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) May 2, 2005
SHELTER PROPERTIES V
(Exact name of Registrant as specified in its charter)
South Carolina 0-11574 57-0721855
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or File Number) Identification Number)
organization)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Shelter Properties V (the "Registrant") owns a 99.99% interest in New Shelter V
Limited Partnership, a Delaware limited partnership (the "Partnership"). The
Partnership owns The Lexington Apartments, a 267-unit apartment complex located
in Sarasota, Florida (the "Property"). On May 2, 2005, the Partnership entered
into a Purchase and Sale Contract (the "Purchase Agreement") with a third party,
Forest Acquisition Fund, LLC, a Massachusetts limited liability company (the
"Purchaser") to sell the Property to the Purchaser for a sales price of
$19,200,000.
The following is a summary of the terms and conditions of the Purchase
Agreement, which summary is qualified in its entirety by reference to the
Purchase Agreement, a copy of which is filed as Exhibit 10(ii)a to this report
and incorporated herein by reference.
PURCHASE PRICE. The purchase price is $19,200,000. The purchase price is subject
to prorations and adjustments at the closing as provided in the Purchase
Agreement. The Purchaser delivered a deposit of $1,500,000 of which $250,000 is
non-refundable.
CLOSING. The closing is to occur twenty-one days after the satisfaction or
waiver of the closing conditions. The Purchaser has the right to extend the
closing one time for up to 21 days by delivering written notice and delivering
an additional (non-refundable) $100,000 payment. The expected closing date for
the transaction is June 13, 2005.
COSTS AND FEES. The Purchaser will pay all of the mortgage taxes and recording
costs, any premiums or fees required to be paid with respect to the title policy
and one half of the customary closing costs of the escrow agent. Purchaser and
the Partnership will split the cost of the transfer and recording taxes.
REPRESENTATIONS AND WARRANTIES. The Partnership and the Purchaser each made
limited representations and warranties to the other.
CONDITIONS TO CLOSING AND CLOSING DELIVERIES. The closing is subject to
customary closing conditions and customary closing deliveries.
RISK OF LOSS. The risk of loss or damage to the Property by reason of any
insured or uninsured casualty during the period through and including the
closing date will be borne by the Partnership. The Partnership must maintain all
of its existing insurance coverage on the Property in full force and effect
until the closing date.
ASSIGNMENT. With the exception of an assignment to an affiliate of the
Purchaser, the Purchase Agreement is not assignable by the Purchaser without
first obtaining the prior written approval of the Partnership.
DEFAULTS AND REMEDIES. If the Purchaser defaults in its obligations to deliver
when required any required deposits, the purchase price or any other specified
deliveries, then, immediately and without notice or cure, the Purchaser shall
forfeit such deposits to the Partnership, and neither party shall be obligated
to proceed with the purchase and sale of the Property. The Partnership expressly
waives the remedies of specific performance and additional damages for any such
defaults by the Purchaser.
If the Partnership, prior to the closing, defaults in its representations,
warranties, covenants, or obligations then the Purchaser has the option of (i)
terminating the Purchase Agreement, having returned any deposits made by the
Purchaser, and recovering, as its sole recoverable damages its documented direct
and actual out-of-pocket expenses and costs up to $20,000 or (ii) seeking
specific performance of the Partnership's obligation to deliver the deed
pursuant.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
The following exhibits are filed with this report (1):
10(ii)a. Purchase and Sale Contract between New Shelter V Limited
Partnership, a Delaware limited partnership, as Seller, and Forest
Acquisition Fund, LLC, a Massachusetts limited liability company, as
Purchaser, effective May 2, 2005.
(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 V
(a South Carolina Limited Partnership)
By: Shelter Realty V Corporation
Corporate General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
Date: May 6, 2005
Exhibit 10(ii)a
PURCHASE AND SALE CONTRACT
BETWEEN
NEW SHELTER V LIMITED PARTNERSHIP,
a Delaware limited partnership
AS SELLER
AND
FOREST ACQUISITION FUND, LLC,
a Massachusetts limited liability company
AS PURCHASER
THE LEXINGTON APARTMENTS
Page(s)
TABLE OF CONTENTS
Page
ARTICLE I DEFINED TERMS.............................................1
ARTICLE II PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT...............7
2.1 Purchase and Sale. ............................................7
2.2 Purchase Price and Deposit......................................7
2.3 Escrow Provisions Regarding Deposit.............................7
ARTICLE III FEASIBILITY PERIOD........................................9
3.1 Feasibility Period..............................................9
3.2 Expiration of Feasibility Period................................9
3.3 Conduct of Investigation........................................9
3.4 Purchaser Indemnification......................................10
3.5 Property Materials.............................................11
3.6 Property Contracts.............................................12
ARTICLE IV TITLE....................................................12
4.1 Title Documents................................................12
4.2 Survey.........................................................13
4.3 Objection and Response Process.................................13
4.4 Permitted Exceptions...........................................13
4.5 Existing Deed of Trust.........................................14
4.6 Purchaser Financing. .........................................14
ARTICLE V CLOSING..................................................14
5.1 Closing Date...................................................14
5.2 Seller Closing Deliveries......................................15
5.3 Purchaser Closing Deliveries...................................15
5.4 Closing Prorations and Adjustments.............................16
5.5 Post Closing Adjustments.......................................20
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SELLER AND
PURCHASER................................................20
6.1 Seller's Representations.......................................20
6.2 AS-IS..........................................................21
6.3 Survival of Seller's Representations...........................22
6.4 Definition of Seller's Knowledge...............................23
6.5 Representations And Warranties Of Purchaser....................23
ARTICLE VII OPERATION OF THE PROPERTY................................24
7.1 Leases and Property Contracts..................................24
7.2 General Operation of Property..................................24
7.3 Liens..........................................................25
ARTICLE VIII CONDITIONS PRECEDENT TO CLOSING..........................25
8.1 Purchaser's Conditions to Closing..............................25
ARTICLE IX BROKERAGE................................................26
9.1 Indemnity......................................................26
9.2 Broker Commission. ...........................................26
9.3 Broker Signature Page..........................................27
ARTICLE X DEFAULTS AND REMEDIES....................................27
10.1 Purchaser Default..............................................27
10.2 Seller Default.................................................27
ARTICLE XI RISK OF LOSS OR CASUALTY.................................28
11.1 Major Damage...................................................28
11.2 Minor Damage...................................................28
11.3 Repairs........................................................29
ARTICLE XII EMINENT DOMAIN...........................................29
12.1 Eminent Domain.................................................29
ARTICLE XIII MISCELLANEOUS............................................29
13.1 Binding Effect of Contract.....................................29
13.2 Exhibits And Schedules.........................................29
13.3 Assignability..................................................29
13.4 Binding Effect.................................................30
13.5 Captions.......................................................30
13.6 Number And Gender Of Words.....................................30
13.7 Notices........................................................30
13.8 Governing Law And Venue........................................32
13.9 Entire Agreement. ............................................32
13.10 Amendments.....................................................32
13.11 Severability...................................................32
13.12 Multiple Counterparts/Facsimile Signatures.....................33
13.13 Construction. ................................................33
13.14 Confidentiality................................................33
13.15 Time Of The Essence............................................33
13.16 Waiver.........................................................33
13.17 Attorneys Fees.................................................33
13.18 Time Periods...................................................33
13.19 1031 Exchange..................................................33
13.20 No Personal Liability of Officers, Trustees or Directors
of Seller's Partners. ........................................34
13.21 No Exclusive Negotiations......................................34
13.22 ADA Disclosure.................................................35
13.23 No Recording...................................................35
13.24 Relationship of Parties........................................35
13.25 Dispute Resolution. ..........................................35
13.26 AIMCO Marks....................................................36
13.27 Non-Solicitation of Employees..................................36
13.28 Survival.......................................................36
13.29 Multiple Purchasers............................................36
13.30 Radon Gas. ...................................................37
13.31 Energy Efficiency..............................................37
ARTICLE XIV LEAD-BASED PAINT DISCLOSURE..............................37
14.1 Disclosure.....................................................37
14.2 Consent Agreement. ...........................................37
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as of
the 2nd day of May, 2005 (the "Effective Date") by and between NEW SHELTER V
LIMITED PARTNERSHIP, a Delaware limited partnership, having an address at 4582
South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237 ("Seller"), and
FOREST ACQUISITION FUND, LLC, a Massachusetts limited liability company, having
a principal address at 19 Needham Street, Newton Heights, Massachusetts 02167
("Purchaser").
NOW, THEREFORE, in consideration of mutual covenants set forth herein,
Seller and Purchaser hereby agree as follows:
RECITALS
A.....Seller owns the real estate located in Sarasota County, Florida, as
more particularly described in Exhibit A attached hereto and made a part hereof,
and the improvements thereon, commonly known as THE LEXINGTON.
B.....Purchaser desires to purchase, and Seller desires to sell, such
land, improvements and certain associated property, on the terms and conditions
set forth below.
ARTICLE 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
Intentionally left blank. 1.1.3 "AIMCO" shall have the meaning set forth in
Section 14.2. 1.1.4 "AIMCO Marks" means all words, phrases, slogans, materials,
software, proprietary systems, trade secrets, proprietary information and lists,
and other intellectual property owned or used by Seller, the Property Manager,
or AIMCO in the marketing, operation or use of the Property (or in the
marketing, operation or use of any other properties managed by the Property
Manager or owned by AIMCO or an affiliate of either Property Manager or AIMCO).
1.1.5 Intentionally left blank.
1.1.6 Intentionally left blank.
1.1.7 Intentionally left blank.
1.1.8 "Broker" shall have the meaning set forth in Section 9.1. 1.1.9 "Business
Day" means any day other than a Saturday or Sunday or Federal holiday or legal
holiday in the States of Colorado, Texas, or Florida. 1.1.10......"Closing"
means the consummation of the purchase and sale and related transactions
contemplated by this Contract in accordance with the terms and conditions of
this Contract.
1.1.11......"Closing Date" means the date on which date the Closing of the
conveyance of the Property is required to be held pursuant to Section 5.1.
1.1.12......"Code" shall have the meaning set forth in Section 2.3.6.
1.1.13......"Consent Agreement" shall have the meaning set forth in Section
14.2.
1.1.14......"Consultants" shall have the meaning set forth in Section 3.1.
1.1.15......"Damage Notice" shall have the meaning set forth in Section 11.1.
1.1.16......"Deed" shall have the meaning set forth in Section 5.2.1.
1.1.17......"Deed of Trust" shall have the meaning set forth in Section 4.5.
1.1.18......"Deposit" means, to the extent actually deposited by Purchaser with
Escrow Agent, the Initial Deposit and Purchaser's Closing Extension Deposit.
1.1.19......"Escrow Agent" shall have the meaning set forth in Section 2.2.1.
1.1.20......"Excluded Permits" means those Permits which, under applicable law,
are nontransferable and such other Permits, if any, as may be designated as
Excluded Permits on Schedule 1.1.20.
1.1.21......"Existing Survey" shall have the meaning set forth in Section 4.2.
1.1.22......"Feasibility Period" shall have the meaning set forth in Section
3.1.
1.1.23......"FHA" shall have the meaning set forth in Section 13.22.
1.1.24......"Final Response Deadline" shall have the meaning set forth in
Section 4.3.
1.1.25......"Fixtures and Tangible Personal Property" means all fixtures,
furniture, furnishings, fittings, equipment, machinery, apparatus, appliances
and other articles of tangible personal property located on the Land or in the
Improvements as of the Effective Date and used or usable in connection with the
occupation or operation of all or any part of the Property, but only to the
extent transferable. The term "Fixtures and Tangible Personal Property" does not
include (a) equipment leased by Seller and the interest of Seller in any
equipment provided to the Property for use, but not owned or leased by Seller,
or (b) property owned or leased by any Tenant or guest, employee or other person
furnishing goods or services to the Property, or (c) property and equipment
owned by Seller, which in the ordinary course of business of the Property is not
used exclusively for the business, operation or management of the Property, or
(d) the property and equipment, if any, expressly identified in Schedule 1.1.25.
1.1.26......"General Assignment" shall have the meaning set forth in Section
5.2.3.
1.1.27......"Good Funds" shall have the meaning set forth in Section 2.2.1.
1.1.28......"Improvements" means all buildings and improvements located on the
Land taken "as is." 1.1.29......"Initial Deposit" shall have the meaning set
forth in Section 2.2.1. 1.1.30......"Land" means all of those certain tracts of
land located in the State of Florida described on Exhibit A, and all rights,
privileges and appurtenances pertaining thereto. 1.1.31......"Lease(s)" means
the interest of Seller in and to all leases, subleases and other occupancy
contracts, whether or not of record, which provide for the use or occupancy of
space or facilities on or relating to the Property and which are in force as of
the Closing Date for the applicable Property. 1.1.32......"Leases Assignment"
shall have the meaning set forth in Section 5.2.4. 1.1.33......"Lender" means
Federal Home Loan Mortgage Corporation, assignee of Reilly Mortgage Group, Inc.
1.1.34......"Lender Fees" shall mean all fees and expenses (including, without
limitation, all prepayment penalties and pay-off fees) imposed or charged by
Lender or its counsel in connection with the Loan Payoff, and, to the extent
that the Loan Payoff occurs on a date other than as permitted under the Note and
Deed of Trust, any amounts of interest charged by Lender for the period from the
Closing Date to the permitted prepayment date, the amount of the Lender Fees to
be determined as of the Closing Date. 1.1.35......"Loan" means the indebtedness
owing to Lender evidenced by the Note. 1.1.36......Intentionally left blank.
1.1.37......"Loan Balance" shall have the meaning set forth in Section 2.2.3.
1.1.38......"Loan Payoff" shall have the meaning set forth in Section 5.4.7.
1.1.39......"Losses" shall have the meaning set forth in Section 3.4.1.
1.1.40......"Materials" shall have the meaning set forth in Section 3.5.
1.1.41......"Miscellaneous Property Assets" means all contract rights, leases,
concessions, warranties, plans, drawings and other items of intangible personal
property relating to the ownership or operation of the Property and owned by
Seller, excluding, however, (a) receivables, (b) Property Contracts, (c) Leases,
(d) Permits, (e) cash or other funds, whether in petty cash or house "banks," or
on deposit in bank accounts or in transit for deposit, (f) refunds, rebates or
other claims, or any interest thereon, for periods or events occurring prior to
the Closing Date, (g) utility and similar deposits, (h) insurance or other
prepaid items, (i) Seller's proprietary books and records, or (j) any right,
title or interest in or to the AIMCO Marks. The term "Miscellaneous Property
Assets" also shall include all of Seller's rights, if any, in and to the name
"THE LEXINGTON" as it relates solely to use in connection with the Property (and
not with respect to any other property owned or managed by Seller, Property
Manager, AIMCO, or their respective affiliates). 1.1.42......"Non-Refundable
Deposit Amount" shall have the meaning set forth in Section 2.2.1.
1.1.43......"Note" means that certain Multifamily Note in the original principal
amount of $7,020,000.00, dated December 15, 2000, executed by Seller and payable
to the order of Reilly Mortgage Group, Inc., as assigned to Lender.
1.1.44......"Objection Deadline" shall have the meaning set forth in Section
4.3. 1.1.45......"Objection Notice" shall have the meaning set forth in Section
4.3. 1.1.46......"Objections" shall have the meaning set forth in Section 4.3.
1.1.47......"Permits" means all licenses and permits granted by any governmental
authority having jurisdiction over the Property owned by Seller and required in
order to own and operate the Property. 1.1.48......"Permitted Exceptions" shall
have the meaning set forth in Section 4.4. 1.1.49......"Prohibited Person" means
any of the following: (a) a person or entity that is listed in the Annex to, or
is otherwise subject to the provisions of, Executive Order No. 13224 on
Terrorist Financing (effective September 24, 2001) (the "Executive Order"); (b)
a person or entity owned or controlled by, or acting for or on behalf of any
person or entity that is listed in the Annex to, or is otherwise subject to the
provisions of, the Executive Order; (c) a person or entity that is named as a
"specially designated national" or "blocked person" on the most current list
published by the U.S. Treasury Department's Office of Foreign Assets Control
("OFAC") at its official website,
http://www.treas.gov/offices/enforcement/ofac/; (d) a person or entity that is
otherwise the target of any economic sanctions program currently administered by
OFAC; or (e) a person or entity that is affiliated with any person or entity
identified in clause (a), (b), (c) and/or (d) above. 1.1.50......"Property"
means (a) the Land and Improvements and all rights of Seller, if any, in and to
all of the easements, rights, privileges, and appurtenances belonging or in any
way appertaining to the Land and Improvements, (b) the right, if any and only to
the extent transferable, of Seller in the Property Contracts, Leases, Permits
(other than Excluded Permits), and the Fixtures and Tangible Personal Property,
and (c) the Miscellaneous Property Assets owned by Seller which are located on
the Property and used in its operation. 1.1.51......"Property Contracts" means
all contracts, agreements, equipment leases, purchase orders, maintenance,
service, or utility contracts and similar contracts, excluding Leases, which
relate to the ownership, maintenance, construction or repair and/or operation of
the Property, but only to the extent assignable by their terms or applicable law
(including any contracts that are assignable with the consent of the applicable
vendor), and not including (a) any national contracts entered into by Seller,
Property Manager, or AIMCO with respect to the Property (i) which terminate
automatically upon transfer of the Property by Seller, or (ii) which Seller, in
Seller's sole discretion, elects to terminate with respect to the Property
effective as of the Closing Date, or (b) any property management contract for
the Property. 1.1.52......"Property Contracts Notice" shall have the meaning set
forth in Section 3.6. 1.1.53......"Property Manager" means the current property
manager of the Property. 1.1.54......"Proration Schedule" shall have the meaning
set forth in Section 5.4.1. 1.1.55......"Purchase Price" means the consideration
to be paid by Purchaser to Seller for the purchase of the Property pursuant to
Section 2.2. 1.1.56......"Purchaser's Closing Extension Deposit" shall have the
meaning set forth in Section 5.1. 1.1.57......"Records Disposal Notice" shall
have the meaning set forth in Section 5.4.12. 1.1.58......"Records Hold Period"
shall have the meaning set forth in Section 5.4.12. 1.1.59......"Regional
Property Manager" shall have the meaning set forth in Section 6.4.
1.1.60......"Report" shall have the meaning set forth in Section 14.2.
1.1.61......"Required Assignment Consent" shall have the meaning set forth in
Section 3.6. 1.1.62......"Response Deadline" shall have the meaning set forth in
Section 4.3. 1.1.63......"Response Notice" shall have the meaning set forth in
Section 4.3. 1.1.64......"Seller's Indemnified Parties" shall have the meaning
set forth in Section 3.4.1. 1.1.65......"Seller's Property-Related Files and
Records" shall have the meaning set forth in Section 5.4.12.
1.1.66......"Seller's Representations" shall have the meaning set forth in
Section 6.1. 1.1.67......"Survey" shall have the meaning ascribed thereto in
Section 4.2. 1.1.68......"Survival Period" shall have the meaning set forth in
Section 6.3. 1.1.69......"Survival Provisions" shall have the meaning set forth
in Section 13.28. 1.1.70......"Tenant" means any person or entity entitled to
occupy any portion of the Property under a Lease. 1.1.71......"Tenant Deposits"
means all security deposits, prepaid rentals, cleaning fees and other refundable
deposits and fees collected from Tenants, plus any interest accrued thereon,
paid by Tenants to Seller pursuant to the Leases. Tenant Deposits shall not
include any non-refundable deposits or fees paid by Tenants to Seller, either
pursuant to the Leases or otherwise. 1.1.72......"Tenant Security Deposit
Balance" shall have the meaning set forth in Section 5.4.6.2.
1.1.73......"Terminated Contracts" shall have the meaning set forth in Section
3.6. 1.1.74......"Testing" shall have the meaning set forth in Section 14.2.
1.1.75......"Third-Party Reports" means any reports, studies or other
information prepared or compiled for Purchaser by any Consultant or other
third-party in connection with Purchaser's investigation of the Property.
1.1.76......"Title Commitment" shall have the meaning ascribed thereto in
Section 4.1. 1.1.77......"Title Documents" shall have the meaning set forth in
Section 4.1. 1.1.78......"Title Insurer" shall have the meaning set forth in
Section 2.2.1. 1.1.79......"Title Policy" shall have the meaning set forth in
Section 4.1. 1.1.80......"Uncollected Rents" shall have the meaning set forth in
Section 5.4.6.1. 1.1.81......Intentionally left blank. 1.1.82......"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. Seller agrees to sell and convey the Property to Purchaser and Purchaser
agrees to purchase the Property from Seller, all in accordance with the terms
and conditions set forth in this Contract. 2.2 Purchase Price and Deposit. The
total purchase price ("Purchase Price") for the Property shall be an amount
equal to Nineteen Million Two Hundred Thousand and NO/100 Dollars
($19,200,000.00), less the Lender Fees, which amount shall be paid by Purchaser,
as follows:
2.2.1 On the Effective Date, Purchaser shall deliver to Stewart Title Guaranty
Company, c/o Wendy Howell, National Commercial Closing Specialist, 1980 Post Oak
Boulevard, Suite 610, Houston, TX 77056, 800-729-1906 ("Escrow Agent" or "Title
Insurer") an initial deposit (the "Initial Deposit") of $1,500,000.00 by wire
transfer of immediately available funds ("Good Funds"), which $250,000.00 of
such amount (the "Non-Refundable Deposit Amount") shall become immediately
non-refundable upon delivery to Escrow Agent other than if (a) the Closing does
not occur due to a Seller Default as provided for in Section 10.2., or (b) any
condition set forth in Sections 8.1.1, 8.1.2, 8.1.3 or 8.1.4 on Purchaser's
obligation to Close is not satisfied within the time period required under this
Contract, or (c) Seller terminates the Contract for any reason other than
Purchaser's default in any of its representations, warranties or obligations
under this Contract. The Initial Deposit shall be held and disbursed in
accordance with the escrow provisions set forth in Section 2.3.
2.2.2 Intentionally left blank.
2.2.3 Intentionally left blank.
2.2.4 The balance of the Purchase Price for the Property shall be paid to and
received by Escrow Agent by wire transfer of Good Funds no later than 11:00 a.m.
(in the time zone in which Escrow Agent is located) on the Closing Date (or such
earlier time as required by Seller's lender).
2.3 Escrow Provisions Regarding Deposit.
2.3.1 Escrow Agent shall hold the Deposit and make delivery of the Deposit to
the party entitled thereto under the terms of this Contract. Escrow Agent shall
invest the Deposit in such short-term, high-grade securities, interest-bearing
bank accounts, money market funds or accounts, bank certificates of deposit or
bank repurchase contracts as Escrow Agent, in its discretion, deems suitable,
and all interest and income thereon shall become part of the Deposit and shall
be remitted to the party entitled to the Deposit pursuant to this Contract.
2.3.2 Escrow Agent shall hold the Deposit until the earlier occurrence of (i)
the Closing Date, at which time the Deposit (including the Non-Refundable
Deposit Amount) shall be applied against the Purchase Price, or (ii) the date on
which Escrow Agent shall be authorized to disburse the Deposit as set forth in
Section 2.3.3. The tax identification numbers of the parties shall be furnished
to Escrow Agent upon request.
2.3.3 If the Deposit has not been released earlier in accordance with Section
2.3.2, and either party makes a written demand upon Escrow Agent for payment of
the Deposit or the Non-Refundable Deposit Amount portion, Escrow Agent shall
give written notice to the other party of such demand. If Escrow Agent does not
receive a written objection from the other party to the proposed payment within
5 Business Days after the giving of such notice, Escrow Agent is hereby
authorized to make such payment (subject to Purchaser's obligation under Section
3.5.2 to return all Third-Party Reports and information and Materials provided
to Purchaser as a pre-condition to the return of that portion of the Deposit to
which Purchaser is entitled to receive). If Escrow Agent does receive such
written objection within such 5-Business Day period, Escrow Agent shall continue
to hold such amount until otherwise directed by written instructions from the
parties to this Contract or a final judgment or arbitrator's decision. However,
Escrow Agent shall have the right at any time to deposit the Deposit and
interest thereon, if any, with a court of competent jurisdiction in the state in
which the Property is located. Escrow Agent shall give written notice of such
deposit to Seller and Purchaser. Upon such deposit, Escrow Agent shall be
relieved and discharged of all further obligations and responsibilities
hereunder.
2.3.4 The parties acknowledge that Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that Escrow Agent shall
not be deemed to be the agent of either of the parties for any act or omission
on its part unless taken or suffered in bad faith in willful disregard of this
Contract or involving gross negligence. Seller and Purchaser jointly and
severally shall indemnify and hold Escrow Agent harmless from and against all
costs, claims and expenses, including reasonable attorney's fees, incurred in
connection with the performance of Escrow Agent's duties hereunder, except with
respect to actions or omissions taken or suffered by Escrow Agent in bad faith,
in willful disregard of this Contract or involving gross negligence on the part
of the Escrow Agent. 2.3.5 The parties shall deliver to Escrow Agent an executed
copy of this Contract, which shall constitute the sole instructions to Escrow
Agent. Escrow Agent shall execute the signature page for Escrow Agent attached
hereto with respect to the provisions of this Section 2.3; provided, however,
that (a) Escrow Agent's signature hereon shall not be a prerequisite to the
binding nature of this Contract on Purchaser and Seller, and the same shall
become fully effective upon execution by Purchaser and Seller, and (b) the
signature of Escrow Agent will not be necessary to amend any provision of this
Contract other than this Section 2.3.
2.3.6 Escrow Agent, as the person responsible for closing the transaction within
the meaning of Section 6045(e)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code"), shall file all necessary information, reports, returns,
and statements regarding the transaction required by the Code including, but not
limited to, the tax reports required pursuant to Section 6045 of the Code.
Further, Escrow Agent agrees to indemnify and hold Purchaser, Seller, and their
respective attorneys and brokers harmless from and against any Losses resulting
from Escrow Agent's failure to file the reports Escrow Agent is required to file
pursuant to this section. 2.3.7 The provisions of this Section 2.3 shall survive
the termination of this Contract, and if not so terminated, the Closing and
delivery of the Deed to Purchaser.
ARTICLE III.
FEASIBILITY PERIOD
3.1 Feasibility Period. Subject to the terms of Section 3.3 and 3.4 and the
right of Tenants under the Leases, from the Effective Date to and including the
date which is 21 days after the Effective Date (the "Feasibility Period"),
Purchaser, and its agents, contractors, engineers, surveyors, attorneys, and
employees (collectively, "Consultants") shall have the right from time to time
to enter onto the Property: 3.1.1 To conduct and make any and all customary
studies, tests, examinations, inquiries, and inspections, or investigations
(collectively, the "Inspections") of or concerning the Property (including,
without limitation, engineering and feasibility studies, evaluation of drainage
and flood plain, soil tests for bearing capacity and percolation and surveys,
including topographical surveys); 3.1.2 To confirm any and all matters which
Purchaser may reasonably desire to confirm with respect to the Property; 3.1.3
To ascertain and confirm the suitability of the Property for Purchaser's
intended use of the Property; and 3.1.4 To review the Materials at Purchaser's
sole cost and expense. 3.2 Expiration of Feasibility Period. If the results of
any of the matters referred to in Section 3.1 appear unsatisfactory to Purchaser
for any reason or if Purchaser elects not to proceed with the transaction
contemplated by this Contract for any other reason, or for no reason whatsoever,
in Purchaser's sole and absolute discretion, then Purchaser shall have the right
to terminate this Contract by giving written notice to that effect to Seller and
Escrow Agent on or before 5:00 p.m. (in the time zone in which the Escrow Agent
is located) on the date of expiration of the Feasibility Period. If Purchaser
exercises such right to terminate, this Contract shall terminate and be of no
further force and effect, subject to and except for the Survival Provisions, and
Escrow Agent shall forthwith return the Initial Deposit (less the Non-Refundable
Deposit Amount) to Purchaser (subject to Purchaser's obligation under Section
3.5.2 to return all Third-Party Reports and information and Materials provided
to Purchaser as a pre-condition to the return of that portion of the Initial
Deposit to which Purchaser is entitled to receive). If Purchaser fails to
provide Seller with written notice of termination prior to the expiration of the
Feasibility Period in strict accordance with the notice provisions of this
Contract, Purchaser's right to terminate under this Section 3.2 shall be
permanently waived and this Contract shall remain in full force and effect, the
Deposit shall be non-refundable, and Purchaser's obligation to purchase the
Property shall be non-contingent and unconditional except only for satisfaction
of the conditions expressly stated in Section 8.1. 3.3 Conduct of Investigation.
Purchaser shall not permit any mechanic's or materialmen's liens or any other
liens to attach to the Property by reason of the performance of any work or the
purchase of any materials by Purchaser or any other party in connection with any
Inspections conducted by or for Purchaser. Purchaser shall give notice to Seller
a reasonable time prior to entry onto the Property and shall permit Seller to
have a representative present during all Inspections conducted at the Property.
All information made available by Seller to Purchaser in accordance with this
Contract or obtained by Purchaser in the course of its Inspections shall be
treated as confidential information by Purchaser, and, prior to the purchase of
the Property by Purchaser, Purchaser shall use its best efforts to prevent its
Consultants from divulging such information to any unrelated third parties
except as reasonably necessary to third parties engaged by Purchaser for the
limited purpose of analyzing and investigating such information for the purpose
of consummating the transaction contemplated by this Contract. The provisions of
this Section 3.3 shall survive the termination of this Contract, and if not so
terminated shall survive (except for the confidentiality provisions of this
Section 3.3) the Closing and delivery of the Deed to Purchaser. 3.4 Purchaser
Indemnification. 3.4.1 Purchaser shall indemnify, hold harmless and, if
requested by Seller (in Seller's sole discretion), defend (with counsel approved
by Seller) Seller, together with Seller's affiliates, parent and subsidiary
entities, successors, assigns, partners, managers, members, employees, officers,
directors, trustees, shareholders, counsel, representatives, agents, Property
Manager, Regional Property Manager, and AIMCO (collectively, including Seller,
"Seller's Indemnified Parties"), from and against any and all damages,
mechanics' liens, liabilities, losses, demands, actions, causes of action,
claims, costs and expenses (including reasonable attorneys' fees, including the
cost of in-house counsel and appeals) (collectively, "Losses") arising from or
related to Purchaser's or its Consultant's entry onto the Property, and any
Inspections or other matters performed by Purchaser with respect to the Property
during the Feasibility Period or otherwise. Purchaser shall, however, not be
liable for any damages incurred by Seller resulting from the mere discovery by
Purchaser of a pre-existing condition at or with regard to the Property;
provided, however, Purchaser shall not take any actions that exacerbate such
pre-existing condition. Notwithstanding the foregoing, if Purchaser proceeds
with acquisition of the Property after the expiration of the Feasibility Period,
Purchaser shall accept the Property with such pre-existing condition and assume
any liabilities associated therewith. 3.4.2 Notwithstanding anything in this
Contract to the contrary, Purchaser shall not be permitted to perform any
invasive tests on the Property without Seller's prior written consent, which
consent may be withheld in Seller's sole discretion. Further, Seller shall have
the right, without limitation, to disapprove any and all entries, surveys, tests
(including, without limitation, a Phase II environmental study of the Property),
investigations and other matters that in Seller's reasonable judgment could
result in any injury to the Property or breach of any contract, or expose Seller
to any Losses or violation of applicable law, or otherwise adversely affect the
Property or Seller's interest therein. Purchaser shall use best efforts to
minimize disruption to Tenants in connection with Purchaser's or its
Consultants' activities pursuant to this Section. No consent by the Seller to
any such activity shall be deemed to constitute a waiver by Seller or assumption
of liability or risk by Seller. Purchaser hereby agrees to restore, at
Purchaser's sole cost and expense, the Property to the same condition existing
immediately prior to Purchaser's exercise of its rights pursuant to this Article
3. Purchaser shall maintain and cause its third party consultants to maintain
(a) casualty insurance and comprehensive public liability insurance with
coverages of not less than $1,000,000.00 for injury or death to any one person
and $3,000,000.00 for injury or death to more than one person and $1,000,000.00
with respect to property damage, and (b) worker's compensation insurance for all
of their respective employees in accordance with the law of the state in which
the Property is located. Purchaser shall deliver proof of the insurance coverage
required pursuant to this Section 3.4.2 to Seller (in the form of a certificate
of insurance) prior to the earlier to occur of (i) Purchaser's or Purchaser's
Consultants' entry onto the Property, or (ii) the expiration of 5 days after the
Effective Date. The provisions of this Section 3.4 shall survive the termination
of this Contract, and if not so terminated, the Closing and delivery of the Deed
to Purchaser. 3.5 Property Materials. 3.5.1 Within 3 days after the Effective
Date, and to the extent the same exist and are in Seller's possession or
reasonable control (subject to Section 3.5.2), Seller agrees to make the
documents set forth on Schedule 3.5 (the "Materials") available at the Property
for review and copying by Purchaser at Purchaser's sole cost and expense. In the
alternative, at Seller's option and within the foregoing 3-day period, Seller
may deliver some or all of the Materials to Purchaser, or make the same
available to Purchaser on a secure web site (Purchaser agrees that any item to
be delivered by Seller under this Contract shall be deemed delivered to the
extent available to Purchaser on such secured web site). To the extent that
Purchaser determines that any of the Materials have not been made available or
delivered to Purchaser pursuant to this Section 3.5.1, Purchaser shall notify
Seller and Seller shall use commercially reasonable efforts to deliver the same
to Purchaser within 5 Business Days after such notification is received by
Seller; provided, however, that under no circumstances will the Feasibility
Period be extended and Purchaser's sole remedy will be to terminate this
Contract pursuant to Section 3.2. 3.5.2 In providing such information and
Materials to Purchaser, other than Seller's Representations, Seller makes no
representation or warranty, express, written, oral, statutory, or implied, and
all such representations and warranties are hereby expressly excluded and
disclaimed. Any information and Materials provided by Seller to Purchaser under
the terms of this Contract is for informational purposes only and, together with
all Third-Party Reports, shall be returned by Purchaser to Seller as a condition
to return of the Deposit to Purchaser (if Purchaser is otherwise entitled to
such Deposit pursuant to the terms of this Contract) if this Contract is
terminated for any reason. Purchaser shall not in any way be entitled to rely
upon the accuracy of such information and Materials. Purchaser recognizes and
agrees that the Materials and other documents and information delivered or made
available by Seller pursuant to this Contract may not be complete or constitute
all of such documents which are in Seller's possession or control, but are those
that are readily available to Seller after reasonable inquiry to ascertain their
availability. Purchaser understands that, although Seller will use commercially
reasonable efforts to locate and make available the Materials and other
documents required to be delivered or made available by Seller pursuant to this
Contract, Purchaser will not rely on such Materials or other documents as being
a complete and accurate source of information with respect to the Property, and
will instead in all instances rely exclusively on its own Inspections and
Consultants with respect to all matters which it deems relevant to its decision
to acquire, own and operate the Property. 3.5.3 In addition to the items set
forth on Schedule 3.5 , no later than 3 days after the Effective Date, Seller
shall deliver to Purchaser (or otherwise make available to Purchaser as provided
under Section 3.5.1) a rent roll for the Property listing the move-in date,
monthly base rent payable, lease expiration date and unapplied security deposit
for each Lease (the "Rent Roll"). The Rent Roll shall be part of the Materials
for all purposes under this Contract and Seller makes no representations or
warranties regarding the Rent Roll other than the express representation set
forth in Section 6.1.7. 3.5.4 The provisions of this Section 3.5 shall survive
the Closing and delivery of the Deed to Purchaser. 3.6 Property Contracts. On or
before the expiration of the Feasibility Period, Purchaser may deliver written
notice to Seller (the "Property Contracts Notice") specifying any Property
Contracts which Purchaser desires to terminate at the Closing (the "Terminated
Contracts"); provided that (a) the effective date of such termination after
Closing shall be subject to the express terms of such Terminated Contracts (and,
to the extent that the effective date of termination of any Terminated Contract
is after the Closing Date, Purchaser shall be deemed to have assumed all of
Seller's obligations under such Terminated Contract as of the Closing Date), (b)
if any such Property Contract cannot by its terms be terminated, it shall be
assumed by Purchaser and not be a Terminated Contract, and (c) to the extent
that any such Terminated Contract requires payment of a penalty or premium for
cancellation, Purchaser shall be solely responsible for the payment of any such
cancellation fees or penalties. If Purchaser fails to deliver the Property
Contracts Notice on or before the expiration of the Feasibility Period, there
shall be no Terminated Contracts and Purchaser shall assume all Property
Contracts at the Closing. To the extent that any Property Contract to be assumed
by Purchaser (including any Property Contracts that, because of advance notice
requirements, will be temporarily assumed by Purchaser pending the effective
date of termination after the Closing Date) is assignable but requires the
applicable vendor to consent to the assignment or assumption of the Property
Contract by Seller to Purchaser, then, prior to the Closing, Purchaser shall be
responsible for obtaining from each applicable vendor a consent (each a
"Required Assignment Consent") to the assignment of the Property Contract by
Seller to Purchaser (and the assumption by Purchaser of all obligations under
such Property Contract). Purchaser shall indemnify, hold harmless and, if
requested by Seller (in Seller's sole discretion), defend (with counsel approved
by Seller) Seller's Indemnified Parties from and against any and all Losses
arising from or related to Purchaser's failure to obtain any Required Assignment
Consent.
ARTICLE IV
TITLE
4.1 Title Documents. On the Effective Date, Seller shall cause to be delivered
to Purchaser a standard form commitment for title insurance ("Title Commitment")
for the Property in an amount equal to the Purchase Price from Title Insurer for
an owner's title insurance policy (the "Title Policy") on the most recent
standard American Land Title Association form, together with copies of all
instruments identified as exceptions therein (together with the Title
Commitment, referred to herein as the "Title Documents"). Seller shall be
responsible only for payment of the basic premium for the Title Policy.
Purchaser shall be solely responsible for payment of all other costs relating to
procurement of the Title Commitment, the Title Policy, and any requested
endorsements.
4.2 Survey. Prior to the Effective Date, Seller caused to be delivered to
Purchaser a copy of that certain survey dated September 18, 1992, prepared by
Bock & Clark's National Surveyors Network, with respect to the Property (the
"Existing Survey"). Purchaser acknowledges receipt of the Existing Survey and
acknowledges and agrees that delivery of the Existing Survey is subject to
Section 3.5.2. Purchaser acknowledges that it has ordered an updated survey
(such updated survey, together with the Existing Survey, is referred to herein
as the "Survey") from the surveyor who prepared the Existing Survey. Purchaser
shall be solely responsible for the cost and expense of the preparation of the
updated survey ordered by Purchaser. 4.3 Objection and Response Process. On or
before the date which is 5 days after the Effective Date (the "Objection
Deadline"), Purchaser shall give written notice (the "Objection Notice") to the
attorneys for Seller of any matter set forth in the Title Documents or the
Survey to which Purchaser objects (the "Objections"). If Purchaser fails to
tender an Objection Notice on or before the Objection Deadline, Purchaser shall
be deemed to have approved and irrevocably waived any objections to any matters
covered by the Title Documents and the Survey. On or before 10 days after the
Effective Date (the "Response Deadline"), Seller may, in Seller's sole
discretion, give Purchaser notice (the "Response Notice") of those Objections
which Seller is willing to cure, if any. Seller shall be entitled to reasonable
adjournments of the Closing Date to cure the Objections. If Seller fails to
deliver a Response Notice by the Response Deadline, Seller shall be deemed to
have elected not to cure or otherwise resolve any matter set forth in the
Objection Notice. If Purchaser is dissatisfied with the Response Notice,
Purchaser may, as its exclusive remedy, elect by written notice given to Seller
on or before 15 days after the Effective Date (the "Final Response Deadline")
either (a) to accept the Title Documents and Survey with resolution, if any, of
the Objections as set forth in the Response Notice (or if no Response Notice is
tendered, without any resolution of the Objections) and without any reduction or
abatement of the Purchase Price, or (b) to terminate this Contract, in which
event the Initial Deposit (less the Non-Refundable Deposit Amount) shall be
returned to Purchaser (subject to Purchaser's obligation under Section 3.5.2 to
return all Third-Party Reports and information and Materials provided to
Purchaser as a pre-condition to the return of that portion of the Initial
Deposit to which Purchaser is entitled to receive). If Purchaser fails to give
notice to terminate this Contract on or before the Final Response Deadline,
Purchaser shall be deemed to have elected to approve and irrevocably waived any
objections to any matters covered by the Title Documents or the Survey, subject
only to resolution, if any, of the Objections as set forth in the Response
Notice (or if no Response Notice is tendered, without any resolution of the
Objections). 4.4 Permitted Exceptions. The Deed delivered pursuant to this
Contract shall be subject to the following, all of which shall be deemed
"Permitted Exceptions":
4.4.1 All matters shown in the Title Documents and the Survey, other than (a)
those Objections, if any, which Seller has agreed to cure pursuant to the
Response Notice under Section 4.3, (b) mechanics' liens and taxes due and
payable with respect to the period preceding Closing, (c) the standard exception
regarding the rights of parties in possession which shall be limited to those
parties in possession pursuant to the Leases, and (d) the standard exception
pertaining to taxes which shall be limited to taxes and assessments payable in
the year in which the Closing occurs and subsequent taxes and assessments; 4.4.2
All Leases; 4.4.3 Intentionally left blank; 4.4.4 Applicable zoning and
governmental regulations and ordinances; 4.4.5 Any defects in or objections to
title to the Property, or title exceptions or encumbrances, arising by, through
or under Purchaser; and 4.4.6 The terms and conditions of this Contract. 4.5
Existing Deed of Trust. It is understood and agreed that, whether or not
Purchaser gives an Objection Notice with respect thereto, any deeds of trust
and/or mortgages (including any and all mortgages which secure the Note) against
the Property (whether one or more, the "Deed of Trust") shall not be deemed
Permitted Exceptions, whether Purchaser gives written notice of such or not, and
shall be paid off, satisfied, discharged and/or cured by Seller at Closing,
provided that the Lender Fees due in connection with the Loan Payoff shall be
paid by Purchaser. 4.6 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 21 days following the expiration of
the Feasibility Period (the "Closing Date") through an escrow with Escrow Agent,
whereby the Seller, Purchaser and their attorneys need not be physically present
at the Closing and may deliver documents by overnight air courier or other
means. Notwithstanding the foregoing to the contrary, Seller shall have the
option, by delivering written notice to Purchaser to extend the Closing Date to
the last Business Day of the month in which the Closing Date otherwise would
occur pursuant to the preceding sentence, or to such other date (either in the
same month or the next) as Seller reasonably determines is desirable in
connection with the Loan Payoff. Further, the Closing Date may be extended
without penalty at the option of Seller to a date not later than 30 days
following the Closing Date specified in the first sentence of this paragraph
above (or, if applicable, as extended by Seller pursuant to the second sentence
of this paragraph) to satisfy any condition to Closing, or such later date as is
mutually acceptable to Seller and Purchaser. Provided Purchaser is not in
default under the terms of this Contract, Purchaser shall be permitted a
one-time 21 day extension of the Closing Date specified in the first sentence of
this Section 5.1 by (i) delivering written notice to Seller no later than 5
Business Days prior to the scheduled Closing Date, and (ii) simultaneously with
such notice to Seller, delivering to Escrow Agent the amount of $100,000.00
("Purchaser's Closing Extension Deposit"), which amount when received by Escrow
Agent shall be added to the Deposit hereunder, shall be non-refundable (except
as otherwise expressly provided hereunder with respect to the Deposit), and
shall be held, credited and disbursed in the same manner as provided hereunder
with respect to the Deposit.
5.2 Seller Closing Deliveries. No later than 1 Business Day prior to the Closing
Date, Seller shall deliver to Escrow Agent, each of the following items:
5.2.1 Special Warranty Deed (the "Deed") in the form attached as Exhibit B to
Purchaser, subject to the Permitted Exceptions. 5.2.2 A Bill of Sale in the form
attached as Exhibit C. 5.2.3 A General Assignment in the form attached as
Exhibit D (the "General Assignment").
5.2.4 An Assignment of Leases and Security Deposits in the form attached as
Exhibit E (the "Leases Assignment"). 5.2.5 A letter in the form attached hereto
as Exhibit F prepared by Purchaser and countersigned by Seller to each of the
vendors under the Terminated Contracts informing them of the termination of such
Terminated Contract as of the Closing Date (subject to any delay in the
effectiveness of such termination pursuant to the express terms of each
applicable Terminated Contract) (the "Vendor Terminations").
5.2.6 A closing statement executed by Seller.
5.2.7 A title affidavit or at Seller's option an indemnity, as applicable, in
the customary form reasonably acceptable to Seller to enable Title Insurer to
delete the standard exceptions to the title insurance policy set forth in this
Contract (other than matters constituting any Permitted Exceptions and matters
which are to be completed or performed post-Closing) to be issued pursuant to
the Title Commitment; provided that such affidavit does not subject Seller to
any greater liability, or impose any additional obligations, other than as set
forth in this Contract.
5.2.8 A certification of Seller's non-foreign status pursuant to Section 1445 of
the Internal Revenue Code of 1986, as amended; and 5.2.9 Resolutions,
certificates of good standing, and such other organizational documents as Title
Insurer shall reasonably require evidencing Seller's authority to consummate
this transaction.
5.3 Purchaser Closing Deliveries. No later than 1 Business Day prior to the
Closing Date (except for the balance of the Purchase Price which is to be
delivered at the time specified in Section 2.2.4), Purchaser shall deliver to
the Escrow Agent (for disbursement to Seller upon the Closing) the following
items with respect to the Property being conveyed at such Closing: 5.3.1 The
full Purchase Price (with credit for the Deposit), plus or minus the adjustments
or prorations required by this Contract. 5.3.2 A title affidavit (or at
Purchaser's option an indemnity) pertaining to Purchaser's activity on the
Property prior to Closing, in the customary form reasonably acceptable to
Purchaser, to enable Title Insurer to delete the standard exceptions to the
title insurance policy set forth in this Contract (other than matters
constituting any Permitted Exceptions and matters which are to be completed or
performed post-Closing) to be issued pursuant to the Title Commitment; provided
that such affidavit does not subject Purchaser to any greater liability, or
impose any additional obligations, other than as set forth in this Contract.
5.3.3 Any declaration or other statement which may be required to be submitted
to the local assessor with respect to the terms of the sale of the Property.
5.3.4 A closing statement executed by Purchaser.
5.3.5 A countersigned counterpart of the General Assignment.
5.3.6 A countersigned counterpart of the Leases Assignment.
5.3.7 Notification letters to all Tenants prepared and executed by Purchaser
in the form attached hereto as Exhibit G.
5.3.8 The Vendor Terminations (Purchaser shall be solely responsible for
identifying each of the Terminated Contracts (subject to the terms and
conditions of Section 3.6) and addressing and preparing each of the Vendor
Terminations for execution by Purchaser and Seller).
5.3.9 Any cancellation fees or penalties due to any vendor under any Terminated
Contract as a result of the termination thereof. 5.3.10 Resolutions,
certificates of good standing, and such other organizational documents as Title
Insurer shall reasonably require evidencing Purchaser's authority to consummate
this transaction.
5.3.11 Intentionally left blank.
5.3.12 The Lender Fees (subject to reduction from the Purchase Price in
accordance with Section 2.2).
5.4 Closing Prorations and Adjustments.
5.4.1 General. All normal and customarily proratable items, including, without
limitation, collected rents, operating expenses, personal property taxes, other
operating expenses and fees, shall be prorated as of the Closing Date, Seller
being charged or credited, as appropriate, for all of same attributable to the
period up to the Closing Date (and credited for any amounts paid by Seller
attributable to the period on or after the Closing Date, if assumed by
Purchaser) and Purchaser being responsible for, and credited or charged, as the
case may be, for all of same attributable to the period on and after the Closing
Date. Seller shall prepare a proration schedule (the "Proration Schedule") of
the adjustments described in this Section 5.4 prior to Closing. Such adjustments
shall be paid by Purchaser to Seller (if the prorations result in a net credit
to Seller) or by Seller to Purchaser (if the prorations result in a net credit
to Purchaser), by increasing or reducing the cash to be paid by Purchaser at
Closing. 5.4.2 Operating Expenses. All of the operating, maintenance, taxes
(other than real estate taxes, such as rental taxes), and other expenses
incurred in operating the Property that Seller customarily pays, and any other
costs incurred in the ordinary course of business for the management and
operation of the Property, shall be prorated on an accrual basis. Seller shall
pay all such expenses that accrue prior to Closing and Purchaser shall pay all
such expenses that accrue from and after the Closing Date.
5.4.3 Utilities. The final readings and final billings for utilities will be
made if possible as of the Closing Date, in which case Seller shall pay all such
bills as of the Closing Date and no proration shall be made at the Closing with
respect to utility bills. Otherwise, a proration shall be made based upon the
parties' reasonable good faith estimate and a readjustment made within 30 days
after the Closing, if necessary. Seller shall be entitled to the return of any
deposit(s) posted by it with any utility company, and Seller shall notify each
utility company serving the Property to terminate Seller's account, effective as
of noon on the Closing Date. 5.4.4 Real Estate Taxes. Any real estate ad valorem
or similar taxes for the Property, or any installment of assessments payable in
installments which installment is payable in the calendar year of Closing, shall
be prorated to the date of Closing, based upon actual days involved. The
proration of real property taxes or installments of assessments shall be based
upon the assessed valuation and tax rate figures (assuming payment at the
earliest time to allow for the maximum possible discount) for the year in which
the Closing occurs to the extent the same are available; provided, that in the
event that actual figures (whether for the assessed value of the Property or for
the tax rate) for the year of Closing are not available at the Closing Date, the
proration shall be made using figures from the preceding year (assuming payment
at the earliest time to allow for the maximum possible discount).
Notwithstanding anything herein to the contrary, the proration of real property
taxes or installments of assessments for the tax year beginning on January 1,
2005 and ending on December 31, 2005 (the "Tax Year"), shall be subject to a
one-time re-adjustment after Closing when the actual property taxes are known;
provided, however, Seller shall not be liable for any reproration and payment
less than $5,000.00 or in excess of $45,000.00; provided, further, Purchaser
must provide written notice to Seller within 30 days after such taxes are
finally known, accompanied with a statement and calculation of reproration.
Purchaser and Seller acknowledge and agree that any reproration made pursuant to
this Section 5.4.4 shall only be made using the applicable taxing authority's
assessed valuation and tax rate figures for the Tax Year, when made available
(the "Tax Year Figures"), and Purchaser and Seller will accept the Tax Year
Figures for purposes of any reproration. The provisions of this Section 5.4.4
shall survive Closing for a period of one (1) year.
5.4.5 Property Contracts. Purchaser shall assume at Closing the obligations
under the Property Contracts assumed by Purchaser; however, operating expenses
shall be prorated under Section 5.4.2.
5.4.6 Leases.
5.4.6.1 All collected rent (whether fixed monthly rentals, additional rentals,
escalation rentals, retroactive rentals, operating cost pass-throughs or other
sums and charges payable by Tenants under the Leases), income and expenses from
any portion of the Property shall be prorated as of the Closing Date (prorated
for any partial month). Purchaser shall receive all collected rent and income
attributable to dates from and after the Closing Date. Seller shall receive all
collected rent and income attributable to dates prior to the Closing Date.
Notwithstanding the foregoing, no prorations shall be made in relation to either
(a) non-delinquent rents which have not been collected as of the Closing Date,
or (b) delinquent rents existing, if any, as of the Closing Date (the foregoing
(a) and (b) referred to herein as the "Uncollected Rents"). In adjusting for
Uncollected Rents, no adjustments shall be made in Seller's favor for rents
which have accrued and are unpaid as of the Closing, but Purchaser shall pay
Seller such accrued Uncollected Rents as and when collected by Purchaser.
Purchaser agrees to bill Tenants of the Property for all Uncollected Rents and
to take reasonable actions to collect Uncollected Rents. After the Closing,
Seller shall continue to have the right, but not the obligation, in its own
name, to demand payment of and to collect Uncollected Rents owed to Seller by
any Tenant, which right shall include, without limitation, the right to continue
or commence legal actions or proceedings against any Tenant and the delivery of
the Leases Assignment shall not constitute a waiver by Seller of such right.
Purchaser agrees to cooperate with Seller in connection with all efforts by
Seller to collect such Uncollected Rents and to take all steps, whether before
or after the Closing Date, as may be necessary to carry out the intention of the
foregoing, including, without limitation, the delivery to Seller, within 7 days
after a written request, of any relevant books and records (including, without
limitation, rent statements, receipted bills and copies of tenant checks used in
payment of such rent), the execution of any and all consents or other documents,
and the undertaking of any act reasonably necessary for the collection of such
Uncollected Rents by Seller; provided, however, that Purchaser's obligation to
cooperate with Seller pursuant to this sentence shall not obligate Purchaser to
terminate any Tenant lease with an existing Tenant or evict any existing Tenant
from the Property.
5.4.6.2 At Closing, Purchaser shall receive a credit against the Purchase Price
in an amount equal to the received and unapplied balance of all cash (or cash
equivalent) Tenant Deposits, including, but not limited to, security, damage or
other refundable deposits or required to be paid by any of the Tenants to secure
their respective obligations under the Leases, together, in all cases, with any
interest payable to the Tenants thereunder as may be required by their
respective Tenant Lease or state law (the "Tenant Security Deposit Balance").
Any cash (or cash equivalents) held by Seller which constitute the Tenant
Security Deposit Balance shall be retained by Seller in exchange for the
foregoing credit against the Purchase Price and shall not be transferred by
Seller pursuant to this Contract (or any of the documents delivered at Closing),
but the obligation with respect to the Tenant Security Deposit Balance
nonetheless shall be assumed by Purchaser. The Tenant Security Deposit Balance
shall not include any non-refundable deposits or fees paid by Tenants to Seller,
either pursuant to the Leases or otherwise.
5.4.6.3 With respect to operating expenses, taxes, utility charges, other
operating cost pass-throughs, retroactive rental escalations, sums or charges
payable by Tenants under the Tenant Leases, to the extent that Seller has
received as of the Closing payments allocable to periods subsequent to Closing,
the same shall be properly prorated with an adjustment in favor of Purchaser,
and Purchaser shall reserve a credit therefor at Closing. With respect to any
payments received by Purchaser after the Closing allocable to Seller prior to
Closing, Purchaser shall promptly pay the same to Seller. 5.4.7 Existing Loan.
On the Closing Date, Seller shall pay (which payment may be made by Seller out
of the proceeds of the Purchase Price) the outstanding principal balance of the
Note together with all interest accrued under the Note prior to the Closing Date
(the "Loan Payoff"). Purchaser shall pay all Lender Fees (subject to reduction
from the Purchase Price in accordance with Section 2.2). Any existing reserves,
impounds and other accounts maintained in connection with the Loan shall be
released in Good Funds to Seller at the Closing unless credited by Lender
against the amount due from Seller under the Note.
5.4.8 Insurance. No proration shall be made in relation to insurance premiums
and insurance policies will not be assigned to Purchaser. 5.4.9 Employees. All
of Seller's and Seller's manager's on-site employees shall have their employment
at the Property terminated as of the Closing Date. 5.4.10 Closing Costs.
Purchaser shall pay any sales, use, gross receipts, mortgage, or similar taxes,
any premiums or fees required to be paid by Purchaser with respect to the Title
Policy pursuant to Section 4.1, and one-half of the customary closing costs of
the Escrow Agent. Seller shall pay any transfer taxes (including documentary
stamp taxes and surtaxes), the cost of recording any instruments required to
discharge any liens or encumbrances against the Property, the base premium for
the Title Policy to the extent required by Section 4.1, and one-half of the
customary closing costs of the Escrow Agent.
5.4.11 Intentionally left blank.
5.4.12 Possession. Possession of the Property, subject to the Leases, Property
Contracts which are not identified as Terminated Contracts during the
Feasibility Period (subject to the limitations of Section 3.6), and Permitted
Exceptions, shall be delivered to Purchaser at the Closing upon release from
escrow of all items to be delivered by Purchaser pursuant to Section 5.3,
including, without limitation, the Purchase Price. To the extent reasonably
available to Seller, originals or copies of the Leases and Property Contracts,
lease files, warranties, guaranties, operating manuals, keys to the property,
and Seller's books and records (other than proprietary information)
(collectively, "Seller's Property-Related Files and Records") regarding the
Property shall be made available to Purchaser at the Property after the Closing.
Purchaser agrees, for a period of not less than 3 years after the Closing (the
"Records Hold Period"), to (a) provide and allow Seller reasonable access to
Seller's Property-Related Files and Records for purposes of inspection and
copying thereof, and (b) reasonably maintain and preserve Seller's
Property-Related Files and Records. If at any time after the Records Hold
Period, Purchaser desires to dispose of Seller's Property-Related Files and
Records, Purchaser must first provide Seller prior written notice (the "Records
Disposal Notice"). Seller shall have a period of 30 days after receipt of the
Records Disposal Notice to enter the Property (or such other location that such
records are then stored) and remove or copy those of Seller's Property-Related
Files and Records that Seller desires to retain. Purchaser agrees (i) to include
the covenants of this Section 5.4.12 pertaining to Seller's Property-Related
Files and Records in any management contract for the Property (and to bind the
manager thereunder to such covenants), and (ii) to bind any future purchaser of
the Property to the covenants of this Section 5.4.12 pertaining to Seller's
Property-Related Files and Records. Purchaser shall indemnify, hold harmless
and, if requested by Seller (in Seller's sole discretion), defend (with counsel
approved by Seller) Seller's Indemnified Parties from and against any and all
Losses arising from or related to Purchaser's failure to comply with the
provisions of this Section 5.4.12.
5.4.13 Survival. The provisions of this Section 5.4 shall survive the Closing
and delivery of the Deed to Purchaser. 5.5 Post Closing Adjustments. In general,
and except as provided in this Contract or the Closing Documents, Seller shall
be entitled to all income, and shall pay all expenses, relating to the operation
of the Property for the period prior to the Closing Date and Purchaser shall be
entitled to all income, and shall pay all expenses, relating to the operation of
the Property for the period commencing on and after the Closing Date. Purchaser
or Seller may request that Purchaser and Seller undertake to re-adjust any item
on the Proration Schedule (or any item omitted therefrom) in accordance with the
provisions of Section 5.4 of this Contract; provided, however, that (subject to
the real estate taxes re-adjustment provisions in Section 5.4.4) neither party
shall have any obligation to re-adjust any items (a) after the expiration of 60
days after Closing, or (b) subject to such 60-day period, unless such items
exceed $5,000.00 in magnitude (either individually or in the aggregate). The
provisions of this Section 5.5 shall survive the Closing and delivery of the
Deed 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, Seller represents and warrants to Purchaser the following
(collectively, the "Seller's Representations") as of the Effective Date and as
of the Closing Date (provided that Purchaser's remedies if any such Seller's
Representations are untrue as of the Closing Date are limited to those set forth
in Section 8.1):
6.1.1 Seller is duly organized, validly existing and in good standing under the
laws of the state of its formation set forth in the initial paragraph of this
Contract; and, subject to Section 8.2.4, has or at the Closing shall have the
entity power and authority to sell and convey the Property and to execute the
documents to be executed by Seller and prior to the Closing will have taken as
applicable, all corporate, partnership, limited liability company or equivalent
entity actions required for the execution and delivery of this Contract, and the
consummation of the transactions contemplated by this Contract. The compliance
with or fulfillment of the terms and conditions hereof will not conflict with,
or result in a breach of, the terms, conditions or provisions of, or constitute
a default under, any contract to which Seller is a party or by which Seller is
otherwise bound, which conflict, breach or default would have a material adverse
affect on Seller's ability to consummate the transaction contemplated by this
Contract or on the Property. Subject to Section 8.2.4, this Contract is a valid,
binding and enforceable agreement against Seller in accordance with its terms;
6.1.2 Other than the Leases, the Property is not subject to any written lease
executed by Seller or, to Seller's knowledge, any other possessory interests of
any person; 6.1.3 Seller is not a "foreign person," as that term is used and
defined in the Internal Revenue Code, Section 1445, as amended; 6.1.4 Except for
(a) any actions by Seller to evict Tenants under the Leases, or (b) any matter
covered by Seller's current insurance policy(ies), to Seller's knowledge, there
are no actions, proceedings, litigation or governmental investigations or
condemnation actions either pending or threatened against the Property or
against Seller relating to the Property; 6.1.5 To Seller's knowledge, Seller has
not received any written notice from a governmental agency of any uncured
material violations of any federal, state, county or municipal law, ordinance,
order, regulation or requirement affecting the Property; 6.1.6 To Seller's
knowledge, Seller has not received any written notice of any material default by
Seller under any of the Property Contracts that will not be terminated on the
Closing Date; 6.1.7 To Seller's knowledge, the Rent Roll delivered to Purchaser
pursuant to Section 3.5.3 is accurate in all material respects as of the date
set forth therein; 6.1.8 Except for that certain equipment lease dated July 20,
2004, for the lease of a digital copier from Ricoh Customer Finance Corp., to
Seller's knowledge, there are no other material leases for any of the Fixtures
and Tangible Personal Property; and 6.1.9 To Seller's knowledge, the Property
Contracts delivered or made available to Purchaser on or before the Effective
Date pursuant to Section 3.5.1, are all of the material Property Contracts. A
"material" Property Contract shall mean a Property Contract that (a) is not
terminable upon 30 days written notice, and (b) requires payment of a penalty,
premium or other consideration for termination, which payment, together with any
payments or premiums previously paid by Purchaser to terminate any other
Property Contracts not delivered or made available to Purchaser, if applicable,
exceeds, in the aggregate, $25,000.00. 6.2 AS-IS. Except for Seller's
Representations, the Property is expressly purchased and sold "AS IS," "WHERE
IS," and "WITH ALL FAULTS." The Purchase Price and the terms and conditions set
forth herein are the result of arm's-length bargaining between entities familiar
with transactions of this kind, and said price, terms and conditions reflect the
fact that Purchaser shall have the benefit of, and is not relying upon, any
information provided by Seller or Broker or statements, representations or
warranties, express or implied, made by or enforceable directly against Seller
or Broker, including, without limitation, any relating to the value of the
Property, the physical or environmental condition of the Property, any state,
federal, county or local law, ordinance, order or permit; or the suitability,
compliance or lack of compliance of the Property with any regulation, or any
other attribute or matter of or relating to the Property (other than any
covenants of title contained in the Deed conveying the Property and Seller's
Representations). Purchaser agrees that Seller shall not be responsible or
liable to Purchaser for any defects, errors or omissions, or on account of any
conditions affecting the Property. Purchaser, its successors and assigns, and
anyone claiming by, through or under Purchaser, hereby fully releases Seller's
Indemnified Parties from, and irrevocably waives its right to maintain, any and
all claims and causes of action that it or they may now have or hereafter
acquire against Seller's Indemnified Parties with respect to any and all Losses
arising from or related to any defects, errors, omissions or other conditions
affecting the Property. Purchaser represents and warrants that, as of the date
hereof and as of the Closing Date, it has and shall have reviewed and conducted
such independent analyses, studies (including, without limitation, environmental
studies and analyses concerning the presence of lead, asbestos, PCBs and radon
in and about the Property), reports, investigations and inspections as it deems
appropriate in connection with the Property. If Seller provides or has provided
any documents, summaries, opinions or work product of consultants, surveyors,
architects, engineers, title companies, governmental authorities or any other
person or entity with respect to the Property, including, without limitation,
the offering prepared by Broker, Purchaser and Seller agree that Seller has done
so or shall do so only for the convenience of both parties, Purchaser shall not
rely thereon and the reliance by Purchaser upon any such documents, summaries,
opinions or work product shall not create or give rise to any liability of or
against Seller's Indemnified Parties. Purchaser shall rely only upon any title
insurance obtained by Purchaser with respect to title to the Property. Purchaser
acknowledges and agrees that no representation has been made and no
responsibility is assumed by Seller with respect to current and future
applicable zoning or building code requirements or the compliance of the
Property with any other laws, rules, ordinances or regulations, the financial
earning capacity or expense history of the Property, the continuation of
contracts, continued occupancy levels of the Property, or any part thereof, or
the continued occupancy by tenants of any Leases or, without limiting any of the
foregoing, occupancy at Closing. Prior to Closing, Seller shall have the right,
but not the obligation, to enforce its rights against any and all Property
occupants, guests or tenants. Purchaser agrees that the departure or removal,
prior to Closing, of any of such guests, occupants or tenants shall not be the
basis for, nor shall it give rise to, any claim on the part of Purchaser, nor
shall it affect the obligations of Purchaser under this Contract in any manner
whatsoever; and Purchaser shall close title and accept delivery of the Deed with
or without such tenants in possession and without any allowance or reduction in
the Purchase Price under this Contract. Purchaser hereby releases Seller from
any and all claims and liabilities relating to the foregoing matters. The
provisions of this Section 6.2 shall survive the Closing and delivery of the
Deed to Purchaser. 6.3 Survival of Seller's Representations. Seller and
Purchaser agree that Seller's Representations shall survive Closing for a period
of 6 months (the "Survival Period"). Seller shall have no liability after the
Survival Period with respect to Seller's Representations contained herein except
to the extent that Purchaser has requested arbitration against Seller during the
Survival Period for breach of any of Seller's Representations. Except as set
forth in the last sentence of Section 8.1, under no circumstances shall Seller
be liable to Purchaser for more than $50,000 in any individual instance or in
the aggregate for all breaches of Seller's Representations, nor shall Purchaser
be entitled to bring any claim for a breach of Seller's Representations unless
the claim for damage (either in the aggregate or as to any individual claim) by
Purchaser exceeds $5,000. In the event that Seller breaches any representation
contained in Section 6.1 and Purchaser had knowledge of such breach prior to the
Closing Date, Purchaser shall be deemed to have waived any right of recovery,
and Seller shall not have any liability in connection therewith. 6.4 Definition
of Seller's Knowledge. Any representations and warranties made "to the knowledge
of Seller" shall not be deemed to imply any duty of inquiry. For purposes of
this Contract, the term Seller's "knowledge" shall mean and refer only to actual
knowledge of the Designated Representative of the Seller and shall not be
construed to refer to the knowledge of any other partner, officer, director,
agent, employee or representative of the Seller, or any affiliate of the Seller,
or to impose upon such Designated Representative any duty to investigate the
matter to which such actual knowledge or the absence thereof pertains, or to
impose upon such Designated Representative any individual personal liability. As
used herein, the term Designated Representative shall refer to Ms. Jean Hunt who
is the Regional Property Manager handling this Property (the "Regional Property
Manager") and Ms. Maria Torres who is the Property Manager handling this
Property. 6.5 Representations And Warranties Of Purchaser. For the purpose of
inducing Seller to enter into this Contract and to consummate the sale and
purchase of the Property in accordance herewith, Purchaser represents and
warrants to Seller the following as of the Effective Date and as of the Closing
Date: 6.5.1 Purchaser is a limited liability company duly organized, validly
existing and in good standing under the laws of Massachusetts. 6.5.2 Purchaser,
acting through any of its or their duly empowered and authorized officers or
members, has all necessary entity power and authority to own and use its
properties and to transact the business in which it is engaged, and has full
power and authority to enter into this Contract, to execute and deliver the
documents and instruments required of Purchaser herein, and to perform its
obligations hereunder; and no consent of any of Purchaser's partners, directors,
officers or members are required to so empower or authorize Purchaser. The
compliance with or fulfillment of the terms and conditions hereof will not
conflict with, or result in a breach of, the terms, conditions or provisions of,
or constitute a default under, any contract to which Purchaser is a party or by
which Purchaser is otherwise bound, which conflict, breach or default would have
a material adverse affect on Purchaser's ability to consummate the transaction
contemplated by this Contract. This Contract is a valid, binding and enforceable
agreement against Purchaser in accordance with its terms. 6.5.3 No pending or,
to the knowledge of Purchaser, threatened litigation exists which if determined
adversely would restrain the consummation of the transactions contemplated by
this Contract or would declare illegal, invalid or non-binding any of
Purchaser's obligations or covenants to Seller. 6.5.4 Other than Seller's
Representations, Purchaser has not relied on any representation or warranty made
by Seller or any representative of Seller (including, without limitation,
Broker) in connection with this Contract and the acquisition of the Property.
6.5.5 The Broker and its affiliates do not, and will not at the Closing, have
any direct or indirect legal, beneficial, economic or voting interest in
Purchaser (or in an assignee of Purchaser, which pursuant to Section 13.3,
acquires the Property at the Closing), nor has Purchaser or any affiliate of
Purchaser granted (as of the Effective Date or the Closing Date) the Broker or
any of its affiliates any right or option to acquire any direct or indirect
legal, beneficial, economic or voting interest in Purchaser. 6.5.6 Purchaser is
not a Prohibited Person. 6.5.7 To Purchaser's knowledge, none of its investors,
affiliates or brokers or other agents (if any), acting or benefiting in any
capacity in connection with this Contract is a Prohibited Person. 6.5.8 The
funds or other assets Purchaser will transfer to Seller under this Contract are
not the property of, or beneficially owned, directly or indirectly, by a
Prohibited Person. 6.5.9 The funds or other assets Purchaser will transfer to
Seller under this Contract are not the proceeds of specified unlawful activity
as defined by 18 U.S.C. ss.1956(c)(7).
The provisions of this Section 6.5 shall survive the Closing and delivery
of the Deed to Purchaser.
ARTICLE VII
OPERATION OF THE PROPERTY
7.1 Leases and Property Contracts. During the period of time from the Effective
Date to the Closing Date, in the ordinary course of business Seller may enter
into new Property Contracts, new Leases, renew existing Leases or modify,
terminate or accept the surrender or forfeiture of any of the Leases, modify any
Property Contracts, or institute and prosecute any available remedies for
default under any Lease or Property Contract without first obtaining the written
consent of Purchaser; provided, however, Seller agrees that (a) after the
expiration of the Feasibility Period, any such new Property Contracts shall be
terminable upon 30 days written notice, and (b) any such new Property Contracts
or any new or renewed Leases shall not have a term in excess of 1 year (or such
longer period of time for which such Property Contracts or Leases are entered
into by Seller in the ordinary course of its operation of the Property) without
the prior written consent of Purchaser, which consent shall not be unreasonably
withheld, conditioned or delayed; and provided further that any new, renewed or
modified Leases shall be on Seller's standard form lease (which is subject to
change but in no event shall be in a form that violates Florida law).
Additionally, the amount of rent for any new, renewed or modified Leases shall
be at a rate which is no less than eighty-percent (80%) of: (i) in the case of a
new Lease, the amount of rent at which the applicable vacant unit was last
rented to a third party tenant, and (ii) in the case of a renewed or modified
Lease, the amount of the rent at which the applicable unit was rented prior to
renewal or modification of the Lease.
7.2 General Operation of Property. Except as specifically set forth in this
Article 7, Seller shall operate the Property after the Effective Date in the
ordinary course of business, and except as necessary in the Seller's sole
discretion to address (a) any life or safety issue at the Property or (b) any
other matter which in Seller's reasonable discretion materially adversely
affecting the use, operation or value of the Property, Seller will not make any
material alterations to the Property or remove any material Fixtures and
Tangible Personal Property without the prior written consent of Purchaser which
consent shall not be unreasonably withheld, denied or delayed. 7.3 Liens. Other
than utility easements and temporary construction easements granted by Seller in
the ordinary course of business, Seller covenants that it will not voluntarily
create or cause any lien or encumbrance to attach to the Property between the
Effective Date and the Closing Date (other than Leases and Property Contracts as
provided in Section 7.1) unless Purchaser approves such lien or encumbrance,
which approval shall not be unreasonably withheld or delayed. If Purchaser
approves any such subsequent lien or encumbrance, the same shall be deemed a
Permitted Encumbrance for all purposes hereunder.
ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING
8.1 Purchaser's Conditions to Closing. Purchaser's obligation to close
under this Contract, shall be subject to and conditioned upon the fulfillment
of each and all of the following conditions precedent:
8.1.1 All of the documents required to be delivered by Seller to Purchaser at
the Closing pursuant to the terms and conditions hereof shall have been
delivered; 8.1.2 Each of Seller's Representations shall be true in all material
respects as of the Closing Date; 8.1.3 Seller shall have complied with,
fulfilled and performed in all material respects each of the covenants, terms
and conditions to be complied with, fulfilled or performed by Seller hereunder;
and 8.1.4 Neither Seller nor Seller's general partner shall be a debtor in any
bankruptcy proceeding nor shall have been in the last 6 months a debtor in any
bankruptcy proceeding.
Notwithstanding anything to the contrary, there are no other conditions on
Purchaser's obligation to Close except as expressly set forth in this Section
8.1. If any condition set forth in Sections 8.1.1, 8.1.3 or 8.1.4 is not met,
Purchaser may (a) waive any of the foregoing conditions and proceed to Closing
on the Closing Date with no offset or deduction from the Purchase Price, or (b)
if such failure constitutes a default by Seller, exercise any of its remedies
pursuant to Section 10.2. If the condition set forth in Section 8.1.2 is not
met, Purchaser may, as its sole and exclusive remedy, (i) notify Seller of
Purchaser's election to terminate this Contract and receive a return of the
Deposit from the Escrow Agent, or (ii) waive such condition and proceed to
Closing on the Closing Date with no offset or deduction from the Purchase Price;
provided, however, with respect to a breach of the Seller's representation set
forth in Section 6.1.9, Seller shall have the right (but not the obligation) to
cure such breach, within ten (10) days after receiving written notice from
Purchaser, by assuming all liability for the termination of such material
Property Contract not previously disclosed or made available to Purchaser. If
Seller fails to agree to such assumption within said ten (10) day period, then
Purchaser shall have the remedies set forth above. If Seller agrees to such
assumption within said ten (10) day period, then Purchaser shall proceed to
Closing on the Closing Date with no offset or deduction from the Purchase Price.
Subject to the provisions of Section 6.3 and notwithstanding anything therein to
the contrary, under no circumstances shall Seller be liable to Purchaser for
more than $100,000 in any individual instance or in the aggregate for a breach
of Seller's representation set forth in Section 6.1.9. 8.2 Seller's Conditions
to Closing. Without limiting any of the rights of Seller elsewhere provided for
in this Contract, Seller's obligation to close with respect to conveyance of the
Property under this Contract shall be subject to and conditioned upon the
fulfillment of each and all of the following conditions precedent:
8.2.1 All of the documents and funds required to be delivered by Purchaser to
Seller at the Closing pursuant to the terms and conditions hereof shall have
been delivered; 8.2.2 Each of the representations, warranties and covenants of
Purchaser contained herein shall be true in all material respects as of the
Closing Date; 8.2.3 Purchaser shall have complied with, fulfilled and performed
in all material respects each of the covenants, terms and conditions to be
complied with, fulfilled or performed by Purchaser hereunder; and 8.2.4
Intentionally Omitted.
If any of the foregoing conditions to Seller's obligation to close with
respect to conveyance of the Property under this Contract are not met, Seller
may (a) waive any of the foregoing conditions and proceed to Closing on the
Closing Date, or (b) terminate this Contract, and, if such failure constitutes a
default by Purchaser, exercise any of its remedies under Section 10.1.
ARTICLE IX
BROKERAGE
9.1 Indemnity. Seller represents and warrants to Purchaser that it has dealt
only with CB Richard Ellis, having an address at 2415 E. Camelback Road,
Phoenix, Arizona 85016-4290 ("Broker") in connection with this Contract. Seller
and Purchaser each represents and warrants to the other that, other than Broker,
it has not dealt with or utilized the services of any other real estate broker,
sales person or finder in connection with this Contract, and each party agrees
to indemnify, hold harmless, and, if requested in the sole and absolute
discretion of the indemnitee, defend (with counsel approved by the indemnitee)
the other party from and against all Losses relating to brokerage commissions
and finder's fees arising from or attributable to the acts or omissions of the
indemnifying party. The provisions of this Section 9.1 shall survive the
termination of this Contract, and if not so terminated, the Closing and delivery
of the Deed to Purchaser.
9.2 Broker Commission. If the Closing occurs, Seller agrees to pay Broker a
commission according to the terms of a separate contract. Broker shall not be
deemed a party or third party beneficiary of this Contract. 9.3 Broker Signature
Page. As a condition to Seller's obligation to pay the commission pursuant to
Section 9.2, Broker shall execute the signature page for Broker attached hereto
solely for purposes of confirming the matters set forth therein; provided,
however, that (a) Broker's signature hereon shall not be a prerequisite to the
binding nature of this Contract on Purchaser and Seller, and the same shall
become fully effective upon execution by Purchaser and Seller, and (b) the
signature of Broker will not be necessary to amend any provision of this
Contract.
ARTICLE X
DEFAULTS AND REMEDIES
10.1 Purchaser Default. If Purchaser defaults in its obligations hereunder to
(a) deliver the Initial Deposit (or any other deposit or payment required of
Purchaser hereunder), (b) deliver to the Seller the deliveries specified under
Section 5.3 on the date required thereunder, or (c) deliver the Purchase Price
at the time required by Section 2.2.4 and close on the purchase of the Property
on the Closing Date, then, immediately and without notice or cure, Purchaser
shall forfeit the Deposit, and the Escrow Agent shall deliver the Deposit to
Seller, and neither party shall be obligated to proceed with the purchase and
sale of the Property. If, Purchaser defaults in any of its other
representations, warranties or obligations under this Contract, and such default
continues for more than 10 days after written notice from Seller, then Purchaser
shall forfeit the Deposit, and the Escrow Agent shall deliver the Deposit to
Seller, and neither party shall be obligated to proceed with the purchase and
sale of the Property. The Deposit is liquidated damages and recourse to the
Deposit is, except for Purchaser's indemnity and confidentiality obligations
hereunder, Seller's sole and exclusive remedy for Purchaser's failure to perform
its obligation to purchase the Property or breach of a representation or
warranty. Seller expressly waives the remedies of specific performance and
additional damages for such default by Purchaser. SELLER AND PURCHASER
ACKNOWLEDGE THAT SELLER'S DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND THAT THE
DEPOSIT IS A REASONABLE ESTIMATE OF SELLER'S DAMAGES RESULTING FROM A DEFAULT BY
PURCHASER IN ITS OBLIGATION TO PURCHASE THE PROPERTY. SELLER AND PURCHASER
FURTHER AGREE THAT THIS SECTION 10.1 IS INTENDED TO AND DOES LIQUIDATE THE
AMOUNT OF DAMAGES DUE SELLER, AND SHALL BE SELLER'S EXCLUSIVE REMEDY AGAINST
PURCHASER, BOTH AT LAW AND IN EQUITY, ARISING FROM OR RELATED TO A BREACH BY
PURCHASER OF ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS
CONTRACT, OTHER THAN WITH RESPECT TO PURCHASER'S INDEMNITY AND CONFIDENTIALITY
OBLIGATIONS HEREUNDER.
10.2 Seller Default. If Seller, prior to the Closing, defaults in its
representations, warranties, covenants, or obligations under this Contract,
including to sell the Property as required by this Contract and such default
continues for more than 10 days after written notice from Purchaser, then, at
Purchaser's election and as Purchaser's sole and exclusive remedy, either (A)
this Contract shall terminate, and all payments and things of value, including
the Deposit, provided by Purchaser hereunder shall be returned to Purchaser
(subject to Purchaser's obligation under Section 3.5.2 to return all Third-Party
Reports and information and Materials provided to Purchaser as a pre-condition
to the return of the Deposit) and Purchaser may recover, as its sole recoverable
damages (but without limiting its right to receive a refund of the Deposit), its
direct and actual out-of-pocket expenses and costs (documented by paid invoices
to third parties) in connection with this transaction, which damages shall not
exceed $20,000 in aggregate, or (B) Purchaser may seek specific performance of
Seller's obligation to deliver the Deed pursuant to this Contract (but not
damages). Purchaser agrees that it shall promptly deliver to Seller an
assignment of all of Purchaser's right, title and interest in and to (together
with possession of) all plans, studies, surveys, reports, and other materials
paid for with the out-of-pocket expenses reimbursed by Seller pursuant to the
foregoing sentence. SELLER AND PURCHASER FURTHER AGREE THAT THIS SECTION 10.2 IS
INTENDED TO AND DOES LIMIT THE AMOUNT OF DAMAGES DUE PURCHASER AND THE REMEDIES
AVAILABLE TO PURCHASER, AND SHALL BE PURCHASER'S EXCLUSIVE REMEDY AGAINST
SELLER, BOTH AT LAW AND IN EQUITY ARISING FROM OR RELATED TO A BREACH BY SELLER
OF ITS REPRESENTATIONS, WARRANTIES, OR COVENANTS OR ITS OBLIGATION TO CONSUMMATE
THE TRANSACTIONS CONTEMPLATED BY THIS CONTRACT. UNDER NO CIRCUMSTANCES MAY
PURCHASER SEEK OR BE ENTITLED TO RECOVER ANY SPECIAL, CONSEQUENTIAL, PUNITIVE,
SPECULATIVE OR INDIRECT DAMAGES, ALL OF WHICH PURCHASER SPECIFICALLY WAIVES,
FROM SELLER FOR ANY BREACH BY SELLER, OF ITS REPRESENTATIONS, WARRANTIES OR
COVENANTS OR ITS OBLIGATIONS UNDER THIS CONTRACT. PURCHASER SPECIFICALLY WAIVES
THE RIGHT TO FILE ANY LIS PENDENS OR ANY LIEN AGAINST THE PROPERTY UNLESS AND
UNTIL IT HAS IRREVOCABLY ELECTED TO SEEK SPECIFIC PERFORMANCE OF THIS CONTRACT
AND HAS FILED AN ACTION SEEKING SUCH REMEDY.
ARTICLE XI
RISK OF LOSS OR CASUALTY
11.1 Major Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to Closing, and the cost of repair is more than
$250,000, then Seller shall have no obligation to repair such damage or
destruction and shall notify Purchaser in writing of such damage or destruction
(the "Damage Notice"). Within 10 days after Purchaser's receipt of the Damage
Notice, Purchaser may elect at its option to terminate this Contract by
delivering written notice to Seller. In the event Purchaser fails to terminate
this Contract within the foregoing 10-day period, this transaction shall be
closed in accordance with the terms of this Contract for the full Purchase Price
notwithstanding any such damage or destruction and Purchaser shall receive all
insurance proceeds pertaining thereto (plus a credit against the Purchase Price
in the amount of any deductible payable by Seller in connection therewith) at
Closing.
11.2 Minor Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to the Closing, and the cost of repair is equal to
or less than $250,000, this transaction shall be closed in accordance with the
terms of this Contract, notwithstanding the damage or destruction; provided,
however, Seller shall make such repairs to the extent of any recovery from
insurance carried on the Property if they can be reasonably effected before the
Closing. Subject to Section 11.3, if Seller is unable to effect such repairs,
then Purchaser shall receive all insurance proceeds pertaining thereto (plus a
credit against the Purchase Price in the amount of any deductible payable by
Seller in connection therewith) at Closing.
11.3 Repairs. To the extent that Seller elects to commence any repair,
replacement or restoration of the Property prior to Closing, then Seller shall
be entitled to receive and apply available insurance proceeds to any portion of
such repair, replacement or restoration completed or installed prior to Closing,
with Purchaser being responsible for completion of such repair, replacement or
restoration after Closing from the balance of any available insurance proceeds.
The provisions of this Section 11.3 shall survive the Closing and delivery of
the Deed to Purchaser.
ARTICLE XII
EMINENT DOMAIN
12.1 Eminent Domain. In the event that, at the time of Closing, any material
part of the Property is (or previously has been) acquired, or is about to be
acquired, by any governmental agency by the powers of eminent domain or transfer
in lieu thereof (or in the event that at such time there is any notice of any
such acquisition or intent to acquire by any such governmental agency),
Purchaser shall have the right, at Purchaser's option, to terminate this
Contract by giving written notice within 10 days after Purchaser's receipt from
Seller of notice of the occurrence of such event, and if Purchaser so terminates
this Contract shall recover the Deposit hereunder (subject to Purchaser's
obligation under Section 3.5.2 to return all Third-Party Reports and information
and Materials provided to Purchaser as a pre-condition to the return of the
Deposit). If Purchaser fails to terminate this Contract within such 10-day
period, this transaction shall be closed in accordance with the terms of this
Contract for the full Purchase Price and Purchaser shall receive the full
benefit of any condemnation award. It is expressly agreed between the parties
hereto that this section shall in no way apply to customary dedications for
public purposes which may be necessary for the development of the Property.
ARTICLE XIII
MISCELLANEOUS
13.1 Binding Effect of Contract. This Contract shall not be binding on either
party until executed by both Purchaser and Seller. As provided in Section 2.3.5
and Section 9.3 above, neither the Escrow Agent's nor the Broker's execution of
this Contract shall be a prerequisite to its effectiveness.
13.2 Exhibits And Schedules. All Exhibits and Schedules, whether or not annexed
hereto, are a part of this Contract for all purposes. 13.3 Assignability. This
Contract is not assignable by Purchaser without first obtaining the prior
written approval of the Seller, except that Purchaser may assign this Contract
to one or more entities so long as (a) Purchaser is an affiliate of the
purchasing entity(ies), (b) Purchaser is not released from its liability
hereunder, and (c) Purchaser provides written notice to Seller of any proposed
assignment no later than 10 days prior to the Closing Date. As used herein, an
affiliate is a person or entity controlled by, under common control with, or
controlling another person or entity.
13.4 Binding Effect. Subject to Section 13.3, this Contract shall be binding
upon and inure to the benefit of Seller and Purchaser, and their respective
successors, heirs and permitted assigns.
13.5 Captions. The captions, headings, and arrangements used in this Contract
are for convenience only and do not in any way affect, limit, amplify, or modify
the terms and provisions hereof.
13.6 Number And Gender Of Words. Whenever herein the singular number is used,
the same shall include the plural where appropriate, and words of any gender
shall include each other gender where appropriate. 13.7 Notices. All notices,
demands, requests and other communications required or permitted hereunder shall
be in writing, and shall be (a) personally delivered with a written receipt of
delivery; (b) sent by a nationally recognized overnight delivery service
requiring a written acknowledgement of receipt or providing a certification of
delivery or attempted delivery; (c) sent by certified or registered mail, return
receipt requested, or (d) sent by confirmed facsimile transmission with an
original copy thereof transmitted to the recipient by one of the means described
in subsections (a) through (c) no later than 3 Business Days thereafter. All
notices shall be deemed effective when actually delivered as documented in a
delivery receipt; provided, however, that if the notice was sent by overnight
courier or mail as aforesaid and is affirmatively refused or cannot be delivered
during customary business hours by reason of the absence of a signatory to
acknowledge receipt, or by reason of a change of address with respect to which
the addressor did not have either knowledge or written notice delivered in
accordance with this paragraph, then the first attempted delivery shall be
deemed to constitute delivery. Each party shall be entitled to change its
address for notices from time to time by delivering to the other party notice
thereof in the manner herein provided for the delivery of notices. All notices
shall be sent to the addressee at its address set forth following its name
below:
To Purchaser:
Forest Acquisition Fund, LLC
19 Needham Street
Newton, Massachusetts 02461
Attention: Jeffrey Libert
Telephone: 617-630-9566 x18
Facsimile: 617-964-0003
and a copy to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center, 41st Floor
Boston, Massachusetts 02111
Attention: Frederick J. Pittaro, Esq.
Telephone: 617-348-1714
Facsimile: 617-542-2441
To Seller:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Patrick Slavin
Telephone: 303-691-4340
Facsimile: 303-300-3282
And:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Mr. Harry Alcock
Telephone: 303-691-4344
Facsimile: 303-300-3282
with copy to:
Chad Asarch, Esq.
Vice President and Assistant General Counsel
AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Telephone: 303-691-4303
Facsimile: 303-300-3260
and a copy to:
Argent Real Estate
1401 Brickell Avenue, Suite 520
Miami, Florida 33131
Attention: Mr. David Marquette
Telephone: 305-371-9299
Facsimile: 305-371-6898]
and a copy to:
Loeb & Loeb LLP
10100 Santa Monica Boulevard, Suite 2200
Los Angeles, California 90067-4164
Attention: Karen N. Higgins, Esq. and Rafael Castellanos, Esq.
Telephone: 310-282-2345
Facsimile: 310-919-3578
Any notice required hereunder to be delivered to the Escrow Agent shall be
delivered in accordance with above provisions as follows:
Stewart Title Guaranty Company
1980 Post Oak Boulevard, Suite 610
Houston, Texas 77056
Attention: Wendy Howell, National Commercial Closing Specialist
Telephone: 800-729-1906
Unless specifically required to be delivered to the Escrow Agent pursuant
to the terms of this Contract, no notice hereunder must be delivered to the
Escrow Agent in order to be effective so long as it is delivered to the other
party in accordance with the above provisions. 13.8 Governing Law And Venue. The
laws of the State of Florida shall govern the validity, construction,
enforcement, and interpretation of this Contract, unless otherwise specified
herein except for the conflict of laws provisions thereof. Subject to Section
13.25, all claims, disputes and other matters in question arising out of or
relating to this Contract, or the breach thereof, shall be decided by
proceedings instituted and litigated in a court of competent jurisdiction in the
state in which the Property is situated, and the parties hereto expressly
consent to the venue and jurisdiction of such court.
13.9 Entire Agreement. This Contract embodies the entire Contract between the
parties hereto concerning the subject matter hereof and supersedes all prior
conversations, proposals, negotiations, understandings and Contracts, whether
written or oral.
13.10 Amendments. This Contract shall not be amended, altered, changed,
modified, supplemented or rescinded in any manner except by a written contract
executed by all of the parties; provided, however, that, (a) as provided in
Section 2.3.5 above, the signature of the Escrow Agent shall not be required as
to any amendment of this Contract other than an amendment of Section 2.3, and
(b) as provided in Section 9.3 above, the signature of the Broker shall not be
required as to any amendment of this Contract. 13.11 Severability. In the event
that any part of this Contract shall be held to be invalid or unenforceable by a
court of competent jurisdiction, such provision shall be reformed, and enforced
to the maximum extent permitted by law. If such provision cannot be reformed, it
shall be severed from this Contract and the remaining portions of this Contract
shall be valid and enforceable.
13.12 Multiple Counterparts/Facsimile Signatures. This Contract may be executed
in a number of identical counterparts. This Contract may be executed by
facsimile signatures which shall be binding on the parties hereto, with original
signatures to be delivered as soon as reasonably practical thereafter.
13.13 Construction. No provision of this Contract shall be construed in favor
of, or against, any particular party by reason of any presumption with respect
to the drafting of this Contract; both parties, being represented by counsel,
having fully participated in the negotiation of this instrument. 13.14
Confidentiality. Purchaser shall not disclose the terms and conditions contained
in this Contract and shall keep the same confidential, provided that Purchaser
may disclose the terms and conditions of this Contract (a) as required by law,
(b) to consummate the terms of this Contract, or any financing relating thereto,
or (c) to Purchaser's or Seller's lenders, attorneys and accountants. Any
information and Materials provided by Seller to Purchaser hereunder are
confidential and Purchaser shall be prohibited from making such information
public to any other person or entity other than its agents and legal
representatives, without Seller's prior written authorization, which may be
granted or denied in Seller's sole discretion. Notwithstanding the provisions of
Section 13.9, Purchaser agrees that the covenants, restrictions and agreements
of Purchaser contained in any confidentiality agreement executed by Purchaser
prior to the Effective Date shall survive the execution of this Contract and
shall not be superceded hereby.
13.15 Time Of The Essence. It is expressly agreed by the parties hereto that
time is of the essence with respect to this Contract. 13.16 Waiver. No delay or
omission to exercise any right or power accruing upon any default, omission, or
failure of performance hereunder shall impair any right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. No waiver, amendment,
release, or modification of this Contract shall be established by conduct,
custom, or course of dealing and all waivers must be in writing and signed by
the waiving party. 13.17 Attorneys Fees. In the event either party hereto
commences litigation or arbitration against the other to enforce its rights
hereunder, the prevailing party in such litigation shall be entitled to recover
from the other party its reasonable attorneys' fees and expenses incidental to
such litigation and arbitration, including the cost of in-house counsel and any
appeals.
13.18 Time Periods. Should the last day of a time period fall on a weekend or
legal holiday, the next Business Day thereafter shall be considered the end of
the time period.
13.19 1031 Exchange. Seller and Purchaser acknowledge and agree that the
purchase and sale of the Property may be part of a tax-free exchange under
Section 1031 of the Code for either Purchaser or Seller. Each party hereby
agrees to take all reasonable steps on or before the Closing Date to facilitate
such exchange if requested by the other party, provided that (a) no party making
such accommodation shall be required to acquire any substitute property, (b)
such exchange shall not affect the representations, warranties, liabilities and
obligations of the parties to each other under this Contract, (c) no party
making such accommodation shall incur any additional cost, expense or liability
in connection with such exchange (other than expenses of reviewing and executing
documents required in connection with such exchange), and (d) no dates in this
Contract will be extended as a result thereof. Notwithstanding anything to the
contrary contained in the foregoing, if Seller so elects to close the transfer
of the Property as an exchange, then (i) Seller, at its sole option, may
delegate its obligations to transfer the Property under this Contract, and may
assign its rights to receive the Purchase Price from Purchaser, to a deferred
exchange intermediary (an "Intermediary") or to an exchange accommodation
titleholder, as the case may be; (ii) such delegation and assignment shall in no
way reduce, modify or otherwise affect the obligations of Seller pursuant to
this Contract; (iii) Seller shall remain fully liable for its obligations under
this Contract as if such delegation and assignment shall not have taken place;
(iv) Intermediary or exchange accommodation titleholder, as the case may be,
shall have no liability to Purchaser; and (v) the closing of the transfer of the
Property to Purchaser shall be undertaken by direct deed from Seller (or, if
applicable, from other affiliates of Seller whom Seller will cause to execute
such deeds) to Purchaser or to exchange accommodation titleholder, as the case
may be. Notwithstanding anything to the contrary contained in the foregoing, if
Purchaser so elects to close the acquisition of the Property as an exchange,
then (i) Purchaser, at its sole option, may delegate its obligations to acquire
the Property under this Contract, and may assign its rights to receive the
Property from Seller, to an Intermediary or to an exchange accommodation
titleholder, as the case may be; (ii) such delegation and assignment shall in no
way reduce, modify or otherwise affect the obligations of Purchaser pursuant to
this Contract; (iii) Purchaser shall remain fully liable for its obligations
under this Contract as if such delegation and assignment shall not have taken
place; (iv) Intermediary or exchange accommodation titleholder, as the case may
be, shall have no liability to Seller; and (v) the closing of the acquisition of
the Property by Purchaser or the exchange accommodation titleholder, as the case
may be, shall be undertaken by direct deed from Seller (or, if applicable, from
other affiliates of Seller whom Seller will cause to execute such deeds) to
Purchaser (or to exchange accommodation titleholder, as the case may be).
Notwithstanding anything in this Section 13.19 to the contrary, Seller shall
have the right to extend the Closing Date (as extended pursuant to the second or
third sentences of Section 5.1) for up to 30 days in order to facilitate a tax
free exchange pursuant to this Section 13.19, and to obtain all documentation in
connection therewith.
13.20 No Personal Liability of Officers, Trustees or Directors of Seller's
Partners. Purchaser acknowledges that this Contract is entered into by Seller
which is a Delaware limited partnership, and Purchaser agrees that none of
Seller's Indemnified Parties shall have any personal liability under this
Contract or any document executed in connection with the transactions
contemplated by this Contract.
13.21 No Exclusive Negotiations. Seller shall have the right, at all times prior
to the expiration of the Feasibility Period, to solicit backup offers and enter
into discussions, negotiations, or any other communications concerning or
related to the sale of the Property with any third-party; provided, however,
that such communications are subject to the terms of this Contract, and that
Seller shall not enter into any contract or binding Contract with a third-party
for the sale of the Property unless such Contract is contingent on the
termination of this Contract without the Property having been conveyed to
Purchaser.
13.22 ADA Disclosure. Purchaser acknowledges that the Property may be subject to
the federal Americans With Disabilities Act (the "ADA") and the federal Fair
Housing Act (the "FHA"). The ADA requires, among other matters, that tenants
and/or owners of "public accommodations" remove barriers in order to make the
Property accessible to disabled persons and provide auxiliary aids and services
for hearing, vision or speech impaired persons. Seller makes no warranty,
representation or guarantee of any type or kind with respect to the Property's
compliance with the ADA or the FHA (or any similar state or local law), and
Seller expressly disclaims any such representation.
13.23 No Recording. Purchaser shall not cause or allow this Contract or any
contract or other document related hereto, nor any memorandum or other evidence
hereof, to be recorded or become a public record without Seller's prior written
consent, which consent may be withheld at Seller's sole discretion. If the
Purchaser records this Contract or any other memorandum or evidence thereof,
Purchaser shall be in default of its obligations under this Contract. Purchaser
hereby appoints the Seller as Purchaser's attorney-in-fact to prepare and record
any documents necessary to effect the nullification and release of the Contract
or other memorandum or evidence thereof from the public records. This
appointment shall be coupled with an interest and irrevocable.
13.24 Relationship of Parties. Purchaser and Seller acknowledge and agree that
the relationship established between the parties pursuant to this Contract is
only that of a seller and a purchaser of property. Neither Purchaser nor Seller
is, nor shall either hold itself out to be, the agent, employee, joint venturer
or partner of the other party. 13.25 Dispute Resolution. Any controversy,
dispute, or claim of any nature arising out of, in connection with, or in
relation to the interpretation, performance, enforcement or breach of this
Contract (and any closing document executed in connection herewith), including
any claim based on contract, tort or statute, shall be resolved at the written
request of any party to this Contract by binding arbitration. The arbitration
shall be administered in accordance with the then current Commercial Arbitration
Rules of the American Arbitration Association. Any matter to be settled by
arbitration shall be submitted to the American Arbitration Association in the
state in which the Property is located. The parties shall attempt to designate
one arbitrator from the American Arbitration Association. If they are unable to
do so within 30 days after written demand therefor, then the American
Arbitration Association shall designate an arbitrator. The arbitration shall be
final and binding, and enforceable in any court of competent jurisdiction. The
arbitrator shall award attorneys' fees (including those of in-house counsel) and
costs to the prevailing party and charge the cost of arbitration to the party
which is not the prevailing party. Notwithstanding anything herein to the
contrary, this Section 13.25 shall not prevent Purchaser or Seller from seeking
and obtaining equitable relief on a temporary or permanent basis, including,
without limitation, a temporary restraining order, a preliminary or permanent
injunction or similar equitable relief, from a court of competent jurisdiction
located in the state in which the Property is located (to which all parties
hereto consent to venue and jurisdiction) by instituting a legal action or other
court proceeding in order to protect or enforce the rights of such party under
this Contract or to prevent irreparable harm and injury. The court's
jurisdiction over any such equitable matter, however, shall be expressly limited
only to the temporary, preliminary, or permanent equitable relief sought; all
other claims initiated under this Contract between the parties hereto shall be
determined through final and binding arbitration in accordance with this Section
13.25. 13.26 AIMCO Marks. Purchaser agrees that Seller, the Property Manager or
AIMCO, or their respective affiliates, are the sole owners of all right, title
and interest in and to the AIMCO Marks (or have the right to use such AIMCO
Marks pursuant to license agreements with third parties) and that no right,
title or interest in or to the AIMCO Marks is granted, transferred, assigned or
conveyed as a result of this Contract. Purchaser further agrees that Purchaser
will not use the AIMCO Marks for any purpose. 13.27 Non-Solicitation of
Employees. Purchaser acknowledges and agrees that, without the express written
consent of Seller, neither Purchaser nor any of Purchaser's employees,
affiliates or agents shall solicit any of Seller's employees or any employees
located at the Property (or any of Seller's affiliates' employees located at any
property owned by such affiliates) for potential employment.
13.28 Survival. Except for (a) all of the provisions of this Article 13 (other
than Section 13.19 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 the Property at the Closing, including,
without limitation, any assignee(s) of the original Purchaser pursuant to
Section 13.3 of this Contract. In the event that "Purchaser" has any obligations
or makes any covenants, representations or warranties under this Contract, the
same shall be made jointly and severally by all entities being a Purchaser
hereunder. In the event that Seller receives notice from any entity being a
Purchaser hereunder, the same shall be deemed to constitute notice from all
entities being a Purchaser hereunder. In the event that any entity being a
Purchaser hereunder takes any action, breaches any obligation or otherwise acts
pursuant to the terms of this Contract, the same shall be deemed to be the
action of the other entity(ies) being a Purchaser hereunder and the action of
"Purchaser" under this Contract. In the event that Seller is required to give
notice or take action with respect to Purchaser under this Contract, notice to
any entity being a Purchaser hereunder or action with respect to any entity
being a Purchaser hereunder shall be a notice or action to all entities being a
Purchaser hereunder. In the event that any entity being a Purchaser hereunder
desires to bring an action or arbitration against Seller, such action must be
joined by all entities being a Purchaser hereunder in order to be effective. In
the event that there is any agreement by Seller to pay any amount pursuant to
this Contract to Purchaser under any circumstance, that amount shall be deemed
maximum aggregate amount to be paid to all parties being a Purchaser hereunder
and not an amount that can be paid to each party being a Purchaser hereunder. In
the event that Seller is required to return the Initial Deposit or other amount
to Purchaser, Seller shall return the same to any entity being a Purchaser
hereunder and, upon such return, shall have no further liability to any other
entity being a Purchaser hereunder for such amount. The foregoing provisions
also shall apply to any documents, including, without limitation, the General
Assignment and Assumption and the Assignment and Assumption of Leases and
Security Deposits, executed in connection with this Contract and the
transaction(s) contemplated hereby. 13.30 Radon Gas. Radon is a naturally
occurring radioactive gas that, when it has accumulated in a building in
sufficient quantities, may present health risks to persons who are exposed to it
over time. Levels of radon that exceed federal and state guidelines have been
found in buildings in Florida. Additional information regarding radon and radon
testing may be obtained from your county health department. [Note: This
paragraph is provided for informational purposes pursuant to Section 404.056(6),
Florida Statutes (2002)].
13.31 Energy Efficiency. Purchaser may have the buildings' energy efficiency
rating determined. Seller has, simultaneously with the execution hereof,
delivered to Purchaser a copy of the Florida Building Energy Efficiency Rating
System pamphlet prepared by the State of Florida Department of Community
Affairs. [Note: This paragraph is provided for informational purposes pursuant
to Section 553.996, Florida Statues (2002)].
ARTICLE XIV
LEAD-BASED PAINT DISCLOSURE
14.1 Disclosure. Seller and Purchaser hereby acknowledge delivery of the Lead
Based Paint Disclosure attached as Exhibit H hereto. The provisions of this
Section 14.1 shall survive the Closing and delivery of the Deed to Purchaser.
14.2 Consent Agreement. Testing (the "Testing") has been performed at the
Property with respect to lead-based paint. Law Engineering and Environmental
Services, Inc. performed the Testing and reported its findings in the
Certification of Lead-Based Paint Free Housing dated May 14, 2001, a copy of
which is attached hereto as Exhibit I (the "Report"). The Report certifies the
Property as lead based paint free. By execution hereof, Purchaser acknowledges
receipt of a copy of the Report, the Lead-Based Paint Disclosure Statement
attached hereto as Exhibit H, and acknowledges receipt of that certain Consent
Agreement (the "Consent Agreement") by and among the United States Environmental
Protection Agency (executed December 19, 2001), the United States Department of
Housing and Urban Development (executed January 2, 2002), and Apartment
Investment and Management Company ("AIMCO") (executed December 18, 2001).
Because the Property has been certified as lead based paint free, Seller is not
required under the Consent Agreement to remediate or abate any lead-based paint
condition at the Property prior to the Closing. Purchaser acknowledges and
agrees that (1) after Closing, the Purchaser and the Property shall be subject
to the Consent Agreement and the provisions contained herein related thereto and
(2) that Purchaser shall not be deemed to be a third party beneficiary to the
Consent Agreement. The provisions of this Section 14.2 shall survive the
termination of this Contract, and if not so terminated, the Closing and delivery
of the Deed to Purchaser.
[Remainder of Page Intentionally Left Blank]
NOW, THEREFORE, the parties hereto have executed this Contract as of the
date first set forth above.
Seller:
NEW SHELTER V LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Shelter V GP Limited Partnership,
a Delaware limited partnership,
its sole general partner
By: Shelter Realty V Corporation,
a South Carolina corporation,
its sole general partner
By: /s/ Brian Bornhorst
Name:Brian Bornhorst
Title:Vice President
Purchaser:
FOREST ACQUISITION FUND, LLC,
a Massachusetts limited liability company
By: /s/ Jeffrey Libert
Name: Jeffrey Libert
Title: Manager
Purchaser's Tax Identification Number:
68-0488929