UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 29, 2004
SHELTER PROPERTIES III
(Exact name of registrant as specified in its charter)
South Carolina 0-10260 57-0718508
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Registrant's telephone number)
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 2.01 Completion of a Disposition of Assets
On October 29, 2004, the Registrant sold one of its investment properties,
Colony House Apartments, located in Murpheesboro, Tennessee. The Registrant sold
Colony House Apartments to Colony House General Partnership, a third party, for
approximately $7,300,000. The sales price was determined based on the fair
market value of the investment property.
In accordance with the Amended Limited Partnership Agreement of the Registrant,
the Registrant's general partner is evaluating the cash requirements of the
Registrant to determine whether any portion of the net proceeds will be
distributed to the Registrant's partners.
Item 9.01 Financial Statements and Exhibits
(b) Pro forma financial information.
The following unaudited pro forma consolidated balance sheet and statements of
operations reflect the operations of the Registrant as if Colony House
Apartments had been sold on January 1, 2003.
The pro forma consolidated financial statements do not project the Registrant's
results of operations at any future date or for any future period. This pro
forma information should be read in conjunction with the Registrant's 2003
Annual Report on Form 10-KSB.
PRO FORMA CONSOLIDATED BALANCE SHEET
(in thousands)
June 30, 2004
All other assets $ 778
Investment properties, net 5,187
Total Assets $ 5,965
All other liabilities $ 924
Mortgage notes payable 9,257
Partners' deficit (4,216)
Total Liabilities and Equity $ 5,965
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit data)
Six Months Ended Year Ended
June 30, December 31,
2004 2003
Total revenues $ 1,463 $ 2,802
Total expenses 1,682 3,236
Net loss $ (219) $ (434)
Net loss per limited partnership unit $ (3.94) $ (7.81)
(c) Exhibits.
The following exhibits are filed with this report (1):
10(iv)(c) Purchase and Sale Contract between Registrant and the Dama Realty
Investors, LLC, dated August 18, 2004.
10(iv)(d) Assignment and Assumption of Real Estate Sale Agreement between The
Dama Realty Investors, LLC and Colony House General Partnership, dated
August 18, 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.
SHELTER PROPERTIES III
By: Shelter Realty III Corporation
Corporate General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
Date: November 3, 2004
Exhibit 10(iv)c
PURCHASE AND SALE CONTRACT
AMONG
CHELSEA PLACE LIMITED PARTNERSHIP,
a Tennessee limited partnership,
SHELTER PROPERTIES III LIMITED PARTNERSHIP,
a South Carolina limited partnership, and
NOB HILL VILLA APARTMENTS ASSOCIATES, L.P.,
a Tennessee limited partnership
AS SELLERS
AND
DAMA REALTY INVESTORS, LLC,
a New York limited liability company
AS PURCHASER
Table of Contents
Page
ARTICLE I DEFINED TERMS......................................................1
ARTICLE II PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT.......................8
2.1 Purchase and Sale................................................8
2.2 Purchase Price and Deposit.......................................8
2.3 Escrow Provisions Regarding Deposit..............................9
ARTICLE III FEASIBILITY PERIOD..............................................10
3.1 Feasibility Period..............................................10
3.2 Expiration of Feasibility Period................................11
3.3 Conduct of Investigation........................................11
3.4 Purchaser Indemnification.......................................12
3.5 Property Materials..............................................12
3.6 Property Contracts..............................................13
ARTICLE IV TITLE, SURVEY AND ENVIRONMENTAL..................................14
4.1 Title Documents.................................................14
4.2 Survey..........................................................14
4.3 Environmental...................................................15
4.4 Objection and Response Process..................................15
4.5 Permitted Exceptions............................................16
4.6 Existing Deed of Trust..........................................16
4.7 Assumed Encumbrances............................................16
4.8 Purchaser Financing.............................................19
ARTICLE V CLOSING...........................................................19
5.1 Closing Date....................................................19
5.2 Seller Closing Deliveries.......................................19
5.3 Purchaser Closing Deliveries....................................20
5.4 Closing Prorations and Adjustments..............................21
5.5 Post Closing Adjustments........................................25
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER...........26
6.1 Seller's Representations........................................26
6.2 AS-IS...........................................................27
6.3 Survival of Seller's Representations............................28
6.4 Definition of Seller's Knowledge................................28
6.5 Representations And Warranties Of Purchaser.....................28
ARTICLE VII OPERATION OF THE PROPERTIES.....................................29
7.1 Leases and Property Contracts...................................29
7.2 General Operation of Property...................................30
7.3 Liens...........................................................30
ARTICLE VIII CONDITIONS PRECEDENT TO CLOSING................................30
8.1 Purchaser's Conditions to Closing...............................30
8.2 Sellers' Conditions to Closing..................................31
ARTICLE IX BROKERAGE........................................................32
9.1 Indemnity.......................................................32
9.2 Broker Commission...............................................32
9.3 Broker Signature Page...........................................32
ARTICLE X DEFAULTS AND REMEDIES.............................................32
10.1 Purchaser Default...............................................32
10.2 Seller Default..................................................33
ARTICLE XI RISK OF LOSS OR CASUALTY.........................................34
11.1 Major Damage....................................................34
11.2 Minor Damage....................................................35
11.3 Repairs.........................................................35
ARTICLE XII EMINENT DOMAIN..................................................35
12.1 Eminent Domain..................................................35
ARTICLE XIII MISCELLANEOUS..................................................36
13.1 Binding Effect of Contract......................................36
13.2 Exhibits And Schedules..........................................36
13.3 Assignability...................................................36
13.4 Binding Effect..................................................36
13.5 Captions........................................................36
13.6 Number And Gender Of Words......................................36
13.7 Notices.........................................................36
13.8 Governing Law And Venue.........................................38
13.9 Entire Agreement................................................39
13.10 Amendments......................................................39
13.11 Severability....................................................39
13.12 Multiple Counterparts/Facsimile Signatures......................39
13.13 Construction....................................................39
13.14 Confidentiality.................................................39
13.15 Time Of The Essence.............................................39
13.16
Waiver............................................................40
13.17 Attorneys Fees..................................................40
13.18 Time Periods....................................................40
13.19 1031 Exchange...................................................40
13.20 No Personal Liability of Officers, Trustees or Directors of
Seller's Partners...............................................40
13.21 No Exclusive Negotiations.......................................40
13.22 ADA Disclosure..................................................40
13.23 No Recording....................................................40
13.24 Relationship of Parties.........................................41
13.25 Dispute Resolution..............................................41
13.26 AIMCO Marks.....................................................41
13.27 Non-Solicitation of Employees...................................41
13.28 Survival........................................................42
13.29 Multiple Purchasers.............................................42
13.30 Sellers' Several Obligations....................................42
13.31 Obligation to Close on all Properties...........................42
ARTICLE XIV LEAD-BASED PAINT DISCLOSURE.....................................43
14.1 Disclosure......................................................43
14.2 Consent Agreement - Pre-1978 - Not Certified....................43
14.3 Consent Agreement - Pre-1978 Certified..........................43
14.4 Consent Agreement - Pre-1978-LBP, But No LBP Hazards............43
EXHIBIT A-1 LEGAL DESCRIPTION OF CHELSEA PLACE COMMUNITY.............A-1
EXHIBIT A-2 LEGAL DESCRIPTION OF COLONY HOUSE COMMUNITY..............A-2
EXHIBIT A-3 LEGAL DESCRIPTION OF NOB HILL VILLA COMMUNITY............A-3
EXHIBIT B FORM OF LIMITED WARRANTY DEED............................B-1
EXHIBIT C FORM OF BILL OF SALE.....................................C-1
EXHIBIT D GENERAL ASSIGNMENT AND ASSUMPTION........................D-1
EXHIBIT E ASSIGNMENT AND ASSUMPTION OF LEASES AND
SECURITY DEPOSITS........................................E-1
EXHIBIT F NOTICE TO VENDOR REGARDING TERMINATION
OF CONTRACT..............................................F-1
EXHIBIT G TENANT NOTIFICATION......................................G-1
EXHIBIT H LEAD-BASED PAINT DISCLOSURE..............................H-1
SCHEDULE A SELLER INFORMATION SCHEDULE.....................Schedule A-1
SCHEDULE 1.1.29 LIST OF EXCLUDED FIXTURES AND TANGIBLE
PERSONAL PROPERTY............................Schedule 1.1.29
SCHEDULE 3.5 LIST OF MATERIALS...............................Schedule 3.5
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as of
the 18th day of August, 2004 (the "Effective Date"), by the selling parties
identified on Schedule A (the "Seller Information Schedule") having an address
at 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237
(individually a "Seller" and collectively "Sellers"), and DAMA Realty Investors,
LLC, a New York limited liability company, having a principal address c/o First
Management Services, Inc., 333 Union Street, Suite 400, Nashville, TN 37201
("Purchaser").
NOW, THEREFORE, in consideration of mutual covenants set forth herein,
Sellers and Purchaser hereby agree as follows:
RECITALS
A.....Each Seller owns the real estate commonly known as and identified by
the "Community Name" listed on the Seller Information Schedule and as more
particularly described in Exhibits A-1 to A-3 attached hereto and made a part
hereof, and the improvements thereon.
B.....Purchaser desires to purchase, and each Seller desires to sell, the
land, improvements and certain associated property described in this Contract on
the terms and conditions set forth below.
ARTICLE I...
Defined Terms
1.1...Unless otherwise defined herein, any term with its initial letter
capitalized in this Contract shall have the meaning set forth in this ARTICLE 1.
1.1.1 "ADA" shall have the meaning set forth in Section 13.22.
1.1.2 "Additional Deposit" shall have the meaning set forth in Section 2.2.2.
1.1.3 "AIMCO" means Apartment Investment and Management Company.
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 a Seller, its Property Manager, or AIMCO
in the marketing, operation or use of a 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 "Applicable Share" means, a fraction, the numerator of which is the
Property's Base Purchase Price set forth on the Seller Information Schedule, and
the denominator of which is $35,500,000.00.
1.1.6 "Assumed Deed of Trust" means, with respect to an Assumption Property, the
deed of trust or mortgage identified on the Seller Information Schedule.
1.1.7 "Assumed Encumbrance" means, with respect to an Assumption Property, all
security and related documents in connection with the Loan for an Assumption
Property, including the Assumed Deed of Trust.
1.1.8 "Assumed Loan Documents" means, with respect to an Assumption Property,
the Note, Assumed Deed of Trust, Assumed Encumbrances and any other documents
executed in connection with the Loan for such Assumption Property.
1.1.9 "Assumption Lender Fees" shall have the meaning set forth in Section
4.7.5.
1.1.10......"Assumption Property" means a Property identified as an Assumption
Property on the Seller Information Schedule for which the Loan and Assumed Loan
Documents will be assumed by Purchaser at Closing.
1.1.11......"Base Purchase Price" means the "Base Purchase Price" for a Property
set forth on the Seller Information Schedule.
1.1.12......"Broker" shall have the meaning set forth in Section 9.1.
1.1.13......"Business Day" means any day other than a Saturday or Sunday or
Federal holiday or legal holiday in the States of Colorado, Texas, or Tennessee.
1.1.14......"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.
1.1.15......"Closing Date" means the date on which date the Closing of the
conveyance of the Properties is required to be held pursuant to Section 5.1.
1.1.16......"Code" shall have the meaning set forth in Section 2.3.6.
1.1.17......"Consent Agreement" shall have the meaning set forth in Section
14.3.
1.1.18......"Consultants" shall have the meaning set forth in Section 3.1.
1.1.19......"Damage Notice" shall have the meaning set forth in Section 11.1.
1.1.20......"Deed" shall have the meaning set forth in Section 5.2.1.
1.1.21......"Deed of Trust" means any deeds of trust and/or mortgages which
secure a Note against a Payoff Property.
1.1.22...... "Deposit" means, to the extent actually deposited by Purchaser with
Escrow Agent, the Initial Deposit and the Additional Deposit.
1.1.23......"Environmental Report" shall have the meaning set forth in Section
4.3.
1.1.24......"Escrow Agent" shall have the meaning set forth in Section 2.2.1.
1.1.25......"Excluded Permits" means, with respect to each Property, those
Permits which, under applicable law, are nontransferable and such other Permits,
if any, as may be designated as Excluded Permits on the Seller Information
Schedule.
1.1.26...... "Feasibility Period" shall have the meaning set forth in Section
3.1.
1.1.27......"FHA " shall have the meaning set forth in Section 13.22.
1.1.28......"Final Response Deadline" shall have the meaning set forth in
Section 4.4.
1.1.29......"Fixtures and Tangible Personal Property" means, with respect to
each Property, all fixtures, furniture, furnishings, fittings, equipment,
machinery, apparatus, appliances and other articles of tangible personal
property located on such Property as of the Effective Date and used or usable in
connection with the occupation or operation of all or any part of such Property,
but only to the extent transferable. The term "Fixtures and Tangible Personal
Property" does not include (a) equipment leased by the applicable Seller and the
interest of the applicable Seller in any equipment provided to its Property for
use, but not owned or leased by such Seller, or (b) property owned or leased by
any Tenant or guest, employee or other person furnishing goods or services to
such Property, or (c) property and equipment owned by the applicable Seller,
which in the ordinary course of business of such Property is not used
exclusively for the business, operation or management of such Property, or (d)
the property and equipment, if any, expressly identified in Schedule 1.1.29 or
listed on the Seller Information Schedule as "Excluded FF&E."
1.1.30......"General Assignment" shall have the meaning set forth in Section
5.2.3.
1.1.31......"Good Funds" shall have the meaning set forth in Section 2.2.1.
1.1.32......"Improvements" means all buildings and improvements located on the
Land corresponding to each Property, taken "as is."
1.1.33......"Initial Deposit" shall have the meaning set forth in Section 2.2.1.
1.1.34......"Land" means, with respect to each Property, the corresponding tract
of land described on Exhibits A-1 to A-3, and all rights, privileges and
appurtenances pertaining thereto.
1.1.35......"LBP Report" means, with respect to a Property, the report
identified on the Seller Information Schedule, prepared by the consultant
identified therein with respect to lead-based paint.
1.1.36......"Lease(s)" means, with respect to each Property, the interest of the
applicable 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 such Seller's Property and which are in force as of
the Closing Date for the applicable Property.
1.1.37......"Leases Assignment" shall have the meaning set forth in Section
5.2.4.
1.1.38......"Lender" means, with respect to each Property, those "Lenders"
identified on the Seller Information Schedule, each of whose servicer, if any,
also is identified on the Seller Information Schedule.
1.1.39......"Lender Fees" means, with respect to each Payoff Property, all fees
and expenses (including, without limitation, all prepayment penalties and
pay-off fees) imposed or charged by each 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 applicable Note and Deed of Trust, any amounts
of interest charged by the applicable Lender for the period from the Closing
Date to the permitted prepayment date. The exact amount of the Lender Fees shall
be determined as of the Closing Date.
1.1.40......"Loan" means the indebtedness owing to Lender evidenced by a Note.
1.1.41......"Loan Approval Period" shall have the meaning set forth in
Section 4.7.4.
1.1.42......"Loan Approval Termination" shall have the meaning set forth in
Section 4.7.4.
1.1.43......"Loan Assumption Application" shall have the meaning set forth in
Section 4.7.3.
1.1.44......"Loan Assumption Application Submittal Deadline" shall have the
meaning set forth in Section 4.7.3.
1.1.45......"Loan Assumption and Modification" shall have the meaning set forth
in Section 4.7.2.
1.1.46...... "Loan Assumption and Release" shall have the meaning set forth in
Section 4.7.2.
1.1.47......"Loan Balance" shall have the meaning set forth in Section 2.2.3.
1.1.48......"Loan Payoff" shall have the meaning set forth in Section 5.4.7
and Section 4.7.2.
1.1.49......"Losses" shall have the meaning set forth in Section 3.4.1.
1.1.50......"Materials" shall have the meaning set forth in Section 3.5.
1.1.51......"Miscellaneous Property Assets" means, with respect to each
Property, all contract rights, leases, concessions, warranties, plans, drawings
and other items of intangible personal property relating to the ownership or
operation of a Property and owned by its respective Seller, excluding, however,
with respect to each Property (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) such 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 the applicable
Seller's rights, if any, in and to the name "Community Name" identified in the
Seller Information Schedule as it relates solely to use in connection with the
applicable Property (and not with respect to any other property owned or managed
by any Seller, Property Manager, AIMCO, or their respective affiliates).
1.1.52......"Modification" shall have the meaning set forth in Section 4.7.2.
1.1.53......"New Environmental Report Matters" shall have the meaning set forth
in Section 4.3.
1.1.54......"New Survey Matters" shall have the meaning set forth in Section
4.2.
1.1.55......"New Title Matters" shall have the meaning set forth in Section
4.1.
1.1.56......"Note" means, with respect to each Property, the promissory note(s)
identified in the Seller Information Schedule.
1.1.57......"Objection Deadline" shall have the meaning set forth in Section
4.4.
1.1.58......"Objection Notice" shall have the meaning set forth in Section 4.4.
1.1.59......"Objections" shall have the meaning set forth in Section 4.4.
1.1.60......"Payoff Property" means those Properties for which the Loan will be
paid off at Closing and identified as a Payoff Property on the Seller
Information Schedule.
1.1.61......"Permits" means, with respect to each Property, all licenses and
permits granted by any governmental authority having jurisdiction over such
Property and required in order to own and operate such Property.
1.1.62......"Permitted Exceptions" shall have the meaning set forth in Section
4.5.
1.1.63......"Prior Environmental Report" means, with respect to each Property,
the environmental report identified in the Seller Information Schedule.
1.1.64......"Prior Survey" means, with respect to each Property, the survey
identified in the Seller Information Schedule.
1.1.65......"Prior Title Documents" means, with respect to each Property, the
title documents identified in the Seller Information Schedule.
1.1.66......"Property" means (a) the Land and Improvements and all rights of the
applicable Seller, if any, in and to all of the easements, rights, privileges,
and appurtenances belonging or in any way appertaining to such Land and
Improvements, (b) the right, if any and only to the extent transferable, of such
Seller in the Property Contracts, Leases, Permits (other than Excluded Permits),
and the Fixtures and Tangible Personal Property related to such Land and
Improvements, and (c) the Miscellaneous Property Assets owned by Seller which
are located on such Land and Improvements and used in its operation.
1.1.67......"Property Contracts" means, with respect to each Property, 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 such
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 the
applicable Seller, Property Manager, or AIMCO with respect to the applicable
Property (i) which terminate automatically upon transfer of such Property by
such Seller, or (ii) which such Seller, in Seller's sole discretion, elects to
terminate with respect to such Property effective as of the Closing Date, or (b)
any property management contract for such 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 5.4.12.
1.1.68......"Property Contracts Notice" shall have the meaning set forth in
Section 3.6.
1.1.69......"Property Manager" means the current property manager of each
Property.
1.1.70......"Proration Schedule" shall have the meaning set forth in Section
5.4.1.
1.1.71......"Purchase Price" shall have the meaning set forth in Section 2.2.
1.1.72......"Records Disposal Notice" shall have the meaning set forth in
Section 5.4.13.
1.1.73......"Records Hold Period" shall have the meaning set forth in
Section 5.4.13.
1.1.74......"Regional Property Manager" means, with respect to each Property,
the individual identified in the Seller Information Schedule.
1.1.75......"Reinstatement Notice" shall have the meaning set forth in Section
8.1.
1.1.76......"Remediation" shall have the meaning set forth in Section 14.2.
1.1.77......"Required Assignment Consent" shall have the meaning set forth in
Section 3.6.
1.1.78......"Required Loan Fund Amounts" shall have the meaning set forth in
Section 4.7.6.
1.1.79......"Response Deadline" shall have the meaning set forth in Section
4.4.
1.1.80......"Response Notice" shall have the meaning set forth in Section 4.4.
1.1.81......"Seller's Indemnified Parties" shall have the meaning set forth
in Section 3.4.1.
1.1.82......"Seller Information Schedule" shall have the meaning set forth in
the introductory paragraph.
1.1.83......"Seller's Property-Related Files and Records" shall have the
meaning set forth in Section 5.4.13.
1.1.84......"Seller's Representations" shall have the meaning set forth in
Section 6.1.
1.1.85......"Seller's Representative" means AIMCO.
1.1.86......"Specific AIMCO Provisions" shall have the meaning set forth in
Section 4.7.2.
1.1.87......"Survey" shall have the meaning ascribed thereto in Section 4.2.
1.1.88......"Survival Period" shall have the meaning set forth in Section 6.3.
1.1.89......"Survival Provisions" shall have the meaning set forth in Section
13.28.
1.1.90......"Tenant" means any person or entity entitled to occupy any portion
of the applicable Property under a Lease.
1.1.91......"Tenant Deposits" means, with respect to a Property, 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
the applicable Seller pursuant to its Leases. Tenant Deposits shall not include
any non-refundable deposits or fees paid by Tenants to the applicable Seller,
either pursuant to the Leases or otherwise.
1.1.92......"Tenant Security Deposit Balance" shall have the meaning set forth
in Section 5.4.6.2.
1.1.93......"Terminated Contracts" shall have the meaning set forth in
Section 3.6.
1.1.94......"Termination Notice" shall have the meaning set forth in Section
8.1.
1.1.95......"Testing" shall have the meaning set forth in Section 14.2.
1.1.96......"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 a Property.
1.1.97......"Title Commitment" shall have the meaning ascribed thereto in
Section 4.1.
1.1.98......"Title Documents" shall have the meaning set forth in Section 4.1.
1.1.99......"Title Insurer" shall have the meaning set forth in Section 2.2.1.
1.1.100....."Title Policy" shall have the meaning set forth in Section 4.1.
1.1.101....."Uncollected Rents" shall have the meaning set forth in Section
5.4.6.1.
1.1.102....."Updated Environmental Report" shall have the meaning set forth
in Section 4.3.
1.1.103....."Updated Survey" shall have the meaning set forth in Section 4.2.
1.1.104....."Updated Title Documents" shall have the meaning set forth in
Section 4.1.
1.1.105....."Utility Contract " shall have the meaning set forth in Section
5.4.12.
1.1.106....."Vendor Terminations" shall have the meaning set forth in
Section 5.2.5.
ARTICLE II..
PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT
2.1 Purchase and Sale. Each Seller agrees to sell and convey its Property listed
on the Seller Information Schedule to Purchaser and Purchaser agrees to purchase
such Property from each Seller, all in accordance with the terms and conditions
set forth in this Contract.
2.2 Purchase Price and Deposit. The Base Purchase Price for each Property is set
forth in the Seller Information Schedule, and, in the case of a Payoff Property,
also shall be reduced by the Lender Fees applicable to such Property (the
"Purchase Price"). The Purchase Price for each Property shall be paid as
follows:
2.2.1 On the Effective Date, Purchaser shall deliver to Fidelity National Title
Insurance Company, 1900 West Loop South, Suite 650, Houston, TX 77027, Attn:
Lolly Avant, telephone: (713) 621-9506, facsimile: (713) 623-4406 ("Escrow
Agent" or "Title Insurer") an initial deposit (the "Initial Deposit") of
$355,000 by wire transfer of immediately available funds ("Good Funds"). The
Initial Deposit shall be held and disbursed in accordance with the escrow
provisions set forth in Section 2.3. The Initial Deposit shall be non-refundable
to Purchaser upon and after the Effective Date (other than for Seller's failure
to close as required under this Contract and Purchaser's right to terminate set
forth in Section 4.4 if Seller is unwilling to cure any material New Title
Matters, New Survey Matters or New Environmental Report Matters). The Initial
Deposit shall be allocated among the Sellers of the Properties pursuant to the
Applicable Share attributable to each of their respective Properties.
2.2.2 On the day that the Feasibility Period expires, Purchaser shall deliver to
Escrow Agent an additional deposit (the "Additional Deposit") of $355,000 by
wire by transfer of Good Funds. The Additional Deposit shall be held and
disbursed in accordance with the escrow provisions set forth in Section 2.3. The
Additional Deposit shall be allocated among the Sellers of the Properties
pursuant to the Applicable Share attributable to each of their respective
Properties.
2.2.3 At the Closing, subject to Purchaser's obligations under Section 4.7,
Purchaser shall, with respect to Assumption Properties, receive a credit against
the Purchase Price for such Assumption Property in the amount of the outstanding
principal balance of the applicable Note, together with all accrued but unpaid
interest (if any) thereon, as of the Closing Date (the "Loan Balance").
2.2.4 The balance of the Purchase Price for each 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 any Seller's lender).
2.3 Escrow Provisions Regarding Deposit.
2.3.1 Escrow Agent shall hold the Deposit and make delivery of the Deposit to
the party entitled thereto under the terms of this Contract. Escrow Agent shall
invest the Deposit in such short-term, high-grade securities, interest-bearing
bank accounts, money market funds or accounts, bank certificates of deposit or
bank repurchase contracts as Escrow Agent, in its discretion, deems suitable,
and all interest and income thereon shall become part of the Deposit and shall
be remitted to the party entitled to the Deposit pursuant to this Contract.
2.3.2 Escrow Agent shall hold the Deposit until the earlier occurrence of (i)
the Closing Date, at which time the Deposit shall be applied against the
Purchase Price for each Property, 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 Purchaser or Seller's Representative makes a written demand upon
Escrow Agent for payment of the Deposit, Escrow Agent shall give written notice
to the other parties of such demand. If Escrow Agent does not receive a written
objection from another party to the proposed payment within 5 Business Days
after the giving of such notice, Escrow Agent is hereby authorized to make such
payment (subject to Purchaser's obligation under Section 3.5.2 to return all
Third-Party Reports and information and Materials provided to Purchaser as a
pre-condition to the return of the Deposit to Purchaser if Purchaser is entitled
to the return of the Deposit under this Contract). 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 a Property is located. Escrow Agent shall give written notice of
such deposit to Seller's Representative and Purchaser. Upon such deposit, Escrow
Agent shall be relieved and discharged of all further obligations and
responsibilities hereunder. Sellers hereby appoint Seller's Representative to
give and receive notices to Escrow Agent regarding the Deposit.
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 any 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. Sellers 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 Sellers, and the same shall become
fully effective upon execution by Purchaser and Sellers, 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, Sellers, 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 Deeds to
Purchaser.
ARTICLE III.
FEASIBILITY PERIOD
3.1 Feasibility Period. Subject to the terms of Sections 3.3 and 3.4 and the
right of Tenants under the Leases, from the Effective Date to and including the
date which is 45 days after the Effective Date (the "Feasibility Period"),
Purchaser, and its agents, contractors, engineers, surveyors, attorneys, and
employees (collectively, "Consultants") shall have the right from time to time
to enter onto the Properties:
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 Properties (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 Properties;
3.1.3 To ascertain and confirm the suitability of the property for
Purchaser's intended use of the Properties; 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 in its entirety with respect to all Properties (but not in part with
respect to less than all Properties) by giving written notice to that effect to
Seller's Representative 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 the Survival Provisions, and, except as otherwise provided in Section
4.4, Escrow Agent shall forthwith pay the Initial Deposit to Seller. If
Purchaser fails to provide Seller's Representative 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
Properties 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 any 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 the applicable Seller a reasonable time prior to
entry onto its Property and shall permit such Seller to have a representative
present during all Inspections conducted at its Property. All information made
available by any of the Sellers 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
Properties 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 Deeds to Purchaser.
3.4 Purchaser Indemnification.
3.4.1 Purchaser shall indemnify, hold harmless and, if requested by a Seller (in
such Seller's sole discretion), defend (with counsel approved by such Seller)
such Seller, together with such 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 such
Seller, "Seller's Indemnified Parties"), from and against any and all damages,
mechanics' liens, liabilities, penalties, interest, 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
such Seller's Property, and any Inspections or other matters performed by
Purchaser with respect to such Property during the Feasibility Period or
otherwise.
3.4.2 Notwithstanding anything in this Contract to the contrary, Seller's
Representative shall have the right, without limitation, to disapprove any and
all entries, surveys, tests (including, without limitation, a Phase II
environmental study of its Property), investigations and other matters that in
such Seller's Representative's reasonable judgment could result in any injury to
its Property or breach of any contract, or expose the applicable Seller to any
Losses or violation of applicable law, or otherwise adversely affect such
Property or such 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 Seller'
Representative to any such activity shall be deemed to constitute a waiver by
the applicable Seller or assumption of liability or risk by such Seller.
Purchaser hereby agrees to restore, at Purchaser's sole cost and expense, each
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(s) in which the Properties are
located. Purchaser shall deliver proof of the insurance coverage required
pursuant to this Section 3.4.2 to Sellers (in the form of a certificate of
insurance) prior to the earlier to occur of (i) Purchaser's or Purchaser's
Consultants' entry onto any of the Properties, or (ii) the expiration of 5 days
after the Effective Date.
3.4.3 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 Deeds to
Purchaser.
3.5 Property Materials.
3.5.1 Within 5 days after the Effective Date, and to the extent the same exist
and are in a Seller's possession or reasonable control (subject to Section
3.5.2), each Seller agrees to make the documents set forth on Schedule 3.5 (the
"Materials") relating to its Property available at its Property for review and
copying by Purchaser at Purchaser's sole cost and expense. In the alternative,
at a Seller's option and within the foregoing 5-day period, such Seller may
deliver some or all of its Materials to Purchaser, or make the same available to
Purchaser on a secure web site (Purchaser agrees that any item to be delivered
by a 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 the
applicable Seller and such Seller shall use commercially reasonable efforts to
deliver the same to Purchaser within 5 Business Days after such notification is
received by such 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, each 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 any of the Sellers 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 all applicable Sellers 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 Sellers pursuant to this Contract may not be complete or constitute
all of such documents which are in a Seller's possession or control, but are
those that are readily available to such Seller after reasonable inquiry to
ascertain their availability. Purchaser understands that, although each Seller
will use commercially reasonable efforts to locate and make available the
Materials and other documents required to be delivered or made available by it
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
such Seller's 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 Properties.
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 each Seller (a "Property Contracts
Notice") specifying any Property Contracts of such Seller 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 the applicable 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 a Property Contracts Notice to
a Seller on or before the expiration of the Feasibility Period, there shall be
no Terminated Contracts with respect to such Seller (or its Property) and
Purchaser shall assume all Property Contracts of such Seller 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 the applicable 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 to Purchaser (and the
assumption by Purchaser of all obligations under such Property Contract).
Purchaser shall indemnify, hold harmless and, if requested by the applicable
Seller (in such Seller's sole discretion), defend (with counsel approved by such
Seller) such 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.
ARTICLE IV..
TITLE, Survey and environmental
4.1 Title Documents. Prior to the Effective Date, each Seller caused to be
delivered to Purchaser a copy of the prior Title Documents for each Property.
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.
Within 7 calendar days after the Effective Date, each Seller shall cause to be
delivered to Purchaser an updated title commitment ("Updated Title Commitment")
for each Property in an amount equal to the Property's Base 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". Each Seller shall be responsible
for payment of the premium for the Title Policy for its Property, including
"extended" coverage. Purchaser shall be solely responsible for payment of any
endorsements requested by Purchaser. 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, each Seller caused to be delivered to
Purchaser a copy of the Prior Survey for each Property. Purchaser acknowledges
receipt of the Prior Surveys and agrees that it has approved the Prior Surveys.
Purchaser acknowledges and agrees that delivery of the Prior Surveys is subject
to Section 3.5.2. Purchaser desires that all of the Prior Surveys be updated.
Within 5 days after the Effective Date, Seller's Representative shall order such
updated surveys (the "Updated Survey", and together with the Prior Survey,
referred to herein as the "Survey") from the surveyor who prepared the Prior
Survey (or from such other surveyor as Seller determines in its reasonable
discretion) and each Seller shall pay the cost and expense of the preparation of
such updated surveys for its Property. Any new material matters in the Updated
Surveys that were not disclosed in the Prior Survey are hereinafter referred to
as the "New Survey Matters".
4.3 Environmental. Prior to the Effective Date, each Seller caused to be
delivered to Purchaser a copy of the Prior Environmental Report for each
Property. Purchaser acknowledges that it has reviewed and approved the Prior
Environmental Reports. Purchaser acknowledges and agrees that delivery of the
Prior Environmental Reports is subject to Section 3.4.2. Purchaser is required
to order Phase I Environmental study for each Assumption Property under Section
4.7.8. To the extent that Purchaser desires that the Prior Environmental Report
for the Payoff Property be updated, Purchaser shall request the same in writing
to Seller's Representative no later than one (1) Business Day after the
Effective Date. The Prior Environmental Report, together with any updated
environmental report (the "Updated Environmental Reports") are hereinafter
collectively referred to as the "Environmental Reports"). Purchaser shall be
solely responsible for the cost and expense of the Updated Environmental
Reports. Any new material matters on the Updated Environmental Reports that were
not disclosed on the Prior Environmental Reports are hereinafter referred to as
the "New Environmental Report Matters."
4.4 Objection and Response Process. On or before the date which is 35 days after
the Effective Date (the "Objection Deadline"), Purchaser shall, on a Property-by
Property basis, give written notice (the "Objection Notice") to the attorneys
for Seller of any material New Title Matters, New Survey Matters or New
Environmental Report 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 Surveys, or the Prior Environmental Reports,
nor to any New Title Matters, New Survey Matters or New Environmental Report
Matters that are not material. If Purchaser fails to tender an Objection Notice
with respect to a Property 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, the Updated Surveys and the Updated
Environmental Reports. On or before 40 days after the Effective Date (the
"Response Deadline"), a Seller who has received an Objection Notice may, in
Seller's sole discretion, give Purchaser notice (the "Response Notice") of those
Objections which Seller is willing to cure, if any. Sellers shall be entitled to
reasonable adjournments of the Closing Date to cure the Objections applicable to
any Seller. If a 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's Representative on or before the
expiration of the Feasibility Period (the "Final Response Deadline") either (a)
to accept the Updated Title Documents, the Updated Surveys and the Updated
Environmental Reports with resolution, if any, of the Objections as set forth in
the Response Notice (or if no Response Notice is tendered, without any
resolution of the Objections) and without any reduction or abatement of the
Purchase Price, or (b) to terminate this Contract, in which event the Initial
Deposit shall be returned to Purchaser (subject to Purchaser's obligation under
Section 3.5.2 to return all Third-Party Reports and information and Materials
provided to Purchaser as a pre-condition to the return of the Initial Deposit).
If Purchaser fails to give notice to terminate this Contract on or before the
Final Response Deadline, Purchaser shall be deemed to have elected to approve
and irrevocably waived any objections to any matters covered by the Updated
Title Documents, the Updated Surveys and the Updated Environmental Reports,
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).
4.5 Permitted Exceptions. The Deed for each Property delivered pursuant to this
Contract shall be subject to the following, all of which shall be deemed
"Permitted Exceptions":
4.5.1 All matters shown in the Title Documents and the Survey for such Property,
other than (a) those Objections, if any, which the applicable Seller has agreed
to cure pursuant to the Response Notice under Section 4.4, (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;
4.5.2 All Leases for such Property;
4.5.3 With respect to any Assumption Property, its Assumed Encumbrances;
4.5.4 Applicable zoning and governmental regulations and ordinances;
4.5.5 Any defects in or objections to title to such Property, or title
exceptions or encumbrances, arising by, through or under Purchaser; and
4.5.6 The terms and conditions of this Contract.
4.6 Existing Deed of Trust. The provisions of this Section 4.6 apply only to
Payoff Properties. It is understood and agreed that, whether or not Purchaser
gives an Objection Notice with respect to a Payoff Property, any Deed of Trust
shall not be deemed a Permitted Exception, whether Purchaser gives written
notice of such or not, and shall be paid off, satisfied, discharged and/or cured
by the applicable Seller at Closing, provided that the Lender Fees due in
connection with a Loan Payoff shall be paid by Purchaser.
4.7 Assumed Encumbrances. This Section 4.7 applies only to Assumption
Properties.
4.7.1 Purchaser recognizes and agrees that, in connection with the Loan on an
Assumption Property made by Lender, such Assumption Property is encumbered by
the Assumed Deed of Trust and the Assumed Encumbrances. The Loan is evidenced by
the Note applicable to such Assumption Property. Within 10 days after the
Effective Date, each Seller of an Assumption Property agrees that it will make
available to Purchaser (in the same manner in which such Seller is permitted to
make the Materials available to Purchaser under Section 3.5.1) copies of the
Assumed Loan Documents which are in such Seller's possession or reasonable
control (subject to Section 3.5.2).
4.7.2 Purchaser agrees that, at the Closing and effective as of the Closing
Date, (a) Purchaser shall assume the applicable Seller's obligations under the
Note and all of the other applicable Assumed Loan Documents and accept title to
each Assumption Property subject to the Deed of Trust and the Assumed
Encumbrances applicable to such Assumption Property, and (b) the applicable
Lender shall release the applicable Seller, as well as any guarantors and other
obligated parties under the Assumed Loan Documents, from all obligations under
the Assumed Loan Documents (and any related guarantees or letters of credit),
including, without limitation, any obligation to make payments of principal and
interest under the applicable Note (collectively, the foregoing (a) and (b)
referred to herein as the "Loan Assumption and Release"). Purchaser acknowledges
and agrees that (x) certain of the provisions of the Assumed Loan Documents may
have been negotiated for the exclusive benefit of the applicable Seller, AIMCO
or their respective affiliates (the "Specific AIMCO Provision"), and (y) unless
the Lender otherwise agrees in such Lender's sole and arbitrary discretion,
Purchaser will not be permitted to assume the benefit of the Specific AIMCO
Provisions and the same shall be of no further force or effect from and after
the Closing Date. In connection with obtaining the Loan Assumption and Release,
Seller acknowledges that Purchaser shall negotiate with Lender for a
modification (the "Modification") of the Note and the Assumed Loan Documents to
provide for a 30-year amortization period (the Loan Assumption and Release and
Modification, together, referred to herein as the "Loan Assumption and
Modification"). Purchaser acknowledges and agrees that Lender's approval of the
Modification may be conditioned upon (i) amendment or modification of the
Assumed Loan Documents to match the terms and conditions of Lender's standard
loan documentation for similar deals with substantially similar terms, (ii) the
imposition of additional borrower reserve accounts, and (iii) an increase to the
original Loan interest rate of up to 2.0 basis points. Purchaser shall be
responsible for all Assumption Lender Fees imposed or charged by Lender in
connection with the Loan Assumption and Modification.
4.7.3 Purchaser further acknowledges that the Assumed Loan Documents require the
satisfaction by Purchaser of certain requirements as set forth therein to allow
for the Loan Assumption and Modification. Accordingly, Purchaser, at its sole
cost and expense and within 15 days after the Effective Date (the "Loan
Assumption Application Submittal Deadline"), shall satisfy the requirements set
forth in the Assumed Loan Documents to allow for each Loan Assumption and
Modification, including, without limitation, submitting a complete application
to the applicable Lender for assumption of each Loan together with all documents
and information required in connection therewith (the "Loan Assumption
Application"). Purchaser agrees to provide Seller's Representative with a copy
of each Loan Assumption Application no later than 2 Business Days prior to the
Loan Assumption Application Submittal Deadline and shall provide evidence of its
submission to each Lender on or before the Loan Assumption Application Submittal
Deadline. Purchaser acknowledges and agrees that Purchaser is solely responsible
for the preparation and submittal of each Loan Assumption Application, including
the collection of all materials, documents, certificates, financials,
signatures, and other items required to be submitted to such Lender in
connection with each Loan Assumption Application.
4.7.4 Provided that (a) Purchaser fully complies with its obligations under this
Contract (including this Section 4.7) and the requirements of the Assumed Deeds
of Trust (including, without limitation, Section 21 thereof) in connection with
obtaining each Loan Assumption and Release, (b) Purchaser uses its best efforts
to obtain each Loan Assumption and Release, and (c) Purchaser does not obtain
the consent of the Lender to the Loan Assumption and Release for both Assumption
Properties within 65 days after the Effective Date (the "Loan Approval Period"),
then Purchaser shall have the right to give Escrow Agent notice terminating this
Contract based solely on the fact that the Loan Assumption and Release has not
been approved by the Lender (the "Loan Approval Termination") on or before the
expiration of the Loan Approval Period, in which event this Contract shall be of
no further force and effect, subject to and except for Purchaser's liability
pursuant to Section 3.3 and any other provision of this Contract which survives
such termination, and Escrow Agent shall forthwith return the Deposit to
Purchaser. If Purchaser fails to provide Seller with written notice of
termination prior to the expiration of the Loan Approval Period in strict
accordance with the notice provisions of this Contract, Purchaser's right to
terminate under this Section 4.7.4 shall be permanently waived, this Contract
shall remain in full force and effect, the Deposit shall be non-refundable, and
Purchaser's obligation to obtain the Lender's approval of the Loan Assumption
and Release for both Assumption Properties and to purchase all of the Properties
shall be non-contingent and unconditional except only for satisfaction of the
conditions expressly stated in subsections 8.1.1 through 8.1.4. Purchaser
recognizes and agrees that if the Loan Approval Period expires and Purchaser
does not terminate this Contract, the Loan Assumption and Release shall not be a
condition to Purchaser's obligation to close, and, if the Loan Assumption and
Release is not obtained and the Closing has not occurred on or before the
Closing Date, Purchaser shall be in default under this Contract, entitling the
Seller to terminate this Contract, in which event the Deposit shall be
immediately released to Seller by the Escrow Agent and this Contract shall be of
no further force and effect, subject to and except for Purchaser's liability
pursuant to Section 3.3 and any other provision of this Contract which survives
such termination. "
4.7.5 Purchaser shall pay all fees and expenses (including, without limitation,
all servicing fees and charges, transfer fees, assumption fees, title fees,
endorsement fees, and other fees to release each Seller of all liability under a
Loan) imposed or charged by the Lender or its counsel (such fees and expenses
collectively being referred to as the "Assumption Lender Fees"), in connection
with each Loan Assumption Application and each Loan Assumption and Modification.
The provisions of this Section 4.7.5 shall survive the termination of this
Contract and the Closing.
4.7.6 Additionally, Purchaser shall be responsible for (a) replacing (and
increasing to the extent required by the applicable Lender) all reserves,
impounds and other accounts required to be maintained in connection with each
Loan, and (b) funding any additional reserves, impounds or accounts required by
a Lender to be maintained by Purchaser in connection with each Loan after the
Loan Assumption and Release or the Loan Assumption and Modification, whichever
may apply, (the foregoing amounts in (a) and (b) collectively referred to herein
as the "Required Loan Fund Amounts"). Any existing reserves, impounds and other
accounts required to be replaced by Purchaser pursuant to the foregoing sentence
shall be released in Good Funds to the applicable Seller at the Closing. The
provisions of this Section 4.7.6 shall survive the Closing.
4.7.7 Purchaser agrees promptly to deliver to each Lender all documents and
information required by the Assumed Loan Documents, and such other information
or documentation as such Lender reasonably may request, including, without
limitation, financial statements, income tax returns and other financial
information for Purchaser and any required guarantor. Each Seller agrees that it
will cooperate with Purchaser and the applicable Lender, at no cost or expense
to such Seller, in connection with Purchaser's application to Lender for
approval of the applicable Loan Assumption and Modification.
4.7.8 No later than 10 days after the Effective Date, Purchaser shall order a
Phase I Environmental study for each Assumption Property (prepared by an
environmental engineer reasonably acceptable to Seller's Representative and
Lender), and covenants that such Phase I Environmental study shall be delivered
to Seller's Representative and Lender no later than 10 days prior to the Closing
Date in connection with and as a precondition to a Loan Assumption and
Modification for each Assumption Property. 4.7.9 Purchaser shall be in default
hereunder if (a) Purchaser fails to submit a complete Loan Assumption
Application for each Assumption Property by the Loan Assumption Application
Submittal Deadline, or (b) subject to Purchaser's right to terminate set forth
in Section 4.7.4, Purchaser fails to obtain the Loan Assumption and Release for
each Assumption Property prior to the Closing Date. If either of the events set
forth in subsentences (a) or (b) occurs, Sellers may (i) terminate this Contract
and the Deposit shall be immediately released by the Escrow Agent to Sellers,
(ii) extend the time for Closing for all Properties as reasonably determined by
Sellers to permit Purchaser to obtain the Loan Assumption and Release for one or
more of the Assumption Properties, or (iii) terminate this Contract in its
entirety.
4.8 Purchaser Financing. Purchaser assumes full responsibility to obtain the
funds required for settlement, and Purchaser's acquisition of such funds shall
not be a contingency to the Closing.
ARTICLE V...
CLOSING
5.1 Closing Date. The Closing shall occur 30 days after the Feasibility Period
expires (the "Closing Date") through an escrow with Escrow Agent, whereby the
Sellers, 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, any 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 such Seller reasonably determines is desirable in
connection with any Loan Payoff or Loan Assumption and Modification, and the
exercise of such option shall extend the Closing Date for all Properties.
Further, the Closing Date may be extended without penalty at the option of any
Seller either (i) 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 any Seller pursuant to the second sentence of this paragraph) to
satisfy any condition to Closing, (ii) to a date following the Closing Date
specified in the first sentence of this paragraph above (or, if applicable, as
extended by any Seller pursuant to the second sentence of this paragraph) in
order to finalize the drafting with a Lender or a Lender's counsel of all
documents necessary or desirable to accomplish a Loan Assumption and
Modification, and (iii) such later date as is mutually acceptable to Seller and
Purchaser.
5.2 Seller Closing Deliveries. No later than 5 Business Days prior to the
Closing Date, each Seller shall, with respect to each Property to be conveyed by
such Seller hereunder, deliver to Purchaser a draft of each of the items listed
in these subsections 5.2.1, 5.2.2, 5.2.3, 5.2.4 and 5.2.8. No later than 1
Business Day prior to the Closing Date, each Seller shall, with respect to each
Property to be conveyed by such Seller hereunder, deliver to Escrow Agent, each
of the following items:
5.2.1 Limited Warranty Deed (the "Deed") in the form attached as Exhibit B to
Purchaser, subject to the Permitted Exceptions.
5.2.2 A Bill of Sale in the form attached as Exhibit C.
5.2.3 A General Assignment in the form attached as Exhibit D (the "General
Assignment").
5.2.4 An Assignment of Leases and Security Deposits in the form attached as
Exhibit E (the "Leases Assignment").
5.2.5 A letter in the form attached hereto as Exhibit F prepared by Purchaser
and countersigned by such 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 such Seller.
5.2.7 A title affidavit or at such Seller's option an indemnity, as applicable,
in the customary form reasonably acceptable to such 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
such Seller to any greater liability, or impose any additional obligations,
other than as set forth in this Contract; and
5.2.8 A certification of such 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 such Seller's
authority to consummate this transaction.
5.3 Purchaser Closing Deliveries. No later than 5 Business Days prior to the
Closing Date, Purchaser shall, with respect to each Property, deliver to Seller
a draft of each of the items listed in subsections 5.3.2, 5.3.3, 5.3.7 and
5.3.8. 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
the applicable Seller upon the Closing) the following items with respect to each
Property being conveyed at such Closing:
5.3.1 The full Purchase Price for such Property (with credit for the Allocated
Share of the Deposit) and, if applicable for an Assumption Property, the Loan
Balance, plus or minus the adjustments or prorations required by this Contract.
5.3.2 A title affidavit (or at Purchaser's option an indemnity) pertaining to
Purchaser's activity on the applicable 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 such 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 at such Property prepared and executed
by Purchaser in the form attached hereto as Exhibit G.
5.3.8 The Vendor Terminations in the form attached hereto as Exhibit F
(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 the
applicable 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......If Purchaser elects to cause and the applicable Lender has agreed to
permit the Loan Assumption and Release with respect to an Assumption Property,
all documents, instruments, guaranties, Assumption Lender Fees, Required Loan
Fund Amounts, and other items or funds required by the applicable Lender to
cause the applicable Loan Assumption and Modification.
5.3.12......With respect to each Payoff Property, the Lender Fees (subject to
reduction from the Purchase Price in accordance with Section 2.2).
5.4 Closing Prorations and Adjustments. The prorations set forth in this Section
5.4 shall be on a Property-by-Property basis and not among, or between,
Properties, and shall not be allocated on an Applicable Share basis.
5.4.1 General. With respect to each Property, 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, the applicable Seller being charged or
credited, as appropriate, for all of the same attributable to the period up to
the Closing Date (and credited for any amounts paid by the applicable 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 the same attributable to the period on and after the
Closing Date. Each 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 the applicable Seller (if the
prorations result in a net credit to such Seller) or by such Seller to Purchaser
(if the prorations result in a net credit to Purchaser for such Property), by
increasing or reducing the cash to be paid by Purchaser at Closing for such
Property.
5.4.2 Operating Expenses. With respect to each Property, all of the operating,
maintenance, taxes (other than real estate taxes, such as rental taxes), and
other expenses incurred in operating such Property that such Seller customarily
pays, and any other costs incurred in the ordinary course of business for the
management and operation of such Property, shall be prorated on an accrual
basis. Each 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. With respect to each Property, the final readings and final
billings for utilities will be made if possible as of the Closing Date, in which
case each 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. Each
Seller shall be entitled to the return of any deposit(s) posted by it with any
utility company, and such Seller shall notify each utility company serving its
Property to terminate its account, effective as of noon on the Closing Date.
5.4.4 Real Estate Taxes. Any real estate ad valorem or similar taxes for a
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 such 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. Purchaser acknowledges that Seller has filed an
appeal with respect to the real estate ad valorem or other similar property
taxes applicable to the Nob Hill Villa Community Property. After Closing, Seller
shall withdraw such appeal.
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.....With respect to each Property, 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 a 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. Each 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 a Seller's favor for rents which have accrued and
are unpaid as of the Closing, but Purchaser shall pay to such Seller such
accrued Uncollected Rents as and when collected by Purchaser. Purchaser agrees
to bill Tenants of the Properties for all Uncollected Rents and to take
reasonable actions to collect Uncollected Rents. After the Closing, each 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 such 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 any Seller of such right.
Purchaser agrees to cooperate with each Seller in connection with all efforts by
such 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 each 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 such Seller; provided, however,
that Purchaser's obligation to cooperate with a Seller pursuant to this sentence
shall not obligate Purchaser to terminate any Tenant Lease with an existing
Tenant or evict any existing Tenant from a Property.
5.4.6.2.....At Closing, with respect to each Property, Purchaser shall receive a
credit against the applicable 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 a Seller which constitute the Tenant Security Deposit Balance shall be
retained by the applicable Seller in exchange for the foregoing credit against
the applicable Purchase Price and shall not be transferred by such 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 any 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 for a Property, to the extent that
the applicable 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 for such Property. With respect to any payments received by Purchaser
after the Closing allocable to a Seller prior to Closing, Purchaser shall
promptly pay the same to the applicable Seller.
5.4.7 Existing Loan-Payoff Properties. This Section 5.4.7 shall be applicable
only to Payoff Properties. On the Closing Date, each Seller of a Payoff Property
shall pay (which payment may be made by such Seller out of the proceeds of the
Purchase Price applicable to its Property) the outstanding principal balance of
the Note applicable to its Property together with all interest accrued under
such Note prior to the Closing Date (the "Loan Payoff"). Purchaser shall pay all
Lender Fees (subject to reduction from the applicable Purchase Price in
accordance with Section 2.2). Any existing reserves, impounds and other accounts
maintained in connection with the applicable Loan shall be released in Good
Funds to the applicable Seller at the Closing unless credited by the applicable
Lender against the amount due from the applicable Seller under the Note.
5.4.8 Existing Loan-Assumption Properties. This Section 5.4.8 is applicable only
to Assumption Properties. Each Seller of an Assumption Property shall be
responsible for all principal required to be paid under the terms of the Note
applicable to its Assumption Property prior to Closing, together with all
interest accrued under such Note prior to Closing, all of which may be a credit
against the Purchase Price for its Property as provided in Section 2.2.3.
Purchaser shall be responsible for all Assumption Lender Fees and all other
fees, penalties, interest and other amounts due and owing under the Assumed Loan
Documents as a result of any Loan Assumption and Release. As set forth in
Section 4.7.6, any existing reserves, impounds and other accounts maintained in
connection with the applicable Loan and required to be replaced by Purchaser,
shall be released in Good Funds to Seller at the Closing.
5.4.9 Insurance. No proration shall be made in relation to insurance premiums
and insurance policies will not be assigned to Purchaser.
5.4.10......Employees. All of each Seller's and each Seller's manager's on-site
employees shall have their employment at the applicable Property terminated as
of the Closing Date.
5.4.11......Closing Costs. With respect to each Property, Purchaser shall pay
any transfer, mortgage assumption (if applicable), sales, use, gross receipts or
similar taxes, the cost of recording any instruments required to discharge any
liens or encumbrances against such Property, any premiums or fees required to be
paid by Purchaser with respect to the applicable Title Policy pursuant to
Section 4.1, and one-half of the customary closing costs of the Escrow Agent.
Each Seller shall pay the base premium for its Title Policy to the extent
required by Section 4.1, and one-half of the customary closing costs of the
Escrow Agent. Seller will request that Title Insurer secure a simultaneous issue
rate for any loan title policy purchased by Purchaser in connection with the
Closing.
5.4.12......Utility Contracts. If any Seller has entered into an agreement for
the purchase of electricity, gas or other utility service for its Property or a
group of properties (including such Property) (a "Utility Contract"), or an
affiliate of such Seller has entered into a Utility Contract, such Utility
Contract shall be identified on the Seller Information Schedule and, as set
forth on the Seller Information Schedule, (a) Purchaser either shall assume the
Utility Contract with respect to such Property, or (b) the reasonably calculated
costs of the Utility Contract attributable to such Property from and after the
Closing shall be paid to the applicable Seller at the Closing and such Seller
shall remain responsible for payments under the Utility Contract.
5.4.13......Possession. Possession of each 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 applicable Purchase Price. To the extent
reasonably available to each Seller, originals or copies of its Leases and
Property Contracts, lease files, warranties, guaranties, operating manuals, keys
to the property, and such Seller's books and records relating to its Property to
be conveyed by such Seller (other than proprietary information) (collectively,
"Seller's Property-Related Files and Records") regarding the applicable Property
shall be made available to Purchaser at such Property after the Closing.
Purchaser agrees, for a period of not less than 1 year after the Closing (the
"Records Hold Period"), to (a) provide and allow the applicable 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 any Seller's Property-Related Files
and Records, Purchaser must first provide the applicable Seller prior written
notice (the "Records Disposal Notice"). Such Seller shall have a period of 30
days after receipt of the Records Disposal Notice to enter the applicable
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 such Seller
desires to retain. Purchaser agrees (i) to include the covenants of this Section
5.4.13 pertaining to Seller's Property-Related Files and Records in any
management contract for each Property (and to bind the manager thereunder to
such covenants), and (ii) to bind any future purchaser of such Property to the
covenants of this Section 5.4.13 pertaining to Seller's Property-Related Files
and Records. Purchaser shall indemnify, hold harmless and, if requested by each
Seller (in such Seller's sole discretion), defend (with counsel approved by such
Seller) such 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 5.4.13.
5.4.14......Survival. The provisions of this Section 5.4 shall survive the
Closing and delivery of the Deed to Purchaser.
5.5 Post Closing Adjustments. In general, and except as provided in this
Contract or the Closing Documents, each Seller shall be entitled to all income,
and shall pay all expenses, relating to the operation of its 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 such Property for the
period commencing on and after the Closing Date. Purchaser or a Seller may
request that Purchaser and such Seller undertake to re-adjust any item on the
Proration Schedule (or any item omitted therefrom) in accordance with the
provisions of Section 5.4 of this Contract; provided, however, that neither
party shall have any obligation to re-adjust any items for any Property (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) with respect to such Property. The provisions of this Section
5.5 shall survive the Closing and delivery of the Deeds to Purchaser.
ARTICLE VI..
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, each Seller, individually and severally with respect only
to itself and its Property, 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 Such Seller is duly organized, validly existing and in good standing under
the laws of the state of its formation set forth on the Seller Information
Schedule; and, subject to Section 8.2.4, and, with respect to any Assumption
Property, any approvals required from a Lender for a Loan Assumption and
Modification, has or at the Closing shall have the entity power and authority to
sell and convey its Property and to execute the documents to be executed by such
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 such Seller is a party or by which such Seller is otherwise
bound, which conflict, breach or default would have a material adverse affect on
such 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 such Seller in accordance with its
terms;
6.1.2 Other than the Leases, such Seller's Property is not subject to any
written lease executed by such Seller or, to such Seller's knowledge, any other
possessory interests of any person;
6.1.3 Such 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 as set forth on the Seller Information Schedule and for any actions
by such Seller to evict Tenants under its Leases, to such Seller's knowledge,
there are no actions, proceedings, litigation or governmental investigations or
condemnation actions either pending or threatened against such Seller's
Property;
6.1.5 To such Seller's knowledge, such 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 such Seller's Property; and
6.1.6 To such Seller's knowledge, such Seller has not received any written
notice of any material default by such Seller under any of its Property
Contracts that will not be terminated on the Closing Date.
6.1.7 Each Seller agrees that it shall not solicit or transfer any of its
Tenants to relocate to another apartment property in which AIMCO has an
interest, except if necessary to complete repairs on Property.
6.2 AS-IS. Except for Seller's Representations, each Property is expressly
purchased and sold "AS IS," "WHERE IS," and "WITH ALL FAULTS." The Purchase
Price for each Property 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
Sellers or Broker or statements, representations or warranties, express or
implied, made by or enforceable directly against Sellers or Broker, including,
without limitation, any relating to the value of any Property, the physical or
environmental condition of any Property, any state, federal, county or local
law, ordinance, order or permit; or the suitability, compliance or lack of
compliance of any Property with any regulation, or any other attribute or matter
of or relating to any Property (other than any covenants of title contained in
the Deed conveying a Property and Seller's Representations with respect to such
Property). Purchaser agrees that Sellers shall not be responsible or liable to
Purchaser for any defects, errors or omissions, or on account of any conditions
affecting the Properties. Purchaser, its successors and assigns, and anyone
claiming by, through or under Purchaser, hereby fully releases each of 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 any 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 Properties. 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 Properties), reports, investigations and
inspections as it deems appropriate in connection with the Properties. If
Sellers provide or have 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
Properties, including, without limitation, the offering prepared by Broker,
Purchaser and Sellers agree that Sellers have done so or shall do so only for
the convenience of the 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 any
Seller's Indemnified Parties. Purchaser shall rely only upon any title insurance
obtained by Purchaser with respect to title to the Properties. Purchaser
acknowledges and agrees that no representation has been made and no
responsibility is assumed by Sellers with respect to current and future
applicable zoning or building code requirements or the compliance of the
Properties with any other laws, rules, ordinances or regulations, the financial
earning capacity or expense history of the Properties, the continuation of
contracts, continued occupancy levels of the Properties, 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, each Seller shall have the
right, but not the obligation, to enforce its rights against any and all of its
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
applicable Deed with or without such tenants in possession and without any
allowance or reduction in the applicable Purchase Price under this Contract.
Purchaser hereby releases Sellers 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 Deeds to Purchaser.
6.3 Survival of Seller's Representations. Sellers and Purchaser agree that
Seller's Representations shall survive Closing for a period of 6 months (the
"Survival Period"). No Seller shall have liability after the Survival Period
with respect to any of its Seller's Representations contained herein except to
the extent that Purchaser has requested arbitration against such Seller during
the Survival Period for breach of any of such Seller's Representations. Each
Seller shall be liable only for the breach of its own Seller's Representations.
Further, the liability for each Seller for breach of its Seller's
Representations shall be limited to, and capped at, $25,000 for such Seller's
Property for which a breach of Seller's Representations occurred, on a
Property-by-Property basis if a Seller is selling more than one Property. Such
cap on liability shall apply for any individual breach or in the aggregate for
all breaches of such Seller's Representations with respect to such Property.
Purchaser shall not 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 for a Property exceeds $5,000. In the event
that a 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 such 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 [such] 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 Regional Property Manager of such
Seller and shall not be construed to refer to the knowledge of any other
partner, officer, director, agent, employee or representative of such Seller, or
any affiliate of such Seller, or to impose upon such Regional Property Manager
any duty to investigate the matter to which such actual knowledge or the absence
thereof pertains, or to impose upon such Regional Property Manager any
individual personal liability.
6.5 Representations And Warranties Of Purchaser. For the purpose of inducing
Sellers to enter into this Contract and to consummate the sale and purchase of
the Properties in accordance herewith, Purchaser represents and warrants to
Sellers the following as of the Effective Date and as of the Closing Date:
6.5.1 Purchaser is a limited liability company duly organized, validly existing
and in good standing under the laws of New York.
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 Sellers.
6.5.4 Other than Seller's Representations, Purchaser has not relied on any
representation or warranty made by Sellers or any representative of Sellers
(including, without limitation, Broker) in connection with this Contract and the
acquisition of the Properties.
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 any 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 VII
OPERATION OF THE PROPERTIES
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 each Seller may,
with respect to its Property, 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, each 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 such Seller in the
ordinary course of its operation of its 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, each Seller shall operate its Property after the Effective Date in
the ordinary course of business, and except as necessary in such Seller's sole
discretion to address (a) any life or safety issue at its Property or (b) any
other matter which in such Seller's reasonable discretion materially adversely
affects the use, operation or value of such Property, such Seller will not make
any material alterations to its 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 a Seller in the ordinary course of business, each Seller covenants
that it will not voluntarily create or cause any lien or encumbrance to attach
to its 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 VIII......
CONDITIONS PRECEDENT TO CLOSING
8.1 Purchaser's Conditions to Closing. Subject to the provisions of this Section
8.1, 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 Sellers 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 Each 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 such Seller hereunder;
8.1.4 No Seller nor any of Seller's general partners shall be a debtor in any
bankruptcy proceeding nor shall have been in the last 6 months a debtor in any
bankruptcy proceeding; and
8.1.5 If Purchaser has complied with the requirements of Section 4.7, with
respect to any Assumption Property, the applicable Loan Assumption and Release
shall have occurred.
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, 8.1.2, 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
for any Property, or (b) notify Seller's Representative (a "Termination Notice")
in writing of Purchaser's decision to terminate this Contract for the Property
for which there was such a failure of condition or default and receive a return
of the Allocated Share of the Deposit from the Escrow Agent (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 Allocated Share of the Deposit). If Seller's Representative receives a
Termination Notice, Seller's Representative may, within 3 Business Days after
receiving the Termination Notice, give Purchaser written notice (a
"Reinstatement Notice") that Purchaser either must purchase all of the
Properties or terminate this Contract for all of the Properties. Purchaser
shall, within 3 Business Days after receiving a Reinstatement Notice, give
Seller's Representative written notice of whether it desires to purchase all of
the Properties or terminate this Contract in its entirety; Purchaser's failure
to provide Seller's Representative with written notice that it desires to
terminate this Contract in its entirety shall be deemed Purchaser's decision to
purchase all of the Properties.
8.2 Sellers' Conditions to Closing. Without limiting any of the rights of any
Seller elsewhere provided for in this Contract, each Seller's obligation to
close with respect to conveyance of its 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;
8.2.4 Such Seller shall have received all consents, documentation and approvals
necessary to consummate and facilitate the transactions contemplated hereby,
including, without limitation, a tax free exchange pursuant to Section 13.19
(and the amendment of such Seller's (or such Seller's affiliates' partnership or
other organization documents in connection therewith) (a) from Seller's
unaffiliated partners, members, managers, shareholders or directors to the
extent required by Seller's (or Seller's affiliates') organizational documents,
and (b) as required by law;
8.2.5 With respect to any Assumption Property, the applicable Loan Assumption
and Release shall have occurred; and
8.2.6 AIMCO shall, directly or indirectly, own more than 50% of the voting
interests in each Seller at the time of Closing.
If any of the foregoing conditions in Sections 8.2.1 through 8.2.5 to a
Seller's obligation to close with respect to conveyance of its Property under
this Contract are not met, such Seller may (a) waive any of the foregoing
conditions and proceed to Closing on the Closing Date, (b) terminate this
Contract either in its entirety or with respect to its Property, and, if such
failure constitutes a default by Purchaser, exercise any of its remedies under
Section 10.1. If a Seller terminates this Contract with respect to its Property,
the remaining Sellers may elect either to terminate this Contract or proceed to
close the remaining Properties. The termination of this Contract by any Seller
pursuant to this Section 8.2 shall be exercised by written notice from Seller's
Representative to Purchaser by 12:00 p.m. (of the time zone in which the Escrow
Agent is located) of the Closing Date.
If the condition set forth in Section 8.2.6 has not occurred for any
Seller, then this Contract shall terminate in its entirety and Purchaser shall
recover the Deposit (subject to Purchaser's obligation under Section 3.5.2 to
return all Third-party Reports and information and Materials provided to
Purchaser as a pre-condition to the return of the Deposit to Purchaser).
ARTICLE IX
BROKERAGE
9.1 Indemnity. Each Seller, severally and individually, represents and warrants
to Purchaser that it has dealt only with CB Richard Ellis, 2415 E. Camelback
Road, Phoenix, Arizona 85016 ("Broker") in connection with this Contract. Each
Seller, severally and individually, and Purchaser each represents and warrants
to the other that, other than Broker, it has not dealt with or utilized the
services of any other real estate broker, sales person or finder in connection
with this Contract, and each party agrees to indemnify, hold harmless, and, if
requested in the sole and absolute discretion of the indemnitee, defend (with
counsel approved by the indemnitee) the other party from and against all Losses
relating to brokerage commissions and finder's fees arising from or attributable
to the acts or omissions of the indemnifying party. The provisions of this
Section 9.1 shall survive the termination of this Contract, and if not so
terminated, the Closing and delivery of the Deeds to Purchaser.
9.2 Broker Commission. If the Closing occurs, each Seller agrees to pay Broker a
commission according to the terms of a separate contract. Broker shall not be
deemed a party or third party beneficiary of this Contract.
9.3 Broker Signature Page. As a condition to each Seller's obligation to pay the
commission pursuant to Section 9.2, Broker shall execute the signature page for
Broker attached hereto solely for purposes of confirming the matters set forth
therein; provided, however, that (a) Broker's signature hereon shall not be a
prerequisite to the binding nature of this Contract on Purchaser and Sellers,
and the same shall become fully effective upon execution by Purchaser and
Sellers, and (b) the signature of Broker will not be necessary to amend any
provision of this Contract.
ARTICLE X
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 Sellers the deliveries
specified under Section 5.3 on the date required thereunder, or (c) deliver the
Purchase Price for each Property at the time required by Section 2.2.4 and close
on the purchase of the Properties on the Closing Date, then, immediately and
without notice or cure, Purchaser shall forfeit the Deposit, and the Escrow
Agent shall deliver the Allocated Share of the Deposit to each Seller, and
neither party shall be obligated to proceed with the purchase and sale of the
Properties. 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's Representative, then
Purchaser shall forfeit the Deposit, and the Escrow Agent shall deliver the
Allocated Share of the Deposit to each 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, Sellers' sole and exclusive
remedy for Purchaser's failure to perform its obligation to purchase the
Properties or breach of a representation or warranty. Sellers expressly waive
the remedies of specific performance and additional damages for such default by
Purchaser. SELLERS AND PURCHASER ACKNOWLEDGE THAT SELLERS' DAMAGES WOULD BE
DIFFICULT TO DETERMINE, AND THAT THE DEPOSIT IS A REASONABLE ESTIMATE OF
SELLERS' DAMAGES RESULTING FROM A DEFAULT BY PURCHASER IN ITS OBLIGATION TO
PURCHASE THE PROPERTY. SELLERS AND PURCHASER FURTHER AGREE THAT THIS SECTION
10.1.1 IS INTENDED TO AND DOES LIQUIDATE THE AMOUNT OF DAMAGES DUE SELLERS, AND
SHALL BE SELLERS' 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 a Seller, prior to the Closing, defaults in its
representations, warranties, covenants, or obligations under this Contract,
including to sell its 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, Purchaser may
either (A) seek specific performance of the defaulting Seller's obligations to
deliver its Deed pursuant to this Contract (but not damages), or (B) give a
Termination Notice to Seller's Representative of Purchaser's decision to
terminate this Contract for the Property for which there was such a default and
receive a return of the Allocated Share of the Deposit from the Escrow Agent
(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 Allocated Share of the Deposit). If Seller's Representative
receives a Termination Notice, Seller's Representative may, within 3 Business
Days after receiving the Termination Notice, give Purchaser a Reinstatement
Notice that Purchaser either must purchase all of the Properties or terminate
this Contract for all of the Properties. Purchaser shall, within 3 Business Days
after receiving a Reinstatement Notice, give Seller's Representative notice of
whether it desires to purchase all of the Properties or terminate this Contract
in its entirety; Purchaser's failure to provide Seller's Representative notice
that it desires to terminate this Contract in its entirety shall be deemed
Purchaser's decision to purchase all of the Properties. If this Contract is
terminated in whole or in part, Purchaser shall recover the Allocated Share of
Deposit for the terminated Properties (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 Allocated Share of the Deposit), its direct and
actual out-of-pocket expenses and costs (documented by paid invoices to third
parties) in connection with the Properties for which this Contract has been
terminated, which damages shall not exceed $10,000 per terminated Property. If
this Contract is terminated in whole or in part, Purchaser agrees that it shall
promptly deliver to each 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 Sellers pursuant to the foregoing sentence. SELLERS 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 SELLERS, BOTH AT LAW AND IN EQUITY ARISING
FROM OR RELATED TO A BREACH BY ANY 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 SELLERS FOR ANY BREACH BY A 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 ANY PROPERTY UNLESS AND UNTIL IT HAS IRREVOCABLY ELECTED TO SEEK
SPECIFIC PERFORMANCE OF THIS CONTRACT AND HAS FILED AN ACTION SEEKING SUCH
REMEDY.
ARTICLE XI
RISK OF LOSS OR CASUALTY
11.1 Major Damage. If a Property is damaged or destroyed by fire or other
casualty prior to Closing, and the cost of repair is more than $300,000, then
the applicable 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 give a Termination Notice for the
damaged Property to Seller's Representative. If Seller's Representative receives
a Termination Notice, Seller's Representative may, within 3 Business Days after
receiving the Termination Notice, give Purchaser a Reinstatement Notice that
Purchaser either must purchase all of the Properties or terminate this Contract
for all of the Properties. Purchaser shall, within 3 Business Days after
receiving a Reinstatement Notice, give Seller's Representative notice of whether
it desires to purchase all of the Properties or terminate this Contract in its
entirety; Purchaser's failure to provide Seller's Representative notice that it
desires to terminate this Contract in its entirety shall be deemed Purchaser's
decision to purchase all of the Properties. If this Contract is not terminated,
this transaction shall be closed in accordance with the terms of this Contract
for the full Purchase Price for the damaged Property notwithstanding any such
damage or destruction and Purchaser shall receive all insurance proceeds
pertaining thereto (plus a credit against the applicable Purchase Price in the
amount of any deductible payable by the applicable Seller in connection
therewith) at Closing. If this Contract is terminated in whole or in part from
such damage, Purchaser shall recover the Allocated Share of the Deposit for the
terminated Properties (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 a return of the Allocated Share of the Deposit).
11.2 Minor Damage. If a 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, the applicable
Seller shall make such repairs to the extent of any recovery from insurance
carried on such Property if they can be reasonably effected before the Closing.
Subject to Section 11.3, if the applicable Seller is unable to effect such
repairs, then Purchaser shall receive all insurance proceeds pertaining thereto
(plus a credit against the Purchase Price for the damaged Property in the amount
of any deductible payable by the applicable Seller in connection therewith) at
Closing.
11.3 Repairs. To the extent that a Seller elects to commence any repair,
replacement or restoration of its damaged Property prior to Closing, then such
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 Deeds to Purchaser.
ARTICLE XII
EMINENT DOMAIN
12.1 Eminent Domain. If, at the time of Closing, any material part of a 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 give a Termination Notice to Seller's
Representative for the Property for which there was such a condemnation. If
Seller's Representative receives a Termination Notice, Seller's Representative
may, within 3 Business Days after receiving the Termination Notice, give
Purchaser a Reinstatement Notice that Purchaser either must purchase all of the
Properties or terminate this Contract for all of the Properties. Purchaser
shall, within 3 Business Days after receiving a Reinstatement Notice, give
Seller's Representative written notice of whether it desires to purchase all of
the Properties or terminate this Contract in its entirety; Purchaser's failure
to provide Seller's Representative with written notice that it desires to
terminate this Contract in its entirety shall be deemed Purchaser's decision to
purchase all of the Properties. If this Contract is not terminated, this
transaction shall be closed in accordance with the terms of this Contract for
the full Purchase Price for the affected Property 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 a Property. If
this Contract is terminated in whole or in part from such condemnation,
Purchaser shall recover the Allocated Share of the Deposit for the terminated
Properties (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 a return of the Allocated Share of the Deposit).
ARTICLE XIII......
MISCELLANEOUS
13.1 Binding Effect of Contract. This Contract shall not be binding on any party
until executed by both Purchaser and Sellers. 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's Representative, except that
Purchaser may assign its rights under this Contract to each of the three
Properties to one or more entities so long as (a) Purchaser or its key members
are an affiliate, subsidiary, or majority owner of the purchasing entity(ies),
(b) Purchaser is not released from its liability hereunder, (c) Purchaser
provides written notice to Seller's Representative of any proposed assignment no
later than 10 days prior to the Closing Date, and (d) Seller's Representative
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 Sellers and Purchaser, and their respective
successors, heirs and permitted assigns.
13.5 Captions. The captions, headings, and arrangements used in this Contract
are for convenience only and do not in any way affect, limit, amplify, or modify
the terms and provisions hereof.
13.6 Number And Gender Of Words. Whenever herein the singular number is used,
the same shall include the plural where appropriate, and words of any gender
shall include each other gender where appropriate.
13.7 Notices. All notices, demands, requests and other communications required
or permitted hereunder shall be in writing, and shall be (a) personally
delivered with a written receipt of delivery; (b) sent by a nationally
recognized overnight delivery service requiring a written acknowledgement of
receipt or providing a certification of delivery or attempted delivery; (c) sent
by certified 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:
DAMA Realty Investors, LLC
c/o First Management Services, Inc.
333 Union Street, Suite 400
Nashville, TN 37201
Attn: Mr. W. Kirby Davis, Jr.
Telephone: 615-244-8060
Facsimile: 615-242-4170
with copy to:
Segel, Goldman, Mazzota & Siegel, P.C.
9 Washington Square
Albany, NY 12205
Attn: Paul J. Goldman, Esq.
Telephone: 518-452-0941 x105
Facsimile: 518-452-0417
To any Seller or Seller's Representative:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Patrick Slavin
Telephone: 303-691-4340
Facsimile: 303-300-3282
And:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Mr. Harry Alcock
Telephone: 303-691-4344
Facsimile: 303-300-3282
with copy to:
Chad Asarch, Esq.
Vice President and Assistant General Counsel
AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Telephone: 303-691-4303
Facsimile: 303-300-3260
and a copy to:
Kris Vercauteren
AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Telephone: 303-691-4345
Facsimile: 303-300-3274
and a copy to:
Ballard Spahr Andrews & Ingersoll, LLP
1225 17th Street, Suite 2300
Denver, Colorado 80202
Attention: Beverly J. Quail, Esq.
Telephone: 303-299-7305
Facsimile: 303-296-3956
Any notice required hereunder to be delivered to the Escrow Agent shall be
delivered in accordance with above provisions as follows:
Fidelity National Title Insurance Company
1900 West Loop South, Suite 650
Houston, Texas 77027
Telephone: 713-621-9506
Facsimile: 713-623-4406
Unless specifically required to be delivered to the Escrow Agent pursuant
to the terms of this Contract, no notice hereunder must be delivered to the
Escrow Agent in order to be effective so long as it is delivered to the other
party in accordance with the above provisions.
13.8 Governing Law And Venue. The laws of the State of Tennessee 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 agreements, whether
written or oral.
13.10 Amendments. This Contract shall not be amended, altered, changed,
modified, supplemented or rescinded in any manner except by a written contract
executed by all of the parties; provided, however, that, (a) as provided in
Section 2.3.5 above, the signature of the Escrow Agent shall not be required as
to any amendment of this Contract other than an amendment of Section 2.3, and
(b) as provided in Section 9.3 above, the signature of the Broker shall not be
required as to any amendment of this Contract.
13.11 Severability. If 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 Sellers' lenders, attorneys and accountants.
Any information and Materials provided by Sellers 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 the prior written authorization of Seller's
Representative, which may be granted or denied in the sole discretion of
Seller's Representative. 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
superseded hereby.
13.15 Time Of The Essence. It is expressly agreed by the parties hereto that
time is of the essence with respect to this Contract.
13.16 Waiver. No delay or omission to exercise any right or power accruing upon
any default, omission, or failure of performance hereunder shall impair any
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient. No waiver, amendment, release, or modification of this Contract shall
be established by conduct, custom, or course of dealing and all waivers must be
in writing and signed by the waiving party.
13.17 Attorneys Fees. In the event either party hereto commences litigation or
arbitration against the other to enforce its rights hereunder, the substantially
prevailing party in such litigation shall be entitled to recover from the other
party its reasonable attorneys' fees and expenses incidental to such litigation
and arbitration, including the cost of in-house counsel and any appeals.
13.18 Time Periods. Should the last day of a time period fall on a weekend or
legal holiday, the next Business Day thereafter shall be considered the end of
the time period.
13.19 1031 Exchange. Intentionally Deleted.
13.20 No Personal Liability of Officers, Trustees or Directors of Seller's
Partners. Purchaser agrees that none of any 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. Sellers 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 any Property with any third-party; provided, however,
that such communications are subject to the terms of this Contract, and that
Sellers shall not enter into any contract with a third-party for the sale of any
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 Properties 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 a
property accessible to disabled persons and provide auxiliary aids and services
for hearing, vision or speech impaired persons. Sellers make no warranty,
representation or guarantee of any type or kind with respect to any Property's
compliance with the ADA or the FHA (or any similar state or local law), and
Sellers expressly disclaim 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 the prior written
consent of Seller's Representative, which consent may be withheld in the sole
discretion of Seller's Representative. 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's
Representative 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 Sellers 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 Sellers
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 therefore, then the American Arbitration Association shall
designate an arbitrator. The arbitration shall be final and binding, and
enforceable in any court of competent jurisdiction. The arbitrator shall award
attorneys' fees (including those of in-house counsel) and costs to the
substantially prevailing party and charge the cost of arbitration to the party
which is not the substantially prevailing party. Notwithstanding anything herein
to the contrary, this Section 13.25 shall not prevent Purchaser or Sellers 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 Sellers, the Property Manager or AIMCO,
or their respective affiliates, are the sole owners of all right, title and
interest in and to the AIMCO Marks (or have the right to use such AIMCO Marks
pursuant to license agreements with third parties) and that no right, title or
interest in or to the AIMCO Marks is granted, transferred, assigned or conveyed
as a result of this Contract. Purchaser further agrees that Purchaser will not
use the AIMCO Marks for any purpose.
13.27 Non-Solicitation of Employees. Purchaser acknowledges and agrees that,
without the express written consent of Seller, neither Purchaser nor any of
Purchaser's employees, affiliates or agents shall (a) prior to the expiration of
the Feasibility Period, solicit any of Seller's employees or any employees
located at the Property for potential employment, or (b) at any time, solicit
any of Seller's affiliates' employees located at any property owned by such
affiliates for potential employment.
13.28 Survival. Except for (a) all of the provisions of this Article 13 (other
than Section 13.19 and 13.21), 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 any Properties 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 a 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 a Seller or Seller's
Representative 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 a 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
a Seller to pay any amount pursuant to this Contract to Purchaser under any
circumstance, that amount shall be deemed the 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 a Seller is
required to return the Initial Deposit, Additional Deposit or other amount to
Purchaser, such 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 Sellers' Several Obligations. Purchaser agrees that, notwithstanding any
other provision of this Contract to the contrary, the representations,
warranties, obligations, and covenants of each Seller are individual and
several, and not joint and several, and that each Seller is responsible and
liable only for its own Property and its own representations, warranties,
obligations, and covenants. Purchaser agrees that it shall look solely to the
applicable Seller for any amount due hereunder or, obligation owed hereunder,
and further waives any and all claims against any other party or Property for
payment or performance of the same, including, without limitation, any other
Seller or AIMCO, or any partner, member, manager, shareholder, director,
officer, employee, affiliate, representative or agent of any Seller or AIMCO.
13.31 Obligation to Close on all Properties. Except as expressly set forth in
this Contract, Purchaser's obligation to purchase the Properties is not
severable and Purchaser must purchase all of the Properties. Similarly, except
as expressly stated this Contract, Sellers' obligations to sell the Properties
are not severable and Sellers must sell all of the Properties to Purchaser.
ARTICLE XIV
LEAD-BASED PAINT DISCLOSURE
14.1 Disclosure. Sellers 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 Deeds to Purchaser.
14.2 Consent Agreement - Pre-1978 - Not Certified. Intentionally Deleted.
14.3 Consent Agreement - Pre-1978 Certified. The provisions of this Section 14.3
apply to those Properties identified on the Seller Information Schedule as
"Pre-1978-Certified." Testing has been performed at each Property identified as
"Pre-1978, Certified" with respect to lead-based paint. The "LPB Consultant"
identified on the Seller Information Schedule prepared the Report with respect
to the Property identified therein. A copy of each report will be provided to
Purchaser with the Materials. Each Report certifies the respective Property as
lead based paint free. By execution hereof, Purchaser acknowledges receipt of a
copy of the Reports, the Lead-Based Paint Disclosure Statement attached hereto
as Exhibit H, and acknowledges receipt of 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 AIMCO (executed December 18, 2001) (the "Consent Agreement"). Because
the applicable Property has been certified as lead based paint free, the
applicable Seller is not required under the Consent Agreement to remediate or
abate any lead-based paint condition at its Property prior to the Closing.
Purchaser acknowledges and agrees that (1) after Closing, Purchaser and the
applicable Property shall be subject to the Consent Agreement and the provisions
contained herein related thereto and (2) Purchaser shall not be deemed to be a
third party beneficiary to the Consent Agreement. The provisions of this Section
14.3 shall survive the termination of this Contract, and if not so terminated,
the Closing and delivery of the Deed to Purchaser.
14.4 Consent Agreement - Pre-1978-LBP, But No LBP Hazards The provisions of this
Section 14.4 apply to those Properties identified on the Seller Information
Schedule as "Pre-1978, Lead-Based Paint Present, No Lead-Based Hazard." Testing
has been performed at the applicable Property with respect to lead-based paint.
The "LBP Consultant" identified on the Seller Information Schedule prepared the
Report with respect to the Property identified therein. A copy of the Report
with respect to the Property will provided to Purchaser with the Materials. The
Report certifies the applicable Property as free of (a) lead based hazards, (b)
dust lead hazards and (c) soil lead hazards. By execution hereof, Purchaser
acknowledges receipt of a copy of the Report, the Lead-Based Paint Disclosure
Statement attached hereto as Exhibit H, and the Consent Agreement. Because the
applicable Property has been certified as free of (x) lead based hazards, (y)
dust lead hazards and (z) soil lead hazards, the applicable Seller is not
required under the Consent Agreement to remediate or abate any lead-based paint
condition at such Property prior to the Closing. Purchaser acknowledges and
agrees that (1) after Closing, the Purchaser and the applicable Property shall
be subject to the Consent Agreement and the provisions contained herein related
thereto and (2) Purchaser shall not be deemed to be a third party beneficiary to
the Consent Agreement. The provisions of this Section 14.4 shall survive the
termination of this Contract, and if not so terminated, the Closing and delivery
of the Deeds to Purchaser.
[Remainder of Page Intentionally Left Blank]
NOW, THEREFORE, the parties hereto have executed this Contract as of the
date first set forth above.
SELLER:
Chelsea Place Apartments
CHELSEA PLACE LIMITED PARTNERSHIP, a
Tennessee limited partnership
By: Davidson Properties, Inc., a
Tennessee corporation, its general
partner
By:s/sPatrick F. Slavin
Name: Patrick F. Slavin
Title: Senior Vice President
Colony House Apartments
SHELTER PROPERTIES III LIMITED
PARTNERSHIP, a South Carolina limited
partnership
By: Shelter Realty III Corporation, a
South Carolina corporation, its
corporate general partner
By:./s/Patrick F. Slavin
Name: Patrick F. Slavin
Title: Senior Vice President
(Signatures Continued On Next Page)
Nob Hill Villa Apartments
NOB HILL VILLA APARTMENTS Associates,
L.P., a Tennessee limited partnership
By: CCP/IV Nob Hill GP, L.L.C., a South
Carolina limited liability company,
its general partner
By: Consolidated Capital
Properties IV, a California
limited partnership, its sole
member
By: ConCap Equities, Inc.,
a Delaware corporation,
its general partner
By:/s/Patrick F. Slavin
Name: Patrick F. Slavin
Title: Senior Vice
President
PURCHASER:
DAMA REALTY INVESTORS, LLC, a New York
limited liability company
By: /s/W. Kirby Davis, Jr.
Name: W. Kirby Davis, Jr.
Title:
ESCROW AGENT SIGNATURE PAGE
The undersigned executes the Contract to which this signature page is
attached for the purpose of agreeing to the provisions of Section 2.3 of the
Contract, and hereby establishes August 18, 2004 as the date of opening of
escrow and designates 04-194105 as the escrow number assigned to this escrow.
ESCROW AGENT:
FIDELITY NATIONAL TITLE INSURANCE
COMPANY, a Texas insurance company
By:/s/Lolly Avant
Name: Lolly Avant
Title:Vice President, Manager
BROKER SIGNATURE PAGE
The undersigned Broker hereby executes this Broker Signature Page solely
to confirm the following: (a) Broker represents only Sellers in the transaction
described in the Contract to which this signature page is attached, (b) Broker
acknowledges that the only compensation due to Broker in connection with the
Closing of the transaction described in the Contract to which this signature
page is attached is as set forth in a separate agreement between Sellers and
Broker at the Closing, and (c) Broker represents and warrants to Sellers that
Broker and its affiliates have 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 any Property at the Closing) nor has Purchaser granted (as of
the Effective Date or the Closing Date) 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, a Delaware corporation
By: /s/Sam Cunningham
Name: Sam Cunningham
Title: Executive Vice President
Exhibit 10(iv)d
ASSIGNMENT OF CONTRACT
THIS ASSIGNMENT, dated as of September 30, 2004, from DAMA REALTY
INVESTORS, LLC, a New York limited liability company with an address for the
transaction of business c/o First Management Services, Inc., 333 Union Street,
Suite 400, Nashville, Tennessee 37201 (referred to herein as the "Assignor") to
(i) MURFREESBORO CP APARTMENTS G.P., a Tennessee general partnership having an
address for the transaction for business c/o First Management Services, Inc.,
333 Union Street, Suite 400, Nashville, Tennessee 37201, an undivided one-half
tenant in common ownership interest ("Murfreesboro CP") and CHELSEA PLACE
GENERAL PARTNERSHIP, a Tennessee general partnership having an address for the
transaction for business c/o Tri City Rentals, 255 Washington Avenue Extension,
Albany, New York 12205, an undivided one-half tenant in common ownership
interest ("Chelsea"), in and to its right to acquire the Chelsea Place
Apartments, Murfreesboro, Tennessee (the "Chelsea Place Property") (Murfreesboro
CP and Chelsea are collectively referred to herein as the "Chelsea Place
Parties"), (ii) MURFREESBORO CH APARTMENTS G.P., a Tennessee general partnership
having an address for the transaction for business c/o First Management
Services, Inc., 333 Union Street, Suite 400, Nashville, Tennessee 37201, an
undivided one-half tenant in common ownership interest ("Murfreesboro CH") and
COLONY HOUSE GENERAL PARTNERSHIP, a Tennessee general partnership having an
address for the transaction for business c/o Tri City Rentals, 255 Washington
Avenue Extension, Albany, New York 12205, an undivided one-half tenant in common
ownership interest ("Colony"), in and to its right to acquire the Colony House
Apartments, Murfreesboro, Tennessee (the "Colony House Property") (Murfreesboro
CH and Colony are collectively referred to herein as the "Colony House
Parties"), and (iii) NASHVILLE NH APARTMENTS G.P., a Tennessee general
partnership having an address for the transaction of business c/o First
Management Services, Inc., 333 Union Street, Suite 400, Nashville, Tennessee
37201, an undivided one-half tenant in common ownership interest ("Nashville
NH") and NOB HILL GENERAL PARTNERSHIP, a Tennessee general partnership having an
address for the transaction for business c/o Tri City Rentals, 255 Washington
Avenue Extension, Albany, New York 12205, an undivided one-half tenant in common
ownership interest ("Nob Hill"), in and to its right to acquire Nob Hill
Apartments, Nashville, Tennessee (the "Nob Hill Property) (Nashville NH and Nob
Hill are collectively referred to herein as the "Nob Hill
Parties")(collectively, the Chelsea Place Parties, the Colony House Parties, and
the Nob Hill Parties are referred to herein as the "Assignee").
WITNESSETH:
WHEREAS, pursuant to that certain Purchase and Sale Agreement dated August
18, 2004 (the "Agreement") by and between the Assignor and Chelsea Place Limited
Partnership, Shelter Properties III Limited Partnership and Nob Hill Villa
Apartments Associates, L.P. (collectively, the "Sellers") with respect to the
Chelsea Place Property, the Colony House Property and the Nob Hill Property
(collectively, the "Properties"), Sellers agreed to sell and Assignor agreed to
purchase the Properties; and
NOW, THEREFORE, in consideration of One Dollar ($1.00) and other goods and
valuable consideration, the receipt of which is hereby acknowledged by Assignor
and Assignee, it is agreed as follows:
1. Transfer of Rights. The Assignor does hereby sell, assign, and
transfer to (i) Chelsea Place Parties, all the rights of the
Assignor with respect to the Chelsea Place Property and delegates
to the Chelsea Place Parties all of the duties of the Assignor
with respect to the Chelsea Place Property under the Agreement,
(ii) Colony House Parties, all the rights of the assignor with
respect to the Colony House Property and delegates to the Colony
House Parties all of the duties of the Assignor with respect to
the Colony House Property under the Agreement, and (iii) Nob Hill
Parties, all the rights of the assignor with respect to the Nob
Hill Property and delegates to the Nob Hill Parties all of the
duties of the Assignor with respect to the Nob Hill Property
under the Agreement.
2. Assignor's Representation. The Assignor represents that the
Agreement is a valid and binding agreement in all respects, is
assignable, that Assignor's duties thereunder are delegable, and
that this assignment and delegation is a valid exercise of the
rights of the Assignor.
3. Assignee's Assumption of Obligations. By signing and consenting to
this Assignment, (i) Chelsea Place Parties represents that it
assumes, and agrees to perform, all of the obligations of the
Assignor with respect to the Chelsea Place Property under the
Agreement, (ii) Colony House Parties represents that it assumes,
and agrees to perform, all of the obligations of the Assignor
with respect to the Colony House Property under the Agreement,
and (iii) Nob Hill Parties represents that it assumes, and agrees
to perform, all of the obligations of the Assignor with respect
to the Nob Hill Property under the Agreement
[Nothing Further Contained on this Page]
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
the day and year first written above.
ASSIGNOR:
DAMA REALTY INVESTORS, LLC
By:/s/W. Kirby Davis, Jr. Authorized
Representative
ASSIGNEE:
MURFREESBORO CP APARTMENTS G.P.
By: /s/W. Kirby Davis, Jr.
W.Kirby Davis, Jr., Authorized
Representative
CHELSEA PLACE GENERAL PARTNERSHIP
By: /s/Norman Massry
Norman Massry, Authorized Representative
MURFREESBORO CH APARTMENTS G.P.
By: /s/W. Kirby Davis, Jr.
W. Kirby Davis, Jr. Authorized
Representative
COLONY HOUSE GENERAL PARTNERSHIP
By: /s/Norman Massry
Norman Massry, Authorized Representative
NASHVILLE NH APARTMENTS G.P.
By:/s/W. Kirby Davis, Jr. W. Kirby Davis, Jr.
Authorized
Representative
NOB HILL GENERAL PARTNERSHIP
By: /s/Norman Massry
Norman Massry, Authorized Representative
STATE OF TENNESSEE )
) ss.:
COUNTY OF DAVIDSON )
On the 30th day of September, 2004, before me, the undersigned, personally
appeared W. Kirby Davis, JR., personally known to me or proved to me on the
basis of satisfactory evidence to be the individuals whose names are subscribed
to the within instrument and acknowledged to me that he executed the same in his
capacities, and that by his signatures on the instrument, the individuals, or
the person upon behalf of which the individuals acted, executed the instrument.
/s/Monica L. Bayfield
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF ALBANY )
On the 6th day of October, 2004, before me, the undersigned, personally appeared
NORMAN MASSRY, individuals whose names are subscribed to the within instrument
and acknowledged to me that he executed the same in his capacities, and that by
his signatures on the instrument, the individuals, or the person upon behalf of
which the individuals acted executed the instrument.
/s/Paul J. Goldman
Notary Public
Paul J. Goldman-Notary Public
State of New York
No. 4864023
Qualified in Albany County
Commission Expires 6/9/2006