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) December 30, 2003
NATIONAL PROPERTY INVESTORS 7
(Exact name of registrant as specified in its charter)
California 0-13454 13-3230613
(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 December 30, 2003, the Registrant sold one of its investment properties,
Southpoint Apartments, located in Durham, North Carolina. The Registrant sold
Southpoint Apartments to HD South Point, LLC, a third party, for $11,800,000.
The sales price was determined based on the fair market value of the investment
property.
In accordance with the Amended Limited Partnership Agreement of the Registrant,
the Registrant's general partner is evaluating the cash requirements of the
Registrant to determine whether any portion of the net proceeds will be
distributed to the Registrant's partners.
Item 7. Financial Statements and Exhibits
(b) Pro forma financial information.
The following unaudited pro forma consolidated balance sheet and statements of
operations reflect the operations of the Registrant as if Southpoint Apartments
had been sold on January 1, 2002.
The pro forma consolidated financial statements do not project the Registrant's
results of operations 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
(in thousands)
September 30, 2003
All other assets $ 950
Investment properties, net 6,170
Total Assets $ 7,120
All other liabilities $ 291
Mortgage notes payable 9,057
Partners' deficit (2,228)
Total Liabilities and Equity $ 7,120
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit data)
Nine Months Ended Year Ended
September 30, December 31,
2003 2002
Total revenues $ 2,162 $ 2,965
Total expenses 2,351 3,165
Net loss $ (189) $ (200)
Net loss per limited partnership unit $ (3.09) $ (3.27)
(c) Exhibits.
The following exhibits are filed with this report (1):
10.14Purchase and Sale Contract between Registrant and The Dilweg Companies,
LLC, dated October 20, 2003.
10.15Amendment to Purchase and Sale Contract between Registrant and The Dilweg
Companies, LLC, dated October 27, 2003.
10.16Reinstatement and Second Amendment to Purchase and Sale Contract between
Registrant and The Dilweg Companies, LLC, dated November 6, 2003.
10.17Third Amendment to Purchase and Sale Contract between Registrant and The
Dilweg Companies, LLC, dated December 17, 2003.
10.18Assignment and Assumption of Real Estate Sale Agreement between The Dilweg
Companies, LLC and HD South Point, LLC, dated December 30, 2003.
(1) Schedules and supplemental materials to the exhibits have been omitted but
will be provided to the Securities and Exchange Commission upon request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NATIONAL PROPERTY INVESTORS 7
By: NPI Equity Investments, Inc.
Its Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
Date: January 13, 2004
Exhibit 10.14
PURCHASE AND SALE CONTRACT
BETWEEN
NATIONAL PROPERTY INVESTORS 7,
a California limited partnership
AS SELLER
AND
THE DILWEG COMPANIES, LLC,
a North Carolina limited liability company
AS PURCHASER
SOUTH POINT APARTMENTS
Table of Contents
Page
ARTICLE 1 DEFINED TERMS.................................................1
ARTICLE 2 PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT...................6
2.1 Purchase and Sale................................................6
2.2 Purchase Price and Deposit.......................................6
2.3 Escrow Provisions Regarding Deposit..............................7
ARTICLE 3 FEASIBILITY PERIOD............................................8
3.1 Feasibility Period...............................................8
3.2 Expiration of Feasibility Period.................................8
3.3 Conduct of Investigation.........................................9
3.4 Purchaser Indemnification........................................9
3.5 Property Materials..............................................10
3.6 Property Contracts..............................................11
ARTICLE 4 TITLE........................................................11
4.1 Title Documents.................................................11
4.2 Survey..........................................................12
4.3 Objection and Response Process..................................12
4.4 Permitted Exceptions............................................13
4.5 Existing Deed of Trust..........................................13
ARTICLE 5 CLOSING......................................................13
5.1 Closing Date....................................................13
5.2 Seller Closing Deliveries.......................................14
5.3 Purchaser Closing Deliveries....................................15
5.4 Closing Prorations and Adjustments..............................15
5.5 Post Closing Adjustments........................................18
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER.......19
6.1 Seller's Representations........................................19
6.2 AS-IS...........................................................20
6.3 Survival of Seller's Representations............................21
6.4 Definition of Seller's Knowledge................................21
6.5 Representations And Warranties Of Purchaser.....................21
ARTICLE 7 OPERATION OF THE PROPERTY....................................22
7.1 Leases and Property Contracts...................................22
7.2 General Operation of Property...................................23
7.3 Liens...........................................................23
ARTICLE 8 CONDITIONS PRECEDENT TO CLOSING..............................23
8.1 Purchaser's Conditions to Closing...............................23
ARTICLE 9 BROKERAGE....................................................24
9.1 Indemnity.......................................................24
9.2 Broker Commission...............................................25
9.3 Broker Signature Page...........................................25
ARTICLE 10 DEFAULTS AND REMEDIES........................................25
10.1 Purchaser Default...............................................25
10.2 Seller Default..................................................26
ARTICLE 11 RISK OF LOSS OR CASUALTY.....................................26
11.1 Major Damage....................................................26
11.2 Minor Damage....................................................27
11.3 Repairs.........................................................27
ARTICLE 12 EMINENT DOMAIN...............................................27
12.1 Eminent Domain..................................................27
ARTICLE 13 MISCELLANEOUS................................................27
13.1 Binding Effect of Contract......................................27
13.2 Exhibits And Schedules..........................................28
13.3 Assignability...................................................28
13.4 Binding Effect..................................................28
13.5 Captions........................................................28
13.6 Number And Gender Of Words......................................28
13.7 Notices.........................................................28
13.8 Governing Law And Venue.........................................30
13.9 Entire Agreement................................................30
13.10 Amendments......................................................30
13.11 Severability....................................................31
13.12 Multiple Counterparts/Facsimile Signatures......................31
13.13 Construction....................................................31
13.14 Confidentiality.................................................31
13.15 Time Of The Essence.............................................31
13.16 Waiver..........................................................31
13.17 Attorneys Fees..................................................32
13.18 Time Periods....................................................32
13.19 1031 Exchange...................................................32
13.20 No Personal Liability of Officers, Trustees or Directors of
Seller's Partners...............................................32
13.21 No Exclusive Negotiations.......................................33
13.22 ADA Disclosure..................................................33
13.23 No Recording....................................................33
13.24 Relationship of Parties.........................................33
13.25 Dispute Resolution..............................................33
13.26 AIMCO Marks.....................................................34
13.27 Non-Solicitation of Employees...................................34
13.28 Survival........................................................34
13.29 Multiple Purchasers.............................................34
ARTICLE 14 LEAD-BASED PAINT DISCLOSURE..................................35
14.1 Disclosure......................................................35
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as of
the 10th day of October, 2003 (the "Effective Date"), by and between National
Property Investors 7, a California limited partnership, having an address at
4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237 ("Seller"),
and The Dilweg Companies, LLC, a North Carolina limited liability company,
having a principal address at 5310 South Alston Avenue, Suite 210, Durham, North
Carolina 27713 ("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 Durham, County, North
Carolina, as more particularly described in Exhibit A attached hereto and made a
part hereof, and the improvements thereon, commonly known as South Point
Apartments.
B.....Purchaser desires to purchase, and Seller desires to sell, such
land, improvements and certain associated property, on the terms and conditions
set forth below.
ARTICLE 1...
DEFINED TERMS
1.1 Unless otherwise defined herein, any term with its initial letter
capitalized in this Contract shall have the meaning set forth in this ARTICLE 1.
1.1.1 ....."ADA" shall have the meaning set forth in Section 13.22.
1.1.2 .....[Intentionally left blank].
1.1.3 ....."AIMCO" means Apartment Investment and Management Company.
1.1.4 ....."AIMCO Marks" means all words, phrases, slogans, materials, software,
proprietary systems, trade secrets, proprietary information and lists, and other
intellectual property owned or used by Seller, the Property Manager, or AIMCO in
the marketing, operation or use of the Property (or in the marketing, operation
or use of any other properties managed by the Property Manager or owned by AIMCO
or an affiliate of either Property Manager or AIMCO).
1.1.5 .....[Intentionally left blank].
1.1.6 .....[Intentionally left blank].
1.1.7 .....[Intentionally left blank].
1.1.8 ....."Broker" shall have the meaning set forth in Section 9.1.
1.1.9 ....."Business Day" means any day other than a Saturday or Sunday or
Federal holiday or legal holiday in the States of Colorado, Texas or North
Carolina.
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 ....[intentionally deleted]
1.1.14 ...."Consultants" shall have the meaning set forth in Section 3.1.
1.1.15 ...."Damage Notice" shall have the meaning set forth in Section 11.1.
1.1.16 ...."Deed" shall have the meaning set forth in Section 5.2.1.
1.1.16.5 "Deed of Trust" shall have the meaning set forth in Section 4.5.
1.1.17 ...."Deposit" shall have the meaning set forth in Section 2.2.1.
1.1.18 ...."Escrow Agent" shall have the meaning set forth in Section 2.2.1.
1.1.19 ...."Excluded Permits" means those Permits which, under applicable law,
are nontransferable and such other Permits, if any, as may be designated as
Excluded Permits on Schedule 1.1.19.
1.1.20 ...."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 ....[intentionally deleted]
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 ...."[Intentionally left blank].
1.1.29 ...."Land" means all of those certain tracts of land located in the State
of North Carolina 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" means GMAC Commercial Mortgage Corporation.
......1.1.32.5 "Lender Fees" shall mean all fees and expenses (including,
without limitation, all prepayment penalties and pay-off fees) imposed or
charged by Lender or its counsel in connection with the Loan Payoff, and, to the
extent that the Loan Payoff occurs on a date other than as permitted under the
Note and Deed of Trust, any amounts of interest charged by Lender for the period
from the Closing Date to the permitted prepayment date, the amount of the
Lender's Fees to be determined as of the Closing Date.
1.1.33 ...."Loan" means the indebtedness owing to Lender evidenced by the Note.
1.1.34 ....[Intentionally left blank].
1.1.35 ...."Loan Balance" shall have the meaning set forth in Section 2.2.3.
1.1.36 ...."Loan Payoff" shall have the meaning set forth in Section 5.4.7.
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
"South Point Apartments" as it relates solely to use in connection with the
Property (and not with respect to any other property owned or managed by Seller,
Property Manager, AIMCO, or their respective affiliates).
1.1.40 ...."Note" means that certain Multifamily Note (Variable Loan) in the
original principal amount of $5,000,000, dated June 27, 2003, executed by Seller
and payable to the order of GMAC Commercial Mortgage Corporation.
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" has the meaning set forth in Section 6.4.
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.
1.1.51.5"Purchaser's Broker" shall have the meaning set forth in Section 9.1
1.1.52 ...."Regional Property Manager" shall have the meaning set forth in
Section 6.4.
1.1.52.25 "Released Deposit" shall have the meaning set forth in Section 2.2.1.
1.1.52.5 "Remaining Deposit" shall have the meaning set forth in Section 2.2.1.
1.1.53 ....[intentionally deleted]
1.1.54 ...."Rent Roll" shall have the meaning set forth in Section 3.5.3
1.1.55 ...."Response Deadline" shall have the meaning set forth in Section 4.3.
1.1.56 ...."Response Notice" shall have the meaning set forth in Section 4.3.
1.1.57 ...."Seller's Indemnified Parties" shall have the meaning set forth in
Section 3.4.1
1.1.58 ...."Seller's Representations" shall have the meaning set forth in
Section 6.1.
1.1.59 ...."Survey" shall have the meaning ascribed thereto in Section 4.2.
1.1.60 ...."Survival Period" shall have the meaning set forth in Section 6.3.
1.1.61 ...."Survival Provisions" shall have the meaning set forth in Section
13.28.
1.1.62 ...."Tenant" means any person or entity entitled to occupy any portion of
the Property under a Lease.
1.1.63 ...."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.
1.1.64 ...."Tenant Security Deposit Balance" shall have the meaning set forth in
Section 5.4.6.2.
1.1.65 ...."Terminated Contracts" shall have the meaning set forth in Section
3.6.
1.1.66 ....[intentionally deleted]
1.1.67 ...."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.
1.1.68 ...."Title Commitment" shall have the meaning ascribed thereto in Section
4.1.
1.1.69 ...."Title Documents" shall have the meaning set forth in Section 4.1.
1.1.70 ...."Title Insurer" shall have the meaning set forth in Section 2.2.1.
1.1.71 ...."Title Policy" shall have the meaning set forth in Section 4.1.
1.1.72 ...."Uncollected Rents" shall have the meaning set forth in Section
5.4.6.1.
1.1.73 ...."Utility Contract " shall have the meaning set forth in Section
5.4.11.
1.1.74 ...."Vendor Terminations" shall have the meaning set forth in Section
5.2.5.
ARTICLE 2...
PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT
2.1 Purchase and Sale. Seller agrees to sell and convey the Property to
Purchaser and Purchaser agrees to purchase the Property from Seller, all in
accordance with the terms and conditions set forth in this Contract.
2.2 Purchase Price and Deposit. The total purchase price ("Purchase Price") for
the Property shall be an amount equal to $8,460,000, less the Lender Fees, which
amount shall be paid by Purchaser, as follows:
2.2.1 .....On the Effective Date, Purchaser shall deliver to Fidelity National
Title Company, c/o Lolly Avant, National Commercial Closing Specialist, 1900
West Loop South, Suite 650, Houston Texas 77027, Telephone: 1-800-879-1677
("Escrow Agent" or "Title Insurer") a deposit (the "Deposit") of $150,000 by
wire transfer of immediately available funds ("Good Funds"). The Deposit shall
be held and disbursed in accordance with the escrow provisions set forth in
Section 2.3. Fifteen (15) days after the Effective Date, $75,000 of the Deposit
shall be released (the "Released Deposit") to Seller and shall be
non-refundable, except only for breach of this Contract by Seller (and
thereafter termination of this Contract by Purchaser) or satisfaction of the
conditions expressly stated in Section 8.1. (The portion of the Deposit
remaining in escrow shall be the "Remaining Deposit").
2.2.2 .....[Intentionally left blank].
2.2.3 .....[Intentionally left blank].
2.2.4 .....The balance of the Purchase Price for the Property shall be paid to
and received by Escrow Agent by wire transfer of Good Funds no later than 11:00
a.m. (in the time zone in which Escrow Agent is located) on the Closing Date (or
such earlier time as required by Seller's lender, but in no event more than 1
Business Day prior to the Closing Date).
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 (subject to early release of the
Released Deposit pursuant to Section 2.2.1) until the earlier occurrence of (i)
the Closing Date, at which time the Deposit (including the Released 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 remaining in escrow has not been released earlier in
accordance with Sections 2.2.1 or 2.3.2, and either party makes a written demand
upon Escrow Agent for payment of the portion or the Deposit remaining in escrow,
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 remaining in escrow and
interest thereon, if any, with a court of competent jurisdiction in the state in
which the Property is located. Escrow Agent shall give written notice of such
deposit to Seller and Purchaser. Upon such deposit, Escrow Agent shall be
relieved and discharged of all further obligations and responsibilities
hereunder.
2.3.4 .....The parties acknowledge that Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that Escrow Agent shall
not be deemed to be the agent of either of the parties for any act or omission
on its part unless taken or suffered in bad faith in willful disregard of this
Contract or involving gross negligence. Seller and Purchaser jointly and
severally shall indemnify and hold Escrow Agent harmless from and against all
costs, claims and expenses, including reasonable attorney's fees, incurred in
connection with the performance of Escrow Agent's duties hereunder, except with
respect to actions or omissions taken or suffered by Escrow Agent in bad faith,
in willful disregard of this Contract or involving gross negligence on the part
of the Escrow Agent.
2.3.5 .....The parties shall deliver to Escrow Agent an executed copy of this
Contract, which shall constitute the sole instructions to Escrow Agent. Escrow
Agent shall execute the signature page for Escrow Agent attached hereto with
respect to the provisions of this Section 2.3; provided, however, that (a)
Escrow Agent's signature hereon shall not be a prerequisite to the binding
nature of this Contract on Purchaser and Seller, and the same shall become fully
effective upon execution by Purchaser and Seller, and (b) the signature of
Escrow Agent will not be necessary to amend any provision of this Contract other
than this Section 2.3.
2.3.6 .....Escrow Agent, as the person responsible for closing the transaction
within the meaning of Section 6045(e)(2)(A) of the Internal Revenue Code of
1986, as amended (the "Code"), shall file all necessary information, reports,
returns, and statements regarding the transaction required by the Code
including, but not limited to, the tax reports required pursuant to Section 6045
of the Code. Further, Escrow Agent agrees to indemnify and hold Purchaser,
Seller, and their respective attorneys and brokers harmless from and against any
Losses resulting from Escrow Agent's failure to file the reports Escrow Agent is
required to file pursuant to this section.
2.3.7 .....The provisions of this Section 2.3 shall survive the termination of
this Contract, and if not so terminated, the Closing and delivery of the Deed to
Purchaser.
ARTICLE 3...
FEASIBILITY PERIOD
3.1 Feasibility Period. Subject to the terms of Section 3.3 and 3.4 and the
right of Tenants under the Leases, from the Effective Date to and including the
date which is 30 days after the Effective Date (the "Feasibility Period"),
Purchaser, and its agents, contractors, engineers, surveyors, attorneys, and
employees (collectively, "Consultants") shall have the right from time to time
to enter onto the Property:
3.1.1 .....To conduct and make any and all customary studies, tests,
examinations, inquiries, and inspections, or investigations (collectively, the
"Inspections") of or concerning the Property (including, without limitation,
engineering and feasibility studies, evaluation of drainage and flood plain,
soil tests for bearing capacity and percolation and surveys, including
topographical surveys);
3.1.2 .....To confirm any and all matters which Purchaser may reasonably desire
to confirm with respect to the Property;
3.1.3 .....To ascertain and confirm the suitability of the property for
Purchaser's intended use of the Property; and
3.1.4 .....To review the Materials at Purchaser's sole cost and expense.
3.2 Expiration of Feasibility Period. If the results of any of the matters
referred to in Section 3.1 appear unsatisfactory to Purchaser for any reason or
if Purchaser elects not to proceed with the transaction contemplated by this
Contract for any other reason, or for no reason whatsoever, in Purchaser's sole
and absolute discretion, then Purchaser shall have the right to terminate this
Contract by giving written notice to that effect to Seller and Escrow Agent on
or before 5:00 p.m. (in the time zone in which the Escrow Agent is located) on
the date of expiration of the Feasibility Period. If Purchaser exercises such
right to terminate, this Contract shall terminate and be of no further force and
effect subject to and except for Purchaser's liability pursuant to Section 3.3
and any other provision of this Contract which survives such termination, and
Escrow Agent shall forthwith return the Deposit to Purchaser (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); provided, however, if such termination occurs more than 15 days
after the Effective Date, then an amount equal to the Remaining Deposit only
shall be released to Purchaser with the Released Deposit being released to
Seller (if not previously released). 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 entire Deposit (in addition
to the Released 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 (which may be telephonic notice to
Seller's Property Manager), a reasonable time prior to entry onto the Property
and shall permit Seller to have a representative present during all Inspections
conducted at the Property. All information made available by Seller to Purchaser
in accordance with this Contract or obtained by Purchaser in the course of its
Inspections shall be treated as confidential information by Purchaser, and,
prior to the purchase of the Property by Purchaser, Purchaser shall use its best
efforts to prevent its Consultants from divulging such information to any
unrelated third parties except as reasonably necessary to third parties engaged
by Purchaser for the limited purpose of analyzing and investigating such
information for the purpose of consummating the transaction contemplated by this
Contract. The provisions of this Section 3.3 shall survive the termination of
this Contract, and if not so terminated shall survive (except for the
confidentiality provisions of this Section 3.3) the Closing and delivery of the
Deed to Purchaser.
3.4 Purchaser Indemnification.
3.4.1 Purchaser shall indemnify, hold harmless and, if requested by Seller (in
Seller's sole discretion), defend (with counsel approved by Seller) Seller,
together with Seller's affiliates, parent and subsidiary entities, successors,
assigns, partners, managers, members, employees, officers, directors, trustees,
shareholders, counsel, representatives, agents, Property Manager, Regional
Property Manager, and AIMCO (collectively, including Seller, "Seller's
Indemnified Parties"), from and against any and all damages, mechanics' liens,
liabilities, losses, demands, actions, causes of action, claims, costs and
expenses (including reasonable attorneys' fees, including the cost of in-house
counsel and appeals) (collectively, "Losses") arising from or related to
Purchaser's or its Consultant's entry onto the Property, and any Inspections or
other matters performed by Purchaser with respect to the Property during the
Feasibility Period or otherwise.
3.4.2 Notwithstanding anything in this Contract to the contrary, Seller shall
have the right, without limitation, to disapprove any and all entries, surveys,
tests (including, without limitation, a Phase II environmental study of the
Property), investigations and other matters that in Seller's reasonable judgment
could result in any injury to the Property or breach of any contract, or expose
Seller to any Losses or violation of applicable law, or otherwise adversely
affect the Property or Seller's interest therein. Purchaser shall use best
efforts to minimize disruption to Tenants in connection with Purchaser's or its
Consultants' activities pursuant to this Section. No consent by the Seller to
any such activity shall be deemed to constitute a waiver by Seller or assumption
of liability or risk by Seller. Purchaser hereby agrees to restore, at
Purchaser's sole cost and expense, the Property to the same condition existing
immediately prior to Purchaser's exercise of its rights pursuant to this Article
3. Purchaser shall maintain (a) casualty insurance and comprehensive public
liability insurance with coverages of not less than $1,000,000.00 for injury or
death to any one person and $3,000,000.00 for injury or death to more than one
person and $1,000,000.00 with respect to property damage, by water or otherwise,
and (b) worker's compensation insurance for all of their respective employees in
accordance with the law of the state in which the Property is located. Purchaser
shall cause its third party consultants to maintain (i) casualty insurance and
comprehensive public liability insurance with coverages of not less than
$1,000,000.00 for injury or death to any one person and $1,000,000.00 for injury
or death to more than one person and $1,000,000.00 with respect to property
damage, by water or otherwise, and (ii) worker's compensation insurance for all
of their respective employees in accordance with the law of the state in which
the Property is located. Purchaser shall deliver proof of the insurance coverage
required pursuant to this Section 3.4.2 to Seller (in the form of a certificate
of insurance) prior to 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 10 days after the Effective Date, and to the extent the same exist
and are in Seller's possession or reasonable control (subject to Section 3.5.2),
Seller agrees to make the documents set forth on Schedule 3.5 (the "Materials")
available at the Property for review and copying by Purchaser at Purchaser's
sole cost and expense. In the alternative, at Seller's option and within the
foregoing 10-day period, Seller may deliver some or all of the Materials to
Purchaser, or make the same available to Purchaser on a secure web site
(Purchaser agrees that any item to be delivered by Seller under this Contract
shall be deemed delivered to the extent available to Purchaser on such secured
web site). To the extent that Purchaser determines that any of the Materials
have not been made available or delivered to Purchaser pursuant to this Section
3.5.1, Purchaser shall notify Seller and Seller shall use commercially
reasonable efforts to deliver the same to Purchaser within 5 Business Days after
such notification is received by Seller; provided, however, that under no
circumstances will the Feasibility Period be extended and Buyer's sole remedy
will be to terminate this Contract pursuant to Section 3.2.
3.5.2 In providing such information and Materials to Purchaser, other than
Seller's Representations, Seller makes no representation or warranty, express,
written, oral, statutory, or implied, and all such representations and
warranties are hereby expressly excluded and disclaimed. Any information and
Materials provided by Seller to Purchaser under the terms of this Contract is
for informational purposes only and, together with all Third-Party Reports,
shall be returned by Purchaser to Seller as a condition to return of the Deposit
to Purchaser (if Purchaser is otherwise entitled to such Deposit pursuant to the
terms of this Contract) if this Contract is terminated for any reason. Purchaser
shall not in any way be entitled to rely upon the accuracy of such information
and Materials. Purchaser recognizes and agrees that the Materials and other
documents and information delivered or made available by Seller pursuant to this
Contract may not be complete or constitute all of such documents which are in
Seller's possession or control, but are those that are readily available to
Seller after reasonable inquiry to ascertain their availability. Purchaser
understands that, although Seller will use commercially reasonable efforts to
locate and make available the Materials and other documents required to be
delivered or made available by Seller pursuant to this Contract, Purchaser will
not rely on such Materials or other documents as being a complete and accurate
source of information with respect to the Property, and will instead in all
instances rely exclusively on its own Inspections and Consultants with respect
to all matters which it deems relevant to its decision to acquire, own and
operate the Property.
3.5.3 In addition to the items set forth on Schedule 3.5, no later than 10 days
after the Effective Date, Seller shall deliver to Purchaser (or otherwise make
available to Purchaser as provided under Section 3.5.1) a rent roll for the
Property listing the move-in date, monthly base rent payable, lease expiration
date and unapplied security deposit for each Lease (the "Rent Roll"). The Rent
Roll shall be 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 5.2.11.
3.5.4 The provisions of this Section 3.5 shall survive the Closing and delivery
of the Deed to Purchaser.
3.6 Property Contracts. On or before the expiration of the Feasibility Period,
Purchaser may deliver written notice to Seller (the "Property Contracts Notice")
specifying any Property Contracts which Purchaser desires to terminate 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 (and, to the extent that the effective date of termination
of any Terminated Contract is after the Closing Date, Purchaser shall be deemed
to have assumed all of Seller's obligations under such Terminated Contract as of
the Closing Date), (b) if any such Property Contract cannot by its terms be
terminated, it shall be assumed by Purchaser and not be a Terminated Contract,
and (c) to the extent that any such Terminated Contract requires payment of a
penalty or premium for cancellation, Purchaser shall be solely responsible for
the payment of any such cancellation fees or penalties. If Purchaser fails to
deliver the Property Contracts Notice on or before the expiration of the
Feasibility Period, there shall be no Terminated Contracts and Purchaser shall
assume all Property Contracts at the Closing.
ARTICLE 4
TITLE
4.1 Title Documents. Within 10 calendar days after the Effective Date, Seller
shall cause to be delivered to Purchaser a standard form commitment for title
insurance ("Title Commitment") for the Property in an amount equal to the
Purchase Price from Title Insurer for an owner's title insurance policy (the
"Title Policy") on the most recent standard American Land Title Association
form, together with copies of all instruments identified as exceptions therein
(together with the Title Commitment, referred to herein as the "Title
Documents"). Purchaser shall be responsible to pay the premium for the Title
Policy. Purchaser also shall be 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,
Purchaser shall pay the costs of the Existing Survey prepared in August 2003.
Purchaser acknowledges and agrees that delivery of the Existing Survey is
subject to Section 3.5.2. To the extent that Purchaser desires that a new survey
of the Property be prepared (or that the Existing Survey be updated), Purchaser
shall request the same in writing to Seller no later than 5 Business Days after
the Effective Date, in which event Seller shall order such new or updated survey
(together with the Existing Survey, referred to herein as the "Survey") from the
surveyor who prepared the Existing Survey (or from such other surveyor as Seller
determines in its reasonable discretion). Purchaser shall be solely responsible
for the cost and expense of the preparation of any new or updated survey
requested pursuant to the terms of this Section 4.2.
4.3 Objection and Response Process. On or before the date which is 25 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 29 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 the end of the Feasibility
Period either (a) to accept the Title Documents and Survey with resolution, if
any, of the Objections as set forth in the Response Notice (or if no Response
Notice is tendered, without any resolution of the Objections) and without any
reduction or abatement of the Purchase Price, or (b) to terminate this Contract,
in which event the Deposit shall be returned to Purchaser (subject to
Purchaser's obligation under Section 3.5.2 to return all Third-Party Reports and
information and Materials provided to Purchaser as a pre-condition to the return
of the Deposit); provided, however, if such termination occurs more than 15 days
after the Effective Date, then an amount equal to the Remaining Deposit only
shall be released to Purchaser with the Released Deposit being released to
Seller (if not previously released). If Purchaser fails to give notice to
terminate this Contract on or before the expiration of the Feasibility Period,
Purchaser shall be deemed to have elected to approve and irrevocably waived any
objections to any matters covered by the Title Documents or the Survey, subject
only to resolution, if any, of the Objections as set forth in the Response
Notice (or if no Response Notice is tendered, without any resolution of the
Objections).
4.4 Permitted Exceptions. The Deed delivered pursuant to this Contract shall be
subject to the following, all of which shall be deemed "Permitted Exceptions":
4.4.1 All matters shown in the Title Documents and the Survey, other than (a)
those Objections, if any, which Seller has agreed to cure pursuant to the
Response Notice under Section 4.3, (b) mechanics' liens and taxes due and
payable with respect to the period preceding Closing, (c) the standard exception
regarding the rights of parties in possession which shall be limited to those
parties in possession pursuant to the Leases, and (d) the standard exception
pertaining to taxes which shall be limited to taxes and assessments payable in
the year in which the Closing occurs and subsequent taxes and assessments;
4.4.2 All Leases;
4.4.3 [Intentionally left blank];
4.4.4 Applicable zoning and governmental regulations and ordinances;
4.4.5Any defects in or objections to title to the Property, or title exceptions
or encumbrances, arising by, through or under Purchaser; and
4.4.6 The terms and conditions of this Contract.
4.5 Existing Deed of Trust. It is understood and agreed that, whether or not
Purchaser gives an Objection Notice with respect thereto, any deeds of trust
and/or mortgages (including any and all mortgages which secure the Note) against
the Property (whether one or more, the "Deed of Trust "), together with any
related assignment of leases, financing statements or collateral documents,
shall not be deemed Permitted Exceptions, whether Purchaser gives written notice
of such or not, and shall be paid off, satisfied, discharged and/or cured by
Seller at Closing, provided that the Lender's Fees due in connection with the
Loan Payoff shall be paid by Purchaser.
ARTICLE 5
CLOSING
5.1 Closing Date. The Closing shall occur 30 days following the expiration of
the Feasibility Period (the "Closing Date") through an escrow with Escrow Agent,
whereby the Seller, Purchaser and their attorneys need not be physically present
at the Closing and may deliver documents by overnight air courier or other
means; however, if Escrow Agent or its agent cannot lawfully record the transfer
and other closing documents in the State of North Carolina, then Purchaser's
counsel shall act as "recording agent" for Purchaser and Seller pursuant to
instructions reasonably acceptable to Seller. Notwithstanding the foregoing to
the contrary, Seller shall have the option, by delivering written notice to
Purchaser not less than 5 days prior to the scheduled Closing Date, to extend
the Closing Date to the last Business Day of the month in which the Closing Date
otherwise would occur pursuant to the preceding sentence, or to such other date
(either in the same month or the next) as Seller reasonably determines is
desirable in connection with the Loan Payoff. Further, upon not less than 5 days
prior notice to Purchaser, the Closing Date may be extended without penalty at
the option of Seller to a date not later than 30 days following the Closing Date
specified in the first sentence of this paragraph above (or, if applicable, as
extended by Seller pursuant to the second sentence of this paragraph) to satisfy
a condition to be satisfied by Seller, or such later date as is mutually
acceptable to Seller and Purchaser.
5.2 Seller Closing Deliveries. No later than 2 Business Days 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 in the form attached hereto as Exhibit F 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; however, 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.
5.2.11 Countersigned letters to all Tenants prepared and executed by Purchaser
in the form attached hereto as Exhibit G.
5.3 Purchaser Closing Deliveries. No later than 2 Business Days prior to the
Closing Date (except for the balance of the Purchase Price which is to be
delivered at the time specified in Section 2.2.4), Purchaser shall deliver to
the Escrow Agent (for disbursement to Seller upon the Closing) the following
items with respect to the Property being conveyed at such Closing:
5.3.1 The full Purchase Price (with credit for the Deposit), plus or minus the
adjustments or prorations required by this Contract.
5.3.2 [Intentionally deleted]
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 G.
5.3.8 The Vendor Terminations (Purchaser shall be solely responsible for
identifying each of the Terminated Contracts (subject to the terms and
conditions of Section 3.6) and addressing and preparing each of the Vendor
Terminations for execution by Purchaser and Seller).
5.3.9 Any cancellation fees or penalties due to any vendor under any Terminated
Contract as a result of the termination thereof.
5.3.10 Resolutions, certificates of good standing, and such other organizational
documents as Title Insurer shall reasonably require evidencing Purchaser's
authority to consummate this transaction.
5.3.11 [Intentionally deleted].
5.3.12 The Lender Fees (subject to reduction from the Purchase Price in
accordance with Section 2.2).
5.4 Closing Prorations and Adjustments.
5.4.1 General. All normal and customarily proratable items, including, without
limitation, collected rents, operating expenses, personal property taxes, other
operating expenses and fees, shall be prorated as of the Closing Date, Seller
being charged or credited, as appropriate, for all of same attributable to the
period up to the Closing Date (and credited for any amounts paid by Seller
attributable to the period on or after the Closing Date, if assumed by
Purchaser) and Purchaser being responsible for, and credited or charged, as the
case may be, for all of same attributable to the period on and after the Closing
Date. Seller shall prepare, subject to Purchaser's reasonable approval, 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 (less
Purchaser's reasonable costs of collection, if any). 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; however, the foregoing right of
Seller shall be limited to actions seeking monetary damages and in no event
shall Seller seek to evict any Tenants in any action to collect Uncollected
Rents. 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 reasonably 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
reasonable consents or other documents, and the undertaking of any act
reasonably necessary for the collection of such Uncollected Rents by Seller;
provided, however, that Purchaser's obligation to cooperate with Seller pursuant
to this sentence shall not obligate Purchaser to terminate any Tenant lease with
an existing Tenant or evict any existing Tenant from the Property.
5.4.6.2 At Closing, Purchaser shall receive a credit against the Purchase Price
in an amount equal to the received and unapplied balance of all cash (or cash
equivalent) Tenant Deposits, including, but not limited to, security, damage or
other refundable deposits or required to be paid by any of the Tenants to secure
their respective obligations under the Leases, together, in all cases, with any
interest payable to the Tenants thereunder as may be required by their
respective Tenant Lease or state law (the "Tenant Security Deposit Balance").
Any cash (or cash equivalents) held by Seller which constitute the Tenant
Security Deposit Balance shall be retained by Seller in exchange for the
foregoing credit against the Purchase Price and shall not be transferred by
Seller pursuant to this Contract (or any of the documents delivered at Closing),
but the obligation with respect to the Tenant Security Deposit Balance
nonetheless shall be assumed by Purchaser. The Tenant Security Deposit Balance
shall not include any non-refundable deposits or fees paid by Tenants to Seller,
either pursuant to the Leases or otherwise.
5.4.6.3 With respect to operating expenses, taxes, utility charges, other
operating cost pass-throughs, retroactive rental escalations, sums or charges
payable by Tenants under the Tenant Leases, to the extent that Seller has
received as of the Closing payments allocable to periods subsequent to Closing,
the same shall be properly prorated with an adjustment in favor of Purchaser,
and Purchaser shall reserve a credit therefor at Closing. With respect to any
payments received by Purchaser after the Closing allocable to Seller prior to
Closing, Purchaser shall promptly pay the same to Seller.
5.4.7 Existing Loan. On the Closing Date, Seller shall pay (which payment may be
made by Seller out of the proceeds of the Purchase Price) the outstanding
principal balance of the Note together with all interest accrued under the Note
prior to the Closing Date (the "Loan Payoff"). Purchaser shall pay all Lender
Fees (subject to reduction from the Purchase Price in accordance with Section
2.2). Any existing reserves, impounds and other accounts maintained in
connection with the Loan shall be released in Good Funds to Seller at the
Closing unless credited by Lender against the amount due from Seller under the
Note.
5.4.8 Insurance. No proration shall be made in relation to insurance premiums
and insurance policies will not be assigned to Purchaser.
5.4.9 Employees. All of Seller's and Seller's manager's on-site employees shall
have their employment at the Property terminated as of the Closing Date by
Seller.
5.4.10 Closing Costs. Seller shall pay any transfer taxes and one-half of the
customary closing costs of Escrow Agent. Purchaser shall pay any 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 for the Title Policy pursuant to Section 4.1, one-half of the
customary closing costs of the Escrow Agent, and any costs of Purchaser's
counsel acting as "recording 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 promptly 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 90 days after
Closing, or (b) subject to such 90-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
5.2.11) is accurate in all material respects.
6.1.8 To Seller's knowledge, there is no threatened or pending litigation which,
if determined adversely, would prevent the consummation of the sale of the
Property.
6.1.9 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.
6.1.10 To Seller's knowledge, Seller has made available to Purchaser the Note
which is secured by the Deed of Trust currently encumbering the Property.
6.2 AS-IS. Except for Seller's Representations, the Property is expressly
purchased and sold "AS IS," "WHERE IS," and "WITH ALL FAULTS." The Purchase
Price and the terms and conditions set forth herein are the result of
arm's-length bargaining between entities familiar with transactions of this
kind, and said price, terms and conditions reflect the fact that Purchaser shall
have the benefit of, and is not relying upon, any information provided by Seller
or Broker or statements, representations or warranties, express or implied, made
by or enforceable directly against Seller or Broker, including, without
limitation, any relating to the value of the Property, the physical or
environmental condition of the Property, any state, federal, county or local
law, ordinance, order or permit; or the suitability, compliance or lack of
compliance of the Property with any regulation, or any other attribute or matter
of or relating to the Property (other than any covenants of title contained in
the Deed conveying the Property and Seller's Representations). Purchaser agrees
that Seller shall not be responsible or liable to Purchaser for any defects,
errors or omissions, or on account of any conditions affecting the Property.
Purchaser, its successors and assigns, and anyone claiming by, through or under
Purchaser, hereby fully releases Seller's Indemnified Parties from, and
irrevocably waives its right to maintain, any and all claims and causes of
action that it or they may now have or hereafter acquire against Seller's
Indemnified Parties with respect to any and all Losses arising from or related
to any defects, errors, omissions or other conditions affecting the Property.
Purchaser represents and warrants that, as of the date hereof and as of the
Closing Date, it has and shall have reviewed and conducted such independent
analyses, studies (including, without limitation, environmental studies and
analyses concerning the presence of lead, asbestos, PCBs and radon in and about
the Property), reports, investigations and inspections as it deems appropriate
in connection with the Property. If Seller provides or has provided any
documents, summaries, opinions or work product of consultants, surveyors,
architects, engineers, title companies, governmental authorities or any other
person or entity with respect to the Property, including, without limitation,
the offering prepared by Broker, Purchaser and Seller agree that Seller has done
so or shall do so only for the convenience of both parties, Purchaser shall not
rely thereon and the reliance by Purchaser upon any such documents, summaries,
opinions or work product shall not create or give rise to any liability of or
against Seller's Indemnified Parties. Purchaser shall rely only upon any title
insurance obtained by Purchaser with respect to title to the Property. Purchaser
acknowledges and agrees that no representation has been made and no
responsibility is assumed by Seller with respect to current and future
applicable zoning or building code requirements or the compliance of the
Property with any other laws, rules, ordinances or regulations, the financial
earning capacity or expense history of the Property, the continuation of
contracts, continued occupancy levels of the Property, or any part thereof, or
the continued occupancy by tenants of any Leases or, without limiting any of the
foregoing, occupancy at Closing. Prior to Closing, Seller shall have the right,
but not the obligation, to enforce its rights against any and all Property
occupants, guests or tenants. Purchaser agrees that the departure or removal,
prior to Closing, of any of such guests, occupants or tenants shall not be the
basis for, nor shall it give rise to, any claim on the part of Purchaser, nor
shall it affect the obligations of Purchaser under this Contract in any manner
whatsoever; and Purchaser shall close title and accept delivery of the Deed with
or without such tenants in possession and without any allowance or reduction in
the Purchase Price under this Contract. Purchaser hereby releases Seller from
any and all claims and liabilities relating to the foregoing matters. The
provisions of this Section 6.2 shall survive the Closing and delivery of the
Deed to Purchaser.
6.3 Survival of Seller's Representations. Seller and Purchaser agree that
Seller's Representations shall survive Closing for a period of 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 $200,000 in any individual
instance or in the aggregate for all breaches of Seller's Representations, nor
shall Purchaser be entitled to bring any claim for a breach of Seller's
Representations unless the claim for damage (either in the aggregate or as to
any individual claim) by Purchaser exceeds $5,000. In the event that Seller
breaches any representation contained in Section 6.1 and Purchaser had knowledge
of such breach prior to the Closing Date and proceeded to close on the Property.
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 James Munn who is the Regional Property Manager
with respect to this Property (the "Regional Property Manager"), and Carl
Faircloth who is the Community Manager handling this Property (the "Property
Manager").
6.5 Representations And Warranties Of Purchaser. For the purpose of inducing
Seller to enter into this Contract and to consummate the sale and purchase of
the Property in accordance herewith, Purchaser represents and warrants to Seller
the following as of the Effective Date and as of the Closing Date:
6.5.1 Purchaser is a limited liability company duly organized, validly existing
and in good standing under the laws of North Carolina.
6.5.2 Purchaser, acting through any of its or their duly empowered and
authorized officers or members, has all necessary entity power and authority to
own and use its properties and to transact the business in which it is engaged,
and has full power and authority to enter into this Contract, to execute and
deliver the documents and instruments required of Purchaser herein, and to
perform its obligations hereunder; and no consent of any of Purchaser's
partners, directors, officers or members are required to so empower or authorize
Purchaser. The compliance with or fulfillment of the terms and conditions hereof
will not conflict with, or result in a breach of, the terms, conditions or
provisions of, or constitute a default under, any contract to which Purchaser is
a party or by which Purchaser is otherwise bound, which conflict, breach or
default would have a material adverse affect on Purchaser's ability to
consummate the transaction contemplated by this Contract. This Contract is a
valid, binding and enforceable agreement against Purchaser in accordance with
its terms.
6.5.3 No pending or, to the knowledge of Purchaser, threatened litigation exists
which if determined adversely would restrain the consummation of the
transactions contemplated by this Contract or would declare illegal, invalid or
non-binding any of Purchaser's obligations or covenants to Seller.
6.5.4 Other than Seller's Representations, Purchaser has not relied on any
representation or warranty made by Seller or any representative of Seller
(including, without limitation, Broker) in connection with this Contract and the
acquisition of the Property.
6.5.5 The Broker and its affiliates do not, and will not at the Closing, have
any direct or indirect legal, beneficial, economic or voting interest in
Purchaser (or in an assignee of Purchaser, which pursuant to Section 13.3,
acquires the Property at the Closing), nor has Purchaser or any affiliate of
Purchaser granted (as of the Effective Date or the Closing Date) the Broker or
any of its affiliates any right or option to acquire any direct or indirect
legal, beneficial, economic or voting interest in Purchaser.
The provisions of this Section 6.6 shall survive the Closing and delivery
of the Deed to Purchaser.
ARTICLE 7
OPERATION OF THE PROPERTY
7.1 Leases and Property Contracts. During the period of time from the Effective
Date to the Closing Date, in the ordinary course of business Seller may enter
into new Property Contracts, new Leases, renew existing Leases or modify,
terminate or accept the surrender or forfeiture of any of the Leases, modify any
Property Contracts, or institute and prosecute any available remedies for
default under any Lease or Property Contract without first obtaining the written
consent of Purchaser; provided, however, Seller agrees that any such new
Property Contracts or any new or renewed Leases shall not have a term in excess
of 1 year (or such longer period of time for which such Property Contracts or
Leases are entered into by Seller in the ordinary course of its operation of the
Property) without the prior written consent of Purchaser, which consent shall
not be unreasonably withheld, conditioned or delayed.
7.2 General Operation of Property. Except as specifically set forth in this
Article 7, Seller shall operate the Property after the Effective Date in the
ordinary course of business, and except as necessary in the Seller's sole
discretion to address (a) any life or safety issue at the Property or (b) any
other matter which in Seller's reasonable discretion materially adversely
affecting the use, operation or value of the Property, Seller will not make any
material alterations to the Property or remove any material Fixtures and
Tangible Personal Property without the prior written consent of Purchaser which
consent shall not be unreasonably withheld, denied or delayed.
7.3 Liens. Other than utility easements and temporary construction easements
granted by Seller in the ordinary course of business, Seller covenants that it
will not voluntarily create or cause any lien or encumbrance to attach to the
Property between the Effective Date and the Closing Date (other than Leases and
Property Contracts as provided in Section 7.1) unless Purchaser approves such
lien or encumbrance, which approval shall not be unreasonably withheld or
delayed. If Purchaser approves any such subsequent lien or encumbrance, the same
shall be deemed a Permitted Encumbrance for all purposes hereunder.
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING
8.1 Purchaser's Conditions to Closing. Purchaser's obligation to close under
this Contract, shall be subject to and conditioned upon the fulfillment of each
and all of the following conditions precedent:
8.1.1 All of the documents required to be delivered by Seller to Purchaser at
the Closing pursuant to the terms and conditions hereof shall have been
delivered;
8.1.2 Each of the representations, warranties and covenants of Seller contained
herein shall be true in all material respects as of the Closing Date;
8.1.3 Seller shall have complied with, fulfilled and performed in all material
respects each of the covenants, terms and conditions to be complied with,
fulfilled or performed by Seller hereunder; and
8.1.4 Neither Seller nor Seller's general partner shall be a debtor in any
bankruptcy proceeding nor shall have been in the last 6 months a debtor in any
bankruptcy proceeding.
Notwithstanding anything to the contrary, there are no other conditions on
Purchaser's obligation to Close except as expressly set forth in this Section
8.1. If any condition set forth in Sections 8.1.1, 8.1.3 or 8.1.4 is not met,
Purchaser may (a) waive any of the foregoing conditions and proceed to Closing
on the Closing Date with no offset or deduction from the Purchase Price, or (b)
if such failure constitutes a default by Seller, exercise any of its remedies
pursuant to Section 10.2. If the condition set forth in Section 8.1.2 is not
met, Purchaser may, as its sole and exclusive remedy, (i) notify Seller of
Purchaser's election to terminate this Contract and receive a return of the
Deposit (including the Released Deposit) from the Escrow Agent and, to the
extent released to Seller, the Released Deposit from Seller; 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.
Seller shall use commercially reasonable efforts to obtain the consents stated
in Section 8.2.4(a). In the event that this Contract is terminated because
Seller is unable to obtain the consents stated in Section 8.2.4.(a), then
Purchaser may recover, as its sole recoverable damages (but without limiting its
right to receive a refund of the Deposit, including the Released Deposit), its
direct and actual out-of-pocket expenses and costs (documents by paid invoices
to third parties) in connection with this transaction, but not to exceed $35,000
in aggregate.
8.2.5 [Intentionally deleted].
If any of the foregoing conditions to Seller's obligation to close with
respect to conveyance of the Property under this Contract are not met, Seller
may (a) waive any of the foregoing conditions and proceed to Closing on the
Closing Date, or (b) terminate this Contract, and, if such failure constitutes a
default by Purchaser, exercise any of its remedies under Section 10.1.
ARTICLE 9
BROKERAGE
9.1 Indemnity. Seller represents and warrants to Purchaser that it has dealt
only with The Apartment Group, 3300 One Atlantic Center, 1201 W. Peachtree
Street, Atlanta, Georgia 30309 ("Broker"), in connection with this Contract.
Purchaser represents and warrants to Seller that its sole broker is Sequoia
Realty, LLC, ("Purchaser's Broker"), to whom Purchaser shall be solely
responsible for any broker or similar fees pursuant to a separate agreement.
Seller and Purchaser each represents and warrants to the other that, other than
Broker and Purchaser's Broker, it has not dealt with or utilized the services of
any other real estate broker, sales person or finder in connection with this
Contract, and each party agrees to indemnify, hold harmless, and, if requested
in the sole and absolute discretion of the indemnitee, defend (with counsel
approved by the indemnitee) the other party from and against all Losses relating
to brokerage commissions and finder's fees arising from or attributable to the
acts or omissions of the indemnifying party. The provisions of this Section 9.1
shall survive the termination of this Contract, and if not so terminated, the
Closing and delivery of the Deed to Purchaser.
9.2 Broker Commission. If the Closing occurs, Seller agrees to pay Broker a
commission according to the terms of a separate contract. Broker shall not be
deemed a party or third party beneficiary of this Contract.
9.3 Broker Signature Page. As a condition to Seller's obligation to pay the
commission pursuant to Section 9.2, Broker shall execute the signature page for
Broker attached hereto solely for purposes of confirming the matters set forth
therein; provided, however, that (a) Broker's signature hereon shall not be a
prerequisite to the binding nature of this Contract on Purchaser and Seller, and
the same shall become fully effective upon execution by Purchaser and Seller,
and (b) the signature of Broker will not be necessary to amend any provision of
this Contract.
ARTICLE 10
DEFAULTS AND REMEDIES
10.1 Purchaser Default. If Purchaser defaults in its obligations hereunder to
(a) deliver the Deposit, (b) deliver to the Seller the deliveries specified
under Section 5.3 on the date required thereunder, or (c) deliver the Purchase
Price at the time required by Section 2.2.4 and close on the purchase of the
Property on the Closing Date, then, immediately and without notice or cure,
Purchaser shall forfeit the Deposit, and the Escrow Agent shall deliver the
Deposit to Seller, and neither party shall be obligated to proceed with the
purchase and sale of the Property. If, Purchaser defaults in any of its other
representations, warranties or obligations under this Contract, and such default
continues for more than 10 days after written notice from Seller, then Purchaser
shall forfeit the Deposit, and the Escrow Agent shall deliver the Deposit to
Seller, and neither party shall be obligated to proceed with the purchase and
sale of the Property. The Deposit is liquidated damages and recourse to the
Deposit is, except for Purchaser's indemnity and confidentiality 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 AND CONFIDENTIALITY
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 (including the Released 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 $35,000 in aggregate, or (B)
Purchaser may seek specific performance of Seller's obligation to deliver the
Deed pursuant to this Contract (but not damages). Purchaser agrees that it shall
promptly deliver to Seller an assignment of all of Purchaser's right, title and
interest in and to (together with possession of) all plans, studies, surveys,
reports, and other materials paid for with the out-of-pocket expenses reimbursed
by Seller pursuant to the foregoing sentence. SELLER AND PURCHASER FURTHER AGREE
THAT THIS SECTION 10.2 IS INTENDED TO AND DOES LIMIT THE AMOUNT OF DAMAGES DUE
PURCHASER AND THE REMEDIES AVAILABLE TO PURCHASER, AND SHALL BE PURCHASER'S
EXCLUSIVE REMEDY AGAINST SELLER, BOTH AT LAW AND IN EQUITY ARISING FROM OR
RELATED TO A BREACH BY SELLER OF ITS REPRESENTATIONS, WARRANTIES, OR COVENANTS
OR ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS CONTRACT.
UNDER NO CIRCUMSTANCES MAY PURCHASER SEEK OR BE ENTITLED TO RECOVER ANY SPECIAL,
CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR INDIRECT DAMAGES, ALL OF WHICH PURCHASER
SPECIFICALLY WAIVES, FROM SELLER FOR ANY BREACH BY SELLER, OF ITS
REPRESENTATIONS, WARRANTIES OR COVENANTS OR ITS OBLIGATIONS UNDER THIS CONTRACT.
PURCHASER SPECIFICALLY WAIVES THE RIGHT TO FILE ANY LIS PENDENS OR ANY LIEN
AGAINST THE PROPERTY (A) UNLESS AND UNTIL IT HAS IRREVOCABLY ELECTED TO SEEK
SPECIFIC PERFORMANCE OF THIS CONTRACT AND HAS FILED AN ACTION SEEKING SUCH
REMEDY, OR (B) WITH RESPECT TO ANY MONEY WHICH IS REQUIRED TO BE PAID OR
REFUNDED TO PURCHASER BY SELLER UPON TERMINATION OF THIS CONTRACT (IN AN AMOUNT
NOT TO EXCEED SUCH MONEY OWED).
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 20 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; however, under no circumstance may
Purchaser give notice to terminate less than 5 days before the Closing Date. In
the event Purchaser fails to terminate this Contract within the foregoing 20-day
(or earlier) 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 20 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); however, under no circumstances may Purchaser give notice to terminate
less than 5 days before the Closing Date. If Purchaser fails to terminate this
Contract within such 20-day (or earlier) period, this transaction shall be
closed in accordance with the terms of this Contract for the full Purchase Price
and Purchaser shall receive the full benefit of any condemnation award. It is
expressly agreed between the parties hereto that this section shall in no way
apply to customary dedications for public purposes which may be necessary for
the development of the Property.
ARTICLE 13
MISCELLANEOUS
13.1 Binding Effect of Contract. This Contract shall not be binding on either
party until executed by both Purchaser and Seller. As provided in Section 2.3.5
and Section 9.3 above, neither the Escrow Agent's nor the Broker's execution of
this Contract shall be a 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 to Seller or
Purchaser; 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:
The Dilweg Companies, LLC
5310 South Alston Avenue
Suite 210
Durham, North Carolina 27713
Attention:
with copy to:
Kilpatrick Stockton, LLP
3737 Glenwood Avenue
Suite 400
Raleigh, NC 27612
Attention: Jeff Benson, Esq.
To Seller:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Patrick Slavin
Telephone: 303-691-4340
Facsimile: 303-300-3282
And:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Mr. Harry Alcock
Telephone: 303-691-4344
Facsimile: 303-300-3282
with copy to:
Chad Asarch, Esq.
Vice President and Assistant General Counsel
AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Telephone: 303-691-4303
Facsimile: 303-300-3297
and a copy to:
Argent Real Estate
1401 Brickell Avenue, Suite 520
Miami, Florida 33131
Attention: Mr. David Marquette
Telephone: 305-371-9299
Facsimile: 305-371-6898
and a copy to:
Brownstein Hyatt & Farber, P.C.
410 17th Street, 22nd Floor
Denver, Colorado 80202
Attention: Gary M. Reiff, Esq.
Telephone: 303-223-1100
Facsimile: 303-223-1111
Any notice required hereunder to be delivered to the Escrow Agent shall be
delivered in accordance with above provisions as follows:
Fidelity National Title Company
1900 West Loop North, Suite 650
Houston, Texas 77027
Attention: Lolly Avant, National Commercial Closing Specialist
Telephone: 1-800-879-1677
Unless specifically required to be delivered to the Escrow Agent pursuant
to the terms of this Contract, no notice hereunder must be delivered to the
Escrow Agent in order to be effective so long as it is delivered to the other
party in accordance with the above provisions.
13.8 Governing Law And Venue. The laws of the State of North Carolina shall
govern the validity, construction, enforcement, and interpretation of this
Contract, unless otherwise specified herein except for the conflict of laws
provisions thereof. Subject to Section 13.25, all claims, disputes and other
matters in question arising out of or relating to this Contract, or the breach
thereof, shall be decided by proceedings instituted and litigated in a court of
competent jurisdiction in the state in which the Property is situated, and the
parties hereto expressly consent to the venue and jurisdiction of such court.
13.9 Entire Agreement. This Contract embodies the entire Contract between the
parties hereto concerning the subject matter hereof and supersedes all prior
conversations, proposals, negotiations, understandings and Contracts, whether
written or oral.
13.10 Amendments. This Contract shall not be amended, altered, changed,
modified, supplemented or rescinded in any manner except by a written contract
executed by all of the parties; provided, however, that, (a) as provided in
Section 2.3.5 above, the signature of the Escrow Agent shall not be required as
to any amendment of this Contract other than an amendment of Section 2.3, and
(b) as provided in Section 9.3 above, the signature of the Broker shall not be
required as to any amendment of this Contract.
13.11 Severability. In the event that any part of this Contract shall be held to
be invalid or unenforceable by a court of competent jurisdiction, such provision
shall be reformed, and enforced to the maximum extent permitted by law. If such
provision cannot be reformed, it shall be severed from this Contract and the
remaining portions of this Contract shall be valid and enforceable.
13.12 Multiple Counterparts/Facsimile Signatures. This Contract may be executed
in a number of identical counterparts. This Contract may be executed by
facsimile signatures which shall be binding on the parties hereto, with original
signatures to be delivered as soon as reasonably practical thereafter.
13.13 Construction. No provision of this Contract shall be construed in favor
of, or against, any particular party by reason of any presumption with respect
to the drafting of this Contract; both parties, being represented by counsel,
having fully participated in the negotiation of this instrument.
13.14 Confidentiality. Purchaser shall not disclose the terms and conditions
contained in this Contract and shall keep the same confidential, provided that
Purchaser may disclose the terms and conditions of this Contract (a) as required
by law, (b) to evaluate the proposed transaction or consummate the terms of this
Contract, or any financing relating thereto, or (c) to Purchaser's or Seller's
lenders, attorneys and accountants. Any information and Materials provided by
Seller to Purchaser hereunder are confidential and Purchaser shall be prohibited
from making such information public to any other person or entity other than its
agents and legal representatives, without Seller's prior written authorization,
which may be granted or denied in Seller's sole discretion. Notwithstanding the
foregoing, the parties (and each employee, representative, or other agent of the
parties) may disclose to any and all persons, without limitation of any kind,
the tax treatment and any facts that may be relevant to the tax structure of the
transaction, provided, however, that no party (and no employee, representative,
or other agent thereof) shall disclose any other information that is not
relevant to understanding the tax treatment and tax structure of the transaction
(including the identity of any party and any information that could lead another
to determine the identity of any party), or any other information to the extent
that such disclosure could result in a violation of any federal or state
securities law.
13.15 Time Of The Essence. It is expressly agreed by the parties hereto that
time is of the essence with respect to this Contract.
13.16 Waiver. No delay or omission to exercise any right or power accruing upon
any default, omission, or failure of performance hereunder shall impair any
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient. No waiver, amendment, release, or modification of this Contract shall
be established by conduct, custom, or course of dealing and all waivers must be
in writing and signed by the waiving party.
13.17 Attorneys Fees. In the event either party hereto commences litigation or
arbitration against the other to enforce its rights hereunder, the substantially
prevailing party in such litigation shall be entitled to recover from the other
party its reasonable attorneys' fees and expenses incidental to such litigation
and arbitration, including the cost of in-house counsel and any appeals.
13.18 Time Periods. Should the last day of a time period fall on a weekend or
legal holiday, the next Business Day thereafter shall be considered the end of
the time period.
13.19 1031 Exchange. Seller and Purchaser acknowledge and agree that the
purchase and sale of the Property may be part of a tax-free exchange under
Section 1031 of the Code for either Purchaser or Seller. Each party hereby
agrees to take all reasonable steps on or before the Closing Date to facilitate
such exchange if requested by the other party, provided that (a) no party making
such accommodation shall be required to acquire any substitute property, (b)
such exchange shall not affect the representations, warranties, liabilities and
obligations of the parties to each other under this Contract, (c) no party
making such accommodation shall incur any additional cost, expense or liability
in connection with such exchange (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 release of the Released Deposit, 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
substantially prevailing party and charge the cost of arbitration to the party
which is not the substantially prevailing party. Notwithstanding anything herein
to the contrary, this Section 13.25 shall not prevent Purchaser or Seller from
seeking and obtaining equitable relief on a temporary or permanent basis,
including, without limitation, a temporary restraining order, a preliminary or
permanent injunction or similar equitable relief, from a court of competent
jurisdiction located in the state in which the Property is located (to which all
parties hereto consent to venue and jurisdiction) by instituting a legal action
or other court proceeding in order to protect or enforce the rights of such
party under this Contract or to prevent irreparable harm and injury. The court's
jurisdiction over any such equitable matter, however, shall be expressly limited
only to the temporary, preliminary, or permanent equitable relief sought; all
other claims initiated under this Contract between the parties hereto shall be
determined through final and binding arbitration in accordance with this Section
13.25.
13.26 AIMCO Marks. Purchaser agrees that Seller, the Property Manager or AIMCO,
or their respective affiliates, are the sole owners of all right, title and
interest in and to the AIMCO Marks (or have the right to use such AIMCO Marks
pursuant to license agreements with third parties) and that no right, title or
interest in or to the AIMCO Marks is granted, transferred, assigned or conveyed
as a result of this Contract. Purchaser further agrees that Purchaser will not
use the AIMCO Marks for any purpose.
13.27 Non-Solicitation of Employees. Purchaser acknowledges and agrees that,
without the express written consent of Seller, neither Purchaser nor any of
Purchaser's employees, affiliates or agents shall (a) prior to the expiration of
the Feasibility Period, solicit any of Seller's employees or any employees
located at the Property for potential employment, or (b) at any time solicit any
of Seller's affiliates' employees located at any property owned by such
affiliates for potential employment.
13.28 Survival. Except for (a) all of the provisions of this Article 13 (other
than Section 13.19, 13.21 and 13.23), and (b) any provision of this Contract
which expressly states that it shall so survive, and (c) any payment obligation
of the parties under this Contract (the foregoing (a), (b) and (c) referred to
herein as the "Survival Provisions"), none of the terms and provisions of this
Contract shall survive the termination of this Contract, and, if the Contract is
not so terminated, all of the terms and provisions of this Contract (other than
the Survival Provisions) shall be merged into the Closing documents and shall
not survive Closing.
13.29 Multiple Purchasers. As used in this Contract, the term "Purchaser" means
all entities acquiring any interest in the Property at the Closing, including,
without limitation, any assignee(s) of the original Purchaser pursuant to
Section 13.3 of this Contract. In the event that "Purchaser" has any obligations
or makes any covenants, representations or warranties under this Agreement, the
same shall be made jointly and severally by all entities being a Purchaser
hereunder. In the event that Seller receives notice from any entity being a
Purchaser hereunder, the same shall be deemed to constitute notice from all
entities being a Purchaser hereunder. In the event that any entity being a
Purchaser hereunder takes any action, breaches any obligation or otherwise acts
pursuant to the terms of this Contract, the same shall be deemed to be the
action of the other entity(ies) being a Purchaser hereunder and the action of
"Purchaser" under this Contract. In the event that Seller is required to give
notice or take action with respect to Purchaser under this Contract, notice to
any entity being a Purchaser hereunder or action with respect to any entity
being a Purchaser hereunder shall be a notice or action to all entities being a
Purchaser hereunder. In the event that any entity being a Purchaser hereunder
desires to bring an action or arbitration against Seller, such action must be
joined by all entities being a Purchaser hereunder in order to be effective. In
the event that there is any agreement by Seller to pay any amount pursuant to
this Contract to Purchaser under any circumstance, that amount shall be deemed
maximum aggregate amount to be paid to all parties being a Purchaser hereunder
and not an amount that can be paid to each party being a Purchaser hereunder. In
the event that Seller is required to return the Deposit or other amount to
Purchaser, Seller shall return the same to any entity being a Purchaser
hereunder and, upon such return, shall have no further liability to any other
entity being a Purchaser hereunder for such amount. The foregoing provisions
also shall apply to any documents, including, without limitation, the General
Assignment and Assumption and the Assignment and Assumption of Leases and
Security Deposits, executed in connection with this Contract and the
transaction(s) contemplated hereby.
ARTICLE 14
LEAD-BASED PAINT DISCLOSURE
14.1 Disclosure. Seller and Purchaser hereby acknowledge delivery of the Lead
Based Paint Disclosure attached as Exhibit H hereto. The provisions of this
Section 14.1 shall survive the Closing and delivery of the Deed to Purchaser.
[Remainder of Page Intentionally Left Blank]
NOW, THEREFORE, the parties hereto have executed this Contract as of the
date first set forth above.
Seller:
NATIONAL PROPERTY INVESTORS 7,
a California limited partnership
By: NPI Equity Investors, Inc.,
a Florida corporation,
Its General Partner
By: /s/Patrick F. Slavin
Name: Patrick F. Slavin
Title: Senior Vice President
Purchaser:
THE DILWEG COMPANIES, LLC,
a North Carolina limited liability company
By:/s/Michael R. Hemmerich
Name: Michael R. Hemmerich
Title: Manager
ESCROW AGENT SIGNATURE PAGE
The undersigned executes the Contract to which this signature page is
attached for the purpose of agreeing to the provisions of Section 2.3 of the
Contract, and hereby establishes October 9, 2003 as the date of opening of
escrow and designates 03-192981 as the escrow number assigned to this escrow.
ESCROW AGENT:
FIDELITY NATIONAL TITLE COMPANY
By:/s/Lolly Avant
Name: Lolly Avant
Title: Vice President, National Commercial Mgr.
BROKER SIGNATURE PAGE
The undersigned Broker hereby executes this Broker Signature Page solely
to confirm the following: (a) Broker represents only the Seller in the
transaction described in the Contract to which this signature page is attached,
(b) Broker acknowledges that the only compensation due to Broker in connection
with the Closing of the transaction described in the Contract to which this
signature page is attached is as set forth in a separate agreement between
Seller and Broker at the Closing, and (c) Broker represents and warrants to
Seller that Broker and its affiliates has not and will not receive any
compensation (cash or otherwise) from or on behalf of Purchaser or any affiliate
thereof in connection with the transaction, and do not, and will not at the
Closing, have any direct or indirect legal, beneficial, economic or voting
interest in Purchaser (or in an assignee of Purchaser, which pursuant to Section
13.3 of the Contract, acquires the Property at the Closing) nor has Purchaser
granted (as of the Effective Date or the Closing Date) the Broker or any of its
affiliates any right or option to acquire any direct or indirect legal,
beneficial, economic or voting interest in Purchaser.
BROKER:
THE APARTMENT GROUP
By: /s/Walter Knoechel
Name: Walter Knoechel
Title: Operations Officer
Exhibit 10.15
AMENDMENT TO
PURCHASE AND SALE CONTRACT
THIS AMENDMENT TO PURCHASE AND SALE CONTRACT (this " Amendment") is
entered into as of the 27th of October, 2003 (the "Amendment Date"), by and
between NATIONAL PROPERTY INVESTORS 7, a California limited partnership, having
an address at 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado
80237 ("Seller"), and THE DILWEG COMPANIES, LLC, a North Carolina limited
liability company, having a principal address at 5310 South Alston Avenue, Suite
210, Durham, North Carolina 27713 ("Purchaser"). (Seller and Purchaser,
together, referred to as the "Parties" and each individually as a "Party").
Recitals:
A. Seller and Purchaser entered into the Purchase and Sale Contract dated
October 10, 2003 (the "Contract"), for the Property described therein.
B. 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
consideration, the receipt, sufficiency, and adequacy of which are hereby
acknowledged, the Parties agree as follows:
Agreement:
1. Deposit. The phrase " Fifteen (15) days after the Effective Date," at the
beginning of the last sentence of Section 2.2.1 of the Contract is hereby
deleted in its entirety and the following is inserted in lieu thereof: "Sixteen
(16) days after the Effective Date,".
2. Objection and Response Period. The phrase "provided, however, if such
termination occurs more than 15 days after the Effective Date," in the sixth
sentence of Section 4.3 of the Contract is hereby deleted in its entirety and
the following is inserted in lieu thereof: "provided, however, if such
termination occurs more than 16 days after the Effective Date,".
3. Ratification of Contract. All terms and provisions of the Contract not
specifically modified or amended by this Amendment shall remain in full force
and effect, and the Contract, as expressly modified herein, is hereby ratified,
confirmed and approved in all respects.
4. Miscellaneous. The following provisions shall apply with respect to this
Amendment:
(a) Capitalized terms not defined herein shall have the same meaning
as set forth in the Contract.
(b) In the event of any conflict between the Contract and this
Amendment, the terms and conditions of this Amendment shall control.
(c) 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.
[end of page]
NOW, THEREFORE, the Parties hereto have executed this Amendment as of the
date first set forth above.
SELLER:
NATIONAL PROPERTY INVESTORS 7,
a California limited partnership
By: NPI Equity Investors, Inc.,
a Florida corporation,
Its General Partner
By: /s/Patrick F. Slavin
Name: Patrick F. Slavin
Title: Senior Vice President
PURCHASER:
THE DILWEG COMPANIES, LLC,
a North Carolina limited liability
company
By:/s/Anthony Dilweg
Name: Anthony Dilweg
Title: Manager
Exhibit 10.16
REINSTATEMENT AND SECOND AMENDMENT TO
PURCHASE AND SALE CONTRACT
THIS REINSTATEMENT AND SECOND AMENDMENT TO PURCHASE AND SALE CONTRACT
(this "Amendment") is made and entered into as of the 6th day of November, 2003
(the "Amendment Date"), by and between NATIONAL PROPERTY INVESTORS 7, a
California limited partnership, having an address at 4582 South Ulster Street
Parkway, Suite 1100, Denver, Colorado 80237 ("Seller"), and THE DILWEG
COMPANIES, LLC, a North Carolina limited liability company, having a principal
address at 5310 South Alston Avenue, Suite 210, Durham, North Carolina 27713
("Purchaser"). (Seller and Purchaser, together, referred to as the "Parties" and
each individually as a "Party").
Recitals:
A. Seller and Purchaser entered into that certain Purchase and Sale
Contract dated October 10, 2003, as amended by that certain Amendment to
Purchase and Sale Contract dated October 27, 2003 (as amended, the "Contract")
for the Property described therein.
B. Pursuant to Section 3.2 of the Contract, Purchaser terminated the
Contract by written notice dated October 28, 2003.
C. Seller and Purchaser desire to reinstate and ratify the Contract and 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
consideration, the receipt, sufficiency, and adequacy of which are hereby
acknowledged, the Parties agree as follows:
Agreement:
1. Reinstatement. The Contract is hereby reinstated, as amended herein, ratified
and affirmed and is effective as if the termination pursuant to Section 3.2 had
not occurred.
2. Purchase Price. The Purchase Price stated in Section 2.2 of the Contract is
hereby reduced by $100,000.00 to $8,360,000.00 in lieu of $8,460,000.00.
3. Feasibility Period.
a. The first sentence of Section 3.1 of the Contract is hereby
deleted in its entirety and replaced by the following provision:
"Subject to the terms of Section 3.3 and 3.4 and the right of
Tenants under the Leases, from the Effective Date to and including
November 6, 2003 (the "Feasibility Period"), Purchaser, and its
agents, contractors, engineers, surveyors, attorneys, and employees
(collectively, "Consultants") shall have the right from time to time
to enter onto the Property."
b. Purchaser hereby agrees that it has completed its review of the
Property and hereby waives its right to further object (pursuant to Sections 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.
Purchaser agrees that Purchaser's right to terminate the Contract is irrevocably
waived, the Deposit (including the Released 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. Purchaser further agrees that, immediately upon
execution of this Amendment, Escrow Agent shall be authorized, and is hereby
directed by Purchaser, to release directly to Seller the Released Deposit.
4. Closing Date. The first sentence of Section 5.1 of the Contract is hereby
deleted in its entirety and replaced by the following provision:
"The Closing shall occur on December 22, 2003 (the "Closing Date")
through an escrow with Escrow Agent, whereby the Seller, Purchaser
and their attorneys need not be physically present at the Closing
and may deliver documents by overnight air courier or other means;
however, if Escrow Agent or its agent cannot lawfully record the
transfer and other closing documents in the State of North Carolina,
then Purchaser's counsel shall act as "recording agent" for
Purchaser and Seller pursuant to instructions reasonably acceptable
to Seller."
5. Ratification of Contract. All terms and provisions of the Contract not
specifically modified or amended by this Amendment shall remain in full force
and effect, and the Contract, as expressly modified herein, is hereby ratified,
confirmed and approved in all respects by the parties hereto.
6. Miscellaneous. The following provisions shall apply with respect to this
Amendment:
a. Capitalized terms not defined herein shall have the same meaning as set forth
in the Contract.
b. In the event of any conflict between the Contract and this Amendment, the
terms and conditions of this Amendment shall control.
c. 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.
[End of page]
NOW, THEREFORE, the Parties hereto have executed this Amendment as of the
date first set forth above.
Seller:
NATIONAL PROPERTY INVESTORS 7,
a California limited partnership
By: NPI Equity Investments, Inc.,
a Florida corporation,
Its General Partner
By: /s/Patrick F. Slavin
Name: Patrick F. Slavin
Title: Senior Vice President
[Purchaser signature page follows]
[PURCHASER SIGNATURE PAGE TO REINSTATEMENT AND SECOND AMENDMENT TO PURCHASE
AND SALE CONTRACT]
Purchaser:
THE DILWEG COMPANIES, LLC,
a Virginia limited liability company
By: /s/Anthony Dilweg
Name: Anthony Dilweg
Title: Chairman
Exhibit 10.17
THIRD AMENDMENT TO
PURCHASE AND SALE CONTRACT
THIS THIRD AMENDMENT TO PURCHASE AND SALE CONTRACT (this "Amendment") is
made and entered into as of the 17th day of December, 2003 (the "Amendment
Date"), by and between NATIONAL PROPERTY INVESTORS 7, a California limited
partnership, having an address at 4582 South Ulster Street Parkway, Suite 1100,
Denver, Colorado 80237 ("Seller"), and THE DILWEG COMPANIES, LLC, a North
Carolina limited liability company, having a principal address at 5310 South
Alston Avenue, Suite 210, Durham, North Carolina 27713 ("Purchaser"). (Seller
and Purchaser, together, referred to as the "Parties" and each individually as a
"Party").
Recitals:
A. Seller and Purchaser entered into that certain Purchase and Sale
Contract dated October 10, 2003, as amended by (i) that certain Amendment to
Purchase and Sale Contract dated October 27, 2003, and (ii) that certain
Reinstatement and Second Amendment to Purchase and Sale Contract dated November
6, 2003 (as amended, the "Contract") for the Property described therein.
B. 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
consideration, the receipt, sufficiency, and adequacy of which are hereby
acknowledged, the Parties agree as follows:
Agreement:
1. Purchaser Condition to Closing.
(a) The following new Section 8.1.5 is hereby added to the Contract:
"8.1.5 (a) Seller shall have completed the work (the "Work")
substantially as set forth in that certain letter of December
12, 2003 from Remtech Environmental ("Remtech") to Purchaser,
a copy of which is attached hereto as Exhibit 1, in Tenant
units 3202d, 3205a, 3205b, 3205f, 3206b, 3207b, 3214f and
3214b (each, an "Affected Unit"), and Seller shall have
delivered reasonable evidence of completion of the Work to
Purchaser on or prior to the Closing in the form of copies of
testing results or certificates of completion from the
applicable engineer or remediation company which has performed
the Work, and (b) Purchaser shall have no less than 3 Business
Days prior to the Closing to inspect the Affected Units and to
perform air-testing of the Affected Units, to the extent and
of the type reasonably required by Purchaser's lender in
connection with the purchase of the Property, in order to
determine whether the Work has been completed in accordance
with the scope of work set forth in Exhibit 1. Purchaser
agrees that Seller, in Seller's sole discretion, shall choose
the contractor or remediation company to perform the Work.
Purchaser agrees that any testing and inspections performed
pursuant to subpara. (b) of this Section 8.1.5 shall be
performed subject to Sections 3.3 and 3.4 of the Contract,
including Purchaser's obligation to indemnify, hold harmless
and defend Seller thereunder."
(b) The second sentence of the last paragraph of Section 8.1 of the
Contract is hereby deleted in its entirety and replaced by the following:
"If any condition set forth in Sections 8.1.1, 8.1.3, 8.1.4 or
8.1.5 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."
(c) The following provision is hereby added to the end of Section
5.1:
"Further, upon not less than 1 day's prior notice to
Purchaser, the Closing Date may be extended without penalty at
the option of Seller to a date not later than 30 days
following the Closing Date specified in the first sentence of
this paragraph above (or, if applicable, as extended by Seller
pursuant to the second or third sentence of this paragraph) to
complete the Work, or such later date as is mutually
acceptable to Seller and Purchaser."
(d) The following provision is hereby added to the end of Section
5.4.10:
"At Closing, Seller shall receive a credit for any and all
costs incurred by Seller in connection with the performance of
the Work, including, without limitation, any costs incurred in
connection with or arising from Seller's temporary relocation
of Tenants in order to perform the Work."
(e) The following new definitions are hereby added to Section 1.1 of
the Contract:
"1.1.2 "Affected Unit" shall have the meaning set forth in
Section 8.1.5."
and
"1.1.53 "Remtech" shall have the meaning set forth
in Section 8.1.5."
and
"1.1.75 "Work" shall have the meaning set forth
in Section 8.1.5."
2. Purchaser Acknowledgement. Purchaser acknowledges and agrees that Seller
makes no indemnities, representations or warranties with regard to the efficacy,
adequacy or completeness of the Work, the Work is to be completed by Seller
"AS-IS", and that any changes to the Contract set forth in this Amendment
(including, without limitation, the addition of Section 8.1.5 to the Contract)
shall in no way amend, expand, add to or alter any of Seller's representations
or warranties in the Contract. If Seller fails to perform the Work pursuant to
this Amendment, after any extensions permitted to Seller under the Contract (as
amended by this Amendment), Purchaser's sole remedy shall be to terminate the
Contract for failure of a condition and Seller shall not be in default under the
Contract.
3. Purchaser Delivery of Reports. Purchaser agrees that Purchaser shall deliver
to Seller within 1 Business Day after execution of this Amendment, copies of any
and all Third Party Reports in any way relating to or prepared in connection
with the Work or upon which Remtech relied in preparing the letter referenced in
Section 8.1.5 of the Contract (as amended by this Amendment).
4. Closing Date.
(a) The first sentence of Section 5.1 of the Contract is hereby
deleted in its entirety and replaced by the following provision:
"The Closing shall occur on December 30, 2003 (the "Closing
Date") through an escrow with Escrow Agent, whereby the
Seller, Purchaser and their attorneys need not be physically
present at the Closing and may deliver documents by overnight
air courier or other means; however, if Escrow Agent or its
agent cannot lawfully record the transfer and other closing
documents in the State of North Carolina, then Purchaser's
counsel shall act as "recording agent" for Purchaser and
Seller pursuant to instructions reasonably acceptable to
Seller."
(b) The phrase "2 Business Days" in the first sentence of each of
Sections 5.2 and 5.3 of the Contract is hereby deleted in its entirety and
replaced with the following phrase: "1 Business Day."
5. Ratification of Contract. All terms and provisions of the Contract not
specifically modified or amended by this Amendment shall remain in full force
and effect, and the Contract, as expressly modified herein, is hereby ratified,
confirmed and approved in all respects by the parties hereto.
6. Miscellaneous. The following provisions shall apply with respect to this
Amendment:
a. Capitalized terms not defined herein shall have the same meaning as set forth
in the Contract.
b. In the event of any conflict between the Contract and this Amendment, the
terms and conditions of this Amendment shall control.
c. 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.
[End of page]
NOW, THEREFORE, the Parties hereto have executed this Amendment as of the
date first set forth above.
Seller:
NATIONAL PROPERTY INVESTORS 7,
a California limited partnership
By: NPI Equity Investments, Inc.,
a Florida corporation,
Its General Partner
By: /s/Patrick F. Slavin
Name: Patrick F. Slavin
Title: Senior Vice President
[Purchaser signature page follows]
[PURCHASER SIGNATURE PAGE TO
THIRD AMENDMENT TO PURCHASE AND SALE CONTRACT]
Purchaser:
THE DILWEG COMPANIES, LLC,
a Virginia limited liability company
By: /s/Michael R. Hemmerich
Name: Michael R. Hemmerich
Title: Manager
Exhibit 10.18
ASSIGNMENT AND ASSUMPTION OF REAL ESTATE SALE AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION OF SALE AGREEMENT made the 30th day of
December 2003, by and between The Dilweg Companies, LLC, a NC limited liability
company ("Assignor") and HD South Point, LLC, a NC limited liability company
("Assignee").
WITNESSETH:
THAT WHEREAS, Assignor is the Purchaser under a Real Estate Sale and
Purchase Agreement by and among Assignor and National Property Investors 7, a
California limited partnership ("Seller"), effective October 10, 2003, as
amended, a copy of which is attached hereto and incorporated herein by reference
(the "Contract"); and
WHEREAS, Assignor desires to assign its interest in the Contract to
Assignee and Assignee intends to assume all the obligations of Assignor under
the Contract; and
NOW, THEREFORE, in consideration of the foregoing promises, and the amount
of $10.00 in hand paid to Assignor and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Assignor does
hereby grant, bargain, sell, assign, transfer and convey unto Assignee, its
successor and assigns, all of Assignor's right, title, interest and obligations
in the Contract. The Assignee assumes all right, title, interest and obligations
of Assignor under the Contract.
Assignor and Assignee each covenant, for the benefit of Seller, that
Assignee is an entity whose principals are the same principals of Assignor, and
that Assignor and Assignee have complied with the terms of the Contract in
connection with the assignment and assumption of the Contract. Assignor
acknowledges that this instrument does not relieve Assignor of its obligations
as to Seller under the Contract.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns
forever.
IN WITNESS WHEREOF, Assignor and Assignee have executed this instrument on
the say and year first above written.
ASSIGNOR:
The Dilweg Companies, LLC, a NC limited
liability company
By: /s/Michael R. Hemmerich
Name: Micheal R. Hemmerich
Title: Manager
ASSIGNEE:
HD South Point, LLC, a NC limited liability
company
By: Michael R. Hemmerich
Name: Michael R. Hemmerich
Title: Manager