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) March 2, 2004
ANGELES INCOME PROPERTIES, LTD. II
(Exact name of registrant as specified in its charter)
California 0-11767 95-3793526
(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 March 2, 2004, the Registrant sold one of its investment properties,
Georgetown Apartments, located in South Bend, Indiana. The Registrant sold
Georgetown Apartments to Georgetown Apartment Homes-FRIP, L.L.C., an unrelated
party, for $10,950,000. The sale price was determined based on the fair market
value of the investment property.
In accordance with the Limited Partnership Agreement of the Registrant, the
Registrant's managing 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 Angeles Income Properties, Ltd. II as if
Georgetown Apartments had been sold on January 1, 2002.
The unaudited pro forma consolidated financial statements are presented for
illustrative purposes only and are not necessarily indicative of the operating
results or financial position that would have resulted had the sale been
consummated on the date indicated, nor do they represent a forecast thereof at
any future date or for any future period. This pro forma information should be
read in conjunction with the Registrant's 2002 Annual Report on Form 10-KSB.
PRO FORMA CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands)
September 30, 2003
All other assets $ 1,073
Investment properties, net 5,343
Total Assets $ 6,416
All other liabilities $ 620
Mortgage notes payable 19,109
Partners' deficit (13,313)
Total Liabilities and Deficit $ 6,416
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Nine Months Nine Months
Ended Ended Year Ended
September 30, September 30, December 31,
2003 2002 2002
Total revenues $3,829 $ 4,270 $ 5,572
Total expenses 3,994 4,440 5,634
Net loss $ (165) $ (170) $ (62)
Net loss per limited partnership unit $(1.63) $ (1.68) $ (0.62)
(c) Exhibits.
The following exhibits are filed with this report (1):
10.21 Purchase and Sale Contract between Georgetown AIP II, L.P. and Freestone
Realty Advisors, LLC, dated November 25, 2003.
10.22 First Amendment to Purchase and Sale Contract between Georgetown AIP II,
L.P. and Freestone Realty Advisors, LLC, dated January 9, 2004.
10.23 Second Amendment to Purchase and Sale Contract between Georgetown AIP II,
L.P. and Freestone Realty Advisors, LLC, dated January 12, 2004.
10.24 Third Amendment to Purchase and Sale Contract between Georgetown AIP II,
L.P. and Freestone Realty Advisors, LLC, dated January 13, 2004.
10.25 Reinstatement and Fourth Amendment to Purchase and Sale Contract between
Georgetown AIP II, L.P. and Freestone Realty Advisors, LLC, dated January
29, 2004.
10.26 Assignment and Assumption of Contract between Freestone Realty Advisors,
LLC, as Assignor and Georgetown Apartment Homes-FRIP, L.L.C., as Assignee,
dated February 11, 2004.
(1) Schedules and supplemental materials to the exhibits have been omitted but
will be provided to the Securities and Exchange Commission upon request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ANGELES INCOME PROPERTIES, LTD. II
By: Angeles Realty Corporation II
Its Managing General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
Date: March 17, 2004
Exhibit 10.21
PURCHASE AND SALE CONTRACT
BETWEEN
GEORGETOWN AIP II, L.P.
a South Carolina limited partnership
AS SELLER
AND
FREESTONE REALTY ADVISORS, LLC
an Illinois limited liability company
AS PURCHASER
GEORGETOWN APARTMENTS
ARTICLE 1 DEFINED TERMS.................................................1
ARTICLE 2 PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT...................7
2.1 Purchase and Sale................................................7
2.2 Purchase Price and Deposit.......................................7
2.3 Escrow Provisions Regarding Deposit..............................7
ARTICLE 3 FEASIBILITY PERIOD............................................9
3.1 Feasibility Period...............................................9
3.2 Expiration of Feasibility Period.................................9
3.3 Conduct of Investigation.........................................9
3.4 Purchaser Indemnification.......................................10
3.5 Property Materials..............................................11
3.6 Property Contracts..............................................12
ARTICLE 4 TITLE........................................................12
4.1 Title Documents.................................................12
4.2 Survey..........................................................12
4.3 Objection and Response Process..................................13
4.4 Permitted Exceptions............................................13
4.5 Existing Mortgage...............................................14
ARTICLE 5 CLOSING......................................................14
5.1 Closing Date....................................................14
5.2 Seller Closing Deliveries.......................................14
5.3 Purchaser Closing Deliveries....................................15
5.4 Closing Prorations and Adjustments..............................16
5.5 Post Closing Adjustments........................................20
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER.......21
6.1 Seller's Representations........................................21
6.2 AS-IS...........................................................22
6.3 Survival of Seller's Representations............................23
6.4 Definition of Seller's Knowledge................................23
6.5 Representations And Warranties Of Purchaser.....................23
ARTICLE 7 OPERATION OF THE PROPERTY....................................24
7.1 Leases and Property Contracts...................................24
7.2 General Operation of Property...................................25
7.3 Liens...........................................................25
7.4 Rent-Ready Units. .............................................25
ARTICLE 8 CONDITIONS PRECEDENT TO CLOSING..............................25
8.1 Purchaser's Conditions to Closing...............................25
8.2 Seller's Conditions to Closing..................................26
ARTICLE 9 BROKERAGE....................................................26
9.1 Indemnity.......................................................26
9.2 Broker Commission...............................................27
9.3 Broker Signature Page...........................................27
ARTICLE 10 DEFAULTS AND REMEDIES........................................27
10.1 Purchaser Default...............................................27
10.2 Seller Default..................................................28
ARTICLE 11 RISK OF LOSS OR CASUALTY.....................................28
11.1 Major Damage....................................................28
11.2 Minor Damage....................................................29
11.3 Repairs.........................................................29
ARTICLE 12 EMINENT DOMAIN...............................................29
12.1 Eminent Domain..................................................29
ARTICLE 13 MISCELLANEOUS................................................29
13.1 Binding Effect of Contract......................................29
13.2 Exhibits And Schedules..........................................30
13.3 Assignability...................................................30
13.4 Binding Effect..................................................30
13.5 Captions........................................................30
13.6 Number And Gender Of Words......................................30
13.7 Notices.........................................................30
13.8 Governing Law And Venue.........................................32
13.9 Entire Agreement................................................32
13.10 Amendments......................................................32
13.11 Severability....................................................32
13.12 Multiple Counterparts/Facsimile Signatures......................33
13.13 Construction....................................................33
13.14 Confidentiality.................................................33
13.15 Time Of The Essence.............................................33
13.16 Waiver..........................................................33
13.17 Attorneys Fees..................................................33
13.18 Time Periods....................................................34
13.19 1031 Exchange...................................................34
13.20 No Personal Liability of Officers, Trustees or Directors of
Seller's Partners...............................................34
13.21 No Exclusive Negotiations.......................................35
13.22 ADA Disclosure..................................................35
13.23 No Recording....................................................35
13.24 Relationship of Parties.........................................35
13.25 Dispute Resolution..............................................35
13.26 AIMCO Marks.....................................................36
13.27 Non-Solicitation of Employees...................................36
13.28 Survival........................................................36
13.29 Multiple Purchasers.............................................36
ARTICLE 14 LEAD-BASED PAINT DISCLOSURE..................................37
14.1 Disclosure......................................................37
14.2 Consent Agreement. .............................................37
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as of
the 25th day of November, 2003 (the "Effective Date") by and between GEORGETOWN
AIP II, L.P., a South Carolina limited partnership, having an address at 4582
South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237 ("Seller") and
FREESTONE REALTY ADVISORS, LLC, an Illinois limited liability company, having a
principal address at 120 Kenmore Avenue, Deerfield, IL 80015 ("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 the County of St. Joseph,
State of Indiana, as more particularly described in Exhibit A attached hereto
and made a part hereof, and the improvements thereon, commonly known as
Georgetown Apartments.
B.....Purchaser desires to purchase, and Seller desires to sell, such
land, improvements and certain associated property, on the terms and conditions
set forth below.
ARTICLE 1...
DEFINED TERMS
1.1 Unless otherwise defined herein, any term with its initial letter
capitalized in this Contract shall have the meaning set forth in this ARTICLE 1.
1.1.1 ....."ADA" shall have the meaning set forth in Section 13.22.
1.1.2 ....."Additional Deposit" shall have the meaning set forth in Section
2.2.2.
1.1.3 ....."AIMCO" shall have the meaning set forth in Section 14.2.
1.1.4 ....."AIMCO Marks" means all words, phrases, slogans, materials, software,
proprietary systems, trade secrets, proprietary information and lists, and other
intellectual property owned or used by Seller, the Property Manager, or AIMCO in
the marketing, operation or use of the Property (or in the marketing, operation
or use of any other properties managed by the Property Manager or owned by AIMCO
or an affiliate of either Property Manager or AIMCO).
1.1.5 ....."Appeal" shall have the meaning set forth in Section 5.4.4(a).
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 Indiana.
1.1.10 ...."Closing" means the consummation of the purchase and sale and related
transactions contemplated by this Contract in accordance with the terms and
conditions of this Contract.
1.1.11 ...."Closing Date" means the date on which date the Closing of the
conveyance of the Property is required to be held pursuant to Section 5.1.
1.1.12 ...."Code" shall have the meaning set forth in Section 2.3.6.
1.1.13 ...."Consent Agreement" shall have the meaning set forth in
Section 14.2.
1.1.14 ...."Consultants" shall have the meaning set forth in Section 3.1.
1.1.15 ...."Damage Notice" shall have the meaning set forth in Section 11.1.
1.1.16 ...."Deed" shall have the meaning set forth in Section 5.2.1.
......1.1.16.5 [Intentionally left blank].
1.1.17 ...."Deposit" means, to the extent actually deposited by Purchaser with
Escrow Agent, the Initial Deposit and the Additional Deposit.
1.1.18 ...."Escrow Agent" shall have the meaning set forth in Section 2.2.1.
1.1.19 ...."Excluded Permits" means those Permits which, under applicable law,
are nontransferable and such other Permits, if any, as may be designated as
Excluded Permits on Schedule 1.1.19.
1.1.20 ...."Existing Survey" shall have the meaning set forth in Section 4.2.
1.1.21 ...."Feasibility Period" shall have the meaning set forth in
Section 3.1.
1.1.22 ...."Final Response Deadline" shall have the meaning set forth in
Section 4.3.
1.1.23 ...."FHA " shall have the meaning set forth in Section 13.22.
1.1.24 ...."Fixtures and Tangible Personal Property" means all fixtures,
furniture, furnishings, fittings, equipment, machinery, apparatus, appliances
and other articles of tangible personal property located on the Land or in the
Improvements as of the Effective Date and used or usable in connection with the
occupation or operation of all or any part of the Property, but only to the
extent transferable. The term "Fixtures and Tangible Personal Property" does not
include (a) equipment leased by Seller and the interest of Seller in any
equipment provided to the Property for use, but not owned or leased by Seller,
or (b) property owned or leased by any Tenant or guest, employee or other person
furnishing goods or services to the Property, or (c) property and equipment
owned by Seller, which in the ordinary course of business of the Property is not
used exclusively for the business, operation or management of the Property, or
(d) the property and equipment, if any, expressly identified in Schedule 1.1.24.
1.1.25 ...."General Assignment" shall have the meaning set forth in
Section 5.2.3.
1.1.26 ...."Good Funds" shall have the meaning set forth in Section 2.2.1.
1.1.27 ...."Improvements" means all buildings and improvements located on
the Land taken "as is."
1.1.28 ...."Initial Deposit" shall have the meaning set forth in
Section 2.2.1.
1.1.29 ...."Land" means all of those certain tracts of land located in the State
of Indiana 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 FEDERAL HOME LOAN MORTGAGE CORPORATION, a corporation
organized and existing under the laws of the United States, whose servicer is
GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation. Lender is
assignee of GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation.
1.1.33 ....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
Mortgage, 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.
1.1.34 ...."Loan" means the indebtedness owing to Lender evidenced by the Note.
1.1.35 ....[Intentionally left blank].
1.1.36 ...."Loan Balance" shall have the meaning set forth in Section 2.2.3.
1.1.37 ...."Loan Payoff" shall have the meaning set forth in Section 5.4.7.
1.1.38 ...."Losses" shall have the meaning set forth in Section 3.4.1.
1.1.39 ...."Materials" shall have the meaning set forth in Section 3.5.
1.1.40 ...."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
"The Georgetown 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).
1.1.41 ...."Mortgage" shall have the meaning set forth in Section 4.5.
1.1.42 ...."Note" means that certain Multifamily Note in the original principal
amount of 6,175,000.00, dated May 16, 2003, executed by Seller and payable to
the order of GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation, as
assigned to FEDERAL HOME LOAN MORTGAGE CORPORATION, a corporation organized and
existing under the laws of the United States.
1.1.43 ...."Objection Deadline" shall have the meaning set forth in
Section 4.3.
1.1.44 ...."Objection Notice" shall have the meaning set forth in
Section 4.3.
1.1.45 ...."Objections" shall have the meaning set forth in Section 4.3.
1.1.46 ...."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.
1.1.47 ...."Permitted Exceptions" shall have the meaning set forth in Section
4.4.
1.1.48 ...."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.
1.1.49 ...."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.
1.1.50 ...."Property Contracts Notice" shall have the meaning set forth in
Section 3.6.
1.1.51 ...."Property Manager" means the current property manager of the
Property.
1.1.52 ...."Property Taxes" shall have the meaning set forth in Section
5.4.4(a).
1.1.53 ...."Proration Schedule" shall have the meaning set forth in
Section 5.4.1.
1.1.54 ...."Purchase Price" means the consideration to be paid by Purchaser to
Seller for the purchase of the Property pursuant to Section 2.2.
1.1.55 ...."Refund" shall have the meaning set forth in Section 5.4.4(a).
1.1.56 ...."Regional Property Manager" shall have the meaning set forth in
Section 6.4.
1.1.57 ...."Remediation" shall have the meaning set forth in Section 14.2.
......1.1.57.5 "Rent-Ready Condition" means the physical condition to
which Seller, in the ordinary course of its business, would prepare Tenant Units
in anticipation of renting such Tenant Units to Prospective Tenants.
......1.1.57.5.5 "Rent Roll" shall have the meaning set forth in Section
3.5.3.
1.1.58 ...."Report" shall have the meaning set forth in Section 14.2.
1.1.59 ...."Response Deadline" shall have the meaning set forth in
Section 4.3.
1.1.60 ...."Response Notice" shall have the meaning set forth in Section 4.3.
1.1.61 ...."Seller's Indemnified Parties" shall have the meaning set forth
in Section 3.4.1
1.1.62 ...."Seller's Representations" shall have the meaning set forth in
Section 6.1.
1.1.63 ...."Survey" shall have the meaning ascribed thereto in Section 4.2.
1.1.64 ...."Survival Period" shall have the meaning set forth in Section 6.3.
1.1.65 ...."Survival Provisions" shall have the meaning set forth in Section
13.28.
1.1.66 ...."Tax Year" shall have the meaning set forth in Section 5.4.4(c).
1.1.67 ...."Tenant" means any person or entity entitled to occupy any portion of
the Property under a Lease.
1.1.68 ...."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.
1.1.69 ...."Tenant Security Deposit Balance" shall have the meaning set forth in
Section 5.4.6.2.
......1.1.69.5 "Tenant Unit" means each apartment in the Property which is
leased by Seller to Tenants in the ordinary course of Seller's business.
1.1.70 ...."Terminated Contracts" shall have the meaning set forth in
Section 3.6.
1.1.71 ...."Testing" shall have the meaning set forth in Section 14.2.
1.1.72 ...."Third Party Costs" shall have the meaning set forth in Section
5.4.4(b).
1.1.73 ...."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.
1.1.74 ...."Title Commitment" shall have the meaning ascribed thereto in Section
4.1.
1.1.75 ...."Title Documents" shall have the meaning set forth in Section 4.1.
1.1.76 ...."Title Insurer" shall have the meaning set forth in Section 2.2.1.
1.1.77 ...."Title Policy" shall have the meaning set forth in Section 4.1.
1.1.78 ...."Uncollected Rents" shall have the meaning set forth in Section
5.4.6.1.
1.1.79 ...."Utility Contract " shall have the meaning set forth in Section
5.4.11.
1.1.80 ...."Vendor Terminations" shall have the meaning set forth in Section
5.2.5.
1.1.81 ...."Viterra" shall have the meaning set forth in Section 3.6.
1.1.82 ...."Water Billing Contract" shall have the meaning set forth in
Section 3.6.
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 $11,050,000.00, less the Lender Fees,
which amount shall be paid by Purchaser, as follows:
2.2.1 .....On the Effective Date, Purchaser shall deliver to Stewart Title
Guaranty Company, c/o Wendy Howell, National Commercial Closing Specialist, 1980
Post Oak Boulevard, Suite 610, Houston, TX 77056, 800-729-1906 ("Escrow Agent"
or "Title Insurer") a deposit (the "Initial Deposit") of $110,500.00 by wire
transfer of immediately available funds ("Good Funds"). The Initial Deposit
shall be held and disbursed in accordance with the escrow provisions set forth
in Section 2.3.
2.2.2 .....On the day that the Feasibility Period expires, Purchaser shall
deliver to Escrow Agent an additional deposit (the "Additional Deposit") of
$110,500.00 by wire transfer of Good Funds. The Additional Deposit shall be held
and disbursed in accordance with the escrow provisions set forth in Section 2.3.
2.2.3 .....[Intentionally left blank].
2.2.4 .....The balance of the Purchase Price for the Property shall be paid to
and received by Escrow Agent by wire transfer of Good Funds no later than 11:00
a.m. (in the time zone in which Escrow Agent is located) on the Closing Date (or
such earlier time as required by Seller's lender).
2.3 Escrow Provisions Regarding Deposit.
2.3.1 .....Escrow Agent shall hold the Deposit and make delivery of the Deposit
to the party entitled thereto under the terms of this Contract. Escrow Agent
shall invest the Deposit in such short-term, high-grade securities,
interest-bearing bank accounts, money market funds or accounts, bank
certificates of deposit or bank repurchase contracts as Escrow Agent, in its
discretion, deems suitable, and all interest and income thereon shall become
part of the Deposit and shall be remitted to the party entitled to the Deposit
pursuant to this Contract.
2.3.2 .....Escrow Agent shall hold the Deposit until the earlier occurrence of
(i) the Closing Date, at which time the Deposit shall be applied against the
Purchase Price, or (ii) the date on which Escrow Agent shall be authorized to
disburse the Deposit as set forth in Section 2.3.3. The tax identification
numbers of the parties shall be furnished to Escrow Agent upon request.
2.3.3 .....If the Deposit has not been released earlier in accordance with
Section 2.3.2, and either party makes a written demand upon Escrow Agent for
payment of the Deposit, Escrow Agent shall give written notice to the other
party of such demand. If Escrow Agent does not receive a written objection from
the other party to the proposed payment within 5 Business Days after the giving
of such notice, Escrow Agent is hereby authorized to make such payment (subject
to Purchaser's obligation under Section 3.5.2 to return all Third-Party Reports
and information and Materials provided to Purchaser as a pre-condition to the
return of the Deposit to Purchaser). If Escrow Agent does receive such written
objection within such 5-Business Day period, Escrow Agent shall continue to hold
such amount until otherwise directed by written instructions from the parties to
this Contract or a final judgment or arbitrator's decision. However, Escrow
Agent shall have the right at any time to deposit the Deposit and interest
thereon, if any, with a court of competent jurisdiction in the state in which
the Property is located. Escrow Agent shall give written notice of such deposit
to Seller and Purchaser. Upon such deposit, Escrow Agent shall be relieved and
discharged of all further obligations and responsibilities hereunder.
2.3.4 .....The parties acknowledge that Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that Escrow Agent shall
not be deemed to be the agent of either of the parties for any act or omission
on its part unless taken or suffered in bad faith in willful disregard of this
Contract or involving gross negligence. Seller and Purchaser jointly and
severally shall indemnify and hold Escrow Agent harmless from and against all
costs, claims and expenses, including reasonable attorney's fees, incurred in
connection with the performance of Escrow Agent's duties hereunder, except with
respect to actions or omissions taken or suffered by Escrow Agent in bad faith,
in willful disregard of this Contract or involving gross negligence on the part
of the Escrow Agent.
2.3.5 .....The parties shall deliver to Escrow Agent an executed copy of this
Contract, which shall constitute the sole instructions to Escrow Agent. Escrow
Agent shall execute the signature page for Escrow Agent attached hereto with
respect to the provisions of this Section 2.3; provided, however, that (a)
Escrow Agent's signature hereon shall not be a prerequisite to the binding
nature of this Contract on Purchaser and Seller, and the same shall become fully
effective upon execution by Purchaser and Seller, and (b) the signature of
Escrow Agent will not be necessary to amend any provision of this Contract other
than this Section 2.3.
2.3.6 .....Escrow Agent, as the person responsible for closing the transaction
within the meaning of Section 6045(e)(2)(A) of the Internal Revenue Code of
1986, as amended (the "Code"), shall file all necessary information, reports,
returns, and statements regarding the transaction required by the Code
including, but not limited to, the tax reports required pursuant to Section 6045
of the Code. Further, Escrow Agent agrees to indemnify and hold Purchaser,
Seller, and their respective attorneys and brokers harmless from and against any
Losses resulting from Escrow Agent's failure to file the reports Escrow Agent is
required to file pursuant to this section.
2.3.7 .....The provisions of this Section 2.3 shall survive the termination of
this Contract, and if not so terminated, the Closing and delivery of the Deed to
Purchaser.
ARTICLE 3...
FEASIBILITY PERIOD
3.1 Feasibility Period. Subject to the terms of Section 3.3 and 3.4 and the
right of Tenants under the Leases, from the Effective Date to and including the
date which is 45 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). If Purchaser fails to provide Seller with written notice of
termination prior to the expiration of the Feasibility Period in strict
accordance with the notice provisions of this Contract, Purchaser's right to
terminate under this Section 3.2 shall be permanently waived and this Contract
shall remain in full force and effect, the Deposit shall be non-refundable, and
Purchaser's obligation to purchase the Property shall be non-contingent and
unconditional except only for satisfaction of the conditions expressly stated in
Section 8.1.
3.3 Conduct of Investigation. Purchaser shall not permit any mechanic's or
materialmen's liens or any other liens to attach to the Property by reason of
the performance of any work or the purchase of any materials by Purchaser or any
other party in connection with any Inspections conducted by or for Purchaser.
Purchaser shall give notice to Seller a reasonable time prior to entry onto the
Property and shall permit Seller to have a representative present during all
Inspections conducted at the Property. All information made available by Seller
to Purchaser in accordance with this Contract or obtained by Purchaser in the
course of its Inspections shall be treated as confidential information by
Purchaser, and, prior to the purchase of the Property by Purchaser, Purchaser
shall use its best efforts to prevent its Consultants from divulging such
information to any unrelated third parties except as reasonably necessary to
third parties engaged by Purchaser for the limited purpose of analyzing and
investigating such information for the purpose of consummating the transaction
contemplated by this Contract; provided, however, Purchaser may, subject to
Section 13.14 below, disclose the results of the Inspections to Purchaser's
prospective investors. 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) (collectively, "Losses") arising
from or related to Purchaser's or its Consultant's entry onto the Property, and
any Inspections or other matters performed by Purchaser with respect to the
Property during the Feasibility Period or otherwise.
3.4.2 .....Notwithstanding anything in this Contract to the contrary, Seller
shall have the right, without limitation, to disapprove any and all entries,
surveys, tests (including, without limitation, a Phase II environmental study of
the Property), investigations and other matters that in Seller's reasonable
judgment could result in any injury to the Property or breach of any contract,
or expose Seller to any Losses or violation of applicable law, or otherwise
adversely affect the Property or Seller's interest therein. Purchaser shall use
best efforts to minimize disruption to Tenants in connection with Purchaser's or
its Consultants' activities pursuant to this Section. No consent by the Seller
to any such activity shall be deemed to constitute a waiver by Seller or
assumption of liability or risk by Seller. Purchaser hereby agrees to restore,
at Purchaser's sole cost and expense, the Property to the same condition
existing immediately prior to Purchaser's exercise of its rights pursuant to
this Article 3. Purchaser shall maintain and cause its third party consultants
to maintain (a) casualty insurance and comprehensive public liability insurance
with coverages of not less than $1,000,000.00 for injury or death to any one
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, and (b) worker's compensation
insurance for all of their respective employees in accordance with the law of
the state in which the Property is located. Purchaser shall deliver proof of the
insurance coverage required pursuant to this Section 3.4.2 to Seller (in the
form of a certificate of insurance) prior to the earlier to occur of (i)
Purchaser's or Purchaser's Consultants' entry onto the Property, or (ii) the
expiration of 5 days after the Effective Date. The provisions of this Section
3.4 shall survive the termination of this Contract, and if not so terminated,
the Closing and delivery of the Deed to Purchaser.
3.5 Property Materials.
3.5.1 .....Within 10 days after the Effective Date, and to the extent the same
exist and are in Seller's possession or reasonable control (subject to Section
3.5.2), Seller agrees to make the documents set forth on Schedule 3.5 (the
"Materials") available at the Property for review and copying by Purchaser at
Purchaser's sole cost and expense. In the alternative, at Seller's option and
within the foregoing 10-day period, Seller may deliver some or all of the
Materials to Purchaser, or make the same available to Purchaser on a secure web
site (Purchaser agrees that any item to be delivered by Seller under this
Contract shall be deemed delivered to the extent available to Purchaser on such
secured web site). To the extent that Purchaser determines that any of the
Materials have not been made available or delivered to Purchaser pursuant to
this Section 3.5.1, Purchaser shall notify Seller and Seller shall use
commercially reasonable efforts to deliver the same to Purchaser within 5
Business Days after such notification is received by Seller. The Feasibility
Period shall be extended on a day-for-day basis, up to a maximum extension of 5
days, for each day that Seller is late in delivering the Materials in accordance
with this Section 3.5. Notwithstanding anything in this Section 3.5.1 to the
contrary, Buyer's sole remedy in the event Seller fails to provide the Materials
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 6.1.8. Seller shall update the
Rent Roll in accordance with Section 5.2.12.
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. Without limiting the generality of
the foregoing, Purchaser agrees to assume that certain Reading and Billing
Agreement dated January 25, 2002 (the "Water Billing Contract"), by and between
Seller and Viterra Energy Services ("Viterra"). Seller's assignment, and
Purchaser's assumption, of the Water Billing Contract is subject to (i) any
approval of Viterra required by the Water Billing Contract and (ii) Viterra
releasing Seller from any and all obligations under the Water Billing Contract.
ARTICLE 4...
TITLE
4.1 Title Documents. Within 10 calendar days after the Effective Date, Seller
shall cause to be delivered to Purchaser a standard form commitment for title
insurance ("Title Commitment") for the Property in an amount equal to the
Purchase Price from Title Insurer for an owner's title insurance policy (the
"Title Policy") on the most recent standard American Land Title Association
form, together with copies of all instruments identified as exceptions therein
(together with the Title Commitment, referred to herein as the "Title
Documents"). Seller shall be responsible only for payment of the basic premium
for the Title Policy. Purchaser shall be solely responsible for payment of all
other costs relating to procurement of the Title Commitment, the Title Policy,
and any requested endorsements; provided, however, Seller shall pay the costs of
any endorsement(s) required to cure an Objection (as defined below) which Seller
has elected to cure in the Response Notice delivered by Seller in accordance
with Section 4.3 below.
4.2 Survey. Within 3 Business Days after the Effective Date, Seller shall
deliver to Purchaser or make available at the Property any existing survey of
the Property (the "Existing Survey") which to Seller's knowledge is in Seller's
possession or reasonable control (subject to Section 3.5.2); provided, however,
in the event that such Existing Survey was prepared in connection with the sale
of the Property, then Seller shall deliver the same to Purchaser, and Purchaser
and Seller shall each pay, at the Closing, one-half (1/2) of the costs thereof.
Purchaser acknowledges and agrees that delivery of the Existing Survey is
subject to Section 3.5.2. To the extent that Purchaser desires that a new survey
of the Property be prepared (or that the Existing Survey be updated), Purchaser
shall request the same in writing to Seller no later than 5 Business Days after
the Effective Date, in which event Seller shall order such new or updated survey
(together with the Existing Survey, referred to herein as the "Survey") from the
surveyor who prepared the Existing Survey (or from such other surveyor as Seller
determines in its reasonable discretion). Purchaser shall be solely responsible
for the cost and expense of the preparation of any new or updated survey
requested pursuant to the terms of this Section 4.2.
4.3 Objection and Response Process. On or before the date which is 15 days after
the Effective Date (the "Objection Deadline"), Purchaser shall give written
notice (the "Objection Notice") to the attorneys for Seller of any matter set
forth in the Title Documents or the Survey to which Purchaser objects (the
"Objections"). The Objection Deadline shall be extended, on a day-for-day basis,
up to a maximum extension of 5 days, for each day Seller is late in delivering
the Title Commitment in accordance with Section 4.1 above; provided, however, in
no event shall the extension of the Objection Deadline cause the Final Response
Deadline to be later than the expiration of the Feasibility Period. 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 the
date that is 5 days after the Objection Deadline, as extended (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 date that is 10 days
after the Objection Deadline, as extended (the "Final Response Deadline"),
either (a) to accept the Title Documents and Survey with resolution, if any, of
the Objections as set forth in the Response Notice (or if no Response Notice is
tendered, without any resolution of the Objections) and without any reduction or
abatement of the Purchase Price, or (b) to terminate this Contract, in which
event the Deposit shall be returned to Purchaser (subject to Purchaser's
obligation under Section 3.5.2 to return all Third-Party Reports and information
and Materials provided to Purchaser as a pre-condition to the return of the
Deposit). If Purchaser fails to give notice to terminate this Contract on or
before the Final Response Deadline, Purchaser shall be deemed to have elected to
approve and irrevocably waived any objections to any matters covered by the
Title Documents or the Survey, subject only to resolution, if any, of the
Objections as set forth in the Response Notice (or if no Response Notice is
tendered, without any resolution of the Objections).
4.4 Permitted Exceptions. The Deed delivered pursuant to this Contract shall be
subject to the following, all of which shall be deemed "Permitted Exceptions":
4.4.1 .....All matters shown in the Title Documents and the Survey, other than
(a) those Objections, if any, which Seller has agreed to cure pursuant to the
Response Notice under Section 4.3, (b) mechanics' liens and taxes due and
payable with respect to the period preceding Closing, (c) the standard exception
regarding the rights of parties in possession which shall be limited to those
parties in possession pursuant to the Leases, and (d) the standard exception
pertaining to taxes which shall be limited to taxes and assessments payable in
the year in which the Closing occurs and subsequent taxes and assessments;
4.4.2 .....All Leases;
4.4.3 .....[Intentionally left blank];
4.4.4 .....Applicable zoning and governmental regulations and ordinances;
4.4.5 .....Any defects in or objections to title to the Property, or title
exceptions or encumbrances, arising by, through or under Purchaser; and
4.4.6 .....The terms and conditions of this Contract.
4.5 Existing Mortgage. 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 "Mortgage ") 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; provided, however, that Purchaser shall have the option, in Purchaser's
sole discretion, to elect to accelerate the Closing to December 30, 2003 by
delivering written notice to Seller no later than December 15, 2003.
Notwithstanding the foregoing to the contrary, Seller shall have the option, by
delivering written notice to Purchaser, to extend the Closing Date (as the same
may be accelerated by Purchaser pursuant to the first sentence of this Section
5.1) to the last Business Day of the month in which the Closing Date otherwise
would occur or to such other date (either in the same month or the next) as
Seller reasonably determines is desirable in connection with the Loan Payoff.
Further, the Closing Date may be extended without penalty at the option of
Seller to a date not later than 30 days following the Closing Date specified in
the first sentence (as the same may be accelerated by Purchaser) 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 .....Limited Warranty Deed (the "Deed") in the form attached as Exhibit B
to Purchaser, subject to the Permitted Exceptions.
5.2.2 .....A Bill of Sale in the form attached as Exhibit C.
5.2.3 .....A General Assignment in the form attached as Exhibit D (the "General
Assignment").
5.2.4 .....An Assignment of Leases and Security Deposits in the form attached as
Exhibit E (the "Leases Assignment").
5.2.5 .....A letter 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 ....Seller agrees to countersign and deliver to the Escrow Agent the
notification letters prepared by Purchaser in accordance with this Section
5.3.7.
5.2.11 ....Any required Indiana Disclosure of Sales Information form.
5.2.12 ....An updated Rent Roll reflecting the information required in Section
3.5.3; provided, however, that the content of such updated Rent Roll shall in no
event expand or modify the conditions to Purchaser's obligation to close as
specified under Section 8.1.
5.3 Purchaser Closing Deliveries. No later than 2 Business Day prior to the
Closing Date (except for the balance of the Purchase Price which is to be
delivered at the time specified in Section 2.2.4), Purchaser shall deliver to
the Escrow Agent (for disbursement to Seller upon the Closing) the following
items with respect to the Property being conveyed at such Closing:
5.3.1 .....The full Purchase Price (with credit for the Deposit), plus or minus
the adjustments or prorations required by this Contract.
5.3.2 .....A title affidavit (or at Purchaser's option an indemnity) pertaining
to Purchaser's activity on the Property prior to Closing, in the customary form
reasonably acceptable to Purchaser, to enable Title Insurer to delete the
standard exceptions to the title insurance policy set forth in this Contract
(other than matters constituting any Permitted Exceptions and matters which are
to be completed or performed post-Closing) to be issued pursuant to the Title
Commitment; provided that such affidavit does not subject Purchaser to any
greater liability, or impose any additional obligations, other than as set forth
in this Contract.
5.3.3 .....Any declaration or other statement which may be required to be
submitted to the local assessor with respect to the terms of the sale of the
Property.
5.3.4 .....A closing statement executed by Purchaser.
5.3.5 .....A countersigned counterpart of the General Assignment.
5.3.6 .....A countersigned counterpart of the Leases Assignment.
5.3.7 .....Notification letters to all Tenants prepared and executed by
Purchaser in the form attached hereto as Exhibit 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 ....Any required Indiana Disclosure of Sales Information form, to the
extent such form must be countersigned by Purchaser.
5.3.12 The Lender Fees (subject to reduction from the Purchase Price in
accordance with Section 2.2).
5.4 Closing Prorations and Adjustments.
5.4.1 General. All normal and customarily proratable items, including, without
limitation, collected rents, operating expenses, personal property taxes, other
operating expenses and fees, shall be prorated as of the Closing Date, Seller
being charged or credited, as appropriate, for all of same attributable to the
period up to the Closing Date (and credited for any amounts paid by Seller
attributable to the period on or after the Closing Date, if assumed by
Purchaser) and Purchaser being responsible for, and credited or charged, as the
case may be, for all of same attributable to the period on and after the Closing
Date. Seller shall prepare a proration schedule (the "Proration Schedule") of
the adjustments described in this Section 5.4 prior to Closing. Such adjustments
shall be paid by Purchaser to Seller (if the prorations result in a net credit
to Seller) or by Seller to Purchaser (if the prorations result in a net credit
to Purchaser), by increasing or reducing the cash to be paid by Purchaser at
Closing.
5.4.2 Operating Expenses. All of the operating, maintenance, taxes (other than
real estate taxes, such as rental taxes), and other expenses incurred in
operating the Property that Seller customarily pays, and any other costs
incurred in the ordinary course of business for the management and operation of
the Property, shall be prorated on an accrual basis. Seller shall pay all such
expenses that accrue prior to Closing and Purchaser shall pay all such expenses
that accrue from and after the Closing Date.
5.4.3 Utilities. The final readings and final billings for utilities will be
made if possible as of the Closing Date, in which case Seller shall pay all such
bills as of the Closing Date and no proration shall be made at the Closing with
respect to utility bills. Otherwise, a proration shall be made based upon the
parties' reasonable good faith estimate and a readjustment made within 30 days
after the Closing, if necessary. Seller shall be entitled to the return of any
deposit(s) posted by it with any utility company, and Seller shall notify each
utility company serving the Property to terminate Seller's account, effective as
of noon on the Closing Date.
5.4.4 Real Estate Taxes. Any real estate ad valorem or similar taxes for the
Property, or any installment of assessments payable in installments which
installment is payable in the calendar year of Closing, shall be prorated to the
date of Closing, based upon actual days involved. The proration of real property
taxes or installments of assessments shall be based upon the assessed valuation
and tax rate figures (assuming payment at the earliest time to allow for the
maximum possible discount) 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 110% of the figures from the preceding year (assuming payment at the
earliest time to allow for the maximum possible discount). The proration of real
property taxes or installments of assessments shall be final and not subject to
re-adjustment after Closing.
(a) Purchaser acknowledges that Seller has filed an appeal (the "Appeal") with
respect to real estate ad valorem or other similar property taxes
applicable to the Property (the "Property Taxes"). If such Appeal relates
to any Tax Year (defined below) prior to the Tax Year in which the Closing
occurs, Seller shall be entitled, in Seller's sole discretion, to continue
to pursue such Appeal after the Closing Date, and, in the event that the
Appeal is successful in reducing the amount of Property Taxes payable with
respect to any such prior Tax Year, Seller shall be entitled to the full
amount of any rebate, refund or reduction (collectively, a "Refund")
resulting from the Appeal. Seller shall not be obligated to continue to
pursue any Appeal with respect to the Property, including, without
limitation, any Appeal that relates to a Tax Year during or after the Tax
Year in which Closing occurs.
(b) If such Appeal relates to the Tax Year in which the Closing occurs, then,
prior to the Closing, Seller shall notify Purchaser whether Seller desires
to continue to process the Appeal from and after the Closing Date. If
Seller fails to notify Purchaser of its election to continue the Appeal,
Seller will be deemed to have elected not to continue the Appeal from and
after the Closing Date and the provisions of Section 5.4.4(b)(2) below
shall apply.
(1) If Seller elects to continue the Appeal, then, from and after the Closing
Date, Seller agrees that it will continue, at Seller's sole cost and
expense, to reasonably process the Appeal to conclusion with the
applicable taxing authority (including any further appeals which Seller
deems reasonable to pursue). In the event that the Appeal is successful in
reducing the amount of Property Taxes payable with respect to the Tax Year
in which Closing occurs, then Purchaser and Seller shall share any Refund
on a pro rata basis (in accordance with the number of days in the Tax Year
of Closing that each held title to the Property) after first reimbursing
Seller for its actual, reasonable and documented third-party costs
(collectively, the "Third-Party Costs") incurred in connection with the
Appeal. If Third-Party Costs equal or exceed the amount of the Award, then
Seller shall be entitled to the full amount of the Award.
(2) If Seller does not elect to continue the Appeal, then, from and after the
Closing Date, Purchaser may continue, in Purchaser's sole discretion and
at Purchaser's sole cost and expense, to process the Appeal to conclusion
with the applicable taxing authority (including any further appeals which
Purchaser deems reasonable to pursue). In the event that the Appeal is
successful in reducing the amount of Property Taxes payable with respect
to the Tax Year in which Closing occurs, then Purchaser and Seller shall
share any Refund on a pro rata basis (in accordance with the number of
days in the Tax Year of Closing that each held title to the Property)
after first reimbursing each of Purchaser and Seller for their respective
Third-Party Costs incurred in connection with the Appeal. If Third-Party
Costs equal or exceed the amount of the Award, then the Award shall be
applied to such Third-Party Costs on a pro rata basis, with each of
Purchaser and Seller receiving a portion of the Award equal to the product
of (i) a fraction, the numerator of which is the respective party's
Third-Party Costs, and the denominator of which is the total of both
parties' Third-Party Costs, and (ii) the amount of the Award.
(c) For purposes of this paragraph, "Tax Year" shall mean each 12-month period
for which the applicable taxing authority assesses Property Taxes, which
may or may not be a calendar year.
5.4.5 Property Contracts. Purchaser shall assume at Closing the obligations
under the Property Contracts assumed by Purchaser, subject to proration of
operating expenses under Section 5.4.2.
5.4.6 Leases.
5.4.6.1 All collected rent (whether fixed monthly rentals, additional rentals,
escalation rentals, retroactive rentals, operating cost pass-throughs or other
sums and charges payable by Tenants under the Leases), income and expenses from
any portion of the Property shall be prorated as of the Closing Date (prorated
for any partial month). Purchaser shall receive all collected rent and income
attributable to dates from and after the Closing Date. Seller shall receive all
collected rent and income attributable to dates prior to the Closing Date.
Notwithstanding the foregoing, no prorations shall be made in relation to either
(a) non-delinquent rents which have not been collected as of the Closing Date,
or (b) delinquent rents existing, if any, as of the Closing Date (the foregoing
(a) and (b) referred to herein as the "Uncollected Rents"). In adjusting for
Uncollected Rents, no adjustments shall be made in Seller's favor for rents
which have accrued and are unpaid as of the Closing, but Purchaser shall pay
Seller such accrued Uncollected Rents as and when collected by Purchaser.
Purchaser agrees to bill Tenants of the Property for all Uncollected Rents and
to take reasonable actions to collect Uncollected Rents. After the Closing,
Seller shall continue to have the right, but not the obligation, in its own
name, to demand payment of and to collect Uncollected Rents owed to Seller by
any Tenant, which right shall include, without limitation, the right to continue
or commence legal actions or proceedings against any Tenant and the delivery of
the Leases Assignment shall not constitute a waiver by Seller of such right.
Purchaser agrees to cooperate with Seller in connection with all efforts by
Seller to collect such Uncollected Rents and to take all steps, whether before
or after the Closing Date, as may be necessary to carry out the intention of the
foregoing, including, without limitation, the delivery to Seller, within 7 days
after a written request, of any relevant books and records (including, without
limitation, rent statements, receipted bills and copies of tenant checks used in
payment of such rent), the execution of any and all consents or other documents,
and the undertaking of any act reasonably necessary for the collection of such
Uncollected Rents by Seller; provided, however, that Purchaser's obligation to
cooperate with Seller pursuant to this sentence shall not obligate Purchaser to
terminate any Tenant lease with an existing Tenant or evict 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").
Notwithstanding the foregoing, Seller may, in its sole discretion, transfer the
Tenant Security Deposit Balance to Purchaser, in Good Funds, at the Closing. Any
cash (or cash equivalents) held by Seller which constitute the Tenant Security
Deposit Balance shall be retained by Seller in exchange for the foregoing credit
against the Purchase Price and shall not be transferred by Seller pursuant to
this Contract (or any of the documents delivered at Closing), but the obligation
with respect to the Tenant Security Deposit Balance nonetheless shall be assumed
by Purchaser. The Tenant Security Deposit Balance shall not include any
non-refundable deposits or fees paid by Tenants to Seller, either pursuant to
the Leases or otherwise.
5.4.6.3 With respect to operating expenses, taxes, utility charges, other
operating cost pass-throughs, retroactive rental escalations, sums or charges
payable by Tenants under the Tenant Leases, to the extent that Seller has
received as of the Closing payments allocable to periods subsequent to Closing,
the same shall be properly prorated with an adjustment in favor of Purchaser,
and Purchaser shall reserve a credit therefor at Closing. With respect to any
payments received by Purchaser after the Closing allocable to Seller prior to
Closing, Purchaser shall promptly pay the same to Seller.
5.4.7 Existing Loan. On the Closing Date, Seller shall pay (which payment may be
made by Seller out of the proceeds of the Purchase Price) the outstanding
principal balance of the Note together with all interest accrued under the Note
prior to the Closing Date (the "Loan Payoff"). Purchaser shall pay all Lender
Fees (subject to reduction from the Purchase Price in accordance with Section
2.2). Any existing reserves, impounds and other accounts maintained in
connection with the Loan shall be released in Good Funds to Seller at the
Closing unless credited by Lender against the amount due from Seller under the
Note.
5.4.8 Insurance. No proration shall be made in relation to insurance premiums
and insurance policies will not be assigned to Purchaser.
5.4.9 Employees. All of Seller's and Seller's manager's on-site employees shall
have their employment at the Property terminated as of the Closing Date.
5.4.10 Closing Costs. Purchaser shall pay any transfer, sales, use, gross
receipts or similar taxes, any premiums or fees required to be paid by Purchaser
with respect to the Title Policy pursuant to Section 4.1, and one-half of the
customary closing costs of the Escrow Agent. Seller shall pay the base premium
for the Title Policy to the extent required by Section 4.1, all costs of
discharging the Mortgage and one-half of the customary closing costs of the
Escrow Agent.
5.4.11 Utility Contracts. If Seller has entered into an agreement for the
purchase of electricity, gas or other utility service for the Property or a
group of properties (including the Property) (a "Utility Contract"), or an
affiliate of Seller has entered into a Utility Contract, then, at the option of
Seller, (a) Purchaser either shall assume the Utility Contract with respect to
the Property, or (b) the reasonably calculated costs of the Utility Contract
attributable to the Property from and after the Closing shall be paid to Seller
at the Closing and Seller shall remain responsible for payments under the
Utility Contract.
5.4.12 Survival. The provisions of this Section 5.4 shall survive the Closing
and delivery of the Deed to Purchaser.
5.4.13 Possession. Possession of the Property, subject to the Leases, Property
Contracts which are not identified as Terminated Contracts during the
Feasibility Period (subject to the limitations of Section 3.6), and Permitted
Exceptions, shall be delivered to Purchaser at the Closing upon release from
escrow of all items to be delivered by Purchaser pursuant to Section 5.3,
including, without limitation, the Purchase Price. To the extent reasonably
available to Seller, originals or copies of the Leases and Property Contracts,
lease files, warranties, guaranties, operating manuals, keys to the property,
and Seller's books and records (other than proprietary information) regarding
the Property shall be made available to Purchaser at the Property after the
Closing.
5.5 Post Closing Adjustments. In general, and except as provided in this
Contract or the Closing Documents, Seller shall be entitled to all income, and
shall pay all expenses, relating to the operation of the Property for the period
prior to the Closing Date and Purchaser shall be entitled to all income, and
shall pay all expenses, relating to the operation of the Property for the period
commencing on and after the Closing Date. Purchaser or Seller may request that
Purchaser and Seller undertake to re-adjust any item on the Proration Schedule
(or any item omitted therefrom) in accordance with the provisions of Section 5.4
of this Contract; provided, however, that neither party shall have any
obligation to re-adjust any items (a) after the expiration of 60 days after
Closing, or (b) subject to such 60-day period, unless such items exceed
$5,000.00 in magnitude (either individually or in the aggregate). The provisions
of this Section 5.6 shall survive the Closing and delivery of the Deed to
Purchaser.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER
6.1 Seller's Representations. Except, in all cases, for any fact, information or
condition disclosed in the Title Documents, the Permitted Exceptions, the
Property Contracts, or the Materials, or which is otherwise known by Purchaser
prior to the Closing, Seller represents and warrants to Purchaser the following
(collectively, the "Seller's Representations") as of the Effective Date and as
of the Closing Date (provided that Purchaser's remedies if any such Seller's
Representations are untrue as of the Closing Date are limited to those set forth
in Section 8.1):
6.1.1 Seller is duly organized, validly existing and in good standing under the
laws of the state of its formation set forth in the initial paragraph of this
Contract; and, subject to Section 8.2.4, has or at the Closing shall have the
entity power and authority to sell and convey the Property and to execute the
documents to be executed by Seller and prior to the Closing will have taken as
applicable, all corporate, partnership, limited liability company or equivalent
entity actions required for the execution and delivery of this Contract, and the
consummation of the transactions contemplated by this Contract. The compliance
with or fulfillment of the terms and conditions hereof will not conflict with,
or result in a breach of, the terms, conditions or provisions of, or constitute
a default under, any contract to which Seller is a party or by which Seller is
otherwise bound, which conflict, breach or default would have a material adverse
affect on Seller's ability to consummate the transaction contemplated by this
Contract or on the Property. Subject to Section 8.2.4, this Contract is a valid,
binding and enforceable agreement against Seller in accordance with its terms;
6.1.2 Other than the Leases, the Property is not subject to any written lease
executed by Seller or, to Seller's knowledge, any other possessory interests of
any person;
6.1.3 Seller is not a "foreign person," as that term is used and defined in the
Internal Revenue Code, Section 1445, as amended;
6.1.4 Except for any actions by Seller to evict Tenants under the Leases, to
Seller's knowledge, there are no actions, proceedings, litigation or
governmental investigations or condemnation actions either pending or threatened
against the Property;
6.1.5 To Seller's knowledge, Seller has not received any written notice from a
governmental agency of any uncured material violations of any federal, state,
county or municipal law, ordinance, order, regulation or requirement affecting
the Property; and
6.1.6 To Seller's knowledge, Seller has not received any written notice of any
material default by Seller under any of the Property Contracts that will not be
terminated on the Closing Date.
6.1.7 To Seller's knowledge: (A) no hazardous or toxic materials or other
substances regulated by applicable federal or state environmental laws are
stored by Seller on, in or under the Property in quantities which violate
applicable laws governing such materials or substances, and (B) the Property is
not used by Seller for the storage, treatment, generation or manufacture of any
hazardous or toxic materials or other substances in a manner which would
constitute a violation of applicable federal or state environmental laws.
6.1.8 To Seller's knowledge, (A) the Rent Roll (as updated pursuant to Section
5.2.12) delivered to Purchaser as part of the Materials is accurate in all
material respects, (B) such Rent Roll references all of the Leases and tenancies
at the Property as of the Effective Date, and (C) such Leases have not been
materially modified or amended except as set forth in the Rent Roll.
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). Except to the
extent set forth in 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, other than Losses to the
extent arising solely from a breach of Seller's Representations. 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 6 months (the
"Survival Period"). Seller shall have no liability after the Survival Period
with respect to Seller's Representations contained herein except to the extent
that Purchaser has requested arbitration against Seller during the Survival
Period for breach of any of Seller's Representations. Under no circumstances
shall Seller be liable to Purchaser for more than $100,000 in any individual
instance or in the aggregate for all breaches of Seller's Representations, nor
shall Purchaser be entitled to bring any claim for a breach of Seller's
Representations unless the claim for damage (either in the aggregate or as to
any individual claim) by Purchaser exceeds $5,000. In the event that Seller
breaches any representation contained in Section 6.1 and Purchaser had knowledge
of such breach prior to the Closing Date, Purchaser shall be deemed to have
waived any right of recovery, and Seller shall not have any liability in
connection therewith.
6.4 Definition of Seller's Knowledge. Any representations and warranties made
"to the knowledge of Seller" shall not be deemed to imply any duty of inquiry.
For purposes of this Contract, the term Seller's "knowledge" shall mean and
refer only to actual knowledge of 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 Kimra Holcomb who is the Regional Property Manager
handling this Property (the "Regional Property Manager").
6.5 Representations And Warranties Of Purchaser. For the purpose of inducing
Seller to enter into this Contract and to consummate the sale and purchase of
the Property in accordance herewith, Purchaser represents and warrants to Seller
the following as of the Effective Date and as of the Closing Date:
6.5.1 Purchaser is a limited liability company duly organized, validly existing
and in good standing under the laws of Illinois.
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 6.5 shall survive the Closing and delivery
of the Deed to Purchaser.
ARTICLE 7
OPERATION OF THE PROPERTY
7.1 Leases and Property Contracts. During the period of time from the Effective
Date to the Closing Date, in the ordinary course of business Seller may enter
into new Property Contracts, new Leases, renew existing Leases or modify,
terminate or accept the surrender or forfeiture of any of the Leases, modify any
Property Contracts, or institute and prosecute any available remedies for
default under any Lease or Property Contract without first obtaining the written
consent of Purchaser; provided, however, Seller agrees that any such new
Property Contracts or any new or renewed Leases shall not have a term in excess
of 1 year (or such longer period of time for which such Property Contracts or
Leases are entered into by Seller in the ordinary course of its operation of the
Property) without the prior written consent of Purchaser, which consent shall
not be unreasonably withheld, conditioned or delayed. Notwithstanding the
foregoing, from and after the Effective Date, Seller shall use best efforts not
to enter into new Leases or renew existing Leases with terms longer than 13
months without first obtaining Purchaser's prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed; provided, however,
that Seller's failure to comply with the foregoing obligation shall not be a
default of Seller under this Contract, nor shall such failure by Seller entitle
Purchaser to any damages hereunder. Notwithstanding anything in this Section 7.1
to the contrary, from and after the expiration of the Feasibility Period, Seller
shall not, without Purchaser's prior written consent, enter into new Property
Contracts unless such Property Contracts are terminable upon 30 days prior
written notice. Seller agrees to cause the Regional Property Manager (or
Seller's counsel) to send, on the Effective Date, to the property manager of the
Property, via 1st class mail or electronic delivery (with a separate copy to
Purchaser), a notice regarding the operating restrictions contained in this
Section 7.1.
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.
7.4 Rent-Ready Units. Seller agrees that, at the Closing, Purchaser shall
receive a credit against the Purchase Price in an amount equal to the product of
(a) the number of Tenant Units on the date of the Closing that are vacant (and
have been vacant for more than 4 days prior to the Closing) and not in
Rent-Ready Condition, and (b) $300.00.
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING
8.1 Purchaser's Conditions to Closing. Purchaser's obligation to close
under this Contract, shall be subject to and conditioned upon the fulfillment
of each and all of the following conditions precedent:
8.1.1 All of the documents required to be delivered by Seller to
Purchaser at the Closing pursuant to the terms and conditions hereof shall
have been delivered;
8.1.2 Each of the representations, warranties and covenants of Seller
contained herein shall be true in all material respects as of the Closing
Date;
8.1.3 Seller shall have complied with, fulfilled and performed in all material
respects each of the covenants, terms and conditions to be complied with,
fulfilled or performed by Seller hereunder; and
8.1.4 Neither Seller nor Seller's general partner shall be a debtor in any
bankruptcy proceeding nor shall have been in the last 6 months a debtor in any
bankruptcy proceeding.
Notwithstanding anything to the contrary, there are no other conditions on
Purchaser's obligation to Close except as expressly set forth in this Section
8.1. If any condition set forth in Sections 8.1.1, 8.1.3 or 8.1.4 is not met,
Purchaser may (a) waive any of the foregoing conditions and proceed to Closing
on the Closing Date with no offset or deduction from the Purchase Price, or (b)
if such failure constitutes a default by Seller, exercise any of its remedies
pursuant to Section 10.2. If the condition set forth in Section 8.1.2 is not
met, Purchaser may, as its sole and exclusive remedy, (i) notify Seller of
Purchaser's election to terminate this Contract and receive a return of the
Deposit from the Escrow Agent, or (ii) waive such condition and proceed to
Closing on the Closing Date with no offset or deduction from the Purchase Price.
8.2 Seller's Conditions to Closing. Without limiting any of the rights of Seller
elsewhere provided for in this Contract, Seller's obligation to close with
respect to conveyance of the Property under this Contract shall be subject to
and conditioned upon the fulfillment of each and all of the following conditions
precedent:
8.2.1 All of the documents and funds required to be delivered by Purchaser to
Seller at the Closing pursuant to the terms and conditions hereof shall have
been delivered;
8.2.2 Each of the representations, warranties and covenants of
Purchaser contained herein shall be true in all material respects as of the
Closing Date;
8.2.3 Purchaser shall have complied with, fulfilled and performed in all
material respects each of the covenants, terms and conditions to be complied
with, fulfilled or performed by Purchaser hereunder; and
8.2.4 Seller shall have received all consents and approvals to the consummation
of the transactions contemplated hereby (a) of Seller's partners, members,
managers, shareholders or directors to the extent required by Seller's (or
Seller's affiliates') organizational documents, or (b) that are required by law.
8.2.5 [Intentionally deleted].
If any of the foregoing conditions to Seller's obligation to close with
respect to conveyance of the Property under this Contract are not met, Seller
may (a) waive any of the foregoing conditions and proceed to Closing on the
Closing Date, or (b) terminate this Contract, and, if such failure constitutes a
default by Purchaser, exercise any of its remedies under Section 10.1.
ARTICLE 9
BROKERAGE
9.1 Indemnity. Seller represents and warrants to Purchaser that it has dealt
only with CB Richard Ellis, having an address at 2415 E. Camelback Road, 1st
Floor, Phoenix, AZ 85016 ("Broker") in connection with this Contract. Seller and
Purchaser each represents and warrants to the other that, other than Broker, it
has not dealt with or utilized the services of any other real estate broker,
sales person or finder in connection with this Contract, and each party agrees
to indemnify, hold harmless, and, if requested in the sole and absolute
discretion of the indemnitee, defend (with counsel approved by the indemnitee)
the other party from and against all Losses relating to brokerage commissions
and finder's fees arising from or attributable to the acts or omissions of the
indemnifying party. The provisions of this Section 9.1 shall survive the
termination of this Contract, and if not so terminated, the Closing and delivery
of the Deed to Purchaser.
9.2 Broker Commission. 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 (or any other deposit or payment required of Purchaser
hereunder), (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, 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
reasonable, 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 $100,000 in aggregate, or (B) Purchaser may seek
specific performance of Seller's obligation to deliver the Deed pursuant to this
Contract (but not damages). Purchaser agrees that it shall promptly deliver to
Seller an assignment of all of Purchaser's right, title and interest in and to
(together with possession of) all plans, studies, surveys, reports, and other
materials paid for with the out-of-pocket expenses reimbursed by Seller pursuant
to the foregoing sentence. SELLER AND PURCHASER FURTHER AGREE THAT THIS SECTION
10.2 IS INTENDED TO AND DOES LIMIT THE AMOUNT OF DAMAGES DUE PURCHASER AND THE
REMEDIES AVAILABLE TO PURCHASER, AND SHALL BE PURCHASER'S EXCLUSIVE REMEDY
AGAINST SELLER, BOTH AT LAW AND IN EQUITY ARISING FROM OR RELATED TO A BREACH BY
SELLER OF ITS REPRESENTATIONS, WARRANTIES, OR COVENANTS OR ITS OBLIGATION TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS CONTRACT. UNDER NO
CIRCUMSTANCES MAY PURCHASER SEEK OR BE ENTITLED TO RECOVER ANY SPECIAL,
CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR INDIRECT DAMAGES, ALL OF WHICH PURCHASER
SPECIFICALLY WAIVES, FROM SELLER FOR ANY BREACH BY SELLER, OF ITS
REPRESENTATIONS, WARRANTIES OR COVENANTS OR ITS OBLIGATIONS UNDER THIS CONTRACT.
PURCHASER SPECIFICALLY WAIVES THE RIGHT TO FILE ANY LIS PENDENS OR ANY LIEN
AGAINST THE PROPERTY UNLESS AND UNTIL IT HAS IRREVOCABLY ELECTED TO SEEK
SPECIFIC PERFORMANCE OF THIS CONTRACT AND HAS FILED AN ACTION SEEKING SUCH
REMEDY.
ARTICLE 11
RISK OF LOSS OR CASUALTY
11.1 Major Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to Closing, and the cost of repair is more than
$500,000, then Seller shall have no obligation to repair such damage or
destruction and shall notify Purchaser in writing of such damage or destruction
(the "Damage Notice"). Within 10 days after Purchaser's receipt of the Damage
Notice, Purchaser may elect at its option to terminate this Contract by
delivering written notice to Seller. In the event Purchaser fails to terminate
this Contract within the foregoing 10-day period, this transaction shall be
closed in accordance with the terms of this Contract for the full Purchase Price
notwithstanding any such damage or destruction and Purchaser shall receive all
insurance proceeds pertaining thereto (plus a credit against the Purchase Price
in the amount of any deductible payable by Seller in connection therewith) at
Closing.
11.2 Minor Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to the Closing, and the cost of repair is less than
$500,000, this transaction shall be closed in accordance with the terms of this
Contract, notwithstanding the damage or destruction; provided, however, Seller
shall make such repairs to the extent of any recovery from insurance carried on
the Property if they can be reasonably effected before the Closing. Subject to
Section 11.3, if Seller is unable to effect such repairs, then Purchaser shall
receive all insurance proceeds pertaining thereto (plus a credit against the
Purchase Price in the amount of any deductible payable by Seller in connection
therewith) at Closing.
11.3 Repairs. To the extent that Seller elects to commence any repair,
replacement or restoration of the Property prior to Closing, then Seller shall
be entitled to receive and apply available insurance proceeds to any portion of
such repair, replacement or restoration completed or installed prior to Closing,
with Purchaser being responsible for completion of such repair, replacement or
restoration after Closing from the balance of any available insurance proceeds.
The provisions of this Section 11.3 shall survive the Closing and delivery of
the Deed to Purchaser.
ARTICLE 12
EMINENT DOMAIN
12.1 Eminent Domain. In the event that, at the time of Closing, any material
part of the Property is (or previously has been) acquired, or is about to be
acquired, by any governmental agency by the powers of eminent domain or transfer
in lieu thereof (or in the event that at such time there is any notice of any
such acquisition or intent to acquire by any such governmental agency),
Purchaser shall have the right, at Purchaser's option, to terminate this
Contract by giving written notice within 10 days after Purchaser's receipt from
Seller of notice of the occurrence of such event, and if Purchaser so terminates
this Contract shall recover the Deposit hereunder (subject to Purchaser's
obligation under Section 3.5.2 to return all Third-Party Reports and information
and Materials provided to Purchaser as a pre-condition to the return of the
Deposit). If Purchaser fails to terminate this Contract within such 10-day
period, this transaction shall be closed in accordance with the terms of this
Contract for the full Purchase Price and Purchaser shall receive the full
benefit of any condemnation award. It is expressly agreed between the parties
hereto that this section shall in no way apply to customary dedications for
public purposes which may be necessary for the development of the Property.
ARTICLE 13
MISCELLANEOUS
13.1 Binding Effect of Contract. This Contract shall not be binding on either
party until executed by both Purchaser and Seller. As provided in Section 2.3.5
and Section 9.3 above, neither the Escrow Agent's nor the Broker's execution of
this Contract shall be a 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, without Seller's consent, to one or more entities so long
as (a) Purchaser is an affiliate of the purchasing entity(ies) or the purchasing
entity is a limited liability company or limited partnership whose sole manager
or sole general partner is Jeffrey B. Kushen, and (b) Purchaser is not released
from its liability hereunder. As used herein, an affiliate is a person or entity
controlled by, under common control with, or controlling another person or
entity.
13.4 Binding Effect. Subject to Section 13.3, this Contract shall be binding
upon and inure to the benefit of Seller and Purchaser, and their respective
successors, heirs and permitted assigns.
13.5 Captions. The captions, headings, and arrangements used in this Contract
are for convenience only and do not in any way affect, limit, amplify, or modify
the terms and provisions hereof.
13.6 Number And Gender Of Words. Whenever herein the singular number is used,
the same shall include the plural where appropriate, and words of any gender
shall include each other gender where appropriate.
13.7 Notices. All notices, demands, requests and other communications required
or permitted hereunder shall be in writing, and shall be (a) personally
delivered with a written receipt of delivery; (b) sent by a nationally
recognized overnight delivery service requiring a written acknowledgement of
receipt or providing a certification of delivery or attempted delivery; (c) sent
by certified or registered mail, return receipt requested, or (d) sent by
confirmed facsimile transmission with an original copy thereof transmitted to
the recipient by one of the means described in subsections (a) through (c) no
later than 3 Business Days thereafter. All notices shall be deemed effective
when actually delivered as documented in a delivery receipt; provided, however,
that if the notice was sent by overnight courier or mail as aforesaid and is
affirmatively refused or cannot be delivered during customary business hours by
reason of the absence of a signatory to acknowledge receipt, or by reason of a
change of address with respect to which the addressor did not have either
knowledge or written notice delivered in accordance with this paragraph, then
the first attempted delivery shall be deemed to constitute delivery. Each party
shall be entitled to change its address for notices from time to time by
delivering to the other party notice thereof in the manner herein provided for
the delivery of notices. All notices shall be sent to the addressee at its
address set forth following its name below:
To Purchaser:
Jeffrey B. Kushen
120 Kenmore Avenue
Deerfield, IL 60015
Telephone: 847-607-1752
Facsimile: 847-607-1753
with copy to:
Jerrold M. Peven, Esq.
Schwartz Cooper Greenberger Krauss
180 N. LaSalle St., Suite 2700
Chicago, IL 60601
Telephone: 312-845-5411
Facsimile: 312-264-2463
To Seller:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Patrick Slavin and Kris Vercanteren
Telephone: 303-691-4340
Facsimile: 303-300-3282
And:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Mr. Harry Alcock
Telephone: 303-691-4344
Facsimile: 303-300-3282
with copy to:
Chad Asarch, Esq.
Vice President and Assistant General Counsel
AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Telephone: 303-691-4303
Facsimile: 303-300-3297
and a copy to:
Brownstein Hyatt & Farber, P.C.
410 17th Street, 22nd Floor
Denver, Colorado 80202
Attention: Gary M. Reiff, Esq.
Telephone: 303-223-1100
Facsimile: 303-223-1111
Any notice required hereunder to be delivered to the Escrow Agent shall be
delivered in accordance with above provisions as follows:
Stewart Title Guaranty Company
1980 Post Oak Boulevard, Suite 610
Houston, Texas 77056
Attention: Wendy Howell, National Commercial Closing Specialist
Telephone: 800-729-1906
Unless specifically required to be delivered to the Escrow Agent pursuant
to the terms of this Contract, no notice hereunder must be delivered to the
Escrow Agent in order to be effective so long as it is delivered to the other
party in accordance with the above provisions.
13.8 Governing Law And Venue. The laws of the State of Indiana shall govern the
validity, construction, enforcement, and interpretation of this Contract, unless
otherwise specified herein except for the conflict of laws provisions thereof.
Subject to Section 13.25, all claims, disputes and other matters in question
arising out of or relating to this Contract, or the breach thereof, shall be
decided by proceedings instituted and litigated in a court of competent
jurisdiction in the state in which the Property is situated, and the parties
hereto expressly consent to the venue and jurisdiction of such court.
13.9 Entire Agreement. This Contract embodies the entire Contract between the
parties hereto concerning the subject matter hereof and supersedes all prior
conversations, proposals, negotiations, understandings and Contracts, whether
written or oral.
13.10 Amendments. This Contract shall not be amended, altered, changed,
modified, supplemented or rescinded in any manner except by a written contract
executed by all of the parties; provided, however, that, (a) as provided in
Section 2.3.5 above, the signature of the Escrow Agent shall not be required as
to any amendment of this Contract other than an amendment of Section 2.3, and
(b) as provided in Section 9.3 above, the signature of the Broker shall not be
required as to any amendment of this Contract.
13.11 Severability. In the event that any part of this Contract shall be held to
be invalid or unenforceable by a court of competent jurisdiction, such provision
shall be reformed, and enforced to the maximum extent permitted by law. If such
provision cannot be reformed, it shall be severed from this Contract and the
remaining portions of this Contract shall be valid and enforceable.
13.12 Multiple Counterparts/Facsimile Signatures. This Contract may be executed
in a number of identical counterparts. This Contract may be executed by
facsimile signatures which shall be binding on the parties hereto, with original
signatures to be delivered as soon as reasonably practical thereafter.
13.13 Construction. No provision of this Contract shall be construed in favor
of, or against, any particular party by reason of any presumption with respect
to the drafting of this Contract; both parties, being represented by counsel,
having fully participated in the negotiation of this instrument.
13.14 Confidentiality. Purchaser shall not disclose the terms and conditions
contained in this Contract and shall keep the same confidential, provided that
Purchaser may disclose the terms and conditions of this Contract (a) as required
by law, (b) to consummate the terms of this Contract, or any financing relating
thereto, or (c) to Purchaser's or Seller's lenders, potential investors,
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, prospective investors and legal representatives, without Seller's prior
written authorization, which may be granted or denied in Seller's sole
discretion. Any prospective investors who are provided the terms of this
Contract or any information or Materials obtained by Purchaser, shall be
advised, in writing, of the confidential nature of such information and
Purchaser shall use its best efforts to insure that such prospective investors
treat such information as confidential in accordance with the terms of this
Contract and any other confidentiality agreement executed by Purchaser prior to
the Effective Date. 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. Notwithstanding
the provisions of Section 13.9, Purchaser agrees that the covenants,
restrictions and agreements of Purchaser contained in any confidentiality
agreement executed by Purchaser prior to the Effective Date shall survive the
execution of this Contract and shall not be superceded hereby.
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 South Carolina limited partnership, and Purchaser agrees that none of
Seller's Indemnified Parties shall have any personal liability under this
Contract or any document executed in connection with the transactions
contemplated by this Contract.
13.21 No Exclusive Negotiations. Seller shall have the right, at all times prior
to the expiration of the Feasibility Period, to solicit backup offers and enter
into discussions, negotiations, or any other communications concerning or
related to the sale of the Property with any third-party; provided, however,
that such communications are subject to the terms of this Contract, and that
Seller shall not enter into any contract or binding Contract with a third-party
for the sale of the Property unless such Contract is contingent on the
termination of this Contract without the Property having been conveyed to
Purchaser.
13.22 ADA Disclosure. Purchaser acknowledges that the Property may be subject to
the federal Americans With Disabilities Act (the "ADA") and the federal Fair
Housing Act (the "FHA"). The ADA requires, among other matters, that tenants
and/or owners of "public accommodations" remove barriers in order to make the
Property accessible to disabled persons and provide auxiliary aids and services
for hearing, vision or speech impaired persons. Seller makes no warranty,
representation or guarantee of any type or kind with respect to the Property's
compliance with the ADA or the FHA (or any similar state or local law), and
Seller expressly disclaims any such representation.
13.23 No Recording. Purchaser shall not cause or allow this Contract or any
contract or other document related hereto, nor any memorandum or other evidence
hereof, to be recorded or become a public record without Seller's prior written
consent, which consent may be withheld at Seller's sole discretion. If the
Purchaser records this Contract or any other memorandum or evidence thereof,
Purchaser shall be in default of its obligations under this Contract. Purchaser
hereby appoints the Seller as Purchaser's attorney-in-fact to prepare and record
any documents necessary to effect the nullification and release of the Contract
or other memorandum or evidence thereof from the public records. This
appointment shall be coupled with an interest and irrevocable.
13.24 Relationship of Parties. Purchaser and Seller acknowledge and agree that
the relationship established between the parties pursuant to this Contract is
only that of a seller and a purchaser of property. Neither Purchaser nor Seller
is, nor shall either hold itself out to be, the agent, employee, joint venturer
or partner of the other party.
13.25 Dispute Resolution. Any controversy, dispute, or claim of any nature
arising out of, in connection with, or in relation to the interpretation,
performance, enforcement or breach of this Contract (and any closing document
executed in connection herewith), including any claim based on contract, tort or
statute, shall be resolved at the written request of any party to this Contract
by binding arbitration. The arbitration shall be administered in accordance with
the then current Commercial Arbitration Rules of the American Arbitration
Association. Any matter to be settled by arbitration shall be submitted to the
American Arbitration Association in the state in which the Property is located.
The parties shall attempt to designate one arbitrator from the American
Arbitration Association. If they are unable to do so within 30 days after
written demand therefor, then the American Arbitration Association shall
designate an arbitrator. The arbitration shall be final and binding, and
enforceable in any court of competent jurisdiction. The arbitrator shall award
attorneys' fees (including those of in-house counsel) and costs to the
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 solicit any of Seller's
employees or any employees located at the Property (or any of Seller's
affiliates' employees located at any property owned by such affiliates) for
potential employment.
13.28 Survival. Except for (a) all of the provisions of this Article 13 (other
than Section 13.19, 13.21 and 13.23), and (b) any provision of this Contract
which expressly states that it shall so survive, and (c) any payment obligation
of Purchaser under this Contract (the foregoing (a), (b) and (c) referred to
herein as the "Survival Provisions"), none of the terms and provisions of this
Contract shall survive the termination of this Contract, and, if the Contract is
not so terminated, all of the terms and provisions of this Contract (other than
the Survival Provisions) shall be merged into the Closing documents and shall
not survive Closing.
13.29 Multiple Purchasers. As used in this Contract, the term "Purchaser" means
all entities acquiring any interest in the Property at the Closing, including,
without limitation, any assignee(s) of the original Purchaser pursuant to
Section 13.3 of this Contract. In the event that "Purchaser" has any obligations
or makes any covenants, representations or warranties under this Agreement, the
same shall be made jointly and severally by all entities being a Purchaser
hereunder. In the event that Seller receives notice from any entity being a
Purchaser hereunder, the same shall be deemed to constitute notice from all
entities being a Purchaser hereunder. In the event that any entity being a
Purchaser hereunder takes any action, breaches any obligation or otherwise acts
pursuant to the terms of this Contract, the same shall be deemed to be the
action of the other entity(ies) being a Purchaser hereunder and the action of
"Purchaser" under this Contract. In the event that Seller is required to give
notice or take action with respect to Purchaser under this Contract, notice to
any entity being a Purchaser hereunder or action with respect to any entity
being a Purchaser hereunder shall be a notice or action to all entities being a
Purchaser hereunder. In the event that any entity being a Purchaser hereunder
desires to bring an action or arbitration against Seller, such action must be
joined by all entities being a Purchaser hereunder in order to be effective. In
the event that there is any agreement by Seller to pay any amount pursuant to
this Contract to Purchaser under any circumstance, that amount shall be deemed
maximum aggregate amount to be paid to all parties being a Purchaser hereunder
and not an amount that can be paid to each party being a Purchaser hereunder. In
the event that Seller is required to return the 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.
14.2 Consent Agreement. Testing (the "Testing") has been performed at the
Property with respect to lead-based paint. Connor Environmental Services and
Engineering Assessments performed the Testing and reported its findings in the
Lead-Based Paint Inspection and Assessment Report dated October 3, 2003, a copy
of which has been provided to Purchaser (the "Report"). The Report certifies the
Property as free of (a) lead based hazards, (b) dust lead hazards and (c) soil
lead hazards. By execution hereof, Purchaser acknowledges receipt of a copy of
the Report, the Lead-Based Paint Disclosure Statement attached hereto as Exhibit
H, and acknowledges receipt of that certain Consent Agreement (the "Consent
Agreement") by and among the United States Environmental Protection Agency
(executed December 19, 2001), the United States Department of Housing and Urban
Development (executed January 2, 2002), and Apartment Investment and Management
Company ("AIMCO") (executed December 18, 2001). Because the Property has been
certified as free of (x) lead based hazards, (y) dust lead hazards and (z) soil
lead hazards, Seller is not required under the Consent Agreement to remediate or
abate any lead-based paint condition at the Property prior to the Closing.
Purchaser acknowledges and agrees that (1) after Closing, the Purchaser and the
Property shall be subject to the Consent Agreement and the provisions contained
herein related thereto and (2) that Purchaser shall not be deemed to be a third
party beneficiary to the Consent Agreement. The provisions of this Section 14.2
shall survive the termination of this Contract, and if not so terminated, the
Closing and delivery of the Deed to Purchaser.
[Remainder of Page Intentionally Left Blank]
NOW, THEREFORE, the parties hereto have executed this Contract as of the
date first set forth above.
Seller:
GEORGETOWN AIP II, L.P.,
a South Carolina limited partnership
By: AIP II Georgetown GP, L.L.C.,
a South Carolina limited liability
company,
its sole general partner
By: Angeles Income Properties Ltd. II,
a California limited partnership,
its sole member
By: Angeles Realty Corporation II,
a California corporation,
its managing general partner
By: /s/Harry Alcock
Name: Harry Alcock
Title: Executive Vice
President
Purchaser:
FREESTONE REALTY ADVISORS, LLC,
an Illinois limited liability company
By: /s/Jeffrey B. Kushen
Name: Jeffrey B. Kushen
Title: Managing Member
ESCROW AGENT SIGNATURE PAGE
The undersigned executes the Contract to which this signature page is
attached for the purpose of agreeing to the provisions of Section 2.3 of the
Contract, and hereby establishes November 26, 2003, as the date of opening of
escrow and designates 03160963 as the escrow number assigned to this escrow.
ESCROW AGENT:
STEWART TITLE GUARANTY COMPANY
By: /s/Wendy Howell
Name: Wendy Howell
Title: National Commercial Closing
Specialist
SCHEDULE 3.5
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:
cb richard ellis
By: /s/Sean Cunningham
Name: Sean Cunningham
Title: Senior Vice President
Exhibit 10.22
FIRST AMENDMENT TO
PURCHASE AND SALE CONTRACT
THIS FIRST AMENDMENT to Purchase and Sale Contract (this "First
Amendment"), is made as of the 9th day of January, 2004, by and between
GEORGETOWN AIP II, L.P., a South Carolina limited partnership ("Seller") and
FREESTONE REALTY ADVISORS, LLC, an Illinois limited liability company
("Purchaser").
WHEREAS, Seller and Purchaser entered into that certain Purchase and Sale
Contract dated November 25, 2003 (the "Contract"), for certain real property
situated in St. Joseph County, Indiana and more specifically described in the
Contract; and
WHEREAS, Seller and Purchaser desire to amend the Contract on the terms
and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants set forth in the
Contract and herein and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Seller and Purchaser agree to
amend the Contract as follows:
1. Extension of Feasibility Period. The Feasibility Period is hereby extended
until January 12, 2004.
2. Miscellaneous. The following provisions shall apply with respect to this
First Amendment:
(a) Except as modified herein, the Contract is in full force and effect and is
hereby ratified by Purchaser and Seller.
(b) Capitalized terms not defined herein shall have the same meaning as set
forth in the Contract.
(c) In the event of any conflict between the Contract and this First Amendment,
the terms and conditions of this First Amendment shall control.
(d) This First Amendment may be executed in counterparts, each of which (or any
combination of which) when signed by all of the parties shall be deemed an
original, but all of which when taken together shall constitute one agreement.
Executed copies hereof may be delivered by telecopier and upon receipt shall be
deemed originals and binding upon the parties hereto, and actual originals shall
be promptly delivered thereafter.
[signature page follows]
NOW, THEREFORE, the parties hereto have executed this First Amendment as
of the date first set forth above.
SELLER:
GEORGETOWN AIP II, L.P.,
a South Carolina limited partnership
By: AIP II Georgetown GP, L.L.C.,
a South Carolina limited liability company,
its sole general partner
By: Angeles Income Properties Ltd. II,
a California limited partnership,
its sole member
By: Angeles Realty Corporation II,
a California corporation,
its managing general partner
By: /s/Chad Asarch
Name: Chad Asarch
Title: Vice President
PURCHASER:
FREESTONE REALTY ADVISORS, LLC,
an Illinois limited liability company
By: /s/Jeffrey B. Kushen
Name: Jeffrey B. Kushen
Title: Manager
Exhibit 10.23
SECOND AMENDMENT TO
PURCHASE AND SALE CONTRACT
THIS SECOND AMENDMENT to Purchase and Sale Contract (this "Second
Amendment"), is made as of the 12th day of January, 2004, by and between
GEORGETOWN AIP II, L.P., a South Carolina limited partnership ("Seller") and
FREESTONE REALTY ADVISORS, LLC, an Illinois limited liability company
("Purchaser").
WHEREAS, Seller and Purchaser entered into that certain Purchase and Sale
Contract dated November 25, 2003, as amended by First Amendment to Purchase and
Sale Contract dated January 9, 2004 (as amended, the "Contract"), for certain
real property situated in St. Joseph County, Indiana and more specifically
described in the Contract; and
WHEREAS, Seller and Purchaser desire to amend the Contract on the terms
and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants set forth in the
Contract and herein and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Seller and Purchaser agree to
amend the Contract as follows:
1. Extension of Feasibility Period. The Feasibility Period is hereby extended
until January 13, 2004.
2. Miscellaneous. The following provisions shall apply with respect to this
Second Amendment:
(a) Except as modified herein, the Contract is in full force and effect and is
hereby ratified by Purchaser and Seller.
(b) Capitalized terms not defined herein shall have the same meaning as set
forth in the Contract.
(c) In the event of any conflict between the Contract and this Second Amendment,
the terms and conditions of this Second Amendment shall control.
(d) This Second Amendment may be executed in counterparts, each of which (or any
combination of which) when signed by all of the parties shall be deemed an
original, but all of which when taken together shall constitute one agreement.
Executed copies hereof may be delivered by telecopier and upon receipt shall be
deemed originals and binding upon the parties hereto, and actual originals shall
be promptly delivered thereafter.
[signature page follows]
NOW, THEREFORE, the parties hereto have executed this Second Amendment as
of the date first set forth above.
SELLER:
GEORGETOWN AIP II, L.P.,
a South Carolina limited partnership
By: AIP II Georgetown GP, L.L.C.,
a South Carolina limited liability company,
its sole general partner
By: Angeles Income Properties Ltd. II,
a California limited partnership,
its sole member
By: Angeles Realty Corporation II,
a California corporation,
its managing general partner
By: /s/Patrick F. Slavin
Name: Patrick F. Slavin
Title: Senior Vice President
PURCHASER:
FREESTONE REALTY ADVISORS, LLC,
an Illinois limited liability company
By: /s/Jeffrey B. Kushen
Name: Jeffrey B. Kushen
Title: Manager
Exhibit 10.24
THIRD AMENDMENT TO
PURCHASE AND SALE CONTRACT
THIS THIRD AMENDMENT to Purchase and Sale Contract (this "Third
Amendment"), is made as of the 13th day of January, 2004, by and between
GEORGETOWN AIP II, L.P., a South Carolina limited partnership ("Seller") and
FREESTONE REALTY ADVISORS, LLC, an Illinois limited liability company
("Purchaser").
WHEREAS, Seller and Purchaser entered into that certain Purchase and Sale
Contract dated November 25, 2003, as amended by First Amendment to Purchase and
Sale Contract dated January 9, 2004 and as further amended by Second Amendment
to Purchase and Sale Contract dated January 12, 2004 (as amended, the
"Contract"), for certain real property situated in St. Joseph County, Indiana
and more specifically described in the Contract; and
WHEREAS, Seller and Purchaser desire to amend the Contract on the terms
and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants set forth in the
Contract and herein and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Seller and Purchaser agree to
amend the Contract as follows:
1. Extension of Feasibility Period. Provided Purchaser has made the Extension
Deposit in accordance with Paragraph 2 below, the Feasibility Period is hereby
extended until January 23, 2004.
2. Extension Deposit. On or before January 14, 2004, Purchaser shall, in
consideration of the extension of the Feasibility Period, deliver to Escrow
Agent an extension deposit (the "Extension Deposit") of $55,250.00 by wire
transfer of Good Funds. The Extension Deposit shall be held and disbursed in
accordance with the escrow provisions set forth in Section 2.3 of the Contract.
In addition, the Extension Deposit shall be credited towards Purchaser's
obligation to deposit the Additional Deposit at the expiration of the
Feasibility Period (if Purchaser does not terminate the Contract in accordance
with Section 3.2 thereof). Upon deposit of the Extension Deposit, any and all
references in the Contract to the "Deposit" shall be deemed to include the
Extension Deposit.
3. Approval of Property. Purchaser hereby acknowledges and agrees that, with the
sole exception of the Outstanding Inspection Items (as defined below), it has
completed its review and inspection of the Property. Purchaser further
acknowledges and agrees that, except for the Outstanding Inspection Items, it
has approved all aspects of the Property and hereby waives its right to 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 (except to
the extent set forth in Purchaser's letter dated January 12, 2004 given in
accordance with Section 3.6 of the Contract), 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, except for the Outstanding Inspection Items, and except as
otherwise set forth in this Third Amendment, Purchaser's right to terminate the
Contract is permanently waived, the Deposit is non-refundable (except as
expressly set forth in the Contract or this Third Amendment), 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.
4. The Outstanding Inspection Items. Seller agrees that Purchaser shall have the
right to conclude its inspection and assessment of the Property with respect to
the items identified on Schedule 1 attached hereto and incorporated herein (the
"Outstanding Inspection Items"). Notwithstanding the foregoing, Purchaser's
Outstanding Inspection Items shall at all times be in compliance with all
requirements of the Contract, including, without limitation, Sections 3.3 and
3.4 thereof.
5. Termite Bond/Warranty. Seller agrees to use commercially reasonable efforts,
at no cost to Seller, to obtain a reinstatement and extension of the expired
termite bond for the Property previously obtained by Seller from its national
vendor. Seller makes no representations or warranties regarding its ability to
obtain the foregoing reinstatement and extension. Seller's failure to obtain a
reinstatement and extension of the termite bond shall not constitute a default
under the Contract.
6. Miscellaneous. The following provisions shall apply with respect to this
Third Amendment:
(a) Except as modified herein, the Contract is in full force and effect and is
hereby ratified by Purchaser and Seller.
(b) Capitalized terms not defined herein shall have the same meaning as set
forth in the Contract.
(c) In the event of any conflict between the Contract and this Third Amendment,
the terms and conditions of this Third Amendment shall control.
(d) This Third Amendment may be executed in counterparts, each of which (or any
combination of which) when signed by all of the parties shall be deemed an
original, but all of which when taken together shall constitute one agreement.
Executed copies hereof may be delivered by telecopier and upon receipt shall be
deemed originals and binding upon the parties hereto, and actual originals shall
be promptly delivered thereafter.
[signature page follows]
NOW, THEREFORE, the parties hereto have executed this Third Amendment as
of the date first set forth above.
SELLER:
GEORGETOWN AIP II, L.P.,
a South Carolina limited partnership
By: AIP II Georgetown GP, L.L.C.,
a South Carolina limited liability company,
its sole general partner
By: Angeles Income Properties Ltd. II,
a California limited partnership,
its sole member
By: Angeles Realty Corporation II,
a California corporation,
its managing general partner
By: /s/Chad Asarch
Name: Chad Asarch
Title: Vice President
PURCHASER:
FREESTONE REALTY ADVISORS, LLC,
an Illinois limited liability company
By: /s/Jeffrey B. Kushen
Name: Jeffrey B. Kushen
Title: Manager
Exhibit 10.25
REINSTATEMENT AND FOURTH AMENDMENT TO
PURCHASE AND SALE CONTRACT
THIS REINSTATEMENT AND FOURTH AMENDMENT to Purchase and Sale Contract
(this "Fourth Amendment") is made as of the 29th day of January, 2004, by and
between GEORGETOWN AIP II, L.P., a South Carolina limited partnership
("Seller"), and FREESTONE REALTY ADVISORS, LLC, an Illinois limited liability
company ("Purchaser").
WHEREAS, Seller and Purchaser entered into that certain Purchase and Sale
Contract dated November 25, 2003, as amended by First Amendment to Purchase and
Sale Contract dated January 9, 2004, as further amended by Second Amendment to
Purchase and Sale Contract dated January 12, 2004 and as further amended by
Third Amendment to Purchase and Sale Contract dated January 13, 2004 (as
amended, the "Contract"), for certain real property situated in St. Joseph
County, Indiana and more specifically described in the Contract;
WHEREAS, pursuant to Section 3.2 of the Contract, Purchaser terminated the
Contract by written notice dated January 23, 2004; and
WHEREAS, Seller and Purchaser desire to reinstate and amend the Contract
on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants set forth in the
Contract and herein and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Seller and Purchaser agree to
amend the Contract as follows:
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. Purchaser agrees that it shall deliver to Escrow Agent,
simultaneously with its execution of this Amendment, the Additional Deposit by
wire transfer of Good Funds.
2. Credit Against the Purchase Price. Seller acknowledges and agrees that, at
the Closing, Purchaser shall receive a $100,000.00 credit (the "Credit") against
the Purchase Price. The Credit is given in response to, and in complete
satisfaction of, any and all objections raised by Purchaser during the
Feasibility Period.
3. Waiver of Contingencies. Purchaser hereby agrees that it has completed its
review of the Property and agrees that it has approved all aspects of the
Property and hereby waives its right to object (pursuant to Sections 3.6 or 4.3
of the Contract or otherwise) to any matter concerning the Title Documents, the
Survey, the Property Contracts (except to the extent set forth in Purchaser's
notice dated January 12, 2004, which notice is subject to the terms and
conditions of Section 3.6 of the Contract), 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 the Deposit is non-refundable (except as expressly set forth in the
Contract), 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.
4. Closing Date. The first sentence of Section 5.1 of the Contract is hereby
amended and restated in its entirety as follows: "The Closing shall occur on
March 2, 2004 (the "Closing Date"), through an escrow with Escrow Agent, whereby
Seller, Purchaser and their attorneys need not be physically present at the
Closing and may deliver documents by overnight air courier or other means."
5. Removal of Abandoned House Boat. Seller agrees to use commercially reasonable
efforts to remove and dispose of, on or before the Closing Date, the abandoned
house boat located on the Property; provided, however, that Seller's compliance
with the foregoing shall not be a condition to Closing and Seller's failure to
comply with the foregoing obligation shall not be a default of Seller under the
Contract.
6. Miscellaneous. The following provisions shall apply with respect to this
Fourth Amendment:
(a) Except as modified herein, the Contract is in full force and effect and is
hereby ratified by Purchaser and Seller.
(b) Capitalized terms not defined herein shall have the same meaning as set
forth in the Contract.
(c) In the event of any conflict between the Contract and this Fourth Amendment,
the terms and conditions of this Fourth Amendment shall control.
(d) This Fourth Amendment may be executed in counterparts, each of which (or any
combination of which) when signed by all of the parties shall be deemed an
original, but all of which when taken together shall constitute one agreement.
Executed copies hereof may be delivered by telecopier and upon receipt shall be
deemed originals and binding upon the parties hereto, and actual originals shall
be promptly delivered thereafter.
[signature page follows]
NOW, THEREFORE, the parties hereto have executed this Fourth Amendment as
of the date first set forth above.
SELLER:
GEORGETOWN AIP II, L.P.,
a South Carolina limited partnership
By: AIP II Georgetown GP, L.L.C.,
a South Carolina limited liability company,
its sole general partner
By: Angeles Income Properties Ltd. II,
a California limited partnership,
its sole member
By: Angeles Realty Corporation II,
a California corporation,
its managing general partner
By: /s/Patrick F. Slavin
Name: Patrick F. Slavin
Title: Senior Vice President
PURCHASER:
FREESTONE REALTY ADVISORS, LLC,
an Illinois limited liability company
By: /s/Jeffrey B. Kushen
Name: Jeffrey B. Kushen
Title: Manager
Exhibit 10.26
ASSIGNMENT AND ASSUMPTION OF CONTRACT
WHEREAS, FREESTONE REALTY ADVISORS, LLC, an Illinois limited liability
company ("Assignor") as purchaser, and GEORGETOWN AIP II, L.P., a South Carolina
limited partnership, as seller, have entered into a certain Purchase and Sale
Contract dated as of November 25, 2003, as amended by a certain First Amendment
to Purchase and Sale Contract dated January 9, 2004, as further amended by a
certain Second Amendment to Purchase and Sale Contract dated as of January 12,
2004, and as further amended by a certain Third Amendment to Purchase and Sale
Contract dated as of January 13, 2004, and as further amended by a certain
Reinstatement and Fourth Amendment to Purchase and Sale Contract dated as of
January 29, 2004 (as amended, the "Contract"), regarding the purchase and sale
of certain real property located at 4315 Wimbleton Court, South Bend, Indiana,
which, together with all improvements situated thereon, is commonly known as
Georgetown Apartments; and
WHEREAS, in accordance with and subject to the provisions of subparagraph
21(a) of the Contract, Assignor desires to transfer, assign and convey all of
Assignor's right, title and interest in and to the Contract to Georgetown
Apartment Homes-FRLP, L.L.C., a Delaware limited liability company ("Assignee");
and
WHEREAS, Assignee has agreed to perform all of the obligations of Assignor
under the Contract.
NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars ($10.00), and other valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1. Assignor hereby transfers, assigns and conveys unto Assignee all of
Assignor's right, title and interest in and to the Contract;
provided, however, that Assignor acknowledges and agrees that the
aforesaid assignment shall not relieve Assignor from any liability
that Assignor may have under the Contract.
2. Assignee hereby covenants and agrees to perform all of the
obligations and duties of Assignor pursuant to the Contract and
hereby indemnifies and agrees to hold Assignor harmless from any and
all liabilities or obligations arising from the Contract or this
Assignment.
3. This Assignment embodies the entire agreement between the parties
and cannot be varied except by the written agreement of the parties.
4. All of the terms and conditions of this Assignment are hereby made
binding on the parties hereto their respective assigns and legal
representatives.
IN WITNESS WHEREOF, the parties hereto have duly executed this Assignment
as of this 11th day of February, 2004.
ASSIGNOR: ASSIGNEE:
FREESTONE REALTY ADVISORS, LLC, GEORGETOWN APARTMENT HOMES-FRIP,
an Illinois Limited liability L.L.C., a Delaware limited
company liability company
By: /s/Jeffrey B. Kushen By:FREESTONE REALTY ADVISORS, LLC
Jeffrey B. Kushen, Manager an Illinois limited liability
company, Manager
By: /s/Jeffrey B. Kushen
Jeffrey B. Kushen,
Manager