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) October 28, 2003
MULTI-BENEFIT REALTY FUND '87-1
(Exact name of registrant as specified in its charter)
California 0-16684 94-3026785
(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 October 28, 2003, the Registrant sold one of its investment properties,
Shadow Brook Apartments, located in West Valley City, Utah. The Registrant sold
Shadow Brook Apartments to RDO Shadow Brook Associates, LLC, an unrelated party,
for $14,750,000. 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 has evaluated the cash requirements of the
Registrant to determine whether any portion of the net proceeds can be
distributed to the Registrant's partners. The Registrant's general partner has
determined that a distribution of approximately $5,884,000 will be made during
November 2003.
Item 7. Financial Statements and Exhibits
(b) Pro forma financial information.
The following unaudited pro forma consolidated balance sheet and statements of
operations reflect the operations of the Registrant as if Shadow Brook
Apartments had been sold on January 1, 2002.
The unaudited pro forma consolidated financial statements are presented for
illustrative purposes only and are not necessarily indicative of the operating
results or financial position that would have resulted had the sale been
consummated on the date indicated, nor do they represent a forecast thereof at
any future date or for any future period. This pro forma information should be
read in conjunction with the Registrant's 2002 Annual Report on Form 10-KSB.
PRO FORMA CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands)
September 30, 2003
All other assets $ 326
Investment properties, net 2,457
Total Assets $ 2,783
All other liabilities $ 530
Mortgage notes payable 3,633
Partners' deficit (1,380)
Total Liabilities and Partners' Deficit $ 2,783
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Nine Months Nine Months
Ended Ended Year Ended
September 30, September 30, December 31,
2003 2002 2002
Total revenues $ 1,060 $ 1,140 $ 1,532
Total expenses 1,477 1,428 1,805
Net loss $ (417) $ (288) $ (273)
Net loss per limited partnership
unit $ (2.41) $ (1.66) $ (1.57)
(c) Exhibits.
The following exhibits are filed with this report (1):
10.24 Purchase and Sale Contract between Multi-Benefit Realty Fund '87-1
and RDO Properties, LLC, dated August 7, 2003.
10.25 Amendment to Purchase and Sale Contract between Multi-Benefit Realty
Fund '87-1 and RDO Properties, LLC, dated September 11, 2003.
10.26 Second Amendment to Purchase and Sale Contract between Multi-Benefit
Realty Fund '87-1 and RDO Properties, LLC, dated September 18, 2003.
10.27 Third Amendment to Purchase and Sale Contract between Multi-Benefit
Realty Fund '87-1 and RDO Properties, LLC, dated October 10, 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.
MULTI-BENEFIT REALTY FUND '87-1
By: CONCAP EQUITIES, INC.
Its General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
Date: November 10, 2003
Exhibit 10.24
PURCHASE AND SALE CONTRACT
BETWEEN
MULTI-BENEFIT REALTY FUND `87-1,
a California limited partnership
AS SELLER
AND
RDO PROPERTIES, LLC
A Utah limited liability company
AS PURCHASER
SHADOW BROOK APARTMENTS
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
3.7 Rent Roll.......................................................11
3.8 Excluded Fixtures and Tangible Property.........................11
3.9 Seller's Failure to Deliver Due Diligence Materials.............11
ARTICLE 4 TITLE........................................................12
4.2 Survey..........................................................12
4.3 Objection and Response Process..................................12
4.4 Permitted Exceptions............................................13
4.5 Assumed Encumbrances............................................13
ARTICLE 5 CLOSING......................................................15
5.1 Closing Date....................................................15
5.2 Seller Closing Deliveries.......................................15
5.3 Purchaser Closing Deliveries....................................16
5.4 Closing Prorations and Adjustments..............................17
5.5 Post Closing Adjustments........................................20
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER.......21
6.1 Seller's Representations........................................21
6.2 AS-IS...........................................................22
6.3 Survival of Seller's Representations............................23
6.4 Definition of Seller's Knowledge................................23
6.5 Representations And Warranties Of Purchaser.....................23
ARTICLE 7 OPERATION OF THE PROPERTY....................................24
7.1 Leases and Property Contracts...................................24
7.2 General Operation of Property...................................24
7.3 Liens...........................................................25
ARTICLE 8 CONDITIONS PRECEDENT TO CLOSING..............................25
8.1 Purchaser's Conditions to Closing...............................25
ARTICLE 9 BROKERAGE....................................................26
9.1 Indemnity.......................................................26
9.2 Intentionally Deleted...........................................26
9.3 Intentionally Deleted...........................................26
ARTICLE 10 DEFAULTS AND REMEDIES........................................26
10.1 Purchaser Default...............................................26
10.2 Seller Default..................................................27
ARTICLE 11 RISK OF LOSS OR CASUALTY.....................................28
11.1 Major Damage....................................................28
11.2 Minor Damage....................................................28
11.3 Repairs.........................................................28
ARTICLE 12 EMINENT DOMAIN...............................................28
12.1 Eminent Domain..................................................28
ARTICLE 13 MISCELLANEOUS................................................29
13.1 Binding Effect of Contract......................................29
13.2 Exhibits And Schedules..........................................29
13.3 Assignability...................................................29
13.4 Binding Effect..................................................29
13.5 Captions........................................................29
13.6 Number And Gender Of Words......................................29
13.7 Notices.........................................................29
13.8 Governing Law And Venue.........................................31
13.9 Entire Agreement................................................31
13.10 Amendments......................................................31
13.11 Severability....................................................32
13.12 Multiple Counterparts/Facsimile Signatures......................32
13.13 Construction....................................................32
13.14 Confidentiality.................................................32
13.15 Time Of The Essence.............................................32
13.16 Waiver..........................................................32
13.17 Attorneys Fees..................................................33
13.18 Time Periods....................................................33
13.19 1031 Exchange...................................................33
13.20 No Personal Liability of Officers, Trustees or Directors
of Seller's Partners............................................33
13.21 No Exclusive Negotiations.......................................34
13.22 ADA Disclosure..................................................34
13.23 No Recording....................................................34
13.24 Relationship of Parties.........................................34
13.25 Dispute Resolution..............................................34
13.26 AIMCO Marks.....................................................35
13.27 Non-Solicitation of Employees...................................35
13.28 Survival........................................................35
13.29 Multiple Purchasers.............................................35
ARTICLE 14 LEAD-BASED PAINT DISCLOSURE..................................36
14.1 Disclosure......................................................36
14.2 Intentionally Deleted...........................................36
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as of
the 7th day of August, 2003 (the "Effective Date") by and between MULTI-BENEFIT
REALTY FUND `87-1, a California limited partnership, having an address at 4582
South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237 ("Seller") and
RDO PROPERTIES, LLC, a Utah limited liability company, having a principal
address at 5445 South Highland Drive, Salt Lake City, Utah ("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 Salt Lake County, Utah, as
more particularly described in Exhibit A attached hereto and made a part hereof,
and the improvements thereon, commonly known as the Shadow Brook 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" means Apartment Investment and Management Company, a
Maryland corporation.
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 ....."Assumed Deed of Trust" shall have the meaning set forth in Section
4.5.1.
1.1.6 ....."Assumed Encumbrances" shall have the meaning set forth in Section
4.5.1.
1.1.7 ....."Assumed Loan Documents" shall have the meaning set forth in Section
4.5.1.
1.1.8 .....Intentionally Deleted.
1.1.9 ....."Business Day" means any day other than a Saturday or Sunday or
Federal holiday or legal holiday in the States of Colorado, Texas, or Utah.
1.1.10 ...."Closing" means the consummation of the purchase and sale and related
transactions contemplated by this Contract in accordance with the terms and
conditions of this Contract.
1.1.11 ...."Closing Date" means the date on which date the Closing of the
conveyance of the Property is required to be held pursuant to Section 5.1.
1.1.12 ...."Code" shall have the meaning set forth in Section 2.3.6.
1.1.13 ...."Consent Contract" shall have the meaning set forth in
Section 14.2.
1.1.14 ...."Consultants" shall have the meaning set forth in Section 3.1.
1.1.15 ...."Damage Notice" shall have the meaning set forth in Section 11.1.
1.1.16 ...."Deed" shall have the meaning set forth in Section 5.2.1.
1.1.17 ...."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 on Schedule 1.1.19.
1.1.20 ...."Existing Survey" shall have the meaning set forth in
Section 4.2.
1.1.21 ...."Feasibility Period" shall have the meaning set forth in
Section 3.1.
1.1.22 ...."Final Response Deadline" shall have the meaning set forth in
Section 4.3.
1.1.23 ...."FHA" shall have the meaning set forth in Section 13.22.
1.1.24 ...."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 1.1.24.
1.1.25 ...."General Assignment" shall have the meaning set forth in
Section 5.2.3.
1.1.26 ...."Good Funds" shall have the meaning set forth in Section 2.2.1.
1.1.27 ...."Improvements" means all buildings and improvements located on
the Land taken "as is."
1.1.28 ...."Initial Deposit" shall have the meaning set forth in
Section 2.2.1.
1.1.29 ...."Land" means all of those certain tracts of land located in the State
of Utah described on Exhibit A, and all rights, privileges and appurtenances
pertaining thereto.
1.1.30 ...."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.
1.1.31 ...."Leases Assignment" shall have the meaning set forth in
Section 5.2.4.
1.1.32 ...."Lender" shall have the meaning set forth in Section 4.5.1.
1.1.33 ...."Loan" shall have the meaning set forth in Section 4.5.1.
1.1.34 ...."Loan Assumption Application" shall have the meaning set forth in
Section 4.5.3.
1.1.35 ...."Loan Assumption and Release" shall have the meaning set forth in
Section 4.5.2.
1.1.36 ...."Loan Balance" shall have the meaning set forth in Section 2.2.3.
1.1.37 ...."Losses" shall have the meaning set forth in Section 3.4.1.
1.1.38 ...."Materials" shall have the meaning set forth in Section 3.5.
1.1.39 ...."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
"SHADOW BROOK APARTMENTS" as it relates solely to use in connection with the
Property (and not with respect to any other property owned or managed by Seller,
Property Manager, AIMCO, or their respective affiliates). Miscellaneous Property
Assets also shall include the phone number for the general office for the
Property, but only to the extent such phone number is (i) owned by Seller, (ii)
assignable by Seller, and (iii) used by Seller exclusively for the Property (and
not with respect to any of AIMCO's other properties). Seller makes no
representations or warranties regarding its ability to require the local phone
company or any other service provider to transfer the phone number to Purchaser.
1.1.40 ...."Note" shall have the meaning set forth in Section 4.5.1.
1.1.41 ...."Objection Deadline" shall have the meaning set forth in
Section 4.3.
1.1.42 ...."Objection Notice" shall have the meaning set forth in
Section 4.3.
1.1.43 ...."Objections" shall have the meaning set forth in Section 4.3.
1.1.44 ...."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.
1.1.45 ...."Permitted Exceptions" shall have the meaning set forth in Section
4.4.
1.1.46 ...."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.
1.1.47 ...."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. Property Contracts shall not include forward or
similar long-term contracts to purchase electricity, natural gas, or other
utilities, which contracts shall be "Utility Contracts" governed by the
provisions of Section 5.4.11.
1.1.48 ...."Property Contracts Notice" shall have the meaning set forth in
Section 3.6.
1.1.49 ...."Property Manager" means the current property manager of the
Property.
1.1.50 ...."Proration Schedule" shall have the meaning set forth in
Section 5.4.1.
1.1.51 ...."Purchase Price" means the consideration to be paid by Purchaser to
Seller for the purchase of the Property pursuant to Section 2.2.
1.1.52 ...."Regional Property Manager" shall have the meaning set forth in
Section 6.4.
1.1.53 ...."Remediation" shall have the meaning set forth in Section 14.2.
1.1.54 ...."Rent-Ready Condition" means the physical condition to which Seller,
in the ordinary course of its business, would prepare Tenant Units in
anticipation of renting such Tenant Units to Prospective Tenants.
1.1.55 ...."Required Loan Fund Amounts" shall have the meaning set forth in
Section 4.5.3.
1.1.56 ...."Response Deadline" shall have the meaning set forth in
Section 4.3.
1.1.57 ...."Response Notice" shall have the meaning set forth in Section 4.3.
1.1.58 ...."Seller's Indemnified Parties" shall have the meaning set forth
in Section 3.4.1
1.1.59 ...."Seller's Representations" shall have the meaning set forth in
Section 6.1.
1.1.60 ...."Survey" shall have the meaning ascribed thereto in Section 4.2.
1.1.61 ...."Survival Period" shall have the meaning set forth in Section 6.3.
1.1.62 ...."Survival Provisions" shall have the meaning set forth in Section
13.28.
1.1.63 ...."Tenant" means any person or entity entitled to occupy any portion of
the Property under a Lease.
1.1.64 ...."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.
1.1.65 ...."Tenant Security Deposit Balance" shall have the meaning set forth in
Section 5.4.6.2.
1.1.66 ....Tenant Unit" means each apartment in the Property which is leased by
Seller to Tenants in the ordinary course of Seller's business.
1.1.67 ...."Terminated Contracts" shall have the meaning set forth in Section
3.6.
1.1.68 ...."Testing" shall have the meaning set forth in Section 14.2.
1.1.69 ...."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.
1.1.70 ...."Title Commitment" shall have the meaning ascribed thereto in Section
4.1.
1.1.71 ...."Title Documents" shall have the meaning set forth in Section 4.1.
1.1.72 ...."Title Insurer" shall have the meaning set forth in Section 2.2.1.
1.1.73 ...."Title Policy" shall have the meaning set forth in Section 4.1.
1.1.74 ...."Uncollected Rents" shall have the meaning set forth in Section
5.4.6.1.
1.1.75 ...."Utility Contract " shall have the meaning set forth in Section
5.4.11.
1.1.76 ...."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 $14,750,000.00, which shall be paid by Purchaser, as
follows:
2.2.1 .....On the Effective Date, Purchaser shall deliver to Fidelity National
Title Company, c/o Lolly Avant, National Commercial Closing Specialist, 1900
West Loop South, Suite 650, Houston, TX 77027, Telephone: 1-800-879-1677
("Escrow Agent" or "Title Insurer") an initial deposit (the "Initial Deposit")
of $147,500.00 by wire transfer of immediately available funds ("Good Funds").
The Initial Deposit shall be held and disbursed in accordance with the escrow
provisions set forth in Section 2.3.
2.2.2 .....On the day that the Feasibility Period expires, Purchaser shall
deliver to Escrow Agent an additional deposit (the "Additional Deposit") of
$147,500.00 by wire transfer of Good Funds. The Additional Deposit shall be held
and disbursed in accordance with the escrow provisions set forth in Section 2.3.
2.2.3 .....At the Closing, subject to the occurrence of the Loan Assumption and
Release, Purchaser shall receive a credit against the Purchase Price in the
amount of the outstanding principal balance of the Note, together with all
accrued but unpaid interest (if any) thereon, as of the Closing Date (the "Loan
Balance").
2.2.4 .....The balance of the Purchase Price for the Property shall be paid to
and received by Escrow Agent by wire transfer of Good Funds no later than 11:00
a.m. (in the time zone in which Escrow Agent is located) on the Closing Date (or
such earlier time as required by Seller's lender).
2.3 Escrow Provisions Regarding Deposit.
2.3.1 .....Escrow Agent shall hold the Deposit and make delivery of the Deposit
to the party entitled thereto under the terms of this Contract. Escrow Agent
shall invest the Deposit in such short-term, high-grade securities,
interest-bearing bank accounts, money market funds or accounts, bank
certificates of deposit or bank repurchase contracts as Escrow Agent, in its
discretion, deems suitable, and all interest and income thereon shall become
part of the Deposit and shall be remitted to the party entitled to the Deposit
pursuant to this Contract.
2.3.2 .....Escrow Agent shall hold the Deposit until the earlier occurrence of
(i) the Closing Date, at which time the Deposit shall be applied against the
Purchase Price, or (ii) the date on which Escrow Agent shall be authorized to
disburse the Deposit as set forth in Section 2.3.3. The tax identification
numbers of the parties shall be furnished to Escrow Agent upon request.
2.3.3 .....If the Deposit has not been released earlier in accordance with
Section 2.3.2, and either party makes a written demand upon Escrow Agent for
payment of the Deposit, Escrow Agent shall give written notice to the other
party of such demand. If Escrow Agent does not receive a written objection from
the other party to the proposed payment within 5 Business Days after the giving
of such notice, Escrow Agent is hereby authorized to make such payment (subject
to Purchaser's obligation under Section 3.5.2 to return all Third-Party Reports
and information and Materials provided to Purchaser 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 harmless from and against any Losses
resulting from Escrow Agent's failure to file the reports Escrow Agent is
required to file pursuant to this section.
2.3.7 .....The provisions of this Section 2.3 shall survive the termination of
this Contract, and if not so terminated, the Closing and delivery of the Deed to
Purchaser.
ARTICLE 3...
FEASIBILITY PERIOD
3.1 Feasibility Period. Subject to the terms of Section 3.3 and 3.4 and the
right of Tenants under the Leases, from the Effective Date to and including the
date which is 35 days after the Effective Date (the "Feasibility Period"),
Purchaser, and its agents, contractors, engineers, surveyors, attorneys, and
employees (collectively, "Consultants") shall have the right from time to time
to enter onto the Property:
3.1.1 .....To conduct and make any and all customary studies, tests,
examinations, inquiries, and inspections, or investigations (collectively, the
"Inspections") of or concerning the Property (including, without limitation,
engineering and feasibility studies, evaluation of drainage and flood plain,
soil tests for bearing capacity and percolation and surveys, including
topographical surveys);
3.1.2 .....To confirm any and all matters which Purchaser may reasonably desire
to confirm with respect to the Property;
3.1.3 .....To ascertain and confirm the suitability of the property for
Purchaser's intended use of the Property; and
3.1.4 .....To review the Materials at Purchaser's sole cost and expense.
3.2 Expiration of Feasibility Period. If the results of any of the matters
referred to in Section 3.1 appear unsatisfactory to Purchaser for any reason or
if Purchaser elects not to proceed with the transaction contemplated by this
Contract for any other reason, or for no reason whatsoever, in Purchaser's sole
and absolute discretion, then Purchaser shall have the right to terminate this
Contract by giving written notice to that effect to Seller and Escrow Agent on
or before 5:00 p.m. (in the time zone in which the Escrow Agent is located) on
the date of expiration of the Feasibility Period. If Purchaser exercises such
right to terminate, this Contract shall terminate and be of no further force and
effect subject to and except for Purchaser's liability pursuant to Section 3.3
and any other provision of this Contract which survives such termination, and
Escrow Agent shall forthwith return the 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. Purchaser shall have access to a
reasonable number of vacant and occupied units at the Property, subject to the
rights of Tenants under the Leases and applicable law. 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 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 or
more persons 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. As a condition to Purchaser's entry onto the Property, 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) no later than 2 days prior
to Purchaser's or Purchaser's Consultants' entry onto the Property. The
provisions of this Section 3.4 shall survive the termination of this Contract,
and if not so terminated, the Closing and delivery of the Deed to Purchaser.
3.5 Property Materials.
3.5.1 .....Within 5 days after the Effective Date, and to the extent the same
exist and are in Seller's possession or reasonable control (subject to Section
3.5.2), Seller agrees to make the documents set forth on Schedule 3.5 (the
"Materials") available at the Property for review and copying by Purchaser at
Purchaser's sole cost and expense. In the alternative, at Seller's option and
within the foregoing 5-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 (other than as expressly provided under Section 3.9)
will the Feasibility Period be extended and Purchaser's sole remedy will be to
terminate this Contract pursuant to Section 3.2.
3.5.2 .....In providing such information and Materials to Purchaser, other than
Seller's Representations, Seller makes no representation or warranty, express,
written, oral, statutory, or implied, and all such representations and
warranties are hereby expressly excluded and disclaimed. Any information and
Materials provided by Seller to Purchaser under the terms of this Contract is
for informational purposes only and, together with all Third-Party Reports,
shall be returned by Purchaser to Seller as a condition to return of the Deposit
to Purchaser (if Purchaser is otherwise entitled to such Deposit pursuant to the
terms of this Contract) if this Contract is terminated for any reason. Purchaser
shall not in any way be entitled to rely upon the accuracy of such information
and Materials. Purchaser recognizes and agrees that the Materials and other
documents and information delivered or made available by Seller pursuant to this
Contract may not be complete or constitute all of such documents which are in
Seller's possession or control, but are those that are readily available to
Seller after reasonable inquiry to ascertain their availability. Purchaser
understands that, although Seller will use commercially reasonable efforts to
locate and make available the Materials and other documents required to be
delivered or made available by Seller pursuant to this Contract, Purchaser will
not rely on such Materials or other documents as being a complete and accurate
source of information with respect to the Property, and will instead in all
instances rely exclusively on its own Inspections and Consultants with respect
to all matters which it deems relevant to its decision to acquire, own and
operate the Property.
3.5.3 .....The provisions of this Section 3.5 shall survive the Closing and
delivery of the Deed to Purchaser.
3.6 Property Contracts. On or before the expiration of the Feasibility Period,
Purchaser may deliver written notice to Seller (the "Property Contracts Notice")
specifying any Property Contracts with respect to which Purchaser desires to
have Seller deliver notices of termination at the Closing (the "Terminated
Contracts"); provided that (a) the effective date of such termination after
Closing shall be subject to the express terms of such Terminated Contracts, (b)
if any such Property Contract cannot by its terms be terminated, it shall be
assumed by Purchaser and not be a Terminated Contract, and (c) to the extent
that any such Terminated Contract requires payment of a penalty or premium for
cancellation, Purchaser shall be solely responsible for the payment of any such
cancellation fees or penalties. If Purchaser fails to deliver the Property
Contracts Notice on or before the expiration of the Feasibility Period, there
shall be no Terminated Contracts and Purchaser shall assume all Property
Contracts at the Closing.
3.7 Rent Roll. In addition to the items set forth on Schedule 3.5, no later than
5 Business Days after the Effective Date, Seller shall deliver to Purchaser (or
otherwise make available to Purchaser as provided under Section 3.5.1) a rent
roll for the Property listing the move-in date, monthly base rent payable, lease
expiration date and unapplied security deposit for each Lease (the "Rent Roll").
The Rent Roll shall be part of the Materials for all purposes under this
Contract and Seller makes no representations or warranties regarding the Rent
Roll other than the express representation set forth in Section 6.1.7. Seller
shall update the Rent Roll in accordance with Section 5.2.10.
3.8 Excluded Fixtures and Tangible Property. Within 5 days after the Effective
Date, Seller shall deliver to Purchaser a list, prepared to Seller's knowledge
(as defined in Section 6.4), of the excluded Fixtures and Tangible Personal
Property described in Section 1.1.24 (a) and (c).
3.9 Seller's Failure to Deliver Due Diligence Materials. If Purchaser believes
that Seller has failed to deliver to Purchaser, on or before the deadline for
such delivery set forth in this Contract, any Materials, Title Documents,
Survey, or other item which this Contract expressly requires Seller to deliver
to Purchaser, Purchaser shall deliver written notice to Seller no later than 2
Business Days after such failure and the expiration of the Feasibility Period
set forth in Section 3.1 shall be extended on a day-for-day basis for each day
that such item is delivered late by Seller, up to a maximum of 5 additional
days. In no event shall the Feasibility Period be extended to more than 40 days
after the Effective Date pursuant to the foregoing sentence.
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 a standard coverage policy of title
insurance (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. Seller has ordered a new survey
(together with the Existing Survey, referred to herein as the "Survey") of the
Property. Purchaser shall be solely responsible for the cost and expense of the
preparation of such new survey.
4.3 Objection and Response Process. On or before the date which is 20 days after
the Effective Date (the "Objection Deadline"), Purchaser shall give written
notice (the "Objection Notice") to the attorneys for Seller of any matter set
forth in the Title Documents or the Survey to which Purchaser objects (the
"Objections"). If Purchaser fails to tender an Objection Notice on or before the
Objection Deadline, Purchaser shall be deemed to have approved and irrevocably
waived any objections to any matters covered by the Title Documents and the
Survey. On or before 25 days after the Effective Date (the "Response Deadline"),
Seller may, in Seller's sole discretion, give Purchaser notice (the "Response
Notice") of those Objections which Seller is willing to cure, if any. Seller
shall be entitled to reasonable adjournments of the Closing Date to cure the
Objections. 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 30 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 .....The Assumed Encumbrances;
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 Assumed Encumbrances.
4.5.1 .....Purchaser recognizes and agrees that, in connection with a loan (the
"Loan") made to Seller by GMAC Commercial Mortgage Corporation as assigned to
Federal Home Loan Corporation (the "Lender"), the Property presently is
encumbered by a Multi Family Deed of Trust, Assignment of Rents and Security
Agreement dated August 30, 2001 and recorded September 5, 2001 (the "Assumed
Deed of Trust") and certain other security and related documents, including,
without limitation, an Indemnification Agreement dated August 30, 2001 and a
Limited Guaranty dated as of August 30, 2001, in connection with the Loan
(collectively, the "Assumed Encumbrances"). The Loan is evidenced by that
certain promissory note dated August 30, 2001 in the stated principal amount of
$8,775,000.00 (the "Note," and together with the Assumed Deed of Trust, the
Assumed Encumbrances and any other documents executed by Seller in connection
with the Loan, the "Assumed Loan Documents"), executed by Seller and payable to
the order of the Lender. The outstanding principal balance of the Note as of
July 1, 2003 is $8,385,220.47. Within 5 days after the Effective Date, Seller
agrees that it will make available to Purchaser (in the same manner in which
Seller is permitted to make the Materials available to Purchaser under Section
3.5.1) copies of the Assumed Loan Documents which are in Seller's possession or
reasonable control (subject to Section 3.5.2).
4.5.2 .....Purchaser agrees that, at the Closing, (a) Purchaser shall assume
Seller's obligations under the Note and all of the other Assumed Loan Documents
and accept title to the Property subject to the Deed of Trust and the Assumed
Encumbrances, and (b) the Lender shall release Seller, as well as any guarantors
and other obligated parties under the Assumed Loan Documents, from all
obligations under the Assumed Loan Documents (and any related guarantees or
letters of credit), including, without limitation, any obligation to make
payments of principal and interest under the Note (collectively, the foregoing
(a) and (b) referred to herein as the "Loan Assumption and Release").
4.5.3 .....Purchaser further acknowledges that the Assumed Loan Documents
require the satisfaction by Purchaser of certain requirements as set forth
therein to allow for the Loan Assumption and Release. Accordingly, Purchaser, at
its sole cost and expense and within 15 days after the Effective Date, shall
satisfy the requirements set forth in the Assumed Loan Documents to allow for
the Loan Assumption and Release, including, without limitation, submitting a
complete application to Lender for assumption of the Loan together with all
documents and information required in connection therewith (the "Loan Assumption
Application"). Purchaser shall comply with of Lender's assumption guidelines in
connection with the Loan Assumption and Release. Purchaser shall pay all fees
and expenses (including, without limitation, all servicing fees and charges,
transfer fees, assumption fees, title fees, endorsement fees, and other fees to
release Seller of all liability under the Loan) imposed or charged by the Lender
or its counsel (such fees and expenses collectively being referred to as the
"Lender Fees"), in connection with the Loan Assumption Application and the Loan
Assumption and Release (which obligation shall survive the termination of this
Contract and the Closing). Additionally, Purchaser shall be responsible for (a)
replacing (and increasing to the extent required by Lender) all reserves,
impounds and other accounts required to be maintained in connection with the
Loan, and (b) funding any additional reserves, impounds or accounts required by
Lender to be maintained by Purchaser in connection with the Loan after the Loan
Assumption and Release (the foregoing amounts in (a) and (b) collectively
referred to herein as the "Required Loan Fund Amounts"). Any existing reserves,
impounds and other accounts required to be replaced by Purchaser pursuant to the
foregoing sentence shall be released in Good Funds to Seller at the Closing.
Purchaser agrees promptly to deliver to the Lender all documents and information
required by the Assumed Loan Documents, and such other information or
documentation as the Lender reasonably may request, including, without
limitation, financial statements, income tax returns and other financial
information for Purchaser and any required guarantor. Seller agrees that it will
cooperate with Purchaser and Lender, at no cost or expense to Seller, in
connection with Purchaser's application to Lender for approval of the Loan
Assumption and Release. No later than 15 days after the Effective Date,
Purchaser shall order a Phase I Environmental study (prepared by an
environmental engineer reasonably acceptable to Seller and Lender), and
covenants that such Phase I Environmental study shall be delivered to Seller and
Lender no later than 10 days prior to the Closing Date in connection with and as
a precondition to the Loan Assumption and Release.
4.5.4 .....If (a) Purchaser fully complies with its obligations under this
Contract (including this Section 4.5) and the requirements of the Assumed Loan
Documents in connection with obtaining the Loan Assumption and Release, (b)
Purchaser uses best efforts to obtain the Loan Assumption Release, and (c)
Purchaser does not obtain the consent of the Lender to the Loan Assumption and
Release on or before 3 Business Days prior to the Closing Date (the "Loan
Approval Period") for reasons other than (i) Purchaser's failure to submit a
complete Loan Assumption Application, or (ii) Purchaser's creditworthiness, then
Purchaser shall have the right, on or before the expiration of the Loan Approval
Period, to give Escrow Agent notice terminating this Contract based solely on
the fact that the Loan Assumption and Release has not been approved by the
Lender (the "Loan Approval Termination"), in which event this Contract shall be
of no further force and effect, subject to and except for Purchaser's liability
pursuant to Section 3.3 and any other provision of this Contract which survives
such termination, and Escrow Agent shall forthwith return the Deposit to
Purchaser. If Purchaser fails to provide Seller with written notice of
termination prior to the expiration of the Loan Approval Period in strict
accordance with the notice provisions of this Contract, Purchaser's right to
terminate under this Section 4.5.4 shall be permanently waived, this Contract
shall remain in full force and effect, the Deposit shall be non-refundable, and
Purchaser's obligation to obtain the Lender's approval of the Loan Assumption
and Release and to purchase the Property shall be non-contingent and
unconditional except only for satisfaction of the conditions expressly stated in
Section 8.1. Purchaser recognizes and agrees that if either (x) the Loan
Approval Period expires and Purchaser is entitled to but does not terminate this
Contract, or (y) Purchaser does not obtain the consent of the Lender to the Loan
Assumption and Release on or before 3 Business Days prior to the Closing Date
because either (I) Purchaser's failed to submit a complete Loan Assumption
Application, or (II) Lender determined that Purchaser was not creditworthy, the
Loan Assumption and Release shall not be a condition to Purchaser's obligation
to close, and, if the Loan Assumption and Release is not obtained and Closing
has not occurred on or before the Closing Date, Purchaser shall be in default
under this Contract, entitling the Seller to terminate this Contract, in which
event the Deposit shall be immediately released to Seller by the Escrow Agent
and this Contract shall 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. Under no circumstances shall
Seller be required to cause the pay-off of the Loan at the Closing.
ARTICLE 5...
CLOSING
5.1 Closing Date. The Closing shall occur 30 days following the expiration of
the Feasibility Period (the "Closing Date") through an escrow with Escrow Agent,
whereby the Seller, Purchaser and their attorneys need not be physically present
at the Closing and may deliver documents by overnight air courier or other
means. Notwithstanding the foregoing to the contrary, Seller shall have the
option, by delivering written notice to Purchaser, 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 Assumption and Release. Further, the Closing Date may
be extended without penalty at the option of Seller either (a) 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, (b) to a date 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) in order to finalize the drafting with
Lender and Lender's counsel of all documents necessary or desirable to
accomplish the Loan Assumption and Release, or (c) such later date as is
mutually acceptable to Seller and Purchaser. Provided that Purchaser is not in
default under the terms of this Contract, Purchaser shall be permitted a
one-time 30-day extension of the Closing Date specified in the first sentence of
this Section 5.1 by (i) delivering written notice to Seller no later than 5 days
prior to the scheduled Closing Date, and (ii) simultaneously with such notice to
Seller, delivering to Escrow Agent the amount of $147,500.00, which amount when
received by Escrow Agent shall be added to the Deposit hereunder, shall be
non-refundable (except as otherwise expressly provided herein with respect to
the Deposit), and shall be held, credited and disbursed in the same manner as
provided hereunder with respect to the Deposit.
5.2 Seller Closing Deliveries. No later than 1 Business Day prior to the Closing
Date, Seller shall deliver to Escrow Agent, each of the following items:
5.2.1 .....Special Warranty Deed (the "Deed") in the form attached as Exhibit B
to Purchaser, subject to the Permitted Exceptions.
5.2.2 .....A Bill of Sale in the form attached as Exhibit C.
5.2.3 .....A General Assignment in the form attached as Exhibit D (the "General
Assignment").
5.2.4 .....An Assignment of Leases and Security Deposits in the form attached as
Exhibit E (the "Leases Assignment").
5.2.5 .....A letter prepared by Purchaser and countersigned by Seller to each of
the vendors under the Terminated Contracts informing them of the termination of
such Terminated Contract as of the Closing Date (subject to any delay in the
effectiveness of such termination pursuant to the express terms of each
applicable Terminated Contract) (the "Vendor Terminations").
5.2.6 .....A closing statement executed by Seller.
5.2.7 .....A title affidavit or at Seller's option an indemnity, as applicable,
in the customary form reasonably acceptable to Seller to enable Title Insurer to
delete the standard exceptions to the title insurance policy set forth in this
Contract (other than matters constituting any Permitted Exceptions and matters
which are to be completed or performed post-Closing) to be issued pursuant to
the Title Commitment; provided that such affidavit does not subject Seller to
any greater liability, or impose any additional obligations, other than as set
forth in this Contract; and
5.2.8 .....A certification of Seller's non-foreign status pursuant to Section
1445 of the Internal Revenue Code of 1986, as amended.
5.2.9 .....Resolutions, certificates of good standing, and such other
organizational documents as Title Insurer shall reasonably require evidencing
Seller's authority to consummate this transaction.
5.2.10 .... An updated Rent Roll reflecting the information required in Section
3.5.3; provided, however, that the content of such updated Rent Roll shall in no
event expand or modify the conditions to Purchaser's obligation to close as
specified under Section 8.1.
5.3 Purchaser Closing Deliveries. No later than 1 Business Day prior to the
Closing Date (except for the balance of the Purchase Price which is to be
delivered at the time specified in Section 2.2.4), Purchaser shall deliver to
the Escrow Agent (for disbursement to Seller upon the Closing) the following
items with respect to the Property being conveyed at such Closing:
5.3.1 .....The full Purchase Price (with credit for the Deposit and, if
applicable, the Loan Balance), 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 ....All documents, instruments, guaranties, Lender Fees, Required Loan
Fund Amounts, and other items or funds required by the Lender to cause the Loan
Assumption and Release.
5.4 Closing Prorations and Adjustments.
5.4.1 .....General. All normal and customarily proratable items, including,
without limitation, collected rents, operating expenses, personal property
taxes, other operating expenses and fees, shall be prorated as of the Closing
Date, Seller being charged or credited, as appropriate, for all of same
attributable to the period up to the Closing Date (and credited for any amounts
paid by Seller attributable to the period on or after the Closing Date, if
assumed by Purchaser) and Purchaser being responsible for, and credited or
charged, as the case may be, for all of same attributable to the period on and
after the Closing Date. Seller shall prepare a proration schedule (the
"Proration Schedule") of the adjustments described in this Section 5.4 prior to
Closing. Such adjustments shall be paid by Purchaser to Seller (if the
prorations result in a net credit to Seller) or by Seller to Purchaser (if the
prorations result in a net credit to Purchaser), by increasing or reducing the
cash to be paid by Purchaser at Closing.
5.4.2 .....Operating Expenses. All of the operating, maintenance, taxes (other
than real estate taxes, such as rental taxes), and other expenses incurred in
operating the Property that Seller customarily pays, and any other costs
incurred in the ordinary course of business for the management and operation of
the Property, shall be prorated on an accrual basis. Seller shall pay all such
expenses that accrue prior to Closing and Purchaser shall pay all such expenses
that accrue from and after the Closing Date.
5.4.3 .....Utilities. The final readings and final billings for utilities will
be made if possible as of the Closing Date, in which case Seller shall pay all
such bills as of the Closing Date and no proration shall be made at the Closing
with respect to utility bills. Otherwise, a proration shall be made based upon
the parties' reasonable good faith estimate and a readjustment made within 30
days after the Closing, if necessary. Seller shall be entitled to the return of
any deposit(s) posted by it with any utility company, and Seller shall notify
each utility company serving the Property to terminate Seller's account,
effective as of noon on the Closing Date.
5.4.4 .....Real Estate Taxes. Any real estate ad valorem or similar taxes for
the Property, or any installment of assessments payable in installments which
installment is payable in the calendar year of Closing, shall be prorated to the
date of Closing, based upon actual days involved. The proration of real property
taxes or installments of assessments shall be based upon the assessed valuation
and tax rate figures for the year in which the Closing occurs to the extent the
same are available; provided, that in the event that actual figures (whether for
the assessed value of the Property or for the tax rate) for the year of Closing
are not available at the Closing Date, the proration shall be made using figures
from the preceding year. The proration of real property taxes or installments of
assessments shall be final and not subject to re-adjustment after Closing.
5.4.5 .....Property Contracts. Purchaser shall assume at Closing the obligations
under the Property Contracts assumed by Purchaser, subject to proration of
operating expenses under Section 5.4.2.
5.4.6 .....Leases.
5.4.6.1 ...All collected rent (whether fixed monthly rentals, additional
rentals, escalation rentals, retroactive rentals, operating cost pass-throughs
or other sums and charges payable by Tenants under the Leases), income and
expenses from any portion of the Property shall be prorated as of the Closing
Date (prorated for any partial month). Purchaser shall receive all collected
rent and income attributable to dates from and after the Closing Date. Seller
shall receive all collected rent and income attributable to dates prior to the
Closing Date. Notwithstanding the foregoing, no prorations shall be made in
relation to either (a) non-delinquent rents which have not been collected as of
the Closing Date, or (b) delinquent rents existing, if any, as of the Closing
Date (the foregoing (a) and (b) referred to herein as the "Uncollected Rents").
In adjusting for Uncollected Rents, no adjustments shall be made in Seller's
favor for rents which have accrued and are unpaid as of the Closing, but
Purchaser shall pay Seller such accrued Uncollected Rents as and when collected
by Purchaser. Purchaser agrees to bill Tenants of the Property for all
Uncollected Rents and to take reasonable actions to collect Uncollected Rents.
After the Closing, Seller shall continue to have the right, but not the
obligation, in its own name, to demand payment of and to collect Uncollected
Rents owed to Seller by any Tenant, which right shall include, without
limitation, the right to continue or commence legal actions or proceedings
against any Tenant and the delivery of the Leases Assignment shall not
constitute a waiver by Seller of such right. Purchaser agrees to cooperate with
Seller in connection with all efforts by Seller to collect such Uncollected
Rents and to take all steps, whether before or after the Closing Date, as may be
necessary to carry out the intention of the foregoing, including, without
limitation, the delivery to Seller, within 7 days after a written request, of
any relevant books and records (including, without limitation, rent statements,
receipted bills and copies of tenant checks used in payment of such rent), the
execution of any and all consents or other documents, and the undertaking of any
act reasonably necessary for the collection of such Uncollected Rents by Seller;
provided, however, that Purchaser's obligation to cooperate with Seller pursuant
to this sentence shall not obligate Purchaser to terminate any Tenant lease with
an existing Tenant or evict or bring other legal proceedings against 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. Seller shall be responsible for all principal required
to be paid under the terms of the Note prior to Closing, together with all
interest accrued under the Note prior to Closing, all of which may be a credit
against the Purchase Price as provided in Section 2.2.3. Purchaser shall be
responsible for the payment of all principal required to be paid from and after
Closing, together with all interest accruing under the Note from and after
Closing. Purchaser also shall be responsible for all Lender Fees and all other
fees, penalties, interest and other amounts due and owing from and after Closing
under the Assumed Loan Documents (including, without limitation, as a result of
Loan Assumption and Release). As set forth in Section 4.5.3, any existing
reserves, impounds and other accounts maintained in connection with the Loan and
required to be replaced by Purchaser, shall be released in Good Funds to Seller
at the Closing.
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, mortgage assumption.
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.
5.4.11 ....Utility Contracts. If Seller has entered into an agreement for the
purchase of electricity, gas or other utility service for the Property or a
group of properties (including the Property) (a "Utility Contract"), or an
affiliate of Seller has entered into a Utility Contract, then, at the option of
Seller, (a) Purchaser either shall assume the Utility Contract with respect to
the Property, or (b) the reasonably calculated costs of the Utility Contract
attributable to the Property from and after the Closing shall be paid to Seller
at the Closing and Seller shall remain responsible for payments under the
Utility Contract.
5.4.12 ....Survival. The provisions of this Section 5.4 shall survive the
Closing and delivery of the Deed to Purchaser.
5.4.13 ....Possession. Possession of the Property, subject to the Leases,
Property Contracts which are not identified as Terminated Contracts during the
Feasibility Period (subject to the limitations of Section 3.6), and Permitted
Exceptions, shall be delivered to Purchaser at the Closing upon release from
escrow of all items to be delivered by Purchaser pursuant to Section 5.3,
including, without limitation, the Purchase Price. To the extent reasonably
available to Seller, originals or copies of the Leases and Property Contracts,
lease files, warranties, guaranties, operating manuals, keys to the property,
and Seller's books and records (other than proprietary information) regarding
the Property shall be made available to Purchaser at the Property after the
Closing.
5.5 Post Closing Adjustments. In general, and except as provided in this
Contract or the Closing Documents, Seller shall be entitled to all income, and
shall pay all expenses, relating to the operation of the Property for the period
prior to the Closing Date and Purchaser shall be entitled to all income, and
shall pay all expenses, relating to the operation of the Property for the period
commencing on and after the Closing Date. Purchaser or Seller may request that
Purchaser and Seller undertake to re-adjust any item on the Proration Schedule
(or any item omitted therefrom) in accordance with the provisions of Section 5.4
of this Contract; provided, however, that neither party shall have any
obligation to re-adjust any items (a) after the expiration of 60 days after
Closing, or (b) subject to such 60-day period, unless such items exceed
$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 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 the knowledge of Seller, the Rent Roll (as updated pursuant to
Section 5.2.10) is accurate in all material respects.
6.1.8 .....To Seller's knowledge: (A) no hazardous or toxic materials or other
substances regulated by applicable federal or state environmental laws are
stored by Seller on, in or under the Property in quantities which violate
applicable laws governing such materials or substances, and (B) the Property is
not used by Seller for the storage, treatment, generation or manufacture of any
hazardous or toxic materials or other substances in a manner which would
constitute a violation of applicable federal or state environmental laws.
6.1.9 .....To Seller's knowledge, Seller has not received any written notice
from any third-party of any violation of the ADA affecting the Property. (For
purposes of the foregoing sentence, third party shall not include Purchaser or
Purchaser's Consultants.)
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 statements, representations or warranties, express or implied, made by or
enforceable directly against Seller, 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, any offering prepared in connection with the sale
of the Property, Purchaser and Seller agree that Seller has done so or shall do
so only for the convenience of both parties, Purchaser shall not rely thereon
and the reliance by Purchaser upon any such documents, summaries, opinions or
work product shall not create or give rise to any liability of or against
Seller's Indemnified Parties. Purchaser shall rely only upon any title insurance
obtained by Purchaser with respect to title to the Property. Purchaser
acknowledges and agrees that no representation has been made and no
responsibility is assumed by Seller with respect to current and future
applicable zoning or building code requirements or the compliance of the
Property with any other laws, rules, ordinances or regulations, the financial
earning capacity or expense history of the Property, the continuation of
contracts, continued occupancy levels of the Property, or any part thereof, or
the continued occupancy by tenants of any Leases or, without limiting any of the
foregoing, occupancy at Closing. Prior to Closing, Seller shall have the right,
but not the obligation, to enforce its rights against any and all Property
occupants, guests or tenants. Purchaser agrees that the departure or removal,
prior to Closing, of any of such guests, occupants or tenants shall not be the
basis for, nor shall it give rise to, any claim on the part of Purchaser, nor
shall it affect the obligations of Purchaser under this Contract in any manner
whatsoever; and Purchaser shall close title and accept delivery of the Deed with
or without such tenants in possession and without any allowance or reduction in
the Purchase Price under this Contract. Purchaser hereby releases Seller from
any and all claims and liabilities relating to the foregoing matters. The
provisions of this Section 6.2 shall survive the Closing and delivery of the
Deed to Purchaser.
6.3 Survival of Seller's Representations. Seller and Purchaser agree that
Seller's Representations shall survive Closing for a period of 12 months (the
"Survival Period"). Seller shall have no liability after the Survival Period
with respect to Seller's Representations contained herein except to the extent
that Purchaser has 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 $150,000.00 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 $5,000.00. 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 Kendra Miller and Jody Nelsen, who are,
respectively, the Regional Property Manager and Community Manager handling this
Property (the "Regional Property Manager").
6.5 Representations And Warranties Of Purchaser. For the purpose of inducing
Seller to enter into this Contract and to consummate the sale and purchase of
the Property in accordance herewith, Purchaser represents and warrants to Seller
the following as of the Effective Date and as of the Closing Date:
6.5.1 .....Purchaser is a limited liability company duly organized, validly
existing and in good standing under the laws of Utah.
6.5.2 .....Purchaser, acting through any of its or their duly empowered and
authorized officers or members, has all necessary entity power and authority to
own and use its properties and to transact the business in which it is engaged,
and has full power and authority to enter into this Contract, to execute and
deliver the documents and instruments required of Purchaser herein, and to
perform its obligations hereunder; and no consent of any of Purchaser's
partners, directors, officers or members are required to so empower or authorize
Purchaser. The compliance with or fulfillment of the terms and conditions hereof
will not conflict with, or result in a breach of, the terms, conditions or
provisions of, or constitute a default under, any contract to which Purchaser is
a party or by which Purchaser is otherwise bound, which conflict, breach or
default would have a material adverse affect on Purchaser's ability to
consummate the transaction contemplated by this Contract. This Contract is a
valid, binding and enforceable agreement against Purchaser in accordance with
its terms.
6.5.3 .....No pending or, to the knowledge of Purchaser, threatened litigation
exists which if determined adversely would restrain the consummation of the
transactions contemplated by this Contract or would declare illegal, invalid or
non-binding any of Purchaser's obligations or covenants to Seller.
6.5.4 .....Other than Seller's Representations, Purchaser has not relied on any
representation or warranty made by Seller or any representative of Seller in
connection with this Contract and the acquisition of the Property.
The provisions of this Section 6.6 shall survive the Closing and delivery
of the Deed to Purchaser.
ARTICLE 7...
OPERATION OF THE PROPERTY
7.1 Leases and Property Contracts. During the period of time from the Effective
Date to the Closing Date, in the ordinary course of business Seller may enter
into new Property Contracts, new Leases, renew existing Leases or modify,
terminate or accept the surrender or forfeiture of any of the Leases, modify any
Property Contracts, or institute and prosecute any available remedies for
default under any Lease or Property Contract without first obtaining the written
consent of Purchaser; provided, however, Seller agrees that any such new
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.
7.2.1 .....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.
7.2.2 .....Seller agrees that at the Closing (a) Seller will deliver to
Purchaser the same number (or less) of Tenant Units which were vacant and not in
Rent-Ready Condition on the date that the Feasibility Period expired, or (b)
Purchaser shall receive a credit against the Purchase Price in an amount equal
to the product of (i) the number of additional Tenant Units on the date of the
Closing that are vacant and not in Rent-Ready Condition in excess of the number
of Tenant Units that were vacant and not in Rent-Ready Condition on the date
that the Feasibility Period expired, and (ii) $300.00.
7.2.3 .....Seller agrees to maintain its existing insurance policies (or
replacement policies on comparable terms) covering the Property in full force
and effect through the Closing Date.
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 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 .....The Loan Assumption and Release shall have occurred.
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 and Purchaser each represents and warrants to the other
that it has not dealt with or utilized the services of any 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 Intentionally Deleted.
9.3 Intentionally Deleted.
ARTICLE 10..
DEFAULTS AND REMEDIES
10.1 ......Purchaser Default. If Purchaser defaults in its obligations hereunder
to (a) deliver the Initial Deposit or Additional Deposit, (b) deliver to the
Seller the deliveries specified under Section 5.3 on the date required
thereunder, or (c) deliver the Purchase Price at the time required by Section
2.2.4 and close on the purchase of the Property on the Closing Date, then,
immediately and without notice or cure, Purchaser shall have no further right to
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 have no further
right to 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 $147,500.00 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.
The provisions of this Section 11.3 shall survive the Closing and delivery of
the Deed to Purchaser.
ARTICLE 12..
EMINENT DOMAIN
12.1 ......Eminent Domain. In the event that, at the time of Closing, any
material part of the Property is (or previously has been) acquired, or is about
to be acquired, by any governmental agency by the powers of eminent domain or
transfer in lieu thereof (or in the event that at such time there is any notice
of any such acquisition or intent to acquire by any such governmental agency),
Purchaser shall have the right, at Purchaser's option, to terminate this
Contract by giving written notice within 10 days after Purchaser's receipt from
Seller of notice of the occurrence of such event, and if Purchaser so terminates
this Contract shall recover the Deposit hereunder (subject to Purchaser's
obligation under Section 3.5.2 to return all Third-Party Reports and information
and Materials provided to Purchaser as a pre-condition to the return of the
Deposit). If Purchaser fails to terminate this Contract within such 10-day
period, this transaction shall be closed in accordance with the terms of this
Contract for the full Purchase Price and Purchaser shall receive the full
benefit of any condemnation award. It is expressly agreed between the parties
hereto that this section shall in no way apply to customary dedications for
public purposes which may be necessary for the development of the Property.
ARTICLE 13..
MISCELLANEOUS
13.1 ......Binding Effect of Contract. This Contract shall not be binding on
either party until executed by both Purchaser and Seller. As provided in Section
2.3.5, the Escrow Agent's execution of this Contract shall not be a prerequisite
to its effectiveness.
13.2 ......Exhibits And Schedules. All Exhibits and Schedules, whether or not
annexed hereto, are a part of this Contract for all purposes.
13.3 ......Assignability. This Contract is not assignable by Purchaser without
first obtaining the prior written approval of the Seller, except that Purchaser
may assign this Contract to one or more entities so long as (a) Purchaser is an
affiliate of the purchasing entity(ies), and (b) Purchaser is not released from
its liability hereunder. As used herein, an affiliate is a person or entity
controlled by, under common control with, or controlling another person or
entity.
13.4 ......Binding Effect. Subject to Section 13.3, this Contract shall be
binding upon and inure to the benefit of Seller and Purchaser, and their
respective successors, heirs and permitted assigns.
13.5 ......Captions. The captions, headings, and arrangements used in this
Contract are for convenience only and do not in any way affect, limit, amplify,
or modify the terms and provisions hereof.
13.6 ......Number And Gender Of Words. Whenever herein the singular number is
used, the same shall include the plural where appropriate, and words of any
gender shall include each other gender where appropriate.
13.7 ......Notices. All notices, demands, requests and other communications
required or permitted hereunder shall be in writing, and shall be (a) personally
delivered with a written receipt of delivery; (b) sent by a nationally
recognized overnight delivery service requiring a written acknowledgement of
receipt or providing a certification of delivery or attempted delivery; (c) sent
by certified or registered mail, return receipt requested, or (d) sent by
confirmed facsimile transmission with an original copy thereof transmitted to
the recipient by one of the means described in subsections (a) through (c) no
later than 3 Business Days thereafter.. All notices shall be deemed effective
when actually delivered as documented in a delivery receipt; provided, however,
that if the notice was sent by overnight courier or mail as aforesaid and is
affirmatively refused or cannot be delivered during customary business hours by
reason of the absence of a signatory to acknowledge receipt, or by reason of a
change of address with respect to which the addressor did not have either
knowledge or written notice delivered in accordance with this paragraph, then
the first attempted delivery shall be deemed to constitute delivery. Each party
shall be entitled to change its address for notices from time to time by
delivering to the other party notice thereof in the manner herein provided for
the delivery of notices. All notices shall be sent to the addressee at its
address set forth following its name below:
......To Purchaser:
......RDO Properties, LLC
......5445 South Highland Drive
......Salt Lake City, Utah
......Attention: David O'Leary
......Facsimile: 801-274-1062
with a copy to:
......David K. Broadbent, Esq.
......Holland & Hart
......60 E. South Temple, Suite 2000
......Salt Lake City, UT 84111-1031
......Facsimile: 801-364-9124
......To Seller:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Patrick Slavin and Kris Vercauteren
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:
......Brownstein Hyatt & Farber, P.C.
......410 17th Street, 22nd Floor
......Denver, Colorado 80202
......Attention: Gary M. Reiff, Esq.
......Telephone: 303-223-1100
......Facsimile: 303-223-1111
Any notice required hereunder to be delivered to the Escrow Agent shall be
delivered in accordance with above provisions as follows:
......Fidelity National Title Company
......1900 West Loop South, Suite 650
......Houston, Texas 77027
......Attention: Ms. Lolly Avant, National Commercial Closing
Specialist
......Telephone: 800-879-1677
......Facsimile: 713-623-4406
Unless specifically required to be delivered to the Escrow Agent pursuant
to the terms of this Contract, no notice hereunder must be delivered to the
Escrow Agent in order to be effective so long as it is delivered to the other
party in accordance with the above provisions.
13.8 ......Governing Law And Venue. The laws of the State of Utah 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, 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.
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, accountants and potential investors (provided that such potential
investors shall be required to execute a written acknowledgment agreeing to be
bound by the provisions of this Section 13.14). 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") and the
federal Fair Housing Act (the "FHA"). The ADA 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 the FHA (or any similar state or local
law), and Seller expressly disclaims any such representation.
13.23 .....No Recording. Purchaser shall not cause or allow this Contract or any
contract or other document related hereto, nor any memorandum or other evidence
hereof, to be recorded or become a public record without Seller's prior written
consent, which consent may be withheld at Seller's sole discretion. If the
Purchaser records this Contract or any other memorandum or evidence thereof,
Purchaser shall be in default of its obligations under this Contract. Purchaser
hereby appoints the Seller as Purchaser's attorney-in-fact to prepare and record
any documents necessary to effect the nullification and release of the Contract
or other memorandum or evidence thereof from the public records. This
appointment shall be coupled with an interest and irrevocable.
13.24 .....Relationship of Parties. Purchaser and Seller acknowledge and agree
that the relationship established between the parties pursuant to this Contract
is only that of a seller and a purchaser of property. Neither Purchaser nor
Seller is, nor shall either hold itself out to be, the agent, employee, joint
venturer or partner of the other party.
13.25 .....Dispute Resolution. Any controversy, dispute, or claim of any nature
arising out of, in connection with, or in relation to the interpretation,
performance, enforcement or breach of this Contract (and any closing document
executed in connection herewith), including any claim based on contract, tort or
statute, shall be resolved at the written request of any party to this Contract
by binding arbitration. The arbitration shall be administered in accordance with
the then current Commercial Arbitration Rules of the American Arbitration
Association. Any matter to be settled by arbitration shall be submitted to the
American Arbitration Association in the state in which the Property is located.
The parties shall attempt to designate one arbitrator from the American
Arbitration Association. If they are unable to do so within 30 days after
written demand therefor, then the American Arbitration Association shall
designate an arbitrator. The arbitration shall be final and binding, and
enforceable in any court of competent jurisdiction. The arbitrator shall award
attorneys' fees (including those of in-house counsel) and costs to the
prevailing party and charge the cost of arbitration to the party which is not
the prevailing party. Notwithstanding anything herein to the contrary, this
Section 13.25 shall not prevent Purchaser or Seller from seeking and obtaining
equitable relief on a temporary or permanent basis, including, without
limitation, a temporary restraining order, a preliminary or permanent injunction
or similar equitable relief, from a court of competent jurisdiction located in
the state in which the Property is located (to which all parties hereto consent
to venue and jurisdiction) by instituting a legal action or other court
proceeding in order to protect or enforce the rights of such party under this
Contract or to prevent irreparable harm and injury. The court's jurisdiction
over any such equitable matter, however, shall be expressly limited only to the
temporary, preliminary, or permanent equitable relief sought; all other claims
initiated under this Contract between the parties hereto shall be determined
through final and binding arbitration in accordance with this Section 13.25.
13.26 .....AIMCO Marks. Purchaser agrees that Seller, the Property Manager or
AIMCO, or their respective affiliates, are the sole owners of all right, title
and interest in and to the AIMCO Marks (or have the right to use such AIMCO
Marks pursuant to license agreements with third parties) and that no right,
title or interest in or to the AIMCO Marks is granted, transferred, assigned or
conveyed as a result of this Contract. Purchaser further agrees that Purchaser
will not use the AIMCO Marks for any purpose.
13.27 .....Non-Solicitation of Employees. Purchaser acknowledges and agrees
that, without the express written consent of Seller, neither Purchaser nor any
of Purchaser's employees, affiliates or agents shall 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 ......Intentionally Deleted.
[Remainder of Page Intentionally Left Blank]
NOW, THEREFORE, the parties hereto have executed this Contract as of the
date first set forth above.
...... Seller:
...... MULTI-BENEFIT REALTY FUND `87-1,
...... a California limited partnership
...... By: Concap Equities, Inc.
...... a Delaware corporation,
...... Its General Partner
...... By: /s/Patrick F. Slavin
...... Name: Patrick F. Slavin
...... Title:Senior Vice President
...... Purchaser:
...... RDO PROPERTIES, LLC
...... a Utah limited liability company
...... By: /s/David O'Leary
...... Name: David O'Leary
...... Title:Member
ESCROW AGENT SIGNATURE PAGE
The undersigned executes the Contract to which this signature page is
attached for the purpose of agreeing to the provisions of Section 2.3 of the
Contract, and hereby establishes August 7, 2003 as the date of opening of escrow
and designates FN # 193543 as the escrow number assigned to this escrow.
...... ESCROW AGENT:
...... FIDELITY NATIONAL TITLE COMPANY
...... By: /s/Rhonda P. Obaugh
...... Name: Rhonda P. Obaugh
...... Title:Vice President
Exhibit 10.25
AMENDMENT TO PURCHASE AND SALE CONTRACT
THIS AMENDMENT TO PURCHASE AND SALE CONTRACT (this "Amendment") is made
and entered into this 11th day of September, 2003 (the "Amendment Date"), by and
between MULT-BENEFIT REALTY FUND '87-1, a California limited partnership, having
an address at 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado
80237 ("Seller") and RDO PROPERTIES, LLC, a Utah limited liability company,
having an address at 5445 South Highland Drive, Salt Lake City, Utah
("Purchaser"). (Seller and Purchaser collectively referred to as the "Parties"
and each individually as "Party").
Recitals:
A. WHEREAS, Seller and Purchaser entered into that certain Purchase and
Sale Contract dated August 7, 2003 (the "Contract") for the Property described
therein.
B. WHEREAS, Seller and Purchaser desire to amend the Contract on the terms
set forth herein.
NOW, THEREFORE, in consideration of the Contract, the covenants, promises,
agreements, and conditions contained herein, and for other good and valuable
considerations, the receipt, sufficiency, and adequacy of which are hereby
acknowledged, the Parties agree to amend the Contract as follows:
Agreement:
1. Feasibility Period. The reference in Section 3.1 of the Contract to "35 days
after the Effective Date" is hereby amended to read "42 days after the Effective
Date". The foregoing amendment is not intended by the parties to extend any
other limitation periods or deadlines in the Contract which are contingent upon
the expiration date of the Feasibility Period, including, without limitation,
the Closing Date specified in the first sentence of Section 5.1 of the Contract.
2. Closing Date. The reference in Section 5.1 of the Contract to "30 days
following the expiration of the Feasibility Period" is hereby amended to read
"on October 14, 2003".
3. Deletion of Section 3.9. Section 3.9 of the Contract is hereby deleted in its
entirety.
4. Miscellaneous. The following provisions shall apply with respect to this
Amendment:
a. Except as modified herein, the Contract, is in full force and effect and is
hereby ratified by Seller and Purchaser.
b. Capitalized terms not defined herein shall have the same meaning as set forth
in the Contract.
c. In the event of any conflict between the Contract and this Amendment, the
terms and conditions of this Amendment shall control.
d. This Amendment may be executed in counterparts, each of which (or any
combination of which) when signed by all of the parties shall be deemed an
original, but all of which when taken together shall constitute one agreement.
Executed copies hereof may be delivered by telecopier and upon receipt shall be
deemed originals and binding upon the parties hereto, and actual originals shall
be promptly delivered thereafter.
[signature pages follow]
NOW, THEREFORE, the Parties hereto have executed this Amendment as of the
date first set forth above.
Seller:
MULTI-BENEFIT REALTY FUND '87-1,
a California limited partnership
By: Concap Equities, Inc.
a Delaware corporation,
Its General Partner
By: /s/Patrick F. Slavin
Name: Patrick F. Slavin
Title:Senior Vice President
[Purchaser signature page follows]
[PURCHASER SIGNATURE PAGE TO AMENDMENT TO
PURCHASE AND SALE CONTRACT
FOR SHADOW BROOK APARTMENTS]
Purchaser:
RDO PROPERTIES, LLC
a Utah limited liability company
By: /s/David O'Leary
Name: David O'Leary
Title:Member
Exhibit 10.26
SECOND AMENDMENT TO PURCHASE AND SALE CONTRACT
THIS SECOND AMENDMENT TO PURCHASE AND SALE CONTRACT (this "Amendment") is
made and entered into to be effective as of the 18th day of September, 2003 (the
"Amendment Date"), by and between MULTI-BENEFIT REALTY FUND '87-1, a California
limited partnership, having an address at 4582 South Ulster Street Parkway,
Suite 1100, Denver, Colorado 80237 ("Seller") and RDO PROPERTIES, LLC, a Utah
limited liability company, having an address at 5445 South Highland Drive, Salt
Lake City, Utah ("Purchaser"). (Seller and Purchaser collectively referred to as
the "Parties" and each individually as "Party").
Recitals:
A. WHEREAS, Seller and Purchaser entered into that certain Purchase and
Sale Contract dated August 7, 2003 for the Property described therein, as
amended by that certain Amendment to Purchase and Sale Contract dated September
11, 2003 (as amended, the "Contract").
B. WHEREAS, Seller and Purchaser desire to amend the Contract on the terms
set forth herein.
NOW, THEREFORE, in consideration of the Contract, the covenants, promises,
agreements, and conditions contained herein, and for other good and valuable
considerations, the receipt, sufficiency, and adequacy of which are hereby
acknowledged, the Parties agree to amend the Contract as follows:
Agreement:
1. Closing Credit. Provided that Purchaser fully complies with its obligations
under the Contract, Purchaser shall receive a credit in the amount of
$100,000.00 (the "Credit") against the Purchase Price at Closing. Purchaser
agrees that (a) the Credit is intended as full satisfaction of all issues raised
in Purchaser's letters of September 17, 2003 (collectively, the "Purchaser
Letter"), (b) Seller shall have no obligation or liability whatsoever with
respect to any of the matters set forth in the Purchaser Letter, and (c)
Purchaser hereby forever discharges and releases Seller from all Losses relating
to or arising from any matter set forth in the Purchaser Letter.
2. Feasibility Period. Purchaser hereby agrees that it has completed its review
of the Property and agrees that it has approved all aspects of the Property and
hereby waives its right to object (pursuant to Section 3.6 or 4.3 of the
Contract or otherwise) to any matter concerning the Title Documents, the Survey,
the Property Contracts, the Leases, the physical condition of the Property, or
otherwise with respect to the Property. Purchaser agrees that Seller has made
all required deliveries and performed all of Seller's required obligations under
the Contract through the date hereof. With the sole exception of Purchaser's
right to terminate the Contract pursuant to Section 4.5.4 thereof, Purchaser
agrees that Purchaser's right to terminate the Contract is permanently waived,
the Deposit is non-refundable, and Purchaser's obligation to purchase the
Property is non-contingent and unconditional except only for satisfaction of the
conditions expressly stated in Section 8.1 of the Contract.
3. Easement Agreement.
(a) The following new Sections 5.2.11 and 5.2.12 are hereby added to
the Contract:
"5.2.11 An easement agreement, in
substantially the form attached hereto as Exhibit H,
duly executed by AIMCO/Brandywine, L.P.
5.2.12 A termination of declaration, executed by Seller and AIMCO
Brandywine, L.P., with respect to that certain Declaration of
Covenants and Mutual Easements dated April 5, 1983 and recorded
April 12, 1983, at Book 5450, Page 2329 in the Office of the
Recorder, Salt Lake County, Utah."
(c) The following new Section 5.3.12 is hereby added to the
Contract:
"5.3.12 An easement agreement, in
substantially the form attached hereto as Exhibit H,
duly executed by Purchaser."
(d) The form easement attached to this Amendment as Exhibit H is
hereby appended to the Contract as Exhibit H.
4. Loan Assumption and Modification.
(a) The following is hereby added to the end of Section 4.5.2 of the
Contract:
"In connection with obtaining the Loan Assumption and Release,
Seller acknowledges that Purchaser shall negotiate with Lender for
(i) a modification (the "Modification") of the Note and the Assumed
Loan Documents to provide for a 30-year amortization period, and
(ii) secondary financing (the "Additional Financing") in the minimum
amount of $3,400,000.00 in connection with Purchaser's purchase of
the Property (the Loan Assumption and Release, the Modification, and
the Additional Financing collectively referred to herein as the
"Loan Assumption and Modification")." Purchaser shall be responsible
for all Lender Fees imposed or charged by Lender in connection with
the Loan Assumption and Modification."
(b) Section 4.5.4 of the Contract is hereby amended and restated in
its entirety as follows:
4.5.4 If (a) Purchaser fully complies with its obligations
under this Contract (including this Section 4.5) and the requirements of
the Assumed Loan Documents in connection with obtaining the Loan
Assumption and Modification, (b) Purchaser uses best efforts to obtain the
Loan Assumption and Modification, and (c) Purchaser does not obtain the
consent of the Lender to the Loan Assumption and Modification on or before
3 Business Days prior to the Closing Date (the "Loan Approval Period") for
reasons other than (i) Purchaser's failure to submit a complete Loan
Assumption Application, or (ii) Purchaser's creditworthiness, then
Purchaser shall have the right, on or before the expiration of the Loan
Approval Period, to give Escrow Agent notice terminating this Contract
based solely on the fact that the Loan Assumption and Modification has not
been approved by the Lender (the "Loan Approval Termination"), in which
event this Contract shall be of no further force and effect, subject to
and except for Purchaser's liability pursuant to Section 3.3 and any other
provision of this Contract which survives such termination, and Escrow
Agent shall forthwith return the Deposit to Purchaser. If Purchaser fails
to provide Seller with written notice of termination prior to the
expiration of the Loan Approval Period in strict accordance with the
notice provisions of this Contract, Purchaser's right to terminate under
this Section 4.5.4 shall be permanently waived, this Contract shall remain
in full force and effect, the Deposit shall be non-refundable, and
Purchaser's obligation to obtain the Lender's approval of the Loan
Assumption and Release and to purchase the Property shall be
non-contingent and unconditional except only for satisfaction of the
conditions expressly stated in Section 8.1. Purchaser recognizes and
agrees that if either (x) the Loan Approval Period expires and Purchaser
is entitled to but does not terminate this Contract, or (y) Purchaser does
not obtain the consent of the Lender to the Loan Assumption and
Modification on or before 3 Business Days prior to the Closing Date
because either (I) Purchaser's failed to submit a complete Loan Assumption
Application, or (II) Lender determined that Purchaser was not
creditworthy, the Loan Assumption and Modification shall not be a
condition to Purchaser's obligation to close, and, if the Loan Assumption
and Release is not obtained and Closing has not occurred on or before the
Closing Date, Purchaser shall be in default under this Contract, entitling
the Seller to terminate this Contract, in which event the Deposit shall be
immediately released to Seller by the Escrow Agent and this Contract shall
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. Under no circumstances shall Seller be
required to cause the pay-off of the Loan at the Closing.
(c) The following new Section 1.1.34.5 is hereby added to the
Contract:
"1.1.34.5 "Loan Assumption and Modification" shall have the meaning
section forth in Section 4.5.2."
(d) The following new Section 1.1.2.5 is hereby added to the
Contract:
"1.1.2.5 "Additional Financing" shall have the
meaning set forth in Section 4.5.2."
(e) The following new Section 1.1.39.5 is hereby added to the
Contract:
"1.1.39.5 "Modification" shall have the meaning set
forth in Section 4.5.2"
5. Miscellaneous. The following provisions shall apply with respect to this
Amendment:
(a) Except as modified herein, the Contract, is in full force and
effect and is hereby ratified by Seller and Purchaser.
(b) Capitalized terms not defined herein shall have the same meaning
as set forth in the Contract.
(c) In the event of any conflict between the Contract and this
Amendment, the terms and conditions of this Amendment shall control.
(d) This Amendment may be executed in counterparts, each of which
(or any combination of which) when signed by all of the parties shall be deemed
an original, but all of which when taken together shall constitute one
agreement. Executed copies hereof may be delivered by telecopier and upon
receipt shall be deemed originals and binding upon the parties hereto, and
actual originals shall be promptly delivered thereafter.
[signature pages follow]
NOW, THEREFORE, the Parties hereto have executed this Amendment as of the
date first set forth above.
Seller:
MULTI-BENEFIT REALTY FUND '87-1,
a California limited partnership
By: Concap Equities, Inc.
a Delaware corporation,
Its General Partner
By: /s/Patrick F. Slavin
Name: Patrick F. Slavin
Title:Senior Vice President
[Purchaser signature page follows]
[PURCHASER SIGNATURE PAGE TO AMENDMENT TO
PURCHASE AND SALE CONTRACT
FOR SHADOW BROOK APARTMENTS]
Purchaser:
RDO PROPERTIES, LLC
a Utah limited liability company
By: /s/David O'Leary
Name: David O'Leary
Title:Member
Exhibit 10.27
THIRD AMENDMENT TO PURCHASE AND SALE CONTRACT
THIS THIRD AMENDMENT TO PURCHASE AND SALE CONTRACT (this "Amendment") is
made and entered into to be effective as of the 10th day of October, 2003 (the
"Amendment Date"), by and between MULTI-BENEFIT REALTY FUND '87-1, a California
limited partnership, having an address at 4582 South Ulster Street Parkway,
Suite 1100, Denver, Colorado 80237 ("Seller") and RDO PROPERTIES, LLC, a Utah
limited liability company, having an address at 5445 South Highland Drive, Salt
Lake City, Utah ("Purchaser"). (Seller and Purchaser collectively referred to as
the "Parties" and each individually as "Party").
Recitals:
A. WHEREAS, Seller and Purchaser entered into that certain Purchase and
Sale Contract dated August 7, 2003 for the Property described therein, as
amended by (i) that certain Amendment to Purchase and Sale Contract dated
September 11, 2003, and (ii) that certain Second Amendment to Purchase and Sale
Contract dated September 18, 2003 (as amended, the "Contract").
B. WHEREAS, Seller and Purchaser desire to amend the Contract on the terms
set forth herein.
NOW, THEREFORE, in consideration of the Contract, the covenants, promises,
agreements, and conditions contained herein, and for other good and valuable
considerations, the receipt, sufficiency, and adequacy of which are hereby
acknowledged, the Parties agree to amend the Contract as follows:
Agreement:
1. Loan Approval Period. The phrase "on or before 3 Business Days prior to the
Closing Date" in each instance in Section 4.5.4, subparagraph (c), of the
Contract is hereby deleted and replaced in its entirety with the phrase "on or
before October 17, 2003" which shall be the expiration of the Loan Approval
Period.
2. Closing Date. The first sentence of Section 5.1 of the Contract is hereby
amended and replaced in its entirety to read as follows:
"The Closing shall occur on the date (the "Closing Date") which is
the earlier of (I) 5 Business Days after Lender approves the Loan
Assumption and Modification, or (II) October 24, 2003, 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."
3. Miscellaneous. The following provisions shall apply with respect to this
Amendment:
(a) Except as modified herein, the Contract, is in full force and
effect and is hereby ratified by Seller and Purchaser.
(b) Capitalized terms not defined herein shall have the same meaning
as set forth in the Contract.
(c) In the event of any conflict between the Contract and this
Amendment, the terms and conditions of this Amendment shall control.
(d) This Amendment may be executed in counterparts, each of which
(or any combination of which) when signed by all of the parties shall be deemed
an original, but all of which when taken together shall constitute one
agreement. Executed copies hereof may be delivered by telecopier and upon
receipt shall be deemed originals and binding upon the parties hereto, and
actual originals shall be promptly delivered thereafter.
[signature pages follow]
NOW, THEREFORE, the Parties hereto have executed this Amendment as of the
date first set forth above.
Seller:
MULTI-BENEFIT REALTY FUND '87-1,
a California limited partnership
By: Concap Equities, Inc.
a Delaware corporation,
Its General Partner
By: /s/Harry Alcock
Name: Harry Alcock
Title:Executive Vice President
[Purchaser signature page follows]
[PURCHASER SIGNATURE PAGE TO THIRD AMENDMENT TO
PURCHASE AND SALE CONTRACT
FOR SHADOW BROOK APARTMENTS]
Purchaser:
RDO PROPERTIES, LLC
a Utah limited liability company
By: /s/David O'Leary
Name: David O'Leary
Title:Member