UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 13, 2004
CONSOLIDATED CAPITAL PROPERTIES IV
(Exact name of Registrant as specified in its charter)
California 0-09782 94-2768742
(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
(Issuer's telephone number)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Consolidated Capital Properties IV (the "Registrant") owns a 99% limited
partnership interest in Briar Bay Apartments Associates Ltd. ("Briar Bay"). On
September 13, 2004, Briar Bay entered into a contract with Victoria Real Estate
Management, Inc., to sell its investment property for a sales price of
approximately $20,352,000. The expected closing date for the transaction is
November 4, 2004 and is subject to extension options.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Contracts related to the sale of the property (1):
10.104 Purchase and Sale Contract between Briar Bay Associates, Ltd., a
Texas limited partnership, as Seller, and Victoria Real Estate
Management, Inc., a Florida corporation, as Purchaser, effective
September 13, 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.
CONSOLIDATED CAPITAL PROPERTIES IV
(a California Limited Partnership)
By: CONCAP EQUITIES, INC.
General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
Date: September 16, 2004
Exhibit 10.104
PURCHASE AND SALE CONTRACT
BETWEEN
BRIAR BAY APARTMENTS ASSOCIATES, LTD.,
a Texas limited partnership
AS SELLER
AND
VICTORIA REAL ESTATE MANAGEMENT, INC.,
a Florida corporation
AS PURCHASER
BRIAR BAY RACQUET CLUB APARTMENTS
ARTICLE 1 DEFINED TERMS...................................................1
ARTICLE 2 PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT....................14
2.1 Purchase and Sale. ...........................................14
2.2 Purchase Price and Deposit.....................................14
2.3 Escrow Provisions Regarding Deposit............................15
ARTICLE 3 FEASIBILITY PERIOD.............................................17
3.1 Feasibility Period.............................................17
3.2 Expiration of Feasibility Period...............................18
3.3 Conduct of Investigation.......................................19
3.4 Purchaser Indemnification......................................19
3.5 Property Materials.............................................20
3.6 Property Contracts.............................................21
3.7 Purchaser's Financing..........................................22
ARTICLE 4 TITLE..........................................................22
4.1 Title Documents................................................22
4.2 Survey.........................................................23
4.3 Objection and Response Process.................................23
4.4 Permitted Exceptions...........................................24
4.5 Existing Deed of Trust.........................................25
ARTICLE 5 CLOSING........................................................25
5.1 Closing Date...................................................25
5.2 Seller Closing Deliveries......................................26
5.3 Purchaser Closing Deliveries...................................28
5.4 Closing Prorations and Adjustments.............................30
5.5 Post Closing Adjustments.......................................36
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER.........36
6.1 Seller's Representations.......................................36
6.2 AS-IS..........................................................38
6.3 Survival of Seller's Representations...........................39
6.4 Definition of Seller's Knowledge...............................39
6.5 Representations And Warranties Of Purchaser....................40
ARTICLE 7 OPERATION OF THE PROPERTY......................................41
7.1 Leases and Property Contracts..................................41
7.2 General Operation of Property..................................41
7.3 Liens..........................................................42
ARTICLE 8 CONDITIONS PRECEDENT TO CLOSING................................42
8.1 Purchaser's Conditions to Closing..............................42
ARTICLE 9 BROKERAGE......................................................44
9.1 Indemnity......................................................44
9.2 Broker Commission. ...........................................45
9.3 Broker Signature Page..........................................45
ARTICLE 10 DEFAULTS AND REMEDIES..........................................45
10.1 Purchaser Default..............................................45
10.2 Seller Default.................................................46
ARTICLE 11 RISK OF LOSS OR CASUALTY.......................................47
11.1 Major Damage...................................................47
11.2 Minor Damage...................................................47
11.3 Repairs........................................................47
ARTICLE 12 EMINENT DOMAIN.................................................48
12.1 Eminent Domain.................................................48
ARTICLE 13 MISCELLANEOUS..................................................48
13.1 Binding Effect of Contract.....................................48
13.2 Exhibits And Schedules.........................................49
13.3 Assignability..................................................49
13.4 Binding Effect.................................................49
13.5 Captions.......................................................49
13.6 Number And Gender Of Words.....................................49
13.7 Notices........................................................49
13.8 Governing Law And Venue........................................52
13.9 Entire Agreement. ............................................52
13.10 Amendments.....................................................53
13.11 Severability...................................................53
13.12 Multiple Counterparts/Facsimile Signatures.....................53
13.13 Construction. ................................................53
13.14 Confidentiality................................................53
13.15 Time Of The Essence............................................54
13.16 Waiver.........................................................54
13.17 Attorneys Fees.................................................54
13.18 Time Periods...................................................54
13.19 1031 Exchange..................................................54
13.20 No Personal Liability of Officers, Trustees or Directors
of Seller's Partners. ........................................55
13.21 No Exclusive Negotiations......................................56
13.22 ADA Disclosure.................................................56
13.23 No Recording...................................................56
13.24 Relationship of Parties........................................56
13.25 Dispute Resolution. ..........................................57
13.26 AIMCO Marks....................................................57
13.27 Non-Solicitation of Employees..................................57
13.28 Survival.......................................................58
13.29 Multiple Purchasers............................................58
13.30 Radon Gas. ...................................................58
13.31 Energy Efficiency..............................................59
ARTICLE 14 LEAD-BASED PAINT DISCLOSURE....................................59
14.1 Disclosure.....................................................59
14.2 Consent Agreement..............................................59
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as of
the 13th day of September, 2004 (the "Effective Date") by and between BRIAR BAY
APARTMENTS ASSOCIATES, LTD., a Texas limited partnership, having an address at
4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237 ("Seller"),
and VICTORIA REAL ESTATE MANAGEMENT, INC., a Florida corporation having a
principal address at 14128 Southwest 93rd Lane, Miami, Florida 33186
("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 Miami-Dade County, Florida,
as more particularly described in Exhibit A attached hereto and made a part
hereof, and the improvements thereon, commonly known as BRIAR BAY RACQUET CLUB
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 5.4.14.
1.1.6 "Broker" shall have the meaning set forth in Section 9.1.
1.1.7 "Business Day" means any day other than a Saturday or Sunday or Federal
holiday or legal holiday in the States of Colorado, California, or Florida, or
any day on which Lender is not open for business.
1.1.8 "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.
1.1.9 "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.
1.1.10......"Code" shall have the meaning set forth in Section 2.3.6.
1.1.11......"Consent Agreement" shall have the meaning set forth in
Section 14.2.
1.1.12......"Consultants" shall have the meaning set forth in Section 3.1.
1.1.13......"Damage Notice" shall have the meaning set forth in Section 11.1.
1.1.14......"Deed" shall have the meaning set forth in Section 5.2.1.
1.1.15......"Deed of Trust" shall have the meaning set forth in Section 4.5.
1.1.16......"Deposit" means, to the extent actually deposited by Purchaser with
Escrow Agent, the Initial Deposit and the Additional Deposit.
1.1.17......"Escrow Agent" shall have the meaning set forth in Section 2.2.1.
1.1.18......"Excluded Permits" means those Permits which, under applicable law,
are nontransferable and such other Permits, if any, as may be designated as
Excluded Permits on Schedule 1.1.18.
1.1.19......Intentionally Omitted.
1.1.20......"Feasibility Period" shall have the meaning set forth in
Section 3.1.
1.1.21......"FHA" shall have the meaning set forth in Section 13.22.
1.1.22......"Final Response Deadline" shall have the meaning set forth in
Section 4.3.
1.1.23......Intentionally Omitted.
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 Florida 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, assignee
of Lehman Brothers Holdings, Inc., d/b/a Lehman Capital, a Division of Lehman
Brothers Holdings, Inc., a Delaware 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
Deed of Trust, any amounts of interest charged by Lender for the period from the
Closing Date to the permitted prepayment date, the amount of the Lender Fees to
be determined as of the Closing Date.
1.1.34......"Loan" means the indebtedness owing to Lender evidenced by the
Note.
1.1.35......"Loan Payoff" shall have the meaning set forth in Section 5.4.7.
1.1.36......"Losses" shall have the meaning set forth in Section 3.4.1.
1.1.37......"Materials" shall have the meaning set forth in Section 3.5.
1.1.38......"Miscellaneous Property Assets" means all contract rights, leases,
concessions, warranties, plans, drawings and other items of intangible personal
property relating to the ownership or operation of the Property and owned by
Seller, excluding, however, (a) receivables, (b) Property Contracts, (c) Leases,
(d) Permits, (e) cash or other funds, whether in petty cash or house "banks," or
on deposit in bank accounts or in transit for deposit, (f) refunds, rebates or
other claims, or any interest thereon, for periods or events occurring prior to
the Closing Date, (g) utility and similar deposits, (h) insurance or other
prepaid items, (i) Seller's proprietary books and records, or (j) any right,
title or interest in or to the AIMCO Marks. The term "Miscellaneous Property
Assets" also shall include all of Seller's rights, if any, in and to the name
"BRIAR BAY RACQUET CLUB 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).
1.1.39......"New Survey Matters" shall have the meaning set forth in Section
4.2.
1.1.40......"New Title Matters" shall have the meaning set forth in Section
4.1.
1.1.41......"Non-Refundable Deposit Amount" shall have the meaning set forth
in Section 2.2.1.
1.1.42......"Note" means that certain Multifamily Note in the original
principal amount of $3,500,000.00, dated November 30, 1995, executed by
Seller and payable to the order of Lehman Brothers Holdings, Inc., d/b/a
Lehman Capital, a Division of Lehman Brothers Holdings, Inc., as assigned to
Lender.
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......"Prior Survey" shall have the meaning set forth in Section 4.2.
1.1.49......"Prior Title Documents" shall have the meaning set forth in
Section 4.1.
1.1.50......"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.
1.1.51......"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
assignable by their terms or applicable law (including any contracts that are
assignable with the consent of the applicable vendor), 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.
1.1.52......"Property Contracts Notice" shall have the meaning set forth in
Section 3.6.
1.1.53......"Property Manager" means the current property manager of the
Property.
1.1.54......"Property Taxes" shall have the meaning set forth in
Section 5.4.14.
1.1.55......"Proration Schedule" shall have the meaning set forth in
Section 5.4.1.
1.1.56......"Purchase Price" means the consideration to be paid by Purchaser to
Seller for the purchase of the Property pursuant to Section 2.2.
1.1.57......"Records Disposal Notice" shall have the meaning set forth in
Section 5.4.12.
1.1.58......"Records Hold Period" shall have the meaning set forth in
Section 5.4.12.
1.1.59......"Refund" shall have the meaning set forth in Section 5.4.14.1.
1.1.60......"Regional Property Manager" shall have the meaning set forth in
Section 6.4.
1.1.61......Intentionally Omitted.
1.1.62......"Report" shall have the meaning set forth in Section 14.2.
1.1.63......"Required Assignment Consent" shall have the meaning set forth in
Section 3.6.
1.1.64......"Response Deadline" shall have the meaning set forth in
Section 4.3.
1.1.65......"Response Notice" shall have the meaning set forth in Section 4.3.
1.1.66......"Seller's Indemnified Parties" shall have the meaning set forth
in Section 3.4.1.
1.1.67......"Seller's Property-Related Files and Records" shall have the meaning
set forth in Section 5.4.12.
1.1.68......"Seller's Representations" shall have the meaning set forth in
Section 6.1.
1.1.69......"Survey" shall have the meaning ascribed thereto in Section 4.2.
1.1.70......"Survival Period" shall have the meaning set forth in Section 6.3.
1.1.71......"Survival Provisions" shall have the meaning set forth in Section
13.28.
1.1.72......"Tax Year" shall have the meaning set forth in Section 5.4.14.3.
1.1.73......"Tenant" means any person or entity entitled to occupy any portion
of the Property under a Lease.
1.1.74......"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.
1.1.75......"Tenant Security Deposit Balance" shall have the meaning set
forth in Section 5.4.6.2.
1.1.76......"Terminated Contracts" shall have the meaning set forth in
Section 3.6.
1.1.77......"Testing" shall have the meaning set forth in Section 14.2.
1.1.78......"Third-Party Costs" shall have the meaning set forth in
Section 5.4.14.2(a).
1.1.79......"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.
1.1.80......Intentionally Omitted.
1.1.81......"Title Documents" shall have the meaning set forth in Section
4.1.
1.1.82......"Title Insurer" shall have the meaning set forth in Section 2.2.1.
1.1.83......"Title Policy" shall have the meaning set forth in Section 4.1.
1.1.84......"Uncollected Rents" shall have the meaning set forth in Section
5.4.6.1.
1.1.85......"Updated Survey" shall have the meaning set forth in Section 4.2.
1.1.86......"Updated Title Commitment" shall have the meaning ascribed
thereto in Section 4.1.
1.1.87......"Updated Title Documents" shall have the meaning set forth in
Section 4.1.
1.1.88......"Utility Contract" shall have the meaning set forth in Section
5.4.11.
1.1.89......"Vendor Terminations" shall have the meaning set forth in Section
5.2.5.
ARTICLE 2...
PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT
2.1 Purchase and Sale. Seller agrees to sell and convey the Property to
Purchaser and Purchaser agrees to purchase the Property from Seller, all in
accordance with the terms and conditions set forth in this Contract.
2.2 Purchase Price and Deposit. The total purchase price ("Purchase Price") for
the Property shall be an amount equal to Twenty Million Three Hundred Fifty One
Thousand and Five Hundred Dollars ($20,351,500.00) less the Lender Fees, which
amount shall be paid by Purchaser, as follows:
2.2.1 On the Effective Date, Purchaser shall deliver to First American Title
Insurance Company, c/o Robin E. Webb, Transaction Manager, 550 S. Hope Street,
Suite 1950, Los Angeles, CA 90071, (213) 271-1705 ("Escrow Agent" or "Title
Insurer") an initial deposit (the "Initial Deposit") of $250,000.00 by wire
transfer of immediately available funds ("Good Funds"), and such $250,000.00
Initial Deposit amount (the "Non-Refundable Deposit Amount") shall become
immediately non-refundable upon delivery to Escrow Agent other than if the
Closing does not occur due to a Seller Default as provided for in Section 10.2.
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 $750,000.00 by
wire transfer of Good Funds. The Additional Deposit shall be held and disbursed
in accordance with the escrow provisions set forth in Section 2.3.
2.2.3 Intentionally Omitted.
2.2.4 The balance of the Purchase Price for the Property shall be paid to and
received by Escrow Agent by wire transfer of Good Funds no later than 11:00 a.m.
(in the time zone in which Escrow Agent is located) on the Closing Date (or such
earlier time as required by Seller's lender).
2.3 Escrow Provisions Regarding Deposit.
2.3.1 Escrow Agent shall hold the Deposit and make delivery of the Deposit to
the party entitled thereto under the terms of this Contract. Escrow Agent shall
invest the Deposit in such short-term, high-grade securities, interest-bearing
bank accounts, money market funds or accounts, bank certificates of deposit or
bank repurchase contracts as Escrow Agent, in its discretion, deems suitable,
and all interest and income thereon shall become part of the Deposit and shall
be remitted to the party entitled to the Deposit pursuant to this Contract.
2.3.2 Escrow Agent shall hold the Deposit until the earlier occurrence of (i)
the Closing Date, at which time the Deposit (including the Non-Refundable
Deposit Amount) 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 or the Non-Refundable Deposit Amount portion, 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 that portion of the Deposit to
which Purchaser is entitled to receive). 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 7 days after the Effective Date (the "Feasibility Period"),
Purchaser, and its agents, contractors, engineers, surveyors, attorneys, and
employees (collectively, "Consultants") shall have the right from time to time
to enter onto the Property:
3.1.1 To conduct and make any and all customary studies, tests, examinations,
inquiries, and inspections, or investigations (collectively, the "Inspections")
of or concerning the Property (including, without limitation, engineering and
feasibility studies, evaluation of drainage and flood plain, soil tests for
bearing capacity and percolation and surveys, including topographical surveys);
3.1.2 To confirm any and all matters which Purchaser may reasonably desire to
confirm with respect to the Property;
3.1.3 To ascertain and confirm the suitability of the Property for
Purchaser's intended use of the Property; and
3.1.4 To review the Materials at Purchaser's sole cost and expense.
3.2 Expiration of Feasibility Period. If the results of any of the matters
referred to in Section 3.1 appear unsatisfactory to Purchaser for any reason or
if Purchaser elects not to proceed with the transaction contemplated by this
Contract for any other reason, or for no reason whatsoever, in Purchaser's sole
and absolute discretion, then Purchaser shall have the right to terminate this
Contract by giving written notice to that effect to Seller and Escrow Agent on
or before 5:00 p.m. (in the time zone in which the Escrow Agent is located) on
the date of expiration of the Feasibility Period. If Purchaser exercises such
right to terminate, this Contract shall terminate and be of no further force and
effect, subject to and except for Purchaser's liability pursuant to Section 3.3
and any other provision of this Contract which survives such termination, and
Escrow Agent shall forthwith return the Initial Deposit (less the Non-Refundable
Deposit Amount) 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 that portion of the Initial
Deposit to which Purchaser is entitled to receive). If Purchaser fails to
provide Seller with written notice of termination prior to the expiration of the
Feasibility Period in strict accordance with the notice provisions of this
Contract, Purchaser's right to terminate under this Section 3.2 shall be
permanently waived and this Contract shall remain in full force and effect, the
Deposit (including both the Initial Deposit and, when delivered in accordance
with Section 2.2.2, the Additional Deposit) shall be non-refundable, and
Purchaser's obligation to purchase the Property shall be non-contingent and
unconditional except only for satisfaction of the conditions expressly stated in
Section 8.1.
3.3 Conduct of Investigation. Purchaser shall not permit any mechanic's or
materialmen's liens or any other liens to attach to the Property by reason of
the performance of any work or the purchase of any materials by Purchaser or any
other party in connection with any Inspections conducted by or for Purchaser.
Purchaser shall give notice to Seller a reasonable time prior to entry onto the
Property and shall permit Seller to have a representative present during all
Inspections conducted at the Property. Purchaser shall conduct and shall cause
its Consultants to conduct any and all Inspections in such a manner as to avoid
any disruption or disturbance of Tenants' occupancy of the Property. All
information made available by Seller to Purchaser in accordance with this
Contract or obtained by Purchaser in the course of its Inspections shall be
treated as confidential information by Purchaser, and, prior to the purchase of
the Property by Purchaser, Purchaser shall use its best efforts to prevent its
Consultants from divulging such information to any unrelated third parties
except as reasonably necessary to third parties engaged by Purchaser for the
limited purpose of analyzing and investigating such information for the purpose
of consummating the transaction contemplated by this Contract. The provisions of
this Section 3.3 shall survive the termination of this Contract, and if not so
terminated shall survive (except for the confidentiality provisions of this
Section 3.3) the Closing and delivery of the Deed to Purchaser.
3.4 Purchaser Indemnification.
3.4.1 Purchaser shall indemnify, hold harmless and, if requested by Seller (in
Seller's sole discretion), defend (with counsel approved by Seller) Seller,
together with Seller's affiliates, parent and subsidiary entities, successors,
assigns, partners, managers, members, employees, officers, directors, trustees,
shareholders, counsel, representatives, agents, Property Manager, Regional
Property Manager, and AIMCO (collectively, including Seller, "Seller's
Indemnified Parties"), from and against any and all damages, mechanics' liens,
liabilities, losses, demands, actions, causes of action, claims, costs and
expenses (including reasonable attorneys' fees, including the cost of in-house
counsel and appeals) (collectively, "Losses") arising from or related to
Purchaser's or its Consultant's entry onto the Property, and any Inspections or
other matters performed by Purchaser with respect to the Property during the
Feasibility Period or otherwise.
3.4.2 Notwithstanding anything in this Contract to the contrary, Seller shall
have the right, without limitation, to disapprove any and all entries, surveys,
tests (including, without limitation, a Phase II environmental study of the
Property), investigations and other matters that in Seller's reasonable judgment
could result in any injury to the Property or breach of any contract, or expose
Seller to any Losses or violation of applicable law, or otherwise adversely
affect the Property or Seller's interest therein. Purchaser shall use best
efforts to minimize disruption to Tenants in connection with Purchaser's or its
Consultants' activities pursuant to this Section. No consent by the Seller to
any such activity shall be deemed to constitute a waiver by Seller or assumption
of liability or risk by Seller. Purchaser hereby agrees to restore, at
Purchaser's sole cost and expense, the Property to the same condition existing
immediately prior to Purchaser's exercise of its rights pursuant to this Article
3. Purchaser shall maintain and cause its third party consultants to maintain
(a) casualty insurance and comprehensive public liability insurance with
coverages of not less than $1,000,000.00 for injury or death to any one 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 one (1) day 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 1-day period, Seller may deliver some or all of the
Materials to Purchaser, or make the same available to Purchaser on a secure web
site (Purchaser agrees that any item to be delivered by Seller under this
Contract shall be deemed delivered to the extent available to Purchaser on such
secured web site). To the extent that Purchaser determines that any of the
Materials have not been made available or delivered to Purchaser pursuant to
this Section 3.5.1, Purchaser shall notify Seller and Seller shall use
commercially reasonable efforts to deliver the same to Purchaser within 5
Business Days after such notification is received by Seller; provided, however,
that under no circumstances will the Feasibility Period be extended and
Purchaser's sole remedy will be to terminate this Contract pursuant to Section
3.2.
3.5.2 In providing such information and Materials to Purchaser, other than
Seller's Representations, Seller makes no representation or warranty, express,
written, oral, statutory, or implied, and all such representations and
warranties are hereby expressly excluded and disclaimed. Any information and
Materials provided by Seller to Purchaser under the terms of this Contract is
for informational purposes only and, together with all Third-Party Reports,
shall be returned by Purchaser to Seller as a condition to return of the Deposit
to Purchaser (if Purchaser is otherwise entitled to such Deposit pursuant to the
terms of this Contract) if this Contract is terminated for any reason. Purchaser
shall not in any way be entitled to rely upon the accuracy of such information
and Materials. Purchaser recognizes and agrees that the Materials and other
documents and information delivered or made available by Seller pursuant to this
Contract may not be complete or constitute all of such documents which are in
Seller's possession or control, but are those that are readily available to
Seller after reasonable inquiry to ascertain their availability. Purchaser
understands that, although Seller will use commercially reasonable efforts to
locate and make available the Materials and other documents required to be
delivered or made available by Seller pursuant to this Contract, Purchaser will
not rely on such Materials or other documents as being a complete and accurate
source of information with respect to the Property, and will instead in all
instances rely exclusively on its own Inspections and Consultants with respect
to all matters which it deems relevant to its decision to acquire, own and
operate the Property.
3.5.3 The provisions of this Section 3.5 shall survive the Closing and delivery
of the Deed to Purchaser.
3.6 Property Contracts. On or before the expiration of the Feasibility Period,
Purchaser may deliver written notice to Seller (the "Property Contracts Notice")
specifying any Property Contracts 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. To the extent that any Property
Contract to be assumed by Purchaser (including any Property Contracts that,
because of advance notice requirements, will be temporarily assumed by Purchaser
pending the effective date of termination after the Closing Date) is assignable
but requires the applicable vendor to consent to the assignment or assumption of
the Property Contract by Seller to Purchaser, then, prior to the Closing,
Purchaser shall be responsible for obtaining from each applicable vendor a
consent (each a "Required Assignment Consent") to the assignment of the Property
Contract by Seller to Purchaser (and the assumption by Purchaser of all
obligations under such Property Contract), Purchaser shall indemnify, hold
harmless and, if requested by Seller (in Seller's sole discretion), defend (with
counsel approved by Seller) Seller's Indemnified Parties from and against any
and all Losses arising from or related to Purchaser's failure to obtain any
Required Assignment Consent.
3.7 Purchaser's Financing. Purchaser assumes full responsibility to obtain
the funds required for settlement, and Purchaser's acquisition of such funds
shall not be a contingency or condition to the Closing.
3.8 Inventory of Fixtures and Tangible Personal Property. During the Feasibility
Period, Seller will generate and deliver to Purchaser an inventory of Fixtures
and Tangible Personal Property located within the management office (and
including a list of maintenance vehicles and equipment) to be conveyed to
Purchaser pursuant to this Contract, but such inventory will not include any
Fixtures and Tangible Personal Property located within the units which are
leased at the Property. On or before the expiration of the Feasibility Period,
Purchaser shall be responsible for (a) reviewing the inventory of Fixtures and
Tangible Personal Property, (b) inspecting the Property for accuracy of such
inventory, and (c) inspecting the Tenant units at the Property to determine the
Fixtures and Tangible Personal Property located therein.
ARTICLE 4...
TITLE
4.1 Title Documents. Prior to the Effective Date, Seller caused to be delivered
to Purchaser a copy of a title commitment number FA-C-7704 dated as of April 14,
2004 issued by Title Insurer (the "Prior Title Commitment"), together with
copies of all instruments identified as exceptions therein (the "Prior Title
Exceptions"). The Prior Title Commitment and the Prior Title Exceptions are
hereinafter collectively referred to as the "Prior Title Documents". Purchaser
acknowledges and agrees that delivery of the Prior Title Documents is subject to
Section 3.5.2. Purchaser acknowledges receipt of the Prior Title Documents and
agrees that it has approved all of the Prior Title Documents. On the Effective
Date, Seller shall cause to be delivered to Purchaser an updated title
commitment ("Updated 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
that were not identified as exceptions in the Prior Title Commitment (together
with the Updated Title Commitment, referred to herein as the "Updated Title
Documents"). The Prior Title Documents and the Updated Title Documents are
hereinafter collectively referred to herein as the "Title Documents". Purchaser
shall be responsible for payment of the premium for the Title Policy and all
other costs relating to procurement of the Title Commitment, the Title Policy,
and any requested endorsements. Any new material matters in the Updated Title
Documents that were not disclosed in the Prior Title Documents are hereinafter
referred to as the "New Title Matters".
4.2 Survey. Prior to the Effective Date, Seller caused to be delivered to
Purchaser a copy of that certain survey dated October 3, 1995, prepared by
Milton R. Gill of American Surveying Company of Tampa, Inc., with respect to the
Property (the "Prior Survey"). Purchaser acknowledges receipt of the Prior
Survey and agrees that it has approved the Prior Survey. Purchaser acknowledges
and agrees that delivery of the Prior 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 Prior Survey be updated), Purchaser may cause to be prepared such new
or updated survey (the "Updated Survey", and together with the Prior Survey,
referred to herein as the "Survey") for the Property, to be delivered to
Purchaser and Seller no later than 30 days after the Effective Date. 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. Any
new matters in the Updated Survey that were not disclosed in the Prior Survey
are hereinafter referred to as the "New Survey Matters". Purchaser acknowledges
that it has no right to object to any New Survey Matters.
4.3 Objection and Response Process. On or before the date which is three (3)
days after the Effective Date (the "Objection Deadline"), Purchaser shall give
written notice (the "Objection Notice") to the attorneys for Seller of any
material New Title Matters to which Purchaser objects (the "Objections").
Purchaser acknowledges that it has no right to object to any matters in the
Prior Title Documents, the Prior Survey, or any New Survey Matters, nor to any
New Title Matters that are not material. 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 Updated Title Documents. On or before six (6) days after the Effective Date
(the "Response Deadline"), Seller may, in Seller's sole discretion, give
Purchaser notice (the "Response Notice") of those Objections which Seller is
willing to cure, if any. Seller shall be entitled to reasonable adjournments of
the Closing Date to cure the Objections. If Seller fails to deliver a Response
Notice by the Response Deadline, Seller shall be deemed to have elected not to
cure or otherwise resolve any matter set forth in the Objection Notice. If
Purchaser is dissatisfied with the Response Notice, Purchaser may, as its
exclusive remedy, elect by written notice given to Seller on or before the
expiration of the Feasibility Period (the "Final Response Deadline") either (a)
to accept the Updated Title Documents with resolution, if any, of the Objections
as set forth in the Response Notice (or if no Response Notice is tendered,
without any resolution of the Objections) and without any reduction or abatement
of the Purchase Price, or (b) to terminate this Contract, in which event the
Initial Deposit (less the Non-Refundable Deposit Amount) 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 that portion of the Initial Deposit to which
Purchaser is entitled to receive. 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 Updated Title Documents, subject only to resolution, if
any, of the Objections as set forth in the Response Notice (or if no Response
Notice is tendered, without any resolution of the Objections).
4.4 Permitted Exceptions. The Deed delivered pursuant to this Contract
shall be subject to the following, all of which shall be deemed "Permitted
Exceptions":
4.4.1 All matters shown in the Title Documents and the Survey, other than (a)
those Objections, if any, which Seller has agreed to cure pursuant to the
Response Notice under Section 4.3, (b) mechanics' liens and taxes due and
payable with respect to the period preceding Closing, (c) the standard exception
regarding the rights of parties in possession which shall be limited to those
parties in possession pursuant to the Leases, and (d) the standard exception
pertaining to taxes which shall be limited to taxes and assessments payable in
the year in which the Closing occurs and subsequent taxes and assessments;
4.4.2 All Leases;
4.4.3 Intentionally Omitted;
4.4.4 Applicable zoning and governmental regulations and ordinances;
4.4.5 Any defects in or objections to title to the Property, or title
exceptions or encumbrances, arising by, through or under Purchaser; and
4.4.6 The terms and conditions of this Contract.
4.5 Existing Deed of Trust. It is understood and agreed that, whether or not
Purchaser gives an Objection Notice with respect thereto, any deeds of trust
and/or mortgages (including any and all mortgages which secure the Note) against
the Property (whether one or more, the "Deed of Trust") shall not be deemed
Permitted Exceptions, whether Purchaser gives written notice of such or not, and
shall be paid off, satisfied, discharged and/or cured by Seller at Closing,
provided that the Lender Fees due in connection with the Loan Payoff shall be
paid by Purchaser.
ARTICLE 5...
CLOSING
5.1 Closing Date. The Closing shall occur 45 days following the expiration of
the Feasibility Period (the "Closing Date") through an escrow with Escrow Agent,
whereby the Seller, Purchaser and their attorneys need not be physically present
at the Closing and may deliver documents by overnight air courier or other
means. Notwithstanding the foregoing to the contrary, Seller shall have the
option, by delivering written notice to Purchaser to extend the Closing Date to
the last Business Day of the month in which the Closing Date otherwise would
occur pursuant to the preceding sentence, or to such other date (either in the
same month or the next) as Seller reasonably determines is desirable in
connection with the Loan Payoff. Further, the Closing Date may be extended
without penalty at the option of Seller to a date not later than 30 days
following the Closing Date specified in the first sentence of this paragraph
above (or, if applicable, as extended by Seller pursuant to the second sentence
of this paragraph) to satisfy a condition to be satisfied by Seller, or such
later date as is mutually acceptable to Seller and Purchaser.
5.2 Seller Closing Deliveries. No later than 1 Business Day prior to the
Closing Date, Seller shall deliver to Escrow Agent, each of the following
items:
5.2.1 Special Warranty Deed (the "Deed") in the form attached as Exhibit B to
Purchaser, subject to the Permitted Exceptions.
5.2.2 A Bill of Sale in the form attached as Exhibit C.
5.2.3 A General Assignment in the form attached as Exhibit D (the "General
Assignment").
5.2.4 An Assignment of Leases and Security Deposits in the form attached as
Exhibit E (the "Leases Assignment").
5.2.5 A letter in the form attached hereto as Exhibit F prepared by Purchaser
and countersigned by Seller to each of the vendors under the Terminated
Contracts informing them of the termination of such Terminated Contract as of
the Closing Date (subject to any delay in the effectiveness of such termination
pursuant to the express terms of each applicable Terminated Contract) (the
"Vendor Terminations").
5.2.6 A closing statement executed by Seller.
5.2.7 A title affidavit or at Seller's option an indemnity, as applicable, in
the customary form reasonably acceptable to Seller to enable Title Insurer to
delete the standard exceptions to the title insurance policy set forth in this
Contract (other than matters constituting any Permitted Exceptions and matters
which are to be completed or performed post-Closing) to be issued pursuant to
the Title Commitment; provided that such affidavit does not subject Seller to
any greater liability, or impose any additional obligations, other than as set
forth in this Contract.
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......A rent roll for the Property (subject to Section 3.5.2) listing the
move-in date, monthly base rent payable, lease expiration date and unapplied
security deposit for each Lease (the "Rent Roll"); provided, however, that the
content of such Rent Roll shall in no event expand or modify the conditions to
Purchaser's obligation to close as specified under Section 8.1.
5.3 Purchaser Closing Deliveries. No later than 1 Business Day prior to the
Closing Date (except for the balance of the Purchase Price which is to be
delivered at the time specified in Section 2.2.4), Purchaser shall deliver to
the Escrow Agent (for disbursement to Seller upon the Closing) the following
items with respect to the Property being conveyed at such Closing:
5.3.1 The full Purchase Price (with credit for the Deposit), plus or minus the
adjustments or prorations required by this Contract.
5.3.2 A title affidavit or at Purchaser's option an indemnity pertaining to
Purchaser's activity on the Property prior to Closing, in the customary form
reasonably acceptable to Purchaser to enable Title Insurer to delete the
standard exceptions to the title insurance policy set forth in this Contract
(other than matters constituting any Permitted Exceptions and matters which are
to be completed or performed post-Closing) to be issued pursuant to the Title
Commitment; provided that such affidavit does not subject Purchaser to any
greater liability, or impose any additional obligations, other than as set forth
in this Contract.
5.3.3 Any declaration or other statement which may be required to be submitted
to the local assessor with respect to the terms of the sale of the Property.
5.3.4 A closing statement executed by Purchaser.
5.3.5 A countersigned counterpart of the General Assignment.
5.3.6 A countersigned counterpart of the Leases Assignment.
5.3.7 Notification letters to all Tenants prepared and executed by Purchaser in
the form attached hereto as Exhibit G.
5.3.8 The Vendor Terminations (Purchaser shall be solely responsible for
identifying each of the Terminated Contracts (subject to the terms and
conditions of Section 3.6) and addressing and preparing each of the Vendor
Terminations for execution by Purchaser and Seller).
5.3.9 Any cancellation fees or penalties due to any vendor under any Terminated
Contract as a result of the termination thereof.
5.3.10......Resolutions, certificates of good standing, and such other
organizational documents as Title Insurer shall reasonably require evidencing
Purchaser's authority to consummate this transaction.
5.3.11......Intentionally Omitted.
5.3.12......The Lender Fees (subject to reduction from the Purchase Price in
accordance with Section 2.2).
5.4 Closing Prorations and Adjustments.
5.4.1 General. All normal and customarily proratable items, including, without
limitation, collected rents, operating expenses, personal property taxes, other
operating expenses and fees, shall be prorated as of the Closing Date, Seller
being charged or credited, as appropriate, for all of same attributable to the
period up to the Closing Date (and credited for any amounts paid by Seller
attributable to the period on or after the Closing Date, if assumed by
Purchaser) and Purchaser being responsible for, and credited or charged, as the
case may be, for all of same attributable to the period on and after the Closing
Date. Seller shall prepare a proration schedule (the "Proration Schedule") of
the adjustments described in this Section 5.4 prior to Closing. Such adjustments
shall be paid by Purchaser to Seller (if the prorations result in a net credit
to Seller) or by Seller to Purchaser (if the prorations result in a net credit
to Purchaser), by increasing or reducing the cash to be paid by Purchaser at
Closing.
5.4.2 Operating Expenses. All of the operating, maintenance, taxes (other than
real estate taxes, such as rental taxes), and other expenses incurred in
operating the Property that Seller customarily pays, and any other costs
incurred in the ordinary course of business for the management and operation of
the Property, shall be prorated on an accrual basis. Seller shall pay all such
expenses that accrue prior to Closing and Purchaser shall pay all such expenses
that accrue from and after the Closing Date.
5.4.3 Utilities. The final readings and final billings for utilities will be
made if possible as of the Closing Date, in which case Seller shall pay all such
bills as of the Closing Date and no proration shall be made at the Closing with
respect to utility bills. Otherwise, a proration shall be made based upon the
parties' reasonable good faith estimate and a readjustment made within 30 days
after the Closing, if necessary. Seller shall be entitled to the return of any
deposit(s) posted by it with any utility company, and Seller shall notify each
utility company serving the Property to terminate Seller's account, effective as
of noon on the Closing Date.
5.4.4 Real Estate Taxes. Any real estate ad valorem or similar taxes for the
Property, or any installment of assessments payable in installments which
installment is payable in the calendar year of Closing, shall be prorated to the
date of Closing, based upon actual days involved. The proration of real property
taxes or installments of assessments shall be based upon the assessed valuation
and tax rate figures (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 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. Notwithstanding the foregoing, if the Appeal (as
hereinafter defined) with respect to the Property Taxes (as hereinafter defined)
results in a reduction of the assessed valuation or tax rate figures upon which
the proration of real property taxes or installments of assessments was based,
then Purchaser and Seller shall re-adjust the proration of any real estate ad
valorem or similar taxes for the Property based upon such reduction of the
assessed valuation or tax rate figures. The provisions of this Section 5.4.4
shall survive the Closing and delivery of the Deed to Purchaser.
5.4.5 Property Contracts. Purchaser shall assume at Closing the obligations
under the Property Contracts assumed by Purchaser; however, operating expenses
shall be prorated 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").
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 mortgage, sales, use, gross
receipts or similar taxes, the cost of recording any instruments required to
discharge any liens or encumbrances against the Property, any premiums or fees
required to be paid by Purchaser with respect to the Title Policy pursuant to
Section 4.1, one-half of the customary closing costs of the Escrow Agent, and,
the deed and documentary stamps and Miami-Dade sur-tax attributable to
$201,500.00 of the Purchase Price. Seller shall pay any deed documentary stamps
or taxes and the Miami-Dade sur-tax attributable to $20,150,000.00 of the
Purchase Price, and one-half of the customary closing costs of the Escrow Agent.
5.4.11......Intentionally Omitted.
5.4.12......Possession. Possession of the Property, subject to the Leases,
Property Contracts which are not identified as Terminated Contracts during the
Feasibility Period (subject to the limitations of Section 3.6), and Permitted
Exceptions, shall be delivered to Purchaser at the Closing upon release from
escrow of all items to be delivered by Purchaser pursuant to Section 5.3,
including, without limitation, the Purchase Price. To the extent reasonably
available to Seller, originals or copies of the Leases and Property Contracts,
lease files, warranties, guaranties, operating manuals, keys to the property,
and Seller's books and records (other than proprietary information)
(collectively, "Seller's Property-Related Files and Records") regarding the
Property shall be made available to Purchaser at the Property after the Closing.
Purchaser agrees, for a period of not less than 2 years after the Closing
("Records Hold Period"), to (a) provide and allow Seller reasonable access to
Seller's Property-Related Files and Records for purposes of inspection and
copying thereof, and (b) reasonably maintain and preserve Seller's
Property-Related Files and Records. If at any time after the Records Hold
Period, Purchaser desires to dispose of Seller's Property-Related Files and
Records, Purchaser must first provide Seller prior written notice (the "Records
Disposal Notice"), Seller shall have a period of 30 days after receipt of the
Records Disposal Notice to enter the Property (or such other location that such
records are then stored) and remove or copy those of Seller's Property-Related
Files and Records that Seller desires to retain, Purchaser agrees (i) to include
the covenants of this Section 5.4.12 pertaining to Seller's Property-Related
Files and Records in any management contract for the Property (and to bind the
manager thereunder to such covenants), and (ii) to bind any future purchaser of
the Property to the covenants of this Section 5.4.12 pertaining to Seller's
Property-Related Files and Records; provided, however, if the tenant units at
the Property are converted into condominium units, Purchaser will not be
required to bind the individual purchasers of such condominium units to the
covenants of this Section 5.4.12 pertaining to Seller's Property-Related Files
and Records. Purchaser shall indemnify, hold harmless and, if requested by
Seller (in Seller's sole discretion), defend (with counsel approved by Seller)
Seller's Indemnified Parties from and against any and all Losses arising from or
related to Purchaser's failure to comply with the provisions of this Section
5.4.12.
5.4.13......Survival. The provisions of this Section 5.4 shall survive the
Closing and delivery of the Deed to Purchaser.
5.4.14......Tax Appeals. Purchaser acknowledges that Seller may have filed an
appeal (the "Appeal") with respect to real estate ad valorem or other similar
property taxes applicable to the Property (the "Property Taxes").
5.4.14.1....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.
5.4.14.2....If such Appeal relates to the Tax Year in which 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 5.4.14.2(b) shall apply.
(a) 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 Refund, then Seller shall be entitled to
the full amount of the Refund.
(b) If Seller does not elect to continue the
Appeal, then, from and after the Closing Date, Purchaser agrees that it will
continue, at Purchaser's sole cost and expense, to reasonably 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 Refund, then the Refund shall be applied to such Third-Party Costs
on a pro rata basis, with each of Purchaser and Seller receiving a portion of
the Refund 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 Refund.
5.4.14.3 For purposes of this Section 5.4.14, "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.
5.5 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 (subject to the Property Taxes
re-adjustment provisions in Section 5.4.4) 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;
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, the Rent Roll is accurate in all material
respects; and
6.1.8 To Seller's knowledge, the Property Manager is personally involved in the
day-to-day operations of the Property.
6.2 AS-IS. Except for Seller's Representations, the Property is expressly
purchased and sold "AS IS," "WHERE IS," and "WITH ALL FAULTS." The Purchase
Price and the terms and conditions set forth herein are the result of
arm's-length bargaining between entities familiar with transactions of this
kind, and said price, terms and conditions reflect the fact that Purchaser shall
have the benefit of, and is not relying upon, any information provided by Seller
or Broker or statements, representations or warranties, express or implied, made
by or enforceable directly against Seller or Broker, including, without
limitation, any relating to the value of the Property, the physical or
environmental condition of the Property, any state, federal, county or local
law, ordinance, order or permit; or the suitability, compliance or lack of
compliance of the Property with any regulation, or any other attribute or matter
of or relating to the Property (other than any covenants of title contained in
the Deed conveying the Property and Seller's Representations). Purchaser agrees
that Seller shall not be responsible or liable to Purchaser for any defects,
errors or omissions, or on account of any conditions affecting the Property.
Purchaser, its successors and assigns, and anyone claiming by, through or under
Purchaser, hereby fully releases Seller's Indemnified Parties from, and
irrevocably waives its right to maintain, any and all claims and causes of
action that it or they may now have or hereafter acquire against Seller's
Indemnified Parties with respect to any and all Losses arising from or related
to any defects, errors, omissions or other conditions affecting the Property.
Purchaser represents and warrants that, as of the date hereof and as of the
Closing Date, it has and shall have reviewed and conducted such independent
analyses, studies (including, without limitation, environmental studies and
analyses concerning the presence of lead, asbestos, PCBs and radon in and about
the Property), reports, investigations and inspections as it deems appropriate
in connection with the Property. If Seller provides or has provided any
documents, summaries, opinions or work product of consultants, surveyors,
architects, engineers, title companies, governmental authorities or any other
person or entity with respect to the Property, including, without limitation,
the offering prepared by Broker, Purchaser and Seller agree that Seller has done
so or shall do so only for the convenience of both parties, Purchaser shall not
rely thereon and the reliance by Purchaser upon any such documents, summaries,
opinions or work product shall not create or give rise to any liability of or
against Seller's Indemnified Parties. Purchaser shall rely only upon any title
insurance obtained by Purchaser with respect to title to the Property. Purchaser
acknowledges and agrees that no representation has been made and no
responsibility is assumed by Seller with respect to current and future
applicable zoning or building code requirements or the compliance of the
Property with any other laws, rules, ordinances or regulations, the financial
earning capacity or expense history of the Property, the continuation of
contracts, continued occupancy levels of the Property, or any part thereof, or
the continued occupancy by tenants of any Leases or, without limiting any of the
foregoing, occupancy at Closing. Prior to Closing, Seller shall have the right,
but not the obligation, to enforce its rights against any and all Property
occupants, guests or tenants. Purchaser agrees that the departure or removal,
prior to Closing, of any of such guests, occupants or tenants shall not be the
basis for, nor shall it give rise to, any claim on the part of Purchaser, nor
shall it affect the obligations of Purchaser under this Contract in any manner
whatsoever; and Purchaser shall close title and accept delivery of the Deed with
or without such tenants in possession and without any allowance or reduction in
the Purchase Price under this Contract. Purchaser hereby releases Seller from
any and all claims and liabilities relating to the foregoing matters. The
provisions of this Section 6.2 shall survive the Closing and delivery of the
Deed to Purchaser.
6.3 Survival of Seller's Representations. Seller and Purchaser agree that
Seller's Representations shall survive Closing for a period of 6 months (the
"Survival Period"). Seller shall have no liability after the Survival Period
with respect to Seller's Representations contained herein except to the extent
that Purchaser has requested arbitration against Seller during the Survival
Period for breach of any of Seller's Representations. Under no circumstances
shall Seller be liable to Purchaser for more than $50,000 in any individual
instance or in the aggregate for all breaches of Seller's Representations, nor
shall Purchaser be entitled to bring any claim for a breach of Seller's
Representations unless the claim for damage (either in the aggregate or as to
any individual claim) by Purchaser exceeds $5,000. In the event that Seller
breaches any representation contained in Section 6.1 and Purchaser had knowledge
of such breach prior to the Closing Date, Purchaser shall be deemed to have
waived any right of recovery, and Seller shall not have any liability in
connection therewith.
6.4 Definition of Seller's Knowledge. Any representations and warranties made
"to the knowledge of Seller" shall not be deemed to imply any duty of inquiry.
For purposes of this Contract, the term Seller's "knowledge" shall mean and
refer only to actual knowledge of the Designated Representative of the Seller
and shall not be construed to refer to the knowledge of any other partner,
officer, director, agent, employee or representative of the Seller, or any
affiliate of the Seller, or to impose upon such Designated Representative any
duty to investigate the matter to which such actual knowledge or the absence
thereof pertains, or to impose upon such Designated Representative any
individual personal liability. As used herein, the term Designated
Representative shall refer to Raul Marrero who is the Regional Property Manager
handling this Property (the "Regional Property Manager") and the Property
Manager.
6.5 Representations And Warranties Of Purchaser. For the purpose of inducing
Seller to enter into this Contract and to consummate the sale and purchase of
the Property in accordance herewith, Purchaser represents and warrants to Seller
the following as of the Effective Date and as of the Closing Date:
6.5.1 Purchaser is a Florida corporation duly organized and in good standing in
the state of its formation.
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.
7.2 General Operation of Property. Except as specifically set forth in this
Article 7, Seller shall operate the Property after the Effective Date in the
ordinary course of business, and except as necessary in the Seller's sole
discretion to address (a) any life or safety issue at the Property or (b) any
other matter which in Seller's reasonable discretion materially adversely
affecting the use, operation or value of the Property, Seller will not make any
material alterations to the Property or remove any material Fixtures and
Tangible Personal Property without the prior written consent of Purchaser which
consent shall not be unreasonably withheld, denied or delayed.
7.3 Liens. Other than utility easements and temporary construction easements
granted by Seller in the ordinary course of business, Seller covenants that it
will not voluntarily create or cause any lien or encumbrance to attach to the
Property between the Effective Date and the Closing Date (other than Leases and
Property Contracts as provided in Section 7.1) unless Purchaser approves such
lien or encumbrance, which approval shall not be unreasonably withheld or
delayed. If Purchaser approves any such subsequent lien or encumbrance, the same
shall be deemed a Permitted Encumbrance for all purposes hereunder.
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING
8.1 Purchaser's Conditions to Closing. Purchaser's obligation to close
under this Contract, shall be subject to and conditioned upon the fulfillment
of each and all of the following conditions precedent:
8.1.1 All of the documents required to be delivered by Seller to Purchaser at
the Closing pursuant to the terms and conditions hereof shall have been
delivered;
8.1.2 Each of Seller's Representations 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 Purchaser agrees that it will not (nor will any of its affiliates)
purchase from Seller (or any of Seller's affiliates) any of the following
properties: (a) The Apartments, located in Omaha, Nebraska, (b) Citadel
Apartments, located in El Paso, Texas, (c) Lake Forest Apartments, located in
Omaha Nebraska, and (d) Nob Hill Villa Apartments, located in Nashville,
Tennessee. Purchaser also acknowledges that neither it nor any of its affiliates
have purchased any properties from Seller (or Seller's affiliates) in the last
six (6) months. Purchaser acknowledges that the foregoing covenant and
acknowledgement are required to verify and confirm that Seller (and its
affiliates) remain in compliance with their organizational documents for
consents in connection with the sale of their properties.
If any of the foregoing conditions to Seller's obligation to close with
respect to conveyance of the Property under this Contract are not met, Seller
may (a) waive any of the foregoing conditions and proceed to Closing on the
Closing Date, or (b) terminate this Contract, and, if such failure constitutes a
default by Purchaser, exercise any of its remedies under Section 10.1.
ARTICLE 9
BROKERAGE
9.1 Indemnity. Seller represents and warrants to Purchaser that it has dealt
only with Mr. Sean Cunningham of CB Richard Ellis, 2415 E. Camelback Road,
Phoenix, Arizona 85016-4290 ("Broker") in connection with this Contract.
Purchaser represents and warrants to Seller that it has dealt only with Fortune
Realty Partners ("Purchaser's Broker") as Purchaser's Broker. Seller and
Purchaser each represents and warrants to the other that, other than Broker and
Purchaser's Broker, it has not dealt with or utilized the services of any other
real estate broker, sales person or finder in connection with this Contract, and
each party agrees to indemnify, hold harmless, and, if requested in the sole and
absolute discretion of the indemnitee, defend (with counsel approved by the
indemnitee) the other party from and against all Losses relating to brokerage
commissions and finder's fees arising from or attributable to the acts or
omissions of the indemnifying party. Further, Purchaser agrees that it will
disclose all matters related to the Purchaser's Broker's Commission (as
hereinafter defined) to its lender and others, as required by law. 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. If the Closing occurs,
Seller agrees to pay Purchaser's Broker a commission in the amount of
$201,500.00 through the Closing Purchase Price proceeds ("Purchaser's Broker's
Commission"). Seller shall not be obligated to pay the Purchaser's Broker's
Commission unless and until the Closing occurs. Neither Broker nor Purchaser's
Broker shall 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 to Broker 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 Initial Deposit or Additional 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 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
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 $20,000 in aggregate, or (B) Purchaser may seek specific performance of
Seller's obligation to deliver the Deed pursuant to this Contract (but not
damages). Purchaser agrees that it shall promptly deliver to Seller an
assignment of all of Purchaser's right, title and interest in and to (together
with possession of) all plans, studies, surveys, reports, and other materials
paid for with the out-of-pocket expenses reimbursed by Seller pursuant to the
foregoing sentence. SELLER AND PURCHASER FURTHER AGREE THAT THIS SECTION 10.2 IS
INTENDED TO AND DOES LIMIT THE AMOUNT OF DAMAGES DUE PURCHASER AND THE REMEDIES
AVAILABLE TO PURCHASER, AND SHALL BE PURCHASER'S EXCLUSIVE REMEDY AGAINST
SELLER, BOTH AT LAW AND IN EQUITY ARISING FROM OR RELATED TO A BREACH BY SELLER
OF ITS REPRESENTATIONS, WARRANTIES, OR COVENANTS OR ITS OBLIGATION TO CONSUMMATE
THE TRANSACTIONS CONTEMPLATED BY THIS CONTRACT. UNDER NO CIRCUMSTANCES MAY
PURCHASER SEEK OR BE ENTITLED TO RECOVER ANY SPECIAL, CONSEQUENTIAL, PUNITIVE,
SPECULATIVE OR INDIRECT DAMAGES, ALL OF WHICH PURCHASER SPECIFICALLY WAIVES,
FROM SELLER FOR ANY BREACH BY SELLER, OF ITS REPRESENTATIONS, WARRANTIES OR
COVENANTS OR ITS OBLIGATIONS UNDER THIS CONTRACT. PURCHASER SPECIFICALLY WAIVES
THE RIGHT TO FILE ANY LIS PENDENS OR ANY LIEN AGAINST THE PROPERTY UNLESS AND
UNTIL IT HAS IRREVOCABLY ELECTED TO SEEK SPECIFIC PERFORMANCE OF THIS CONTRACT
AND HAS FILED AN ACTION SEEKING SUCH REMEDY.
ARTICLE 11
RISK OF LOSS OR CASUALTY
11.1 Major Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to Closing, and the cost of repair is more than
$300,000, then Seller shall have no obligation to repair such damage or
destruction and shall notify Purchaser in writing of such damage or destruction
(the "Damage Notice"). Within 10 days after Purchaser's receipt of the Damage
Notice, Purchaser may elect at its option to terminate this Contract by
delivering written notice to Seller. In the event Purchaser fails to terminate
this Contract within the foregoing 10-day period, this transaction shall be
closed in accordance with the terms of this Contract for the full Purchase Price
notwithstanding any such damage or destruction and Purchaser shall receive all
insurance proceeds pertaining thereto (plus a credit against the Purchase Price
in the amount of any deductible payable by Seller in connection therewith) at
Closing.
11.2 Minor Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to the Closing, and the cost of repair is less than
$300,000, this transaction shall be closed in accordance with the terms of this
Contract, notwithstanding the damage or destruction; provided, however, Seller
shall make such repairs to the extent of any recovery from insurance carried on
the Property if they can be reasonably effected before the Closing. Subject to
Section 11.3, if Seller is unable to effect such repairs, then Purchaser shall
receive all insurance proceeds pertaining thereto (plus a credit against the
Purchase Price in the amount of any deductible payable by Seller in connection
therewith) at Closing.
11.3 Repairs. To the extent that Seller elects to commence any repair,
replacement or restoration of the Property prior to Closing, then Seller shall
be entitled to receive and apply available insurance proceeds to any portion of
such repair, replacement or restoration completed or installed prior to Closing,
with Purchaser being responsible for completion of such repair, replacement or
restoration after Closing from the balance of any available insurance proceeds.
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 to one or more entities so long as (a) Purchaser is an
affiliate of the purchasing entity(ies), (b) Purchaser is not released from its
liability hereunder, (c) Purchaser provides written notice to Seller of any
proposed assignment no later than 10 days prior to the Closing Date, and (d)
Seller consents thereto (which consent shall not be unreasonably withheld or
delayed). As used herein, an affiliate is a person or entity controlled by,
under common control with, or controlling another person or entity.
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; or (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:
Victoria Real Estate Management, Inc.
c/o General Real Estate Corporation
14128 Southwest 93rd Lane
Miami, Florida 33186
Attention: Miguel Poyastro
Telephone: 305-752-5454
Facsimile: 305-752-6969
With a copy to:
Victoria Real Estate Management, Inc.
8500 S.W. 8th Street, Suite #228
Miami, Florida 33144
Attention: Agustin Herran
Telephone: 305-262-6533
Facsimile: 305-262-1703
and a copy to:
Machado & Herran
8500 Southwest 8th Street, Suite 238
Miami, Florida 33144
Attention: Jose Machado, Esq.
Telephone: 305-261-5355x208
Facsimile: 786-551-4618
To Seller:
c/o AIMCO
Stanford Place 3
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Patrick Slavin
Telephone: 303-691-4340
Facsimile: 303-300-3282
And:
c/o AIMCO
Stanford Place 3
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
Stanford Place 3
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Telephone: 303-691-4303
Facsimile: 303-300-3260
and a copy to:
Argent Real Estate
1401 Brickell Avenue, Suite 520
Miami, Florida 33131
Attention: Mr. David Marquette
Telephone: 305-371-9299
Facsimile: 305-675-2998
and a copy to:
Loeb & Loeb LLP
10100 Santa Monica Boulevard, Suite 2200
Los Angeles, California 90067-4164
Attention: Karen N. Higgins, Esq. and Rafael Castellanos, Esq.
Telephone: 310-282-2345
Facsimile: 310-282-2200
Any notice required hereunder to be delivered to the Escrow Agent shall be
delivered in accordance with above provisions as follows:
First American Title Insurance Company
550 S. Hope Street, Suite 1950
Los Angeles, California 90071
Attention: Robin E. Webb, Transaction Manager, Special Projects
Telephone: 213-271-1705
Facsimile: 213-271-1772
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 Florida 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, neither the signature of the Broker nor
the Purchaser's Broker shall be required as to any amendment of this Contract.
13.11 Severability. In the event that any part of this Contract shall be held to
be invalid or unenforceable by a court of competent jurisdiction, such provision
shall be reformed, and enforced to the maximum extent permitted by law. If such
provision cannot be reformed, it shall be severed from this Contract and the
remaining portions of this Contract shall be valid and enforceable.
13.12 Multiple Counterparts/Facsimile Signatures. This Contract may be executed
in a number of identical counterparts. This Contract may be executed by
facsimile signatures which shall be binding on the parties hereto, with original
signatures to be delivered as soon as reasonably practical thereafter.
13.13 Construction. No provision of this Contract shall be construed in favor
of, or against, any particular party by reason of any presumption with respect
to the drafting of this Contract; both parties, being represented by counsel,
having fully participated in the negotiation of this instrument.
13.14 Confidentiality. Purchaser shall not disclose the terms and conditions
contained in this Contract and shall keep the same confidential, provided that
Purchaser may disclose the terms and conditions of this Contract (a) as required
by law, (b) to consummate the terms of this Contract, or any financing relating
thereto, or (c) to Purchaser's or Seller's lenders, attorneys and accountants.
Any information and Materials provided by Seller to Purchaser hereunder are
confidential and Purchaser shall be prohibited from making such information
public to any other person or entity other than its agents and legal
representatives, without Seller's prior written authorization, which may be
granted or denied in Seller's sole discretion. Notwithstanding the 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 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).
Notwithstanding anything in this Section 13.19 to the contrary, Seller shall
have the right to extend the Closing Date (as extended pursuant to the second or
third sentences of Section 5.1) for up to 30 days in order to facilitate a tax
free exchange pursuant to this Section 13.19, and to obtain all documentation in
connection therewith.
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 Texas limited partnership, and Purchaser agrees that none of Seller's
Indemnified Parties shall have any personal liability under this Contract or any
document executed in connection with the transactions contemplated by this
Contract.
13.21 No Exclusive Negotiations. Seller shall have the right, at all times prior
to the expiration of the Feasibility Period, to solicit backup offers and enter
into discussions, negotiations, or any other communications concerning or
related to the sale of the Property with any third-party; provided, however,
that such communications are subject to the terms of this Contract, and that
Seller shall not enter into any contract or binding Contract with a third-party
for the sale of the Property unless such Contract is contingent on the
termination of this Contract without the Property having been conveyed to
Purchaser.
13.22 ADA Disclosure. Purchaser acknowledges that the Property may be subject to
the federal Americans With Disabilities Act (the "ADA"), and the federal Fair
Housing Act (the "FHA"). The ADA requires, among other matters, that tenants
and/or owners of "public accommodations" remove barriers in order to make the
Property accessible to disabled persons and provide auxiliary aids and services
for hearing, vision or speech impaired persons. Seller makes no warranty,
representation or guarantee of any type or kind with respect to the Property's
compliance with the ADA or the FHA (or any similar state or local law), and
Seller expressly disclaims any such representation.
13.23 No Recording. Purchaser shall not cause or allow this Contract or any
contract or other document related hereto, nor any memorandum or other evidence
hereof, to be recorded or become a public record without Seller's prior written
consent, which consent may be withheld at Seller's sole discretion. If the
Purchaser records this Contract or any other memorandum or evidence thereof,
Purchaser shall be in default of its obligations under this Contract. Purchaser
hereby appoints the Seller as Purchaser's attorney-in-fact to prepare and record
any documents necessary to effect the nullification and release of the Contract
or other memorandum or evidence thereof from the public records. This
appointment shall be coupled with an interest and irrevocable.
13.24 Relationship of Parties. Purchaser and Seller acknowledge and agree that
the relationship established between the parties pursuant to this Contract is
only that of a seller and a purchaser of property. Neither Purchaser nor Seller
is, nor shall either hold itself out to be, the agent, employee, joint venturer
or partner of the other party.
13.25 Dispute Resolution. Any controversy, dispute, or claim of any nature
arising out of, in connection with, or in relation to the interpretation,
performance, enforcement or breach of this Contract (and any closing document
executed in connection herewith), including any claim based on contract, tort or
statute, shall be resolved at the written request of any party to this Contract
by binding arbitration. The arbitration shall be administered in accordance with
the then current Commercial Arbitration Rules of the American Arbitration
Association. Any matter to be settled by arbitration shall be submitted to the
American Arbitration Association in the state in which the Property is located.
The parties shall attempt to designate one arbitrator from the American
Arbitration Association. If they are unable to do so within 30 days after
written demand therefor, then the American Arbitration Association shall
designate an arbitrator. The arbitration shall be final and binding, and
enforceable in any court of competent jurisdiction. The arbitrator shall award
attorneys' fees (including those of in-house counsel) and costs to the
prevailing party and charge the cost of arbitration to the party which is not
the prevailing party. Notwithstanding anything herein to the contrary, this
Section 13.25 shall not prevent Purchaser or Seller from seeking and obtaining
equitable relief on a temporary or permanent basis, including, without
limitation, a temporary restraining order, a preliminary or permanent injunction
or similar equitable relief, from a court of competent jurisdiction located in
the state in which the Property is located (to which all parties hereto consent
to venue and jurisdiction) by instituting a legal action or other court
proceeding in order to protect or enforce the rights of such party under this
Contract or to prevent irreparable harm and injury. The court's jurisdiction
over any such equitable matter, however, shall be expressly limited only to the
temporary, preliminary, or permanent equitable relief sought; all other claims
initiated under this Contract between the parties hereto shall be determined
through final and binding arbitration in accordance with this Section 13.25.
13.26 AIMCO Marks. Purchaser agrees that Seller, the Property Manager or AIMCO,
or their respective affiliates, are the sole owners of all right, title and
interest in and to the AIMCO Marks (or have the right to use such AIMCO Marks
pursuant to license agreements with third parties) and that no right, title or
interest in or to the AIMCO Marks is granted, transferred, assigned or conveyed
as a result of this Contract. Purchaser further agrees that Purchaser will not
use the AIMCO Marks for any purpose.
13.27 Non-Solicitation of Employees. Purchaser acknowledges and agrees that,
without the express written consent of Seller, neither Purchaser nor any of
Purchaser's employees, affiliates or agents shall solicit any of Seller's
employees or any employees located at the Property (or any of Seller's
affiliates' employees located at any property owned by such affiliates) for
potential employment.
13.28 Survival. Except for (a) all of the provisions of this Article 13 (other
than Section 13.19, 13.21 and 13.23), and (b) any provision of this Contract
which expressly states -that it shall so survive, and (c) any payment obligation
of Purchaser under this Contract (the foregoing (a), (b) and (c) referred to
herein as the "Survival Provisions"), none of the terms and provisions of this
Contract shall survive the termination of this Contract, and, if the Contract is
not so terminated, all of the terms and provisions of this Contract (other than
the Survival Provisions) shall be merged into the Closing documents and shall
not survive Closing.
13.29 Multiple Purchasers. As used in this Contract, the term "Purchaser" means
all entities acquiring any interest in the Property at the Closing, including,
without limitation, any assignee(s) of the original Purchaser pursuant to
Section 13.3 of this Contract. In the event that "Purchaser" has any obligations
or makes any covenants, representations or warranties under this Agreement, the
same shall be made jointly and severally by all entities being a Purchaser
hereunder. In the event that Seller receives notice from any entity being a
Purchaser hereunder, the same shall be deemed to constitute notice from all
entities being a Purchaser hereunder. In the event that any entity being a
Purchaser hereunder takes any action, breaches any obligation or otherwise acts
pursuant to the terms of this Contract, the same shall be deemed to be the
action of the other entity(ies) being a Purchaser hereunder and the action of
"Purchaser" under this Contract. In the event that Seller is required to give
notice or take action with respect to Purchaser under this Contract, notice to
any entity being a Purchaser hereunder or action with respect to any entity
being a Purchaser hereunder shall be a notice or action to all entities being a
Purchaser hereunder. In the event that any entity being a Purchaser hereunder
desires to bring an action or arbitration against Seller, such action must be
joined by all entities being a Purchaser hereunder in order to be effective. In
the event that there is any agreement by Seller to pay any amount pursuant to
this Contract to Purchaser under any circumstance, that amount shall be deemed
maximum aggregate amount to be paid to all parties being a Purchaser hereunder
and not an amount that can be paid to each party being a Purchaser hereunder. In
the event that Seller is required to return the Initial Deposit, Additional
Deposit or other amounts to Purchaser, Seller shall return the same to any
entity being a Purchaser hereunder and, upon such return, shall have no further
liability to any other entity being a Purchaser hereunder for such amount. The
foregoing provisions also shall apply to any documents, including, without
limitation, the General Assignment and Assumption and the Assignment and
Assumption of Leases and Security Deposits, executed in connection with this
Contract and the transaction(s) contemplated hereby.
13.30 Radon Gas. Radon is a naturally occurring radioactive gas that, when it
has accumulated in a building in sufficient quantities, may present health risks
to persons who are exposed to it over time. Levels of radon that exceed federal
and state guidelines have been found in buildings in Florida. Additional
information regarding radon and radon testing may be obtained from your county
health department. [Note: This paragraph is provided for informational purposes
pursuant to Section 404.056(6), Florida Statutes (2002)].
13.31 Energy Efficiency. Purchaser may have the buildings' energy efficiency
rating determined. Seller has, simultaneously with the execution hereof,
delivered to Purchaser a copy of the Florida Building Energy Efficiency Rating
System pamphlet prepared by the State of Florida Department of Community
Affairs. [Note: This paragraph is provided for informational purposes pursuant
to Section 553.996, Florida Statues (2002)].
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. Law Engineering and Environmental
Services, Inc. performed the Testing and reported its findings in the
Certification of Lead-Based Paint Free Housing dated May 14, 2001, a copy of
which is attached hereto as Exhibit I (the "Report"). The Report certifies the
Property as lead based paint free. 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 lead based paint free, Seller is not
required under the Consent Agreement to remediate or abate any lead-based paint
condition at the Property prior to the Closing. Purchaser acknowledges and
agrees that (1) after Closing, the Purchaser and the Property shall be subject
to the Consent Agreement and the provisions contained herein related thereto and
(2) that Purchaser shall not be deemed to be a third party beneficiary to the
Consent Agreement. The provisions of this Section 14.2 shall survive the
termination of this Contract, and if not so terminated, the Closing and delivery
of the Deed to Purchaser.
[Signatures on the following page.]
NOW, THEREFORE, the parties hereto have executed this Contract as of the
date first set forth above.
Seller:
BRIAR BAY APARTMENTS
ASSOCIATES, LTD., a Texas limited
partnership
By: CCP/IV Briar Bay GP, Inc.,
a South Carolina corporation,
its sole general partner
By: /s/Patrick F. Slavin
Name: Patrick F. Slavin
Title:Senior Vice President
Purchaser:
VICTORIA REAL ESTATE MANAGEMENT, INC., a
Florida corporation
By: /s/Agustin Herran
Name: Agustin Herran
Title: President
Purchaser's Tax Identification
Number/Social Security Number:
65-1051875
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 September 13, 2004 as the date of opening of
escrow and designates NCS 89260 as the escrow number assigned to this escrow.
ESCROW AGENT:
FIRST AMERICAN TITLE INSURANCE COMPANY
By: /s/Audra Williams
Name: Audra Williams
Title:Escrow Officer
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 transaction described in the Contract to which this signature page is
attached is as set forth in a separate agreement between Seller and Broker
payable 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: Executive Vice President