Seller
may (a) waive any of the foregoing conditions and proceed to Closing on the
Closing Date, or (b) terminate this Contract, and, if such failure constitutes a
default by Purchaser, exercise any of its remedies under Section 10.1.
ARTICLE 9
BROKERAGE
9.1. Indemnity. Seller represents and warrants to Purchaser that it has dealt
only with Secured Capital Corp, 11150 Santa Monica Boulevard, Suite 1400, Los
Angeles, California 90025 ("Broker") in connection with this Contract. Seller
and Purchaser each represents and warrants to the other that, other than Broker,
it has not dealt with or utilized the services of any other real estate broker,
sales person or finder in connection with this Contract, and each party agrees
to indemnify, hold harmless, and, if requested in the sole and absolute
discretion of the indemnitee, defend (with counsel approved by the indemnitee)
the other party from and against all Losses relating to brokerage commissions
and finder's fees arising from or attributable to the acts or omissions of the
indemnifying party. The provisions of this Section 9.1 shall survive the
termination of this Contract, and if not so terminated, the Closing and delivery
of the Deed to Purchaser.
9.2. Broker Commission. Seller agrees to pay Broker a commission according to
the terms of a separate Contract. Broker shall not be deemed a party or third
party beneficiary of this Contract.
9.3. Broker Signature Page. Broker shall execute the signature page for Broker
attached hereto solely for purposes of confirming the matters set forth therein;
provided, however, that (a) Broker's signature hereon shall not be a
prerequisite to the binding nature of this Contract on Purchaser and Seller, and
the same shall become fully effective upon execution by Purchaser and Seller,
and (b) the signature of Broker will not be necessary to amend any provision of
this Contract.
ARTICLE 10
DEFAULTS AND REMEDIES
10.1. Purchaser Default. If Purchaser defaults in its obligations hereunder to
(a) deliver the 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, and such default continues
for three (3) Business Days after notice from Seller, then, immediately and
without further notice or cure, Purchaser shall forfeit the Deposit, and the
Escrow Agent shall deliver the Deposit to Seller, and neither party shall be
obligated to proceed with the purchase and sale of the Property. If, Purchaser
defaults in any of its other representations, warranties or obligations under
this Contract, and such default continues for more than 10 days after written
notice from Seller, then Purchaser shall forfeit the Deposit, and the Escrow
Agent shall deliver the Deposit to Seller, and neither party shall be obligated
to proceed with the purchase and sale of the Property. The Deposit is liquidated
damages and recourse to the Deposit is, except for Purchaser's indemnity
obligations hereunder, Seller's sole and exclusive remedy for Purchaser's
failure to perform its obligation to purchase the Property or breach of a
representation or warranty. Seller expressly waives the remedies of specific
performance and additional damages for such default by Purchaser. SELLER AND
PURCHASER ACKNOWLEDGE THAT SELLER'S DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND
THAT THE DEPOSIT IS A REASONABLE ESTIMATE OF SELLER'S DAMAGES RESULTING FROM A
DEFAULT BY PURCHASER IN ITS OBLIGATION TO PURCHASE THE PROPERTY. SELLER AND
PURCHASER FURTHER AGREE THAT THIS SECTION 10.1.1 IS INTENDED TO AND DOES
LIQUIDATE THE AMOUNT OF DAMAGES DUE SELLER, AND SHALL BE SELLER'S EXCLUSIVE
REMEDY AGAINST PURCHASER, BOTH AT LAW AND IN EQUITY, ARISING FROM OR RELATED TO
A BREACH BY PURCHASER OF ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY THIS CONTRACT, OTHER THAN WITH RESPECT TO PURCHASER'S INDEMNITY
OBLIGATIONS HEREUNDER.
10.2. Seller Default. If Seller, prior to the Closing, defaults in its
representations, warranties, covenants, or obligations under this Contract,
including to sell the Property as required by this Contract and such default
continues for more than 10 days after written notice from Purchaser, then, at
Purchaser's election and as Purchaser's sole and exclusive remedy, either (A)
this Contract shall terminate, and all payments and things of value, including
the Deposit, provided by Purchaser hereunder shall be returned to Purchaser
(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) 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 $70,000 in aggregate, or (B) Purchaser may seek specific performance of
Seller's obligation to deliver the Deed pursuant to this Contract (but not
damages). Purchaser agrees that it shall promptly deliver to Seller an
assignment of all of Purchaser's right, title and interest in and to (together
with possession of) all plans, studies, surveys, reports, and other materials
paid for with the out-of-pocket expenses reimbursed by Seller pursuant to the
foregoing sentence. SELLER AND PURCHASER FURTHER AGREE THAT THIS SECTION 10.2 IS
INTENDED TO AND DOES LIMIT THE AMOUNT OF DAMAGES DUE PURCHASER AND THE REMEDIES
AVAILABLE TO PURCHASER, AND SHALL BE PURCHASER'S EXCLUSIVE REMEDY AGAINST
SELLER, BOTH AT LAW AND IN EQUITY ARISING FROM OR RELATED TO A BREACH BY SELLER
OF ITS REPRESENTATIONS, WARRANTIES, OR COVENANTS OR ITS OBLIGATION TO CONSUMMATE
THE TRANSACTIONS CONTEMPLATED BY THIS CONTRACT. UNDER NO CIRCUMSTANCES MAY
PURCHASER SEEK OR BE ENTITLED TO RECOVER ANY SPECIAL, CONSEQUENTIAL, PUNITIVE,
SPECULATIVE OR INDIRECT DAMAGES, ALL OF WHICH PURCHASER SPECIFICALLY WAIVES,
FROM SELLER FOR ANY BREACH BY SELLER, OF ITS REPRESENTATIONS, WARRANTIES OR
COVENANTS OR ITS OBLIGATIONS UNDER THIS CONTRACT. PURCHASER SPECIFICALLY WAIVES
THE RIGHT TO FILE ANY LIS PENDENS OR ANY LIEN AGAINST THE PROPERTY UNLESS AND
UNTIL IT HAS IRREVOCABLY ELECTED TO SEEK SPECIFIC PERFORMANCE OF THIS CONTRACT
AND HAS FILED AN ACTION SEEKING SUCH REMEDY.
ARTICLE 11
RISK OF LOSS OR CASUALTY
11.1. Major Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to Closing, and the cost of repair is more than
$300,000, then Seller shall have no obligation to repair such damage or
destruction and shall notify Purchaser in writing of such damage or destruction
(the "Damage Notice"). Within 10 days after Purchaser's receipt of the Damage
Notice, Purchaser may elect at its option to terminate this Contract by
delivering written notice to Seller. In the event Purchaser fails to terminate
this Contract within the foregoing 10-day period, this transaction shall be
closed in accordance with the terms of this Contract for the full Purchase Price
notwithstanding any such damage or destruction and Purchaser shall receive all
insurance proceeds pertaining thereto (plus a credit against the Purchase Price
in the amount of any deductible payable by Seller in connection therewith) at
Closing.
11.2. Minor Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to the Closing, and the cost of repair is less than
$300,000, this transaction shall be closed in accordance with the terms of this
Contract, notwithstanding the damage or destruction; provided, however, Seller
shall make such repairs to the extent of any recovery from insurance carried on
the Property if they can be reasonably effected before the Closing. Subject to
Section 11.3, if Seller is unable to effect such repairs, then Purchaser shall
receive all insurance proceeds pertaining thereto (plus a credit against the
Purchase Price in the amount of any deductible payable by Seller in connection
therewith) at Closing.
11.3. Repairs. To the extent that Seller elects to commence any repair,
replacement or restoration of the Property prior to Closing, then Seller shall
be entitled to receive and apply available insurance proceeds to any portion of
such repair, replacement or restoration completed or installed prior to Closing,
with Purchaser being responsible for completion of such repair, replacement or
restoration after Closing from the balance of any available insurance proceeds.
To the extent any single repair, replacement or restoration exceeds $25,000,
Seller shall notify Purchaser and obtain Purchaser's reasonable consent prior to
commencing such repair, replacement or restoration. 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 (including, but not limited to an acquisition that limits access to the
Property), 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 without first
obtaining the prior written approval of the Seller, except that Purchaser may
assign this Contract to one or more entities so long as (a) Purchaser is an
affiliate of the purchasing entity(ies), (b) Purchaser is not released from its
liability hereunder, and (c) Seller consents thereto (which consent shall not be
unreasonably withheld or delayed). As used herein, an affiliate is a person or
entity controlled by, under common control with, or controlling another person
or entity, and includes an exchange accommodator or similar intermediary
participating on a party's behalf to facilitate a tax-deferred/delayed exchange
under applicable law.
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:
GTS Investments, Inc.
734 Silver Spur Road, Suite 300
Rolling Hills Estates, California 90274
Attention: Mr. Bien Gan Oei, President
Telephone: 310-544-6233
Facsimile: 310-544-6236
and
Bethany Group, LLC
c/o Thomas E. Thompson
2424 S.E. Bristol
Suite 330
Newport Beach, California 92660
Telephone: 949-585-7615
Facsimile: 949-585-7639
with copy to:
Law Offices of Richard P. Yang
Attorney at Law
2300 So. Sepulveda Boulevard
Los Angeles, California 90064
Telephone: 310-954-2171
Facsimile: 310-954-2169
To Seller:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Patrick Slavin
Telephone: 303-691-4340
Facsimile: 303-300-3282
And:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Mr. Harry Alcock
Telephone: 303-691-4344
Facsimile: 303-300-3282
with copy to:
Chad Asarch, Esq.
Vice President and Assistant General Counsel
AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Telephone: 303-691-4303
Facsimile: 303-300-3297
and a copy to:
Argent Real Estate
1401 Brickell Avenue, Suite 520
Miami, Florida 33131
Attention: Mr. David Marquette
Telephone: 305-371-9299
Facsimile: 305-371-6898
and a copy to:
Ballard Spahr Andrews & Ingersoll, LLP
1225 17th Street, Suite 2300
Denver, Colorado 80202
Attention: Beverly J. Quail, Esq.
Telephone: 303-292-2400
Facsimile: 303-296-3956
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 Louisiana 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. Notwithstanding the foregoing,
the parties (and each employee, representative, or other agent of the parties)
may disclose to any and all persons, without limitation of any kind, the tax
treatment and any facts that may be relevant to the tax structure of the
transaction, provided, however, that no party (and no employee, representative,
or other agent thereof) shall disclose any other information that is not
relevant to understanding the tax treatment and tax structure of the transaction
(including the identity of any party and any information that could lead another
to determine the identity of any party), or any other information to the extent
that such disclosure could result in a violation of any federal or state
securities law.
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 (other than expenses of reviewing and executing
documents required in connection with such exchange), and (d) no dates in this
Contract will be extended as a result thereof. Notwithstanding anything to the
contrary contained in the foregoing, if Seller so elects to close the transfer
of the Property as an exchange, then (i) Seller, at its sole option, may
delegate its obligations to transfer the Property under this Contract, and may
assign its rights to receive the Purchase Price from Purchaser, to a deferred
exchange intermediary (an "Intermediary") or to an exchange accommodation
titleholder, as the case may be; (ii) such delegation and assignment shall in no
way reduce, modify or otherwise affect the obligations of Seller pursuant to
this Contract; (iii) Seller shall remain fully liable for its obligations under
this Contract as if such delegation and assignment shall not have taken place;
(iv) Intermediary or exchange accommodation titleholder, as the case may be,
shall have no liability to Purchaser; and (v) the closing of the transfer of the
Property to Purchaser shall be undertaken by direct deed from Seller (or, if
applicable, from other affiliates of Seller whom Seller will cause to execute
such deeds) to Purchaser or to exchange accommodation titleholder, as the case
may be. Notwithstanding anything to the contrary contained in the foregoing, if
Purchaser so elects to close the acquisition of the Property as an exchange,
then (i) Purchaser, at its sole option, may delegate its obligations to acquire
the Property under this Contract, and may assign its rights to receive the
Property from Seller, to an Intermediary or to an exchange accommodation
titleholder, as the case may be; (ii) such delegation and assignment shall in no
way reduce, modify or otherwise affect the obligations of Purchaser pursuant to
this Contract; (iii) Purchaser shall remain fully liable for its obligations
under this Contract as if such delegation and assignment shall not have taken
place; (iv) Intermediary or exchange accommodation titleholder, as the case may
be, shall have no liability to Seller; and (v) the closing of the acquisition of
the Property by Purchaser or the exchange accommodation titleholder, as the case
may be, shall be undertaken by direct deed from Seller (or, if applicable, from
other affiliates of Seller whom Seller will cause to execute such deeds) to
Purchaser (or to exchange accommodation titleholder, as the case may be).
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.
This Contract was signed prior to the parties verifying that arbitrators in the
state where the Property is located can enforce a specific performance remedy.
If it is determined that arbitrators cannot enforce a specific performance
remedy, this Contract shall be amended to provide that a suit for specific
performance shall be excluded from the requirement of dispute resolution under
this Section 13.25.
13.26. AIMCO Marks. Purchaser agrees that Seller, the Property Manager or AIMCO,
or their respective affiliates, are the sole owners of all right, title and
interest in and to the AIMCO Marks (or have the right to use such AIMCO Marks
pursuant to license agreements with third parties) and that no right, title or
interest in or to the AIMCO Marks is granted, transferred, assigned or conveyed
as a result of this Contract. Purchaser further agrees that Purchaser will not
use the AIMCO Marks for any purpose.
13.27. Non-Solicitation of Employees. Purchaser acknowledges and agrees that,
without the express written consent of Seller, neither Purchaser nor any of
Purchaser's employees, affiliates or agents shall solicit any of Seller's
employees or any employees located at the Property (or any of Seller's
affiliates' employees located at any property owned by such affiliates) for
potential employment.
13.28. Survival. Except for (a) all of the provisions of this Article 13 (other
than Section 13.19, 13.21 and 13.23), and (b) any provision of this Contract
which expressly states that it shall so survive, and (c) any payment obligation
of Purchaser under this Contract (the foregoing (a), (b) and (c) referred to
herein as the "Survival Provisions"), none of the terms and provisions of this
Contract shall survive the termination of this Contract, and, if the Contract is
not so terminated, all of the terms and provisions of this Contract (other than
the Survival Provisions) shall be merged into the Closing documents and shall
not survive Closing.
13.29. Multiple Purchasers. As used in this Contract, the term "Purchaser" means
all entities acquiring any interest in the Property at the Closing, including,
without limitation, any assignee(s) of the original Purchaser pursuant to
Section 13.3 of this Contract. In the event that "Purchaser" has any obligations
or makes any covenants, representations or warranties under this Agreement, the
same shall be made jointly and severally by all entities being a Purchaser
hereunder. In the event that Seller receives notice from any entity being a
Purchaser hereunder, the same shall be deemed to constitute notice from all
entities being a Purchaser hereunder. In the event that any entity being a
Purchaser hereunder takes any action, breaches any obligation or otherwise acts
pursuant to the terms of this Contract, the same shall be deemed to be the
action of the other entity(ies) being a Purchaser hereunder and the action of
"Purchaser" under this Contract. In the event that Seller is required to give
notice or take action with respect to Purchaser under this Contract, notice to
any entity being a Purchaser hereunder or action with respect to any entity
being a Purchaser hereunder shall be a notice or action to all entities being a
Purchaser hereunder. In the event that any entity being a Purchaser hereunder
desires to bring an action or arbitration against Seller, such action must be
joined by all entities being a Purchaser hereunder in order to be effective. In
the event that there is any agreement by Seller to pay any amount pursuant to
this Contract to Purchaser under any circumstance, that amount shall be deemed
maximum aggregate amount to be paid to all parties being a Purchaser hereunder
and not an amount that can be paid to each party being a Purchaser hereunder. In
the event that Seller is required to return the Initial Deposit, Additional
Deposit or other amount to Purchaser, Seller shall return the same to any entity
being a Purchaser hereunder and, upon such return, shall have no further
liability to any other entity being a Purchaser hereunder for such amount. The
foregoing provisions also shall apply to any documents, including, without
limitation, the General Assignment and Assumption and the Assignment and
Assumption of Leases and Security Deposits, executed in connection with this
Contract and the transaction(s) contemplated hereby.
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 (the "Report") and certified the Property to be Lead-Based Paint Free
Housing in a certificate, a copy of which is attached hereto as Exhibit H. The
Report certifies the Property as lead based paint free. As part of the
Materials, Seller will provide Purchaser a copy of the Report and a copy 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). By execution hereof, Purchaser acknowledges receipt of a copy of the
Lead-Based Paint Disclosure Statement attached hereto as Exhibit G. Because the
Property has been certified as lead based paint free, 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.
ARTICLE 15
CONTINGENCIES
15.1. Portfolio Purchase and Sale Contracts. Purchaser and Seller acknowledge
that this Contract is one of four purchase and sale contracts between the
parties ("Portfolio Purchase and Sale Contracts") for the portfolio of real
properties listed on Schedule 15.1.1 ("Portfolio Properties"). This Contract is
contingent and shall not be binding on either party until Seller and Purchaser
have executed all of the Portfolio Purchase and Sale Contracts, similar in form
to this Contract, with respect to all of the Portfolio Properties. If all of the
Portfolio Purchase and Sale Contracts are not signed by Purchaser and Seller on
or before the Effective Date, then this Contract shall be null and void and of
no further force and effect, and neither Purchaser nor Seller shall have any
further rights or obligations hereunder.
15.2. Simultaneous Closing and Release of Cross-Default and
Cross-Collateralization. It is a condition precedent that the Closing occurs
simultaneously with the closings of all the Portfolio Purchase and Sale
Contracts. The respective deeds of trust affecting the properties known as
Parliament Bend and Las Brisas contain cross-default and cross-collateralization
provisions, whereby the Parliament Bend and Las Brisas properties are
cross-defaulted and cross-collateralized with certain other properties. If all
of the Portfolio Purchase and Sale Contracts do not close on or before September
30, 2003 because Seller cannot obtain the release of the cross-default and
cross-collateralization provisions of the respective deeds of trust affecting
the properties known as Parliament Bend and Las Brisas, then Purchaser may
withdraw the Additional Deposit until such time as such release is granted and
Seller has advised Purchaser in writing of receipt of such release, at which
time the Additional Deposit shall be redeposited with the Escrow Agent within 2
Business Days of Purchaser's receipt of the notice and the Closing shall occur
15 days after Purchaser's receipt of the notice. If all of the Portfolio
Purchase and Sale Contracts have not closed on or before September 30, 2003,
Seller and Purchaser shall each have the option to terminate this Contract, in
which case the Deposit shall be returned to Purchaser. Until either Seller or
Purchaser terminates this Contract, the Closing Date shall be extended until
such time as the release of the cross-default and cross-collateralization
provisions of the deeds of trust of the Parliament Bend and Las Brisas
properties is obtained but in no case shall the Closing Date be extended later
than December 31, 2003. In the event all of the Portfolio Purchase and Sale
Contracts do not close on the Closing Date for any reason other than that stated
in the previous two sentences, then this Contract shall terminate and all
payments and things of value, including the Deposit, shall be paid to the party
entitled thereto pursuant to Section 2.3 and Article 10 of this Contract.
[Remainder of Page Intentionally Left Blank]
NOW, THEREFORE, the parties hereto have executed this Contract as of the
date first set forth above.
Seller:
ANGELES PARTNERS, VII,
a California limited partnership
By: Angeles Realty Corporation,
a California corporation,
Its General Partner
By: /s/Patrick F. Slavin
Name: Patrick F. Slavin
Title: Senior Vice President
Purchaser:
BETHANY GROUP, LLC,
a California limited liability company
By: /s/Thomas E. Thompson
Name: Thomas E. Thompson
Title: Manager
and
GTS INVESTMENTS, INC.,
a California corporation
By: /s/Bien Gan Oei
Name: Bien Gan Oei
Title: President
ESCROW AGENT SIGNATURE PAGE
The undersigned executes the Contract to which this signature page is
attached for the purpose of agreeing to the provisions of Section 2.3 of the
Contract, and hereby establishes July 18, 2003 as the date of opening of escrow
and designates 02160938 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
BROKER SIGNATURE PAGE
The undersigned Broker hereby executes this Broker Signature Page solely
to confirm the following: (a) Broker represents only the Seller in the
transaction described in the Contract to which this signature page is attached,
(b) Broker acknowledges that the only compensation due to Broker in connection
with the Closing of the transaction described in the Contract to which this
signature page is attached is as set forth in a separate agreement between
Seller and Broker at the Closing, and (c) Broker represents and warrants to
Seller that Broker and its affiliates has not and will not receive any
compensation (cash or otherwise) from or on behalf of Purchaser or any affiliate
thereof in connection with the transaction, and do not, and will not at the
Closing, have any direct or indirect legal, beneficial, economic or voting
interest in Purchaser (or in an assignee of Purchaser, which pursuant to Section
13.3 of the Contract, acquires the Property at the Closing) nor has Purchaser
granted (as of the Effective Date or the Closing Date) the Broker or any of its
affiliates any right or option to acquire any direct or indirect legal,
beneficial, economic or voting interest in Purchaser.
BROKER:
SECURED CAPITAL CORP
By: /s/Charles P. Toppino
Name: Charles P. Toppino
Title: Executive Vice President
Exhibit 10.8
Purchaser's ASSIGNMENT AND NOMINATION
STEWART TITLE GUARANTY COMPANY
Escrow Holder Date: September 30, 2003
Escrow No: 03160045
[Wendy Howell, Escrow Officer & National Commercial Closing Specialist]
[New/Substituted] Purchaser: REPFund CEDARWOOD APARTMENTS, LLC A Nevada
Limited Liability Company
Seller: ANGELES PARTNERS VII
A California Limited Partnership
FOR VALUABLE CONSIDERATION, the adequacy and receipt of which are hereby
acknowledged, BETHANY GROUP, LLC, a California Limited Liability Company, and
GTS INVESTMENTS, INC., A California Corporation, jointly as the named
Purchaser/s under certain "First Amendment to Purchase and Sale Contract, Dated
August 12, 2003", as further amended by that certain "Second Amendment to
Purchase and Sale Contract, Dated August 29, 2003", and as further amended by
that certain "Third Amendment to Purchase and Sale Contract, Dated September 11,
2003" (collectively, "the Purchase Contract"), hereby assigns, transfers and
sets over all of its rights, titles and interests in and to the Purchase
Contract, the Escrow and the prospective purchase and acquisition of the
underlying real property more particularly described therein, unto and over to
the New/Substituted Purchaser, named above ("Purchaser"), as the formerly named
Purchaser's present assignee/nominee (collectively, "Purchaser-Assignee").
The Purchaser-Assignee shall hereby become the "Purchaser" herein and under the
Purchase Contract. It shall be substituted in place of the former as such
Purchaser herein and thereunder, throughout such Purchase Contract in the
subject Escrow herein.
A. BETHANY GROUP, LLC AND GTS INVESTMENTS, INC., jointly and severally, hereby
represent and warrant unto Purchaser-Assignee that, as of the date hereof, there
are no breaches, defaults or failure of conditions or performance on the part of
the assignor/transferor-Purchaser or, to its best knowledge, on the part of the
Seller herein, under the Purchase Contract or this Escrow.
B. [New/Substituted] Purchaser-Assignee hereby accepts the foregoing assignment
and transfer and expressly agrees to abide by, comply with, perform and
discharge each and all of the duties, obligation, liabilities and conditions
required on Purchaser's part to be satisfied and performed under the Purchase
Contract and in the Escrow.
IN WITNESS WHEREOF, the parties have executed and delivered this instrument
effective as of the date first written above.
Assignor/Transferor: ASSIGNEE/NOMINEE:
BETHANY GROUP, LLC REPFund CEDARWOOD APARTMENTS, LLC
A California Limited Liability Company A Nevada Limited Liability
Company
By: /s/Thomas E. Thompson By: REPFund Apartments, LLC
Mr. Thomas E. Thompson A Nevada Limited Liability
Company
Manager Managing Member
GTS INVESTMENTS, INC. By: GTS Property Portfolios, Inc.
A Delaware Corporation A Nevada Corporation,
Co-Manager
By: /s/Bien Gan Oei By: /s/Bien Gan Oei
Mr. Bien Gan Oei, President Mr. Bien Gan Oei, President
By: Real Estate Partners, Inc.
A California Corporation, Co-Manager
By: /s/Dawson Davenport
Mr. Dawson Davenport, President