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) November 2, 2005
CONSOLIDATED CAPITAL PROPERTIES III
(Exact name of Registrant as specified in its charter)
California 0-10273 94-2653686
(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.
Consolidated Capital Properties III (the "Registrant"), a California limited
partnership, owns Ventura Landing Apartments ("Ventura Landing"), a 184-unit
apartment complex located in Orlando, Florida. On November 2, 2005, the
Registrant and ten other partnerships (together the "Selling Partnerships") that
own apartment complexes containing an aggregate of 3,374 units, entered into a
Purchase and Sale Contract (the "Purchase Agreement") with a third party, The
Bethany Group, LLC, a California limited liability company (the "Purchaser"), to
sell twelve apartment complexes and one parcel of land (together the
"Properties" and individually a "Property") owned by the Selling Partnerships to
the Purchaser for a total sales price of $161,250,000, of which $12,372,449
represents the sales price for Ventura Landing. Each of the Selling Partnerships
is affiliated with AIMCO Properties, L.P., an affiliate of the general partner
of the Registrant.
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 attached as an exhibit.
PURCHASE PRICE. The total purchase price is $161,250,000, of which $12,372,449
represents the purchase price for Ventura Landing, subject to certain prorations
and adjustments at the closing. The Purchaser delivered an initial deposit of
$600,000, of which the Registrant is allocated approximately $46,000. Upon
termination of the feasibility period, the Purchaser will deliver an additional
deposit of $900,000, of which the Registrant will be allocated approximately
$69,000. If the Purchaser fails to notify the Selling Partnerships in writing of
its intent to terminate the contract prior to the end of the feasibility period,
the two deposits will become non-refundable.
CLOSING. The expected closing date of the transaction is January 31, 2006. The
Selling Partnerships have the right to extend the closing for up to thirty days
by delivering written notice to the Purchaser. The Purchaser has the right to
extend the closing for up to twenty-eight days by delivering written notice and
delivering an additional (non-refundable) payment of $500,000, of which the
Registrant will be allocated approximately $38,000. The closing is also subject
to customary closing conditions and deliveries.
COSTS AND FEES. With respect to Ventura Landing, the Purchaser will pay
transfer, sales, use, gross receipts or similar taxes, 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. The Registrant will pay
the base premium for the title policy and one-half of the customary closing
costs of the escrow agent.
REPRESENTATIONS AND WARRANTIES. The Selling Partnerships and the Purchaser each
made limited representations and warranties to the other.
RISK OF LOSS. The risk of loss or damage to the Properties by reason of any
insured or uninsured casualty during the period through and including the
closing date will be borne by the Selling Partnerships. The Selling Partnerships
must maintain in full force and effect until the closing date all existing
insurance coverage on the Properties.
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 Selling Partnerships.
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 the Purchaser will forfeit its deposits to the Selling
Partnerships, and neither Purchaser nor the Selling Partnerships will be
obligated to proceed with the purchase and sale of the Properties. The Selling
Partnerships expressly waive the remedies of specific performance and additional
damages for any such defaults by the Purchaser.
If the Selling Partnerships, prior to the closing, default in their
representations, warranties, covenants, or obligations then the Purchaser has
the option of (i) seeking specific performance of each of the Selling
Partnerships' obligation to deliver the deed for such Selling Partnership's
Property pursuant to the Purchase Agreement or (ii) terminating the Purchase
Agreement, receiving a return of its deposits, and recovering, as its sole
recoverable damages its documented direct and actual out-of-pocket expenses and
costs up to $45,000 per property.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
10.53 Purchase and Sale Contract between Consolidated Capital
Properties III, a California limited partnership, and the
affiliated Selling Partnerships and The Bethany Group, LLC, a
California limited liability company, dated November 2, 2005.*
*Schedules and supplemental materials to the exhibit have been omitted but will
be provided to the Securities and Exchange Commission upon request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONSOLIDATED CAPITAL PROPERTIES III
By: ConCap Equities, Inc.
General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
Date: November 8, 2005
Exhibit 10.53
PURCHASE AND SALE CONTRACT
AMONG
AIMCO DEERFIELD, L.P., a Delaware limited partnership
AIMCO DEERFIELD II, L.P., a Delaware limited partnership
AMBASSADOR VIII, L.P., a Delaware limited partnership
CONSOLIDATED CAPITAL PROPERTIES III, a California limited partnership
CENTURY PROPERTIES FUND XVII, a California limited partnership
NATIONAL PROPERTY INVESTORS 5, a California limited partnership
P.A.C. LAND II LIMITED PARTNERSHIP, an Ohio limited partnership
QUAIL RUN VI LIMITED PARTNERSHIP, a South Carolina limited partnership
SHELTER PROPERTIES III LIMITED PARTNERSHIP, a South Carolina limited
partnership
SHELTER PROPERTIES V LIMITED PARTNERSHIP, a South Carolina limited partnership
TREESLOPE APARTMENTS, L.P., a South Carolina limited partnership
AS SELLERS
AND
THE BETHANY GROUP, LLC,
a California limited liability company
AS PURCHASER
THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO THE SOUTH CAROLINA
UNIFORM ARBITRATION ACT, SECTION 15-48-10, ET SEQ., CODE OF LAWS OF SOUTH
CAROLINA 1976 AS AMENDED.
ARTICLE I DEFINED TERMS.................................................1
ARTICLE II PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT...................9
2.1 Purchase and Sale................................................9
2.2 Purchase Price and Deposit.......................................9
2.3 Escrow Provisions Regarding Deposit.............................10
ARTICLE III FEASIBILITY PERIOD...........................................11
3.1 Feasibility Period..............................................11
3.2 Expiration of Feasibility Period................................12
3.3 Conduct of Investigation........................................12
3.4 Purchaser Indemnification.......................................13
3.5 Property Materials..............................................14
3.6 Property Contracts..............................................15
ARTICLE IV TITLE........................................................15
4.1 Title Documents.................................................15
4.2 Survey..........................................................16
4.3 Objection and Response Process..................................16
4.4 Permitted Exceptions............................................17
4.5 Existing Mortgage/Deed of Trust.................................17
4.6 Assumed Encumbrances............................................18
4.7 Purchaser Financing.............................................22
ARTICLE V CLOSING......................................................22
5.1 Closing Date....................................................22
5.2 Seller Closing Deliveries.......................................23
5.3 Purchaser Closing Deliveries....................................24
5.4 Closing Prorations and Adjustments..............................25
5.5 Post Closing Adjustments........................................31
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER.......31
6.1 Seller's Representations........................................31
6.2 AS-IS...........................................................33
6.3 Survival of Seller's Representations............................34
6.4 Definition of Seller's Knowledge................................34
6.5 Representations And Warranties Of Purchaser.....................34
ARTICLE VII OPERATION OF THE PROPERTIES..................................35
7.1 Leases and Property Contracts...................................35
7.2 General Operation of Property...................................36
7.3 Liens...........................................................36
ARTICLE VIII CONDITIONS PRECEDENT TO CLOSING..............................36
8.1 Purchaser's Conditions to Closing...............................36
8.2 Sellers' Conditions to Closing..................................37
ARTICLE IX BROKERAGE....................................................39
9.1 Indemnity.......................................................39
9.2 Seller Broker Commission........................................39
9.3 Broker Signature Page...........................................39
9.4 Texas Real Estate License Act...................................39
ARTICLE X DEFAULTS AND REMEDIES........................................40
10.1 Purchaser Default...............................................40
10.2 Seller Default..................................................40
ARTICLE XI RISK OF LOSS OR CASUALTY.....................................41
11.1 Major Damage....................................................41
11.2 Minor Damage....................................................42
11.3 Repairs.........................................................42
ARTICLE XII EMINENT DOMAIN...............................................42
12.1 Eminent Domain..................................................42
ARTICLE XIII MISCELLANEOUS................................................43
13.1 Binding Effect of Contract......................................43
13.2 Exhibits And Schedules..........................................43
13.3 Assignability...................................................43
13.4 Binding Effect..................................................43
13.5 Captions........................................................43
13.6 Number And Gender Of Words......................................44
13.7 Notices.........................................................44
13.8 Governing Law And Venue.........................................46
13.9 Entire Agreement................................................46
13.10 Amendments......................................................46
13.11 Severability....................................................46
13.12 Multiple Counterparts/Facsimile Signatures......................46
13.13 Construction....................................................47
13.14 Confidentiality.................................................47
13.15 Time Of The Essence.............................................47
13.16 Waiver..........................................................47
13.17 Attorneys Fees..................................................47
13.18 Time Periods....................................................47
13.19 1031 Exchange...................................................47
13.20 No Personal Liability of Officers, Trustees or Directors of
Seller's Partners...............................................48
13.21 No Exclusive Negotiations.......................................48
13.22 ADA Disclosure..................................................48
13.23 No Recording....................................................49
13.24 Relationship of Parties.........................................49
13.25 Dispute Resolution..............................................49
13.26 AIMCO Marks.....................................................49
13.27 Non-Solicitation of Employees...................................50
13.28 Survival........................................................50
13.29 Multiple Purchasers.............................................50
13.30 Sellers' Several Obligations....................................51
13.31 Obligation to Close on all Properties...........................51
13.32 Radon Gas.......................................................51
13.33 Energy Efficiency...............................................51
ARTICLE XIV LEAD-BASED PAINT DISCLOSURE..................................51
14.1 Disclosure......................................................51
14.2 Consent Agreement - Pre-1978 - Not Certified....................51
14.3 Consent Agreement - Pre-1978 Certified..........................53
PURCHASE AND SALE CONTRACT
.............THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as
of the 2nd day of November, 2005 (the "Effective Date"), by the selling parties
identified on Schedule A (the "Seller Information Schedule") having an address
at 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237
(individually a "Seller" and collectively "Sellers"), and THE BETHANY GROUP,
LLC, a California limited liability company, having a principal address at 17595
Harvard, Suite C-541, Irvine, California 92614 (prior to November 1, 2005) and
1920 Main Street, Suite 770, Irvine, California 92614 (from and after November
1, 2005) ("Purchaser").
.............NOW, THEREFORE, in consideration of mutual covenants set forth
herein, Sellers and Purchaser hereby agree as follows:
RECITALS
.............A. Each Seller owns the real estate commonly known as and identified
by the "Community Name" listed on the Seller Information Schedule and as more
particularly described in Exhibits A-1 to A-13 attached hereto and made a part
hereof, and the improvements thereon.
.............B. Purchaser desires to purchase, and each Seller desires to sell,
the land, improvements and certain associated property described in this
Contract on the terms and conditions set forth below.
ARTICLE I
DEFINED TERMS
1.1...Unless otherwise defined herein, any term with its initial letter
capitalized in this Contract shall have the meaning set forth in this ARTICLE 1.
Any reference to a specific "Property" shall be to the "Common Name of Property"
as set forth in the Seller Information Schedule attached hereto.
1.1.1 "ADA" shall have the meaning set forth in Section 13.22.
1.1.2 "Additional Deposit" shall have the meaning set forth in Section 2.2.2.
1.1.3 "AIMCO" means Apartment Investment and Management Company.
1.1.4 "AIMCO Marks" means all words, phrases, slogans, materials, software,
proprietary systems, trade secrets, proprietary information and lists, and other
intellectual property owned or used by a Seller, its Property Manager, or AIMCO
in the marketing, operation or use of a Property (or in the marketing, operation
or use of any other properties managed by the Property Manager or owned by AIMCO
or an affiliate of either Property Manager or AIMCO).
1.1.5 "Appeal" shall have the meaning set forth in Section 5.4.4(b).
1.1.6 "Applicable Share" means, a fraction, the numerator of which is the
Property's Base Purchase Price set forth on the Seller Information Schedule, and
the denominator of which is the aggregate of all of the Properties' Base
Purchase Prices set forth on the Seller Information Schedule.
1.1.7 "Assumed Encumbrances" means the HAP Contracts and LURAs.
1.1.8 "Base Purchase Price" means the "Base Purchase Price" for a Property
set forth on the Seller Information Schedule.
1.1.9 "Broker" means, collectively, Transaction Broker and Sellers' Brokers.
1.1.10......"Business Day" means any day other than a Saturday or Sunday or
Federal holiday or legal holiday in the States of California, Colorado, Florida,
South Carolina or Texas.
1.1.11......"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.
1.1.12......"Closing Date" means the date on which date the Closing of the
conveyance of the Properties is required to be held pursuant to Section 5.1.
1.1.13......"Code" shall have the meaning set forth in Section 2.3.6.
1.1.14......"Consent Agreement" shall have the meaning set forth in
Section 14.2.
1.1.15......"Consultants" shall have the meaning set forth in Section 3.1.
1.1.16......"Damage Notice" shall have the meaning set forth in Section 11.1.
1.1.17......"Deeds" shall have the meaning set forth in Section 5.2.1.
1.1.18......"Deposit" means, to the extent actually deposited by Purchaser with
Escrow Agent, the Initial Deposit and the Additional Deposit.
1.1.19......"Escrow Agent" shall have the meaning set forth in Section 2.2.1.
1.1.20......"Excluded Permits" means, with respect to each Property, those
Permits which, under applicable law, are nontransferable and such other Permits,
if any, as may be designated as Excluded Permits on the Seller Information
Schedule or during the Feasibility Period.
1.1.21......"Existing Survey" shall have the meaning set forth in Section 4.2.
1.1.22......"Extension Right" shall have the meaning set forth in Section 5.1.
1.1.23......"Feasibility Period" shall have the meaning set forth in
Section 3.1.
1.1.24......"FHA" shall have the meaning set forth in Section 13.22.
1.1.25......"Final Response Deadline" shall have the meaning set forth in
Section 4.3.
1.1.26......"Fixtures and Tangible Personal Property" means, with respect to
each Property, all fixtures, furniture, furnishings, fittings, equipment,
machinery, apparatus, appliances and other articles of tangible personal
property located on such Property as of the Effective Date and used or usable in
connection with the occupation or operation of all or any part of such Property,
but only to the extent transferable. The term "Fixtures and Tangible Personal
Property" does not include (a) equipment leased by the applicable Seller and the
interest of the applicable Seller in any equipment provided to its Property for
use, but not owned or leased by such Seller, or (b) property owned or leased by
any Tenant or guest, employee or other person furnishing goods or services to
such Property, or (c) property and equipment owned by the applicable Seller,
which in the ordinary course of business of such Property is not used
exclusively for the business, operation or management of such Property, or (d)
the property and equipment, if any, expressly identified in Schedule 1.1.26,
listed on the Seller Information Schedule as "Excluded FF&E", or designated by
the applicable Seller during the Feasibility Period.
1.1.27......"General Assignment" shall have the meaning set forth in
Section 5.2.3.
1.1.28......"Good Funds" shall have the meaning set forth in Section 2.2.1.
1.1.29......"HAP Approval" shall have the meaning set forth in Section
4.6.1.2.
1.1.30......"HAP Assumption" shall have the meaning set forth in Section
4.6.1.1.
1.1.31......"HAP Assumption Application" shall have the meaning set forth in
Section 4.6.1.2.
1.1.32......"HAP Assumption Fees" shall have the meaning set forth in
Section 4.6.1.5.
1.1.33......"HAP Contracts" shall have the meaning set forth in Section 4.6.1.
1.1.34......"HAP Submittal Deadline" shall have the meaning set forth in
Section_4.6.1.
1.1.35......"HAP Required Funds Amount" shall have the meaning set forth in
Section 4.6.1.6.
1.1.36......"Housing Authority" shall have the meaning set forth in Section
4.6.1.
1.1.37......"Housing Authority Requirements" shall have the meaning set forth
in Section 4.6.1.2.
1.1.38......"Improvements" means all buildings and improvements located on the
Land corresponding to each Property, taken "as is."
1.1.39......"Independent Contract Consideration" shall have the meaning set
forth in Section 2.2.3.
1.1.40......"Initial Deposit" shall have the meaning set forth in
Section 2.2.1.
1.1.41......"Issuer" shall have the meaning set forth in Section 4.6.2.
1.1.42......"Land" means, with respect to each Property, the corresponding tract
of land described on Exhibits A-1 to A-13, and all rights, privileges and
appurtenances pertaining thereto.
1.1.43......"LBP Report" means, with respect to a Property, the report
identified on the Seller Information Schedule, prepared by the consultant
identified therein with respect to lead-based paint.
1.1.44......"Lease(s)" means, with respect to each Property, the interest of the
applicable Seller in and to all leases, subleases and other occupancy contracts,
whether or not of record, which provide for the use or occupancy of space or
facilities on or relating to such Seller's Property and which are in force as of
the Closing Date for the applicable Property.
1.1.45......"Leases Assignment" shall have the meaning set forth in
Section 5.2.4.
1.1.46......"Lender" means, with respect to each Property, those "Lenders"
identified on the Seller Information Schedule, each of whose servicer, if any,
also is identified on the Seller Information Schedule.
1.1.47......"Lender Fees" means, with respect to each Property, all fees and
expenses (including, without limitation, all prepayment penalties and pay-off
fees) imposed or charged by each Lender or its counsel in connection with the
Loan Payoff, and, to the extent that the Loan Payoff occurs on a date other than
as permitted under the applicable Note and Mortgage/Deed of Trust, any amounts
of interest charged by the applicable Lender for the period from the Closing
Date to the permitted prepayment date. The exact amount of the Lender Fees shall
be determined as of the Closing Date.
1.1.48......"Loan" means the indebtedness owing to Lender evidenced by a Note.
1.1.49......"Loan Payoff" shall have the meaning set forth in Section 5.4.7.
1.1.50......"Losses" shall have the meaning set forth in Section 3.4.1.
1.1.51......"LURA" shall have the meaning set forth in Section 4.6.2.
1.1.52......"LURA Approval" shall have the meaning set forth in Section
4.6.2.2.
1.1.53......"LURA Assignment Form" shall have the meaning set forth in
Section 5.2.6.
1.1.54......"LURA Assumption" shall have the meaning set forth in Section
4.6.2.1.
1.1.55......"LURA Assumption Applications" shall have the meaning set forth
in Section 4.6.2.2.
1.1.56......"LURA Assumption Fees" shall have the meaning set forth in
Section 4.6.2.5.
1.1.57......"LURA Submittal Deadline" shall have the meaning set forth in
Section 4.6.2.2.
1.1.58......"LURA Required Fund Amounts" shall have the meaning set forth in
Section 4.6.2.6.
1.1.59......"Materials" shall have the meaning set forth in Section 3.5.
1.1.60......"Materials Security Deposit" shall have the meaning set forth in
Section 2.3.7.
1.1.61......"Miscellaneous Property Assets" means, with respect to each
Property, all contract rights, leases, concessions, warranties, plans, drawings
and other items of intangible personal property relating to the ownership or
operation of a Property and owned by its respective Seller, excluding, however,
with respect to each Property (a) receivables, (b) Property Contracts, (c)
Leases, (d) Permits, (e) cash or other funds, whether in petty cash or house
"banks," or on deposit in bank accounts or in transit for deposit, (f) refunds,
rebates or other claims, or any interest thereon, for periods or events
occurring prior to the Closing Date, (g) utility and similar deposits, (h)
insurance or other prepaid items, (i) such Seller's proprietary books and
records, or (j) any right, title or interest in or to the AIMCO Marks. The term
"Miscellaneous Property Assets" also shall include all of the applicable
Seller's rights, if any, in and to the "Community Name" identified in the Seller
Information Schedule as it relates solely to use in connection with the
applicable Property (and not with respect to any other property owned or managed
by any Seller, Property Manager, AIMCO, or their respective affiliates).
1.1.62......"Mortgage/Deed of Trust" means any deeds to secure debts, deeds of
trust and/or mortgages which secure a Note against a Property.
1.1.63......"Note" means, with respect to each Property, the promissory note(s)
identified in the Seller Information Schedule.
1.1.64......"Objection Deadline" shall have the meaning set forth in
Section 4.3.
1.1.65......"Objection Notice" shall have the meaning set forth in
Section 4.3.
1.1.66......"Objections" shall have the meaning set forth in Section 4.3.
1.1.67......"Permits" means, with respect to each Property, all licenses and
permits granted by any governmental authority having jurisdiction over such
Property and required in order to own and operate such Property.
1.1.68......"Permitted Exceptions" shall have the meaning set forth in Section
4.4.
1.1.69......"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.
1.1.70......"Property" means (a) the Land and Improvements and all rights of the
applicable Seller, if any, in and to all of the easements, rights, privileges,
and appurtenances belonging or in any way appertaining to such Land and
Improvements, (b) the right, if any and only to the extent transferable, of such
Seller in the Property Contracts, Leases, Permits (other than Excluded Permits),
and the Fixtures and Tangible Personal Property related to such Land and
Improvements, and (c) the Miscellaneous Property Assets owned by Seller which
are located on such Land and Improvements and used in its operation.
1.1.71......"Properties" means, collectively, each Property to be conveyed
hereunder.
1.1.72......"Property Contracts" means, with respect to each Property, all
contracts, agreements, equipment leases, purchase orders, maintenance, service,
or utility contracts and similar contracts, excluding Leases, which relate to
the ownership, maintenance, construction or repair and/or operation of such
Property, but only to the extent assignable by their terms or applicable law
(including any contracts that are assignable with the consent of the applicable
vendor), and not including (a) any national contracts entered into by the
applicable Seller, Property Manager, or AIMCO with respect to the applicable
Property (i) which terminate automatically upon transfer of such Property by
such Seller, or (ii) which such Seller, in Seller's sole discretion, elects to
terminate with respect to such Property effective as of the Closing Date, or (b)
any property management contract for such Property. Property Contracts shall not
include forward or similar long-term contracts to purchase electricity, natural
gas, or other utilities, which contracts shall be "Utility Contracts" governed
by the provisions of Section 5.4.12.
1.1.73......"Property Contracts Notice" shall have the meaning set forth in
Section 3.6.
1.1.74......"Property Manager" means the current property manager of each
Property.
1.1.75......"Property Taxes" shall have the meaning set forth in Section 5.4.4.
1.1.76......"Proration Schedule" shall have the meaning set forth in
Section 5.4.1.
1.1.77......"Purchase Price" shall have the meaning set forth in Section 2.2.
1.1.78......"Records Disposal Notice" shall have the meaning set forth in
Section 5.4.13.
1.1.79......"Records Hold Period" shall have the meaning set forth in
Section 5.4.13.
1.1.80......"Regional Property Manager" means, with respect to each Property,
the individual identified in the Seller Information Schedule.
1.1.81......"Reinstatement Notice" shall have the meaning set forth in Section
8.1.
1.1.82......"Remediation" shall have the meaning set forth in Section 14.2.
1.1.83......"Rent Roll" shall have the meaning set forth in Section 3.5.3.
1.1.84......"Required Assignment Consent" shall have the meaning set forth in
Section 3.6.
1.1.85......"Response Deadline" shall have the meaning set forth in
Section 4.3.
1.1.86......"Response Notice" shall have the meaning set forth in Section 4.3.
1.1.87......"Sellers' Broker" shall have the meaning set forth in Section 9.1.
1.1.88......"Seller's Indemnified Parties" shall have the meaning set forth
in Section 3.4.1.
1.1.89......"Seller Information Schedule" shall have the meaning set forth in
the introductory paragraph.
1.1.90......"Seller's Property-Related Files and Records" shall have the meaning
set forth in Section 5.4.13.
1.1.91......"Seller's Representations" shall have the meaning set forth in
Section 6.1.
1.1.92......"Seller's Representative" means AIMCO.
1.1.93......"Seller Third-Party Reports" means any reports, studies or other
information with respect to a Property prepared or compiled for a Seller by any
Consultant or other third-party not in the employ of Seller.
1.1.94......"Separate Closing Conditions" shall have the meaning set forth in
Section 4.6.3.
1.1.95......"Survey" shall have the meaning ascribed thereto in Section 4.2.
1.1.96......"Survival Period" shall have the meaning set forth in Section 6.3.
1.1.97......"Survival Provisions" shall have the meaning set forth in Section
13.28.
1.1.98......"Tax Year" means each 12-month period for which the applicable
taxing authority assesses Property Taxes, which may or may not be a calendar
year.
1.1.99......"Tenant" means any person or entity entitled to occupy any portion
of the applicable Property under a Lease.
1.1.100....."Tenant Deposits" means, with respect to a Property, all security
deposits, prepaid rentals, cleaning fees and other refundable deposits and fees
collected from Tenants, plus any interest accrued thereon, paid by Tenants to
the applicable Seller pursuant to its Leases. Tenant Deposits shall not include
any non-refundable deposits or fees paid by Tenants to the applicable Seller,
either pursuant to the Leases or otherwise.
1.1.101....."Tenant Security Deposit Balance" shall have the meaning set forth
in Section 5.4.6.2.
1.1.102....."Terminated Contracts" shall have the meaning set forth in Section
3.6.
1.1.103....."Termination Notice" shall have the meaning set forth in Section
8.1.
1.1.104....."Testing" shall have the meaning set forth in Section 14.2.
1.1.105....."Third-Party Reports" means any reports, studies or other
information prepared or compiled for Purchaser by any Consultant or other
third-party in connection with Purchaser's investigation of a Property.
1.1.106....."Title Commitment" shall have the meaning ascribed thereto in
Section 4.1.
1.1.107....."Title Documents" shall have the meaning set forth in Section 4.1.
1.1.108....."Title Insurer" shall have the meaning set forth in Section 2.2.1.
1.1.109....."Title Policy" shall have the meaning set forth in Section 4.1.
1.1.110....."Transaction Broker" shall have the meaning set forth in
Section 9.1.
1.1.111....."Trustee" shall have the meaning set forth in Section 4.6.2.
1.1.112....."Uncollected Rents" shall have the meaning set forth in Section
5.4.6.1.
1.1.113....."Utility Contract " shall have the meaning set forth in Section
5.4.12.
1.1.114....."Vendor Terminations" shall have the meaning set forth in
Section 5.2.5.
ARTICLE II
PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT
2.1 Purchase and Sale. Each Seller agrees to sell and convey its Property listed
on the Seller Information Schedule to Purchaser and Purchaser agrees to purchase
such Property from each Seller, all in accordance with the terms and conditions
set forth in this Contract.
2.2 Purchase Price and Deposit. The Base Purchase Price for each Property is set
forth in the Seller Information Schedule, and shall be reduced by the Lender
Fees applicable to such Property in accordance with a statement from the
applicable Lender (for each such Property that Property's "Purchase Price"). The
Purchase Price for each Property shall be paid 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, Texas 77056, 800-729-1906 ("Escrow Agent" or
"Title Insurer"), with accompanying investment instructions to Escrow Agent
pursuant to Section 2.3.1, an initial aggregate deposit for all of the
Properties (the "Initial Deposit") of $600,000.00 by wire transfer of
immediately available funds ("Good Funds"). The Initial Deposit shall be held
and disbursed in accordance with the escrow provisions set forth in Section 2.3
and the other applicable provisions of this Contract. The Initial Deposit shall
be allocated among the Sellers of the Properties pursuant to the Applicable
Share attributable to each of their respective Properties. Except only as
specifically and expressly otherwise set forth in this Contract, the Initial
Deposit (i) is non-refundable to Purchaser and (ii) shall be delivered to
Sellers upon the expiration or termination of this Contract.
2.2.2 On the day that the Feasibility Period expires, Purchaser shall deliver to
Escrow Agent an additional aggregate deposit (the "Additional Deposit") of
$900,000.00 by wire by transfer of Good Funds. The Additional Deposit shall be
held and disbursed in accordance with the escrow provisions set forth in Section
2.3 and the other applicable provisions of this Contract. The Additional Deposit
shall be allocated among the Sellers of the Properties pursuant to the
Applicable Share attributable to each of their respective Properties.
2.2.3 Sellers and Purchaser agree that the amount of $100.00 (the "Independent
Contract Consideration") has been paid by Purchaser to Seller concurrently with
the deposit into escrow of the Deposit, as consideration for Sellers' execution
and delivery of this Contract and for Purchaser's rights of review, inspection
and termination provided in Article III hereof. The Independent Contract
Consideration is independent of any other consideration or payment provided for
in this Contract and, notwithstanding anything to the contrary herein, is
non-refundable in all events whatsoever.
2.2.4 The balance of the Purchase Price for each Property shall be paid to and
received by Escrow Agent by wire transfer of Good Funds no later than 11:00 a.m.
(in the time zone in which Escrow Agent is located) on the Closing Date (or, if
required by any Seller's lender, the Business Day before the Closing Date).
2.3 Escrow Provisions Regarding Deposit.
2.3.1 Escrow Agent shall hold the Deposit and make delivery of the Deposit to
the party entitled thereto under the terms of this Contract. Escrow Agent shall
invest the Deposit in such short-term, high-grade securities, interest-bearing
bank accounts, money market funds or accounts, bank certificates of deposit or
bank repurchase contracts as Escrow Agent, in its discretion, deems suitable,
subject to Purchaser's written consent or ratification, and all interest and
income thereon shall become part of the Deposit and shall be remitted to the
party entitled to the Deposit pursuant to this Contract.
2.3.2 Escrow Agent shall hold the Deposit until the earlier occurrence of (i)
the Closing Date, at which time the Deposit shall be applied against the
Purchase Price for each Property, or (ii) the date on which Escrow Agent shall
be authorized to disburse the Deposit (or any portion of it) pursuant to the
terms of this Contract, including as set forth in Section 2.3.3. The tax
identification numbers of the parties shall be furnished to Escrow Agent upon
request.
2.3.3 If the Deposit has not been released earlier in accordance with Section
2.3.2, and Purchaser or Seller's Representative makes a written demand upon
Escrow Agent for payment of any portion of the Deposit, Escrow Agent shall give
written notice to the other parties of such demand. If Escrow Agent does not
receive a written objection from another party to the proposed payment within 5
Business Days after the giving of such notice, Escrow Agent is hereby authorized
to make such payment. 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, in the event of
a disagreement among the parties as to the proper disposition of any portion of
the Deposit, Escrow Agent shall have the right at any time to deposit the
portion of the Deposit in issue, and interest thereon, if any, with a court of
competent jurisdiction in the state or commonwealth in which a Property is
located. Escrow Agent shall give written notice of such deposit to Seller's
Representative and Purchaser. Upon such deposit, Escrow Agent shall be relieved
and discharged of all further obligations and responsibilities hereunder (other
than those that accrued prior to such deposit). Sellers hereby appoint Seller's
Representative to give and receive notices to Escrow Agent regarding the
Deposit.
2.3.4 The parties acknowledge that Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that Escrow Agent shall
not be deemed to be the agent of any of the parties for any act or omission on
its part unless taken or suffered in bad faith in willful disregard of this
Contract or involving gross negligence. Sellers and Purchaser jointly and
severally shall indemnify and hold Escrow Agent harmless from and against all
costs, claims and expenses, including reasonable attorneys' fees, incurred in
connection with the performance of Escrow Agent's duties hereunder, except with
respect to actions or omissions taken or suffered by Escrow Agent in bad faith,
in willful disregard of this Contract or involving gross negligence on the part
of the Escrow Agent.
2.3.5 The parties shall deliver to Escrow Agent an executed copy of this
Contract, which shall constitute the sole instructions to Escrow Agent. Escrow
Agent shall execute the signature page for Escrow Agent attached hereto with
respect to the provisions of this Section 2.3; provided, however, that (a)
Escrow Agent's signature hereon shall not be a prerequisite to the binding
nature of this Contract on Purchaser and Sellers, and the same shall become
fully effective upon execution by Purchaser and Sellers, and (b) the signature
of Escrow Agent will not be necessary to amend any provision of this Contract
other than this Section 2.3.
2.3.6 Escrow Agent, as the person responsible for closing the transaction within
the meaning of Section 6045(e)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code"), shall file all necessary information, reports, returns,
and statements regarding the transaction required by the Code including, but not
limited to, the tax reports required pursuant to Section 6045 of the Code.
Further, Escrow Agent agrees to indemnify and hold Purchaser, Sellers, and their
respective attorneys and brokers harmless from and against any Losses resulting
from Escrow Agent's failure to file the reports Escrow Agent is required to file
pursuant to this section.
2.3.7 If Purchaser becomes entitled, under any provision of this Agreement, to a
return of all, or any portion, of the Deposit, Escrow Agent is hereby instructed
to withhold from the amount of the Deposit to be returned to Purchaser the sum
of $50,000.00 (the "Materials Security Deposit") and to withhold such amount
from Purchaser until such time as Purchaser has fully complied with its
obligations under Section 3.5.2 to deliver to the applicable Seller all
Third-Party Reports and also all information and Materials provided to Purchaser
by such Seller pursuant to this Contract. The satisfaction of Purchaser's
obligations under Section 3.5.2 shall be evidenced by a written instruction to
Escrow Agent signed by the applicable Seller upon request by Purchaser made at
any time after the performance of Purchaser's obligations, which signature shall
not unreasonably be withheld, conditioned or delayed.
2.3.8 The provisions of Subsections 2.3.3, 2.3.4, 2.3.6 and 2.3.7 shall survive
the termination of this Contract, and if not so terminated, the Closing and
delivery of the Deeds to Purchaser.
ARTICLE III
FEASIBILITY PERIOD
3.1 Feasibility Period. Subject to the terms of Sections 3.3 and 3.4 and the
right of Tenants under the Leases, from the Effective Date to and including
December 20, 2005 (the "Feasibility Period"), Purchaser, and its agents,
contractors, engineers, surveyors, attorneys, and employees (collectively,
"Consultants") shall have the right, from time to time and at Purchaser's sole
cost and expense, to enter onto the Properties:
3.1.1 To conduct and make any and all customary studies, tests, examinations,
inquiries, and inspections, or investigations (collectively, the "Inspections")
of or concerning the Properties (including, without limitation, engineering and
feasibility studies, evaluation of drainage and flood plain, soil tests for
bearing capacity and percolation and surveys, including topographical surveys);
3.1.2 To confirm any and all matters which Purchaser may reasonably desire to
confirm with respect to the Properties;
3.1.3 To ascertain and confirm the suitability of the Properties for
Purchaser's intended use of the Properties; and
3.1.4 To review the Materials.
3.2 Expiration of Feasibility Period. If the results of any of the matters
referred to in Section 3.1 appear unsatisfactory to Purchaser for any reason or
if Purchaser elects not to proceed with the transaction contemplated by this
Contract for any other reason, or for no reason whatsoever, in Purchaser's sole
and absolute discretion, then Purchaser shall have the right to terminate this
Contract in its entirety with respect to all Properties (but not in part with
respect to less than all Properties) by giving written notice to that effect to
Seller's Representative and Escrow Agent on or before 5:00 p.m. (in the time
zone in which the Escrow Agent is located) on the date of expiration of the
Feasibility Period. If Purchaser exercises such right to terminate, this
Contract shall terminate and be of no further force and effect subject to and
except for the Survival Provisions, and Escrow Agent shall forthwith deliver to
each Seller its Applicable Share of the Initial Deposit. If Purchaser fails to
provide Seller's Representative with written notice of termination prior to the
expiration of the Feasibility Period in strict accordance with the notice
provisions of this Contract, Purchaser's right to terminate under this Section
3.2 shall be permanently waived and this Contract shall remain in full force and
effect, the Deposit (including both the Initial Deposit and, when delivered in
accordance with Section 2.2.2, the Additional Deposit) shall be non-refundable,
and Purchaser's obligation to purchase the Properties as set forth in this
Contract shall be non-contingent and unconditional except only for satisfaction
of the conditions expressly stated in Section 8.1.
3.3 Conduct of Investigation. Purchaser shall not permit any mechanic's or
materialmen's liens or any other liens to attach to any Property by reason of
the performance of any work or the purchase of any materials by Purchaser or any
other party in connection with any Inspections conducted by or for Purchaser.
Purchaser shall give written notice to the applicable Seller not less than 24
hours prior to entry onto its Property and shall permit such Seller to have a
representative present during all Inspections conducted at its Property. All
information made available by any of the Sellers to Purchaser in accordance with
this Contract or obtained by Purchaser in the course of its Inspections shall be
treated as confidential information by Purchaser, and, prior to the purchase of
the Properties by Purchaser, Purchaser shall use its best efforts to prevent its
Consultants from divulging such information to any unrelated third parties
except as reasonably necessary to permit third parties engaged by Purchaser to
analyze and investigate such information for the purpose of consummating the
transaction contemplated by this Contract. The provisions of this Section 3.3
shall survive the termination of this Contract, and if not so terminated shall
survive (except for the confidentiality provisions of this Section 3.3) the
Closing and delivery of the Deeds to Purchaser.
3.4 Purchaser Indemnification.
3.4.1 Purchaser shall indemnify, hold harmless and, if requested by a Seller (in
such Seller's sole discretion), defend (with counsel approved by such Seller)
such Seller, together with such Seller's affiliates, parent and subsidiary
entities, successors, assigns, partners, managers, members, employees, officers,
directors, trustees, shareholders, counsel, representatives, agents, Property
Manager, Regional Property Manager, and AIMCO (collectively, including such
Seller, "Seller's Indemnified Parties"), from and against any and all damages,
mechanics' liens, liabilities, penalties, interest, losses, demands, actions,
causes of action, claims, costs and expenses (including reasonable attorneys'
fees, including the cost of in-house counsel and appeals) (collectively,
"Losses") arising from or related to Purchaser's or its Consultant's entry onto
such Seller's Property, and any Inspections or other matters performed by
Purchaser with respect to such Property during the Feasibility Period or
otherwise.
3.4.2 Notwithstanding anything in this Contract to the contrary, Purchaser shall
not be permitted to perform any invasive tests on a Property without the prior
written consent of Seller's Representative, which consent may be withheld in
Seller's Representative's sole discretion. Further, Seller's Representative
shall have the right, without limitation, to disapprove any and all entries,
surveys, tests (including, without limitation, a Phase II environmental study of
its Property), investigations and other matters that in such Seller's
Representative's reasonable judgment could result in any injury to its Property
or breach of any contract, or expose the applicable Seller to any Losses or
violation of applicable law, or otherwise adversely affect such Property or such
Seller's interest therein; provided, however, each Seller hereby expressly
consents to Purchaser's performance of a Phase I environmental study of the
applicable Property (to be conducted by an environmental engineer reasonably
acceptable to Seller's Representative) and an ACM (asbestos containing material)
study (to be conducted by an environmental engineer reasonably acceptable to
Seller's Representative) in connection therewith, but only to the extent
customarily performed in connection with a Phase I environmental study; and,
provided, further, however, if the Phase I for any Property concludes that a
Phase II is recommended, but the applicable Seller refuses permission for such
Phase II (in such Seller's sole and absolute discretion), Purchaser may
terminate this Agreement pursuant to Section 3.2 prior to the expiration of the
Feasibility Period. Purchaser shall use best efforts to minimize disruption to
Tenants in connection with Purchaser's or its Consultants' activities pursuant
to this Section. No consent by Seller's Representative to any such activity
shall be deemed to constitute a waiver by the applicable Seller or assumption of
liability or risk by such Seller. Purchaser hereby agrees to restore, at
Purchaser's sole cost and expense, each Property substantially 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, by water or otherwise,
and (b) worker's compensation insurance for all of their respective employees in
accordance with the law of the state(s) or commonwealth(s) in which the
Properties are located. Purchaser shall deliver proof of the insurance coverage
required pursuant to this Section 3.4.2 to Sellers (in the form of a certificate
of insurance) prior to Purchaser's or Purchaser's Consultants' entry onto any of
the Properties.
3.4.3 The provisions of this Section 3.4 shall survive the termination of this
Contract, and if not so terminated, the Closing and delivery of the Deeds to
Purchaser.
3.5 Property Materials.
3.5.1 Within 10 days after the Effective Date, and to the extent the same exist
and are in a Seller's possession or reasonable control (subject to Section
3.5.2), each Seller agrees to make the documents set forth on Schedule 3.5 (the
"Materials") relating to its Property available at its Property for review and
copying by Purchaser at Purchaser's sole cost and expense. In the alternative,
at a Seller's option and within the foregoing 10-day period, such Seller may
deliver some or all of its Materials to Purchaser, or make the same available to
Purchaser on a secure web site (Purchaser agrees that any item to be delivered
by a Seller under this Contract shall be deemed delivered to the extent
available to Purchaser on such secured web site). To the extent that Purchaser
determines that any of the Materials have not been made available or delivered
to Purchaser pursuant to this Section 3.5.1, Purchaser shall notify the
applicable Seller and such Seller shall use commercially reasonable efforts to
deliver the same to Purchaser within 5 Business Days after such notification is
received by such Seller; provided, however, that under no circumstances will the
Feasibility Period be extended and Purchaser's sole remedy will be to terminate
this Contract pursuant to Section 3.2.
3.5.2 IN PROVIDING SUCH INFORMATION AND MATERIALS TO PURCHASER, OTHER THAN
SELLER'S REPRESENTATIONS, EACH SELLER MAKES NO REPRESENTATION OR WARRANTY,
EXPRESS, WRITTEN, ORAL, STATUTORY, OR IMPLIED, AND ALL SUCH REPRESENTATIONS AND
WARRANTIES ARE HEREBY EXPRESSLY EXCLUDED AND DISCLAIMED. Any information and
Materials provided by any of the Sellers to Purchaser under the terms of this
Contract is for informational purposes only and, together with all Third-Party
Reports, shall be returned by Purchaser to all applicable Sellers as a condition
to return of the Materials Security Deposit to Purchaser (if Purchaser is
otherwise entitled to such Materials Security Deposit pursuant to the terms of
this Contract) if this Contract is terminated for any reason. Purchaser shall
not in any way be entitled to rely upon the accuracy of such information and
Materials. Purchaser recognizes and agrees that the Materials and other
documents and information delivered or made available by Sellers pursuant to
this Contract may not be complete or constitute all of such documents which are
in a Seller's possession or control, but are those that are readily available to
such Seller after reasonable inquiry to ascertain their availability. Purchaser
understands that, although each Seller will use commercially reasonable efforts
to locate and make available the Materials and other documents required to be
delivered or made available by it pursuant to this Contract, and other than
Seller's Representations, Purchaser will not rely on such Materials or other
documents as being a complete and accurate source of information with respect to
such Seller's Property, and will instead in all instances rely exclusively on
its own Inspections and Consultants with respect to all matters which it deems
relevant to its decision to acquire, own and operate the Properties.
3.5.3 In addition to the items set forth on Schedule 3.5, no later than 15 days
after the Effective Date, the applicable Seller shall deliver to Purchaser (or
otherwise make available to Purchaser as provided under Section 3.5.1) a rent
roll for its 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 Sellers make no representations or warranties regarding the Rent
Roll other than the express representation set forth in Section 6.1.9. The
applicable Seller shall update the Rent Roll in accordance with Section 5.2.11.
3.5.4 The provisions of this Section 3.5 shall survive the Closing and delivery
of the Deeds to Purchaser.
3.6 Property Contracts. On or before the expiration of the Feasibility Period,
Purchaser may deliver written notice to each Seller (a "Property Contracts
Notice") specifying any Property Contracts of such Seller which Purchaser
desires to terminate at the Closing (the "Terminated Contracts"); provided that
(a) the effective date of such termination after Closing shall be subject to the
express terms of such Terminated Contracts (and, to the extent that the
effective date of termination of any Terminated Contract is after the Closing
Date, Purchaser shall be deemed to have assumed all of the applicable Seller's
obligations under such Terminated Contract as of the Closing Date), (b) if any
such Property Contract cannot by its terms be terminated, it shall be assumed by
Purchaser and not be a Terminated Contract, and (c) to the extent that any such
Terminated Contract requires payment of a penalty or premium for cancellation,
Purchaser shall be solely responsible for the payment of any such cancellation
fees or penalties. If Purchaser fails to deliver a Property Contracts Notice to
a Seller on or before the expiration of the Feasibility Period, there shall be
no Terminated Contracts with respect to such Seller (or its Property) and
Purchaser shall assume all Property Contracts of such Seller at the Closing. To
the extent that any Property Contract to be assumed by Purchaser (including any
Property Contracts that, because of advance notice requirements, will be
temporarily assumed by Purchaser pending the effective date of termination after
the Closing Date) is assignable but requires the applicable vendor to consent to
the assignment or assumption of the Property Contract by the applicable Seller
to Purchaser, then, prior to the Closing, Purchaser shall be responsible for
obtaining from each applicable vendor a consent (each a "Required Assignment
Consent") to the assignment of the Property Contract to Purchaser (and the
assumption by Purchaser of all obligations under such Property Contract).
Purchaser shall indemnify, hold harmless and, if requested by the applicable
Seller (in such Seller's sole discretion), defend (with counsel approved by such
Seller) such Seller's Indemnified Parties from and against any and all Losses
arising from or related to Purchaser's failure to obtain any Required Assignment
Consent.
ARTICLE IV
TITLE
4.1 Title Documents. Within 5 calendar days after the Effective Date, each
Seller shall cause to be delivered to Purchaser a standard form commitment for
title insurance ("Title Commitment") for such Seller's Property in an amount
equal to the Property's Base Purchase Price from Title Insurer for an owner's
title insurance policy (the "Title Policy") on the most recent standard American
Land Title Association form or, in the case of a Property located in Texas, on
the most recent standard form promulgated by the Texas State Department of
Insurance, together with copies of all instruments identified as exceptions
therein (together with the Title Commitment, referred to herein as the "Title
Documents"). Each Seller of a Property located in Florida or Texas (but not in
South Carolina) shall be responsible for payment of the basic premium for the
Title Policy for its Property located in such states. Purchaser shall be solely
responsible for payment of all other costs relating to procurement of a Title
Commitment, Title Policy, and any requested endorsements or amendments with
respect to each of the Properties, including the entire cost in the state of
South Carolina.
4.2 Survey. Within 5 calendar days after the Effective Date, each Seller shall
deliver to Purchaser surveys of such Property (in each case, the "Survey" and
collectively, the "Surveys") which to such Seller's knowledge is in such
Seller's possession or reasonable control (subject to Section 3.5.2). Purchaser
acknowledges and agrees that delivery of the Surveys is subject to Section
3.5.2. The applicable Seller and Purchaser shall split equally the cost and
expense of the preparation of the Survey whether the transactions contemplated
hereby close or this Agreement is terminated. The provisions of this Section 4.2
shall survive Closing or the termination of this Agreement.
4.3 Objection and Response Process.
(a) On or before December 8, 2005 (the "Objection Deadline"), Purchaser shall,
with respect to each Property, give written notice (the "Objection Notice") to
the attorneys for Sellers of any matter set forth in any Title Documents or
Survey to which Purchaser objects (the "Objections"). If Purchaser fails to
tender an Objection Notice with respect to a Property on or before its
applicable 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 for such Property. On or before December 19, 2005 (the "Response
Deadline"), the Seller who has received such Objection Notice may, in such
Seller's sole discretion, give Purchaser notice (the "Response Notice") of those
Objections which such Seller is willing to cure, if any. Sellers shall be
entitled to reasonable adjournments of the Closing Date (but not in excess of
30-days in total) for the purpose of curing such Objections. If a Seller fails
to deliver a Response Notice for a Property by such Property's Response
Deadline, such Seller shall be deemed to have elected not to cure or otherwise
resolve any matter set forth in the Objection Notice for such Property. If
Purchaser is dissatisfied with any Response Notice, Purchaser may, as its
exclusive remedy, elect by written notice given to Seller's Representative on or
before the expiration of the Feasibility Period (the "Final Response Deadline")
either (i) 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 (ii) to terminate this Contract in its
entirety regarding all Properties (but not less than all Properties), in which
event the Escrow Agent shall deliver to each Seller its Applicable Share of the
Initial Deposit. If Purchaser fails to give notice to terminate this Contract on
or before the Final Response Deadline, Purchaser shall be deemed to have elected
to approve and irrevocably waived any objections to any matters covered by the
Title Documents or the Survey applicable to each Property, subject only to
resolution, if any, of the Objections as set forth in the Response Notice for
such Property (or if no Response Notice is tendered, without any resolution of
the Objections).
(b) If any Title Commitment for any Property is re-issued on or after the
expiration of the Feasibility Period and discloses any additional title matters
not shown on the original Title Commitment that are material and adverse to the
ownership or operation of such Property, then Purchaser shall have the lesser of
5 days after the receipt of such updated Title Commitment or the Closing Date to
object to such title matters (if Purchaser does not object within such period,
the new matters shall be deemed "Permitted Exceptions" hereunder). The
applicable Seller then shall have 5 days after the receipt of such objections to
provide a Response Notice (if at all) as set forth in Section 4.3(a) (Seller's
failure to provide a Response Notice shall be deemed a refusal to cure). If such
Seller has refused (or is deemed to have refused) to cure such title matters
(which cure may include, if selected by such Seller in such Seller's sole
discretion, by title endorsement), then Purchaser shall have the rights set
forth in the second to last sentence of Section 4.3(a), which rights of
termination shall be exercised (if at all) within 5 days after receipt of
Seller's Response Notice for such new title objections (or the Closing Date, if
earlier). (The updated Title Commitment shall be part of the Title Documents for
all purposes under this Contract.)
4.4 Permitted Exceptions. The Deed for each Property delivered pursuant to
this Contract shall be subject to the following, all of which shall be deemed
"Permitted Exceptions":
4.4.1 All matters shown in the Title Documents and the Survey for such Property,
other than (a) those Objections, if any, which the applicable Seller has agreed
to cure pursuant to the Response Notice under Section 4.3, (b) the standard
exception regarding the rights of parties in possession, and (c) 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 for such Property;
4.4.3 any Assumed Encumbrance;
4.4.4 Applicable zoning and governmental regulations and ordinances;
4.4.5 Any defects in or objections to title to such Property, or title
exceptions or encumbrances, arising by, through or under Purchaser; and
4.5 Existing Mortgage/Deed of Trust. It is understood and agreed that, whether
or not Purchaser gives an Objection Notice with respect thereto for a Property,
any deeds of trust and/or mortgages which secure a Note (collectively, a
"Mortgage/Deed of Trust") shall not be deemed Permitted Exceptions for such
Property, whether Purchaser gives further written notice of such or not, and
shall, pursuant to Section 5.4.7, be paid off, satisfied, discharged and/or
cured from proceeds of the Purchase Price at Closing, provided that the Lender's
Fees due in connection with such Loan Payoff shall be paid by Purchaser. It is
further understood and agreed that, provided that Purchaser provides prompt
notice to Seller, any tax lien for delinquent property taxes, mechanic's liens
for work authorized by the applicable Seller and judgment liens against the
applicable Seller shall not be deemed a Permitted Exception, and shall be paid
off, satisfied, discharged and/or cured by the applicable Seller at or before
Closing.
4.6 Assumed Encumbrances.
4.6.1 Purchaser recognizes and agrees that the West Winds, Braesview, Eagle's
Nest and La Jolla Properties are the subject of one or more HAP contracts
(collectively, the "HAP Contracts") which regulate Section 8 payments to such
Property under existing vouchers administered by the applicable local housing
authority (the "Housing Authority"). The HAP Contracts shall be deemed an
Assumed Encumbrance for all purposes hereunder. Within 10 days after the
Effective Date, each of the West Winds, Braesview, Eagle's Nest and La Jolla
Sellers agrees that it will make available to Purchaser (in the same manner in
which such Sellers are permitted to make the Materials available to Purchaser
under Section 3.5.1) copies of the HAP Contracts which are in such Seller's
possession or reasonable control (subject to Section 3.5.2). Each of the West
Winds, Braesview, Eagle's Nest and La Jolla Sellers shall reasonably cooperate
(at no material cost to such Seller) with Purchaser in Purchaser's request to
the applicable Housing Authority for copies of the HAP Contracts then in effect.
4.6.1.1.....With respect to the HAP Contracts for the West Winds, Braesview,
Eagle's Nest and La Jolla Properties, at the Closing, Purchaser either (a) shall
assume all obligations under the HAP Contracts and accept title to the
applicable Property subject to the same, or (b) the existing HAP Contracts shall
be terminated, and Purchaser shall enter into replacement HAP contracts which
are acceptable to the applicable Housing Authority (with respect to West Winds,
the foregoing (a) and (b) collectively referred to herein as the "HAP
Assumption"). The provisions of this Section 4.6.1.1 shall survive the Closing.
4.6.1.2.....With respect to the West Winds HAP Assumption, Purchaser
acknowledges that the HAP Contracts require the satisfaction by Purchaser of
certain requirements as set forth therein to allow for the HAP Assumption.
Accordingly, no later than 30 days after the Effective Date (the "HAP Submittal
Deadline"), Purchaser, at its sole cost and expense, shall meet with the
applicable Housing Authority and, pursuant to the HAP Contracts and form
HUD-542641, shall submit all applications, certifications, documents,
information, materials and fees (collectively, the "HAP Assumption Application")
required by such Housing Authority in order for such Housing Authority to review
and approve Purchaser's request that the Housing Authority approve the HAP
Assumption (the "HAP Approval"). In addition to the foregoing, Purchaser
recognizes and agrees that such Housing Authority may require Purchaser to
complete and return each of the following (together with such other requirements
as such Housing Authority may from time to time impose, the "Housing Authority
Requirements"): (i) Transfer Agreement, (ii) Proof of Property Ownership Form,
(iii) Form W9, (iv) direct deposit forms, (v) Columbia Housing Authority
Landlord Certification, and (vi) other information of Purchaser. Purchaser
agrees, at Purchaser's sole cost and expense, to submit the Housing Authority
Requirements to the such Housing Authority at such times and in such form as
such Housing Authority requires, together with any fee required by such Housing
Authority in connection therewith. All such Housing Authority Requirements shall
be submitted by Purchaser within such time frames as are necessary in order for
the Closing to proceed on the scheduled Closing Date. The provisions of this
Section 4.6.1.2 shall survive Closing.
4.6.1.3.....Purchaser agrees to provide Seller's Representative with a copy of
the West Winds HAP Assumption Application no later than 2 Business Days prior to
the HAP Submittal Deadline and shall provide evidence of its submission to the
Housing Authority on or before the HAP Submittal Deadline. Purchaser
acknowledges and agrees that Purchaser is solely responsible for the preparation
and submittal of the HAP Assumption Application, including the collection of all
materials, documents, certificates, financials, signatures, and other items
required to be submitted to the Housing Authority in connection therewith.
4.6.1.4.....Purchaser shall comply with the Housing Authority's guidelines in
connection with the West Winds HAP Assumption. Purchaser shall be responsible,
at its sole cost and expense, for correcting and re-submitting any deficiencies
noted by the Housing Authority in connection with a HAP Assumption Application
no later than 3 Business Days after notification from the Housing Authority of
such deficiency. Purchaser also shall provide Seller's Representative with a
copy of any correspondence from the Housing Authority with respect to the HAP
Assumption Application no later than 3 Business Days after receipt of such
correspondence from the Housing Authority.
4.6.1.5.....Purchaser shall pay all fees and expenses (including, without
limitation, all charges, transfer fees, assumption fees (including documentary
stamp and non-recurring intangible taxes), title fees, endorsement fees, and
other fees) imposed or charged by the Housing Authority or its counsel (such
fees and expenses collectively being referred to as the "HAP Assumption Fees"),
in connection with the West Winds HAP Assumption Application and the HAP
Assumption. The provisions of this Section 4.6.1.5 shall survive the termination
of this Contract and the Closing.
4.6.1.6.....In connection with the West Winds HAP Assumption, Purchaser agrees
that Purchaser shall be responsible for (a) replacing (and increasing to the
extent required by the Housing Authority) all reserves, impounds and other
accounts required to be maintained in connection with the HAP Contracts, and (b)
funding any additional reserves, impounds, escrows or accounts required by the
Housing Authority to be maintained by Purchaser in connection with the HAP
Contracts after the HAP Assumption (the foregoing amounts in (a) and (b)
collectively referred to herein as the "HAP Required Fund Amounts"). Any
existing reserves, impounds, escrows and other accounts required to be replaced
by Purchaser pursuant to the foregoing sentence shall be released in Good Funds
to the applicable Seller at the Closing. The provisions of this Section 4.6.1.6
shall survive the Closing.
4.6.1.7.....Purchaser agrees to deliver to the Housing Authority such other
information or documentation as the Housing Authority reasonably may request,
including, without limitation, financial statements, income tax returns and
other financial information for Purchaser and any required guarantor. The West
Wind Seller agrees that it will cooperate with Purchaser and the Housing
Authority, at no material cost or expense to such Seller, in connection with
Purchaser's application to the Housing Authority for approval of the HAP
Assumption.
4.6.1.8.....Further, with respect to the West Winds, Braesview, Eagle's Nest and
La Jolla Properties, Purchaser shall make such filings, pay such fees and costs,
and pay such reserves, impounds, escrows and other amounts post-Closing as
required by each Housing Authority with respect to the HAP Contracts (which may
include, but not be limited to, a change in ownership form, name of the new
owner, name of the property manager, evidence that title to the property has
transferred and an IRS form W-9). The provisions of this Section 4.6.1.8 shall
survive Closing.
4.6.2 Purchaser recognizes and agrees that (i) the Braesview Property is subject
to an Amended and Restated Regulatory Agreement and Declaration of Restrictive
Covenants, dated December 1, 1996, among the Braesview Seller, San Antonio
Housing Financing Corporation ("Issuer"), and American National Bank and Trust
Company of Chicago ("Trustee"), (ii) the Eagle's Nest Property is subject to an
Amended and Restated Regulatory Agreement and Declaration of Restrictive
Covenants, dated December 1, 1996, among the Eagle's Nest Seller, Issuer and
Trustee, and (iii) the La Jolla Property is subject to an Amended and Restated
Regulatory Agreement and Declaration of Restrictive Covenants, dated December 1,
1996, among the Eagle's Nest Seller, Issuer and Trustee (individually each of
the foregoing documents being a "LURA" and collectively the "LURAs"). Each LURA
shall be deemed an Assumed Encumbrance for all purposes hereunder.
4.6.2.1.....With respect to the LURAs, at the Closing, Purchaser shall assume
all obligations under the LURAs and accept title to the applicable Properties
subject to the same (individually a "LURA Assumption" and collectively the "LURA
Assumptions").
4.6.2.2.....No later than 15 days after the Effective Date (the "LURA Submittal
Deadline"), Purchaser, at its sole cost and expense, shall submit all
applications, documents, information, materials and fees to the Issuer and
Trustee (collectively, the "LURA Assumption Applications") required by the
Issuer and Trustee in order for the Issuer and Trustee to review and approve
Purchaser's request for the LURA Assumptions (individually a "LURA Approval" and
collectively the "LURA Approval").
4.6.2.3.....Purchaser agrees to provide Seller's Representative with a copy of
the LURA Assumption Applications no later than 2 Business Days prior to the LURA
Submittal Deadline and shall provide evidence of its submission to the Issuer
and Trustee on or before the LURA Submittal Deadline. Purchaser acknowledges and
agrees that Purchaser is solely responsible for the preparation and submittal of
the LURA Assumption Applications, including the collection of all materials,
documents, certificates, financials, signatures, and other items required to be
submitted to the Issuer and Trustee in connection therewith.
4.6.2.4.....Purchaser shall comply with the Issuer's and Trustee's guidelines
and requirements in connection with the LURA Assumptions. Purchaser shall be
responsible, at its sole cost and expense, for correcting and re-submitting any
deficiencies noted by the Issuer or Trustee in connection with a LURA Assumption
Application no later than 5 Business Days after notification from the Issuer or
Trustee of such deficiency. Purchaser also shall provide Seller's Representative
with a copy of any correspondence from the Issuer or Trustee with respect to a
LURA Assumption Application no later than 3 Business Days after receipt of such
correspondence from the Issuer or Trustee.
4.6.2.5.....Purchaser shall pay all fees and expenses (including, without
limitation, all charges, transfer fees, assumption fees (including documentary
stamp and non-recurring intangible taxes), title fees, endorsement fees, and
other fees) imposed or charged by the Issuer or Trustee or their counsel (such
fees and expenses collectively being referred to as the "LURA Assumption Fees"),
in connection with the LURA Assumption Applications and the LURA Assumptions.
The provisions of this Section 4.6.2.5 shall survive the termination of this
Contract and the Closing.
4.6.2.6.....In connection with the LURA Assumptions, Purchaser agrees that
Purchaser shall be responsible for (a) replacing (and increasing to the extent
required by the Issuer or Trustee) all reserves, impounds and other accounts
required to be maintained in connection with the LURAs, and (b) funding any
additional reserves, impounds, escrows or accounts required by the Issuer or
Trustee to be maintained by Purchaser in connection with the LURAs after the
LURA Assumption (the foregoing amounts in (a) and (b) collectively referred to
herein as the "LURA Required Fund Amounts"). Any existing reserves, impounds,
escrows and other accounts required to be replaced by Purchaser pursuant to the
foregoing sentence shall be released in Good Funds to the applicable Seller at
the Closing. The provisions of this Section 4.6.2.6 shall survive the Closing.
4.6.2.7.....Purchaser agrees to deliver to the Issuer and Trustee such other
information or documentation as the Issuer or Trustee reasonably may request,
including, without limitation, financial statements, income tax returns and
other financial information for Purchaser and any required guarantor. The
Braesview, Eagle's Nest and La Jolla Sellers each agree that it will cooperate
with Purchaser and the Issuer and Trustee, at no material cost or expense to
such Sellers, in connection with Purchaser's application to the Issuer and
Trustee for approval of the LURA Assumption.
4.6.3 If the Housing Authority has not approved the HAP Assumption for West
Winds, or the Issuer and Trustee have not approved the LURA Assumptions (the
"Separate Closing Conditions") on or before January 30, 2006, then Sellers may,
in their sole and absolute discretion, by written notice to Purchaser (a)
terminate this Contract in its entirety, in which case the Applicable Share of
the Initial Deposit shall be delivered to Sellers and the Additional Deposit
shall be returned to Purchaser (subject to Purchaser's obligation under Section
3.5.2 to return all Third-Party Reports and all other information and Materials
provided to Purchaser as a pre-condition to the return of the Materials Security
Deposit) (except if Purchaser is in default of its obligations under this
Contract, including this Section 4.6, in which case Sellers shall have the
rights set forth in Section 10.1), or (b) terminate this Contract with respect
solely to those Properties for which the HAP Approval or LURA Approval have not
been granted, and Purchaser and the remaining Sellers shall proceed to close the
other Properties as provided in this Contract at the time provided therefor in
Section 5.1 (and, to the extent Sellers terminate this Contract with respect to
a Property, the Applicable Share of the Initial Deposit for such Property shall
be delivered to the applicable Seller and the Applicable Share of the Additional
Deposit for such terminated Property shall be returned to Purchaser (subject to
Purchaser's obligation under Section 3.5.2 to return all Third-Party Reports and
all other information and Materials provided to Purchaser as a pre-condition to
the return of the Materials Security Deposit, or, if the Applicable Share of the
Additional Deposit for is less than the Materials Security Deposit, as a
condition to the return of the Applicable Share of the Additional Deposit),
except if Purchaser is in default under this Contract in which event the
applicable Sellers may retain the entire Deposit for the terminated Properties
in accordance with its remedies pursuant to Section 10.1), or (c) terminate this
Contract with respect to those Properties for which the HAP Approval or LURA
Approval have not been granted and any additional Properties (including those
for which such approvals have been obtained or are not necessary) as determined
in Sellers' discretion, and Purchaser and the remaining Sellers shall proceed to
close the other Properties (i.e., those Properties with respect to which this
Contract has not been terminated by Sellers) as provided in this Contract at the
time provided therefor in Section 5.1 (and, to the extent Sellers terminate this
Contract with respect to a Property, the Applicable Share of the Initial Deposit
for such Property shall be delivered to the applicable Seller and the Applicable
Share of the Additional Deposit for such terminated Property shall be returned
to Purchaser (subject to Purchaser's obligation under Section 3.5.2 to return
all Third-Party Reports and all other information and Materials provided to
Purchaser as a pre-condition to the return of the Materials Security Deposit,
or, if the Applicable Share of the Additional Deposit is less than the Materials
Security Deposit, as a condition to the return of the Applicable Share of the
Additional Deposit), except if Purchaser is in default under this Contract in
which event the applicable Sellers may retain the entire Deposit for the
terminated Properties in accordance with its remedies pursuant to Section 10.1),
or (d) extend the date for Closing all of the Properties until February 28,
2006; provided, however, if Sellers have selected the option set forth in
subsection (d) above, and all of the Separate Closing Conditions have not
occurred by February 27, 2006, then Sellers again shall have the options set
forth in subsections (a), (b), (c) and (d), and if Sellers select the options
set forth in subsection (d) above, the Closing Date shall be March 31, 2006.
4.6.4 Purchaser shall be in default hereunder if (a) Purchaser fails to submit
the complete HAP Assumption Application(s) by the HAP Submittal Deadline, or (b)
Purchaser fails to comply with its other obligations hereunder with respect to
the HAP Assumption(s), or (c) Purchaser fails to submit the complete LURA
Assumption Applications by the LURA Submittal Deadline, or (d) Purchaser fails
to comply with its other obligations hereunder with respect to the LURA
Assumptions, in any of which events Sellers may exercise their remedies under
Section 10.1.
4.6.5 Notwithstanding anything in this Contract to the contrary, each of the
West Winds, Braesview, Eagle's Nest and La Jolla Sellers reserves the right to
reject, in such Seller's sole discretion, the terms and conditions imposed by
any Housing Authority, Issuer or Trustee with respect to any HAP Approval or
LURA Approval if such approval imposes any financial or continuing obligations
whatsoever on such Seller, any guarantor, or any affiliate of any Seller (such
as, but not limited to, any reserves or required repairs), or does not fully and
completely release such Seller from any liability arising or accruing after the
transfer of the applicable Property.
4.7 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 January 31, 2006 (the "Closing Date")
through an escrow with Escrow Agent, whereby the Sellers, Purchaser and their
attorneys need not be physically present at the Closing and may deliver
documents by overnight air courier or other means. Notwithstanding the foregoing
to the contrary, any Seller shall have the option, by delivering written notice
to Purchaser, to extend the Closing Date to the last Business Day of the month
in which the Closing Date otherwise would occur pursuant to the preceding
sentence, or to such other date (either in the same month or the next) as such
Seller reasonably determines is desirable in connection with any Loan Payoff and
the exercise of such option shall extend the Closing Date for all Properties.
Further, the Closing Date may be extended without penalty at the option of any
Seller either (i) to a date not later than 30 days following the Closing Date
specified in the first sentence of this paragraph above (or, if applicable, as
extended by any Seller pursuant to the second sentence of this paragraph) to
satisfy a condition set forth in Section 8.2, (ii) as provided in Section 4.6.3,
or (iii) such later date as is mutually acceptable to Sellers and Purchaser.
Provided that Purchaser is not in default under the terms of this Contract,
Purchaser shall have the right to extend the Closing Date for all Properties
(the "Extension Right") to February 28, 2006, by (i) delivering written notice
to Sellers no later than January 16, 2006, and (ii) simultaneously with such
notice to Sellers, delivering to Escrow Agent the amount of $500,000.00, which
when received by Escrow Agent shall be allocated pursuant to the Applicable
Share among the Properties and added to the Deposit for each Property, shall be
non-refundable (except as otherwise expressly provided herein with respect to
the Additional Deposit), and shall be held, credited and disbursed in the same
manner as provided hereunder with respect to the Additional Deposit for the
applicable Property.
5.2 Seller Closing Deliveries. No later than 1 Business Day prior to the Closing
Date, each Seller shall, with respect to each Property to be conveyed by such
Seller hereunder, deliver to Escrow Agent, each of the following items:
5.2.1 The following deeds (the "Deeds") to Purchaser, subject to the Permitted
Exceptions: a Special Warranty Deed in the form attached as Exhibit B-1
(Florida); a Special Warranty Deed in the form attached as Exhibit B-2 (South
Carolina); and a Special Warranty Deed in the form attached as Exhibit B-3
(Texas).
5.2.2 A signed Bill of Sale in the form attached as Exhibit C.
5.2.3 A signed General Assignment in the form attached as Exhibit D (the
"General Assignment").
5.2.4 A signed Assignment of Leases and Security Deposits in the form attached
as Exhibit E (the "Leases Assignment").
5.2.5 A letter in the form attached hereto as Exhibit F prepared by Purchaser
and countersigned by such Seller to each of the vendors under the Terminated
Contracts informing them of the termination of such Terminated Contract as of
the Closing Date (subject to any delay in the effectiveness of such termination
pursuant to the express terms of each applicable Terminated Contract) (the
"Vendor Terminations").
5.2.6 With respect to Braesview, Eagles Nest and La Jolla, a signed Assignment
and Assumption of LURA (the "LURA Assignment Form") in a form and content
required by the Issuer and Trustee (and as reasonably approved by the applicable
Seller).
5.2.7 A closing statement executed by such Seller.
5.2.8 A signed title affidavit or at such Seller's option an indemnity, as
applicable, in the customary form reasonably acceptable to such Seller to enable
Title Insurer to delete the standard exceptions to the title insurance policy
set forth in this Contract (other than matters constituting any Permitted
Exceptions and matters which are to be completed or performed post-Closing) to
be issued pursuant to the Title Commitment; provided that such affidavit does
not subject such Seller to any greater liability, or impose any additional
obligations, other than as set forth in this Contract; and
5.2.9 A signed certification of such Seller's non-foreign status pursuant to
Section 1445 of the Internal Revenue Code of 1986, as amended.
5.2.10......Resolutions, certificates of existence or good standing, and such
other organizational documents as Title Insurer shall reasonably require
evidencing such Seller's authority to consummate this transaction.
5.2.11......An updated Rent Roll reflecting the information required in Section
3.5.3; provided, however, that the content of such updated Rent Roll shall in no
event expand or modify the conditions to Purchaser's obligation to close as
specified under Section 8.1.
5.2.12......With respect to West Winds, if required by the Housing Authority, a
HAP Assignment Agreement in a form and content required by the Housing Authority
(and as reasonably approved by Seller).
5.2.13......With respect to Property located in South Carolina, Seller's
Nonresident Withholding Affidavit Form I-295, if applicable.
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 the applicable Seller upon the Closing)
the following items with respect to each Property being conveyed at such
Closing:
5.3.1 The full Purchase Price for such Property (with credit for the Applicable
Share of the Deposit), plus or minus the adjustments or prorations required by
this Contract.
5.3.2 A signed title affidavit (or at Purchaser's option an indemnity)
pertaining to Purchaser's activity on the applicable Property prior to Closing,
in the customary form reasonably acceptable to Purchaser, to enable Title
Insurer to delete the standard exceptions to the title insurance policy set
forth in this Contract (other than matters constituting any Permitted Exceptions
and matters which are to be completed or performed post-Closing) to be issued
pursuant to the Title Commitment; provided that such affidavit does not subject
Purchaser to any greater liability, or impose any additional obligations, other
than as set forth in this Contract.
5.3.3 A closing statement executed by Purchaser.
5.3.4 A countersigned counterpart of the General Assignment.
5.3.5 A countersigned counterpart of the Leases Assignment.
5.3.6 Notification letters to all Tenants at any Property located in Florida or
South Carolina prepared and executed by Purchaser in the form attached hereto as
Exhibit G-1, except that, with respect to any Property located in Texas, the
notification letters to all Tenants at such Property shall be in the form
attached hereto as Exhibit G-2.
5.3.7 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 the applicable Seller).
5.3.8 Any cancellation fees or penalties due to any vendor under any Terminated
Contract as a result of the termination thereof.
5.3.9 Resolutions, certificates of existence or good standing, and such other
organizational documents as Title Insurer shall reasonably require evidencing
Purchaser's authority to consummate this transaction.
5.3.10......With respect to West Winds, if required by the Housing Authority, a
countersigned HAP Assignment Agreement in form and content required by the
Housing Authority (and as reasonably approved by Purchaser).
5.3.11......The Lender Fees (subject to deduction from the Purchase Price in
accordance with Section 2.2).
5.3.12......With respect to Braesview, Eagle's Nest and La Jolla, a
countersigned LURA Assignment Form in form and content required by the Issuer
and Trustee (and as reasonably approved by Purchaser).
5.4 Closing Prorations and Adjustments. The prorations set forth in this Section
5.4 shall be on a Property-by-Property basis and not among, or between,
Properties, and shall not be allocated on an Applicable Share basis.
5.4.1 General. With respect to each Property, all normal and customarily
proratable items, including, without limitation, collected rents, operating
expenses, personal property taxes, other operating expenses and fees, shall be
prorated as of the Closing Date, the applicable Seller being charged or
credited, as appropriate, for all of the same attributable to the period up to
the Closing Date (and credited for any amounts paid by the applicable Seller
attributable to the period on or after the Closing Date, if assumed by
Purchaser) and Purchaser being responsible for, and credited or charged, as the
case may be, for all of the same attributable to the period on and after the
Closing Date. Each Seller shall prepare a proration schedule (the "Proration
Schedule") of the adjustments described in this Section 5.4 prior to Closing.
Such adjustments shall be paid by Purchaser to the applicable Seller (if the
prorations result in a net credit to such Seller) or by such Seller to Purchaser
(if the prorations result in a net credit to Purchaser for such Property), by
increasing or reducing the cash to be paid by Purchaser at Closing for such
Property.
5.4.2 Operating Expenses. With respect to each Property, all of the operating,
maintenance, taxes (other than real estate taxes, such as rental taxes), and
other expenses incurred in operating such Property that such Seller customarily
pays, and any other costs incurred in the ordinary course of business for the
management and operation of such Property, shall be prorated on an accrual
basis. Each Seller shall pay all such expenses that accrue prior to Closing and
Purchaser shall pay all such expenses that accrue from and after the Closing
Date.
5.4.3 Utilities. With respect to each Property, the final readings and final
billings for utilities will be made if possible as of the Closing Date, in which
case each Seller shall pay all such bills as of the Closing Date and no
proration shall be made at the Closing with respect to utility bills. Otherwise,
a proration shall be made based upon the parties' reasonable good faith estimate
and a readjustment made within 30 days after the Closing, if necessary. Each
Seller shall be entitled to the return of any deposit(s) posted by it with any
utility company, and such Seller shall notify each utility company serving its
Property to terminate its account, effective as of noon on the Closing Date.
5.4.4 Real Estate Taxes.
(a) Any real estate ad valorem or similar taxes for a Property, or any
installment of assessments payable in installments which installment is payable
in the calendar year of Closing, shall be prorated to the date of Closing, based
upon actual days involved. The proration of real property taxes or installments
of assessments shall be based upon the assessed valuation and tax rate figures
(assuming payment at the earliest time to allow for the maximum possible
discount) for the year in which the Closing occurs to the extent the same are
available; provided, that in the event that actual figures (whether for the
assessed value of such Property or for the tax rate) for the year of Closing are
not available at the Closing Date, the proration shall be made using figures
from the preceding year (assuming payment at the earliest time to allow for the
maximum possible discount). The proration of real property taxes or installments
of assessments shall be final and not subject to re-adjustment after Closing.
(b) Purchaser acknowledges that certain of the Sellers may have filed (or may
file) an appeal (the "Appeal") with respect to real estate ad valorem or other
similar property taxes applicable to the Property (the "Property Taxes").
(i) If such Appeal relates to any Tax Year prior to the Tax Year in which the
Closing occurs, such Seller shall be entitled, in such Seller's sole discretion,
to continue to pursue such Appeal after the Closing Date, and, in the event that
the Appeal is successful in reducing the amount of Property Taxes payable with
respect to any such prior Tax Year, such Seller shall be entitled to the full
amount of any rebate, refund or reduction (collectively, a "Refund") resulting
from the Appeal. Such Seller shall not be obligated to continue to pursue any
Appeal with respect to its Property, including, without limitation, any Appeal
that relates to a Tax Year during or after the Tax Year in which Closing occurs.
If Purchaser receives any refund of Property Taxes for a prior Tax Year,
Purchaser promptly shall remit the same to the applicable Seller.
(ii) If such Appeal relates to the Tax Year in which Closing occurs, then, prior
to the Closing, the applicable Seller shall notify Purchaser whether such Seller
desires to continue to process the Appeal from and after the Closing Date. If
such Seller fails to notify Purchaser of its election to continue the Appeal,
such Seller will be deemed to have elected not to continue the Appeal from and
after the Closing Date and the provisions of Section 5.4.4(b)(i)(II) shall
apply.
(I) If a Seller elects to continue the Appeal, then, from and after the Closing
Date, such Seller agrees that it will continue, at such Seller's sole cost and
expense, to reasonably process the Appeal to conclusion with the applicable
taxing authority (including any further appeals which such Seller deems
reasonable to pursue). In the event that the Appeal is successful in reducing
the amount of Property Taxes payable with respect to the Tax Year in which
Closing occurs, then Purchaser and such Seller shall share any Refund on a pro
rata basis (in accordance with the number of days in the Tax Year of Closing
that each held title to the Property) after first reimbursing such Seller for
its actual, reasonable and documented third-party costs (collectively, the
"Third-Party Costs") incurred in connection with the Appeal. If Third-Party
Costs equal or exceed the amount of the Award, then Seller shall be entitled to
the full amount of the Award.
(II) If a Seller does not elect to continue the Appeal, then, from and after the
Closing Date, Purchaser may, in Purchaser's discretion, at Purchaser's sole cost
and expense, to reasonably process the Appeal to conclusion with the applicable
taxing authority (including any further appeals which Purchaser deems reasonable
to pursue). In the event that the Appeal is successful in reducing the amount of
Property Taxes payable with respect to the Tax Year in which Closing occurs,
then Purchaser and the applicable Seller shall share any Refund on a pro rata
basis (in accordance with the number of days in the Tax Year of Closing that
each held title to the Property) after first reimbursing each of Purchaser and
the applicable Seller for their respective Third-Party Costs incurred in
connection with the Appeal. If Third-Party Costs equal or exceed the amount of
the Award, then the Award shall be applied to such Third-Party Costs on a pro
rata basis, with each of Purchaser and such Seller receiving a portion of the
Award equal to the product of (i) a fraction, the numerator of which is the
respective party's Third-Party Costs, and the denominator of which is the total
of both parties' Third-Party Costs, and (ii) the amount of the Award.
5.4.5 Property Contracts. Purchaser shall assume at Closing the obligations
under the Property Contracts assumed by Purchaser; however, operating expenses
shall be prorated under Section 5.4.2.
5.4.6 Leases.
5.4.6.1.....With respect to each Property, all collected rent (whether fixed
monthly rentals, additional rentals, escalation rentals, retroactive rentals,
operating cost pass-throughs or other sums and charges payable by Tenants under
the Leases), income and expenses from any portion of a Property shall be
prorated as of the Closing Date (prorated for any partial month). Purchaser
shall receive all collected rent and income attributable to dates from and after
the Closing Date. Each Seller shall receive all collected rent and income
attributable to dates prior to the Closing Date. Notwithstanding the foregoing,
no prorations shall be made in relation to either (a) non-delinquent rents which
have not been collected as of the Closing Date, or (b) delinquent rents
existing, if any, as of the Closing Date (the foregoing (a) and (b) referred to
herein as the "Uncollected Rents"). In adjusting for Uncollected Rents, no
adjustments shall be made in a Seller's favor for rents which have accrued and
are unpaid as of the Closing, but Purchaser shall pay to such Seller such
accrued Uncollected Rents as and when collected by Purchaser, after first
applying collected rents to the payment of all current obligations owing to
Purchaser under the applicable Lease, and only then to Uncollected Rents due to
the applicable Seller. Purchaser agrees to bill Tenants of the Properties for
all Uncollected Rents and to take reasonable actions (not including lawsuits or
formal proceedings) to collect Uncollected Rents. After the Closing, each Seller
shall continue to have the right, but not the obligation, in its own name, to
demand payment of and to collect Uncollected Rents owed to such Seller by any
Tenant, which right shall include, without limitation, the right to continue or
commence legal actions or proceedings against any Tenant and the delivery of the
Leases Assignment shall not constitute a waiver by any Seller of such right.
Purchaser agrees to cooperate with each Seller in connection with all efforts by
such Seller to collect such Uncollected Rents and to take all steps, whether
before or after the Closing Date, as may be necessary to carry out the intention
of the foregoing, including, without limitation, the delivery to each Seller,
within 7 days after a written request, of any relevant books and records
(including, without limitation, rent statements, receipted bills and copies of
tenant checks used in payment of such rent), the execution of any and all
consents or other documents, and the undertaking of any act reasonably necessary
for the collection of such Uncollected Rents by such Seller; provided, however,
that Purchaser's obligation to cooperate with a Seller pursuant to this sentence
shall not obligate Purchaser to terminate any Tenant Lease with an existing
Tenant, file any formal actions or proceedings, or evict any existing Tenant
from a Property.
5.4.6.2.....At Closing, with respect to each Property, Purchaser shall receive a
credit against the applicable Purchase Price in an amount equal to the received
and unapplied balance of all cash (or cash equivalent) Tenant Deposits,
including, but not limited to, security, damage or other refundable deposits
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 or HUD requirement (the "Tenant Security Deposit Balance"). Any cash (or
cash equivalents) held by a Seller which constitute the Tenant Security Deposit
Balance shall be retained by the applicable Seller in exchange for the foregoing
credit against the applicable Purchase Price and shall not be transferred by
such Seller pursuant to this Contract (or any of the documents delivered at
Closing), but the obligation with respect to the Tenant Security Deposit Balance
nonetheless shall be assumed by Purchaser. The Tenant Security Deposit Balance
shall not include any non-refundable deposits or fees paid by Tenants to any
Seller, either pursuant to the Leases or otherwise.
5.4.6.3.....With respect to operating expenses, taxes, utility charges, other
operating cost pass-throughs, retroactive rental escalations, sums or charges
payable by Tenants under the Tenant Leases for a Property, to the extent that
the applicable Seller has received as of the Closing payments allocable to
periods subsequent to Closing, the same shall be properly prorated with an
adjustment in favor of Purchaser, and Purchaser shall reserve a credit therefor
at Closing for such Property. With respect to any payments received by Purchaser
after the Closing allocable to a Seller prior to Closing, Purchaser shall
promptly pay the same to the applicable Seller.
5.4.7 Existing Loans. Purchaser acknowledges that Purchaser had the opportunity
to assume each Note or to cause prepayment of such Note at Closing (but in
either event, Purchaser would pay the Lender Fees pursuant to Section 2.2).
Purchaser has elected to cause the debt to be prepaid. Therefore, on the Closing
Date, a sufficient amount of the proceeds of the Purchase Price will be used to
pay the outstanding principal balance of the applicable Note together with all
interest accrued under such Note prior to the Closing Date (the "Loan Payoff"),
and 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 the applicable Seller unless credited by Lender against the amount due under
the Note.
5.4.8 [intentionally deleted]
5.4.9 Insurance. No proration shall be made in relation to insurance premiums
and insurance policies will not be assigned to Purchaser.
5.4.10......Employees. All of each Seller's and each Seller's manager's on-site
employees shall have their employment at the applicable Property terminated as
of the Closing Date.
5.4.11......Closing Costs.
(a) With respect to any Property in Florida, Purchaser shall pay any transfer
(including documentary stamp and surtaxes), sales, use, gross receipts or
similar taxes, the cost of recording any instruments required to discharge any
liens or encumbrances against such Property, any premiums or fees required to be
paid by Purchaser with respect to the applicable Title Policy pursuant to
Section 4.1, and one-half of the customary closing costs of the Escrow Agent.
Each Seller shall pay the base premium for its Title Policy to the extent
required by Section 4.1, and one-half of the customary closing costs of the
Escrow Agent.
(b) With respect to any Property in South Carolina, the applicable Seller shall
be responsible for the cost of deed preparation; all transfer, sales, use, gross
receipts or similar taxes including the deed recording fees pursuant to Title
12, Chapter 24, South Carolina Code of Laws 1976, as amended, and/or any other
documentary stamps applicable to real estate transfers; and the cost of
preparation and recording of all instruments required to discharge any liens or
encumbrances against the Property. Purchaser shall be responsible for deed and
mortgage recording and filing fees. Each party shall be responsible for its own
attorneys' fees. Purchaser shall pay all other closing costs unless otherwise
specifically provided for in Section 4.1 or 4.2 of this Contract.
(c) With respect to any Property located in Texas, Purchaser shall pay any
transfer (including documentary stamp and surtaxes), sales, use, gross receipts
or similar taxes, the cost of recording any instruments required to discharge
any liens or encumbrances against such Property, any premiums or fees required
to be paid by Purchaser with respect to the applicable Title Policy pursuant to
Section 4.1, and one-half of the customary closing costs of the Escrow Agent.
Each Seller shall pay the base premium for its Title Policy to the extent
required by Section 4.1 and one-half of the customary closing costs of the
Escrow Agent.
5.4.12......Utility Contracts. If any Seller has entered into an agreement for
the purchase of electricity, gas or other utility service for its Property or a
group of properties (including such Property) (a "Utility Contract"), or an
affiliate of such Seller has entered into a Utility Contract, such Utility
Contract shall be identified on the Seller Information Schedule and, as set
forth on the Seller Information Schedule, (a) Purchaser either shall assume the
Utility Contract with respect to such Property, or (b) the reasonably calculated
costs of the Utility Contract attributable to such Property from and after the
Closing shall be paid to the applicable Seller at the Closing and such Seller
shall remain responsible for payments under the Utility Contract.
5.4.13......Possession. Possession of each Property, subject to the Leases,
Property Contracts which are not identified as Terminated Contracts during the
Feasibility Period (subject to the limitations of Section 3.6), and Permitted
Exceptions, shall be delivered to Purchaser at the Closing upon release from
escrow of all items to be delivered by Purchaser pursuant to Section 5.3,
including, without limitation, the applicable Purchase Price. To the extent
reasonably available to each Seller, originals or copies of its Leases and
Property Contracts, lease files, warranties, guaranties, operating manuals, keys
(including Tenant's master keys), access codes and other passwords, plans and
specifications for the Improvements to the Property, and such Seller's books and
records relating to its Property to be conveyed by such Seller (other than
proprietary information) (collectively, "Seller's Property-Related Files and
Records") regarding the applicable Property shall be made available and
delivered to Purchaser at such 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 the applicable Seller reasonable access to Seller's
Property-Related Files and Records for purposes of inspection and copying
thereof, and (b) reasonably maintain and preserve Seller's Property-Related
Files and Records. If at any time after the Records Hold Period, Purchaser
desires to dispose of any Seller's Property-Related Files and Records, Purchaser
must first provide the applicable Seller prior written notice (the "Records
Disposal Notice"). Such Seller shall have a period of 30 days after receipt of
the Records Disposal Notice to enter the applicable Property (or such other
location that such records are then stored) and remove or copy those of Seller's
Property-Related Files and Records that such Seller desires to retain. Purchaser
agrees (i) to include the covenants of this Section 5.4.13 pertaining to
Seller's Property-Related Files and Records in any management contract for each
Property (and to bind the manager thereunder to such covenants), and (ii) to
bind any future purchaser of such Property to the covenants of this Section
5.4.13 pertaining to Seller's Property-Related Files and Records. Purchaser
shall indemnify, hold harmless and, if requested by each Seller (in such
Seller's sole discretion), defend (with counsel approved by such Seller) such
Seller's Indemnified Parties from and against any and all Losses arising from or
related to Purchaser's failure to comply with the provisions of this Section
5.4.13.
5.4.14......Survival. The provisions of this Section 5.4 shall survive the
Closing and delivery of the Deeds to Purchaser.
5.5 Post Closing Adjustments. In general, and except as provided in this
Contract or the Closing Documents, each Seller shall be entitled to all income,
and shall pay all expenses, relating to the operation of its Property for the
period prior to the Closing Date and Purchaser shall be entitled to all income,
and shall pay all expenses, relating to the operation of such Property for the
period commencing on and after the Closing Date. Purchaser or a Seller may
request that Purchaser and such Seller undertake to re-adjust any item on the
Proration Schedule (or any item omitted therefrom) in accordance with the
provisions of Section 5.4 of this Contract; provided, however, that neither
party shall have any obligation to re-adjust any items for any Property (a)
after the expiration of 60 days after Closing, and (b) unless such items exceed
$5,000.00 in magnitude (either individually or in the aggregate) with respect to
such Property. The provisions of this Section 5.5 shall survive the Closing and
delivery of the Deeds to Purchaser.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER
6.1 Seller's Representations. Except, in all cases, for any fact, information or
condition disclosed in the Title Documents, the Permitted Exceptions, the
Property Contracts, or the Materials, or which is otherwise known by Purchaser
prior to the Closing, each Seller, individually and severally with respect only
to itself and its Property, represents and warrants to Purchaser the following
(collectively, the "Seller's Representations") as of the Effective Date and as
of the Closing Date (provided that Purchaser's remedies if any such Seller's
Representations are untrue as of the Closing Date are limited to those set forth
in Section 8.1):
6.1.1 Such Seller is duly organized, validly existing and in good standing under
the laws of the state or commonwealth of its formation set forth on the Seller
Information Schedule; and, subject to Sections 8.2.4 and 8.2.5 and the HAP
Approval and LURA Approvals, has or at the Closing shall have the entity power
and authority to sell and convey its Property and to execute the documents to be
executed by such Seller and prior to the Closing will have taken as applicable,
all corporate, partnership, limited liability company or equivalent entity
actions required for the execution and delivery of this Contract, and the
consummation of the transactions contemplated by this Contract. Subject to
Sections 8.2.4 and 8.2.5 and the HAP Approval and LURA Approvals, the compliance
with or fulfillment of the terms and conditions hereof will not conflict with,
or result in a breach of, the terms, conditions or provisions of, or constitute
a default under, any contract to which such Seller is a party or by which such
Seller is otherwise bound, which conflict, breach or default would have a
material adverse affect on such Seller's ability to consummate the transaction
contemplated by this Contract or on the Property. Subject to Sections 8.2.4 and
8.2.5 and the HAP Assumption and LURA Approvals, this Contract is a valid,
binding and enforceable agreement against such Seller in accordance with its
terms;
6.1.2 Other than the Leases, such Seller's Property is not subject to any
written lease executed by such Seller or, to such Seller's knowledge, any other
possessory interests of any person;
6.1.3 Such Seller is not a "foreign person," as that term is used and defined in
the Internal Revenue Code, Section 1445, as amended;
6.1.4 Except (a) as set forth on the Seller Information Schedule, (b) for any
actions by such Seller to evict Tenants under its Leases, or (c) any matter
covered by Seller's current insurance policy(ies), to such Seller's knowledge,
there are no actions, proceedings, litigation (including bankruptcy) or
governmental investigations or condemnation actions either pending or threatened
against such Seller's Property;
6.1.5 To such Seller's knowledge, such Seller has not received any written
notice from a governmental agency of any uncured material violations of any
federal, state, county or municipal law, ordinance, order, regulation or
requirement affecting such Seller's Property;
6.1.6 To such Seller's knowledge, such Seller has not received any written
notice of any material default by such Seller under any of its Property
Contracts that will not be terminated on the Closing Date.
6.1.7 To the applicable Seller's knowledge: (a) no hazardous or toxic materials
or other substances regulated by applicable federal or state environmental laws
are stored by such Seller on, in or under its Property in quantities which
violate applicable laws governing such materials or substances, (b) such
Seller's Property is not used by such Seller for the storage, treatment,
generation or manufacture of any hazardous or toxic materials or other
substances in a manner which would constitute a violation of applicable federal
or state environmental laws, (c) such Seller has not received, within 1 year
prior to the Effective Date, written notice of water damage at its Property
resulting in suspected fungal growth that has not been remediated pursuant to
such Seller's normal operating procedures, and (d) such Seller has not, within 1
year prior to the Effective Date, received written notice of a hazardous
substance condition at its Property or received a written order from a
governmental authority regarding a hazardous substance condition at its
Property;
6.1.8 The applicable Seller has not intentionally misstated or misrepresented
any information prepared by it and contained in the Materials delivered pursuant
to Section 3.5.1;
6.1.9 To the applicable Seller's knowledge, the factual documentation of current
operating and financial results prepared by the applicable Seller (but not
Seller Third-Party Reports) concerning the applicable Property and disclosed to
Purchaser hereunder has been prepared in such Seller's ordinary course of
business and is substantially identical with the information relied on by such
Seller in the current ownership, operation and reporting of the applicable
Property by such Seller; provided, however, Seller has not provided, and is
under no obligation to provide, internal evaluations or similar internal
analysis (as compared with the results themselves); and
6.1.10......To the knowledge of the applicable Seller, the Rent Roll for its
Property delivered pursuant to Section 3.5.3 is accurate in all material
respects. Prior to the expiration of the Feasibility Period, each Seller shall
provide Purchaser with a current Rent Roll and such updated Rent Roll shall, to
the knowledge of the applicable Seller, be accurate in all material respects.
6.2 AS-IS. Except for Seller's Representations, each Property is expressly
purchased and sold "AS IS," "WHERE IS," and "WITH ALL FAULTS." The Purchase
Price for each Property and the terms and conditions set forth herein are the
result of arm's-length bargaining between entities familiar with transactions of
this kind, and said price, terms and conditions reflect the fact that Purchaser
shall have the benefit of, and is not relying upon, any information provided by
Sellers or any broker or statements, representations or warranties, express or
implied, made by or enforceable directly against Sellers or any broker,
including, without limitation, any relating to the value of any Property, the
physical or environmental condition of any Property, any state, federal, county
or local law, ordinance, order or permit; or the suitability, compliance or lack
of compliance of any Property with any regulation, or any other attribute or
matter of or relating to any Property (other than any covenants of title
contained in the Deed conveying a Property and Seller's Representations with
respect to such Property). Purchaser agrees that Sellers shall not be
responsible or liable to Purchaser for any defects, errors or omissions, or on
account of any conditions affecting the Properties. Purchaser, its successors
and assigns, and anyone claiming by, through or under Purchaser, hereby fully
releases each of Seller's Indemnified Parties from, and irrevocably waives its
right to maintain, any and all claims and causes of action that it or they may
now have or hereafter acquire against any Seller's Indemnified Parties with
respect to any and all Losses arising from or related to any defects, errors,
omissions or other conditions affecting the Properties. Purchaser represents and
warrants that, as of the date hereof and as of the Closing Date, it has and
shall have reviewed and conducted such independent analyses, studies (including,
without limitation, environmental studies and analyses concerning the presence
of lead, asbestos, PCBs and radon in and about the Properties), reports,
investigations and inspections as it deems appropriate in connection with the
Properties. If Sellers provide or have provided any documents, summaries,
opinions or work product of consultants, surveyors, architects, engineers, title
companies, governmental authorities or any other person or entity with respect
to the Properties, including, without limitation, the offering prepared by any
broker, Purchaser and Sellers agree that Sellers have done so or shall do so
only for the convenience of the parties, Purchaser shall not rely thereon and
the reliance by Purchaser upon any such documents, summaries, opinions or work
product shall not create or give rise to any liability of or against any
Seller's Indemnified Parties. Purchaser acknowledges and agrees that no
representation has been made and no responsibility is assumed by Sellers with
respect to current and future applicable zoning or building code requirements or
requirements with respect to condominium conversion or the compliance of the
Properties with any other laws, rules, ordinances or regulations, or the
compliance by the "declarant" under any conditions, covenants or restrictions
affecting the Properties, the financial earning capacity or expense history of
the Properties, the continuation of contracts, continued occupancy levels of the
Properties, or any part thereof, or the continued occupancy by tenants of any
Leases or, without limiting any of the foregoing, occupancy at Closing. Sellers
make no representations or warranty with respect to any homeowners associations
which may be referenced with respect to any of the Properties. Prior to Closing,
each Seller shall have the right, but not the obligation, to enforce its rights
against any and all of its Property occupants, guests or tenants. Purchaser
agrees that the departure or removal, prior to Closing, of any of such guests,
occupants or tenants shall not be the basis for, nor shall it give rise to, any
claim on the part of Purchaser, nor shall it affect the obligations of Purchaser
under this Contract in any manner whatsoever; and Purchaser shall close title
and accept delivery of the Deeds with or without such tenants in possession and
without any allowance or reduction in the applicable Purchase Price under this
Contract. Except for environmental claims or actions brought by unrelated,
non-governmental third-parties relating to the events occurring before Closing,
Purchaser hereby releases Sellers from any and all claims and liabilities
relating to the foregoing matters. The provisions of this Section 6.2 shall
survive the Closing and delivery of the Deeds to Purchaser.
6.3 Survival of Seller's Representations. Sellers and Purchaser agree that
Seller's Representations shall survive Closing for a period of 1 year (the
"Survival Period"). No Seller shall have liability after the Survival Period
with respect to any of its Seller's Representations contained herein except to
the extent that Purchaser has requested arbitration against such Seller during
the Survival Period for breach of any of such Seller's Representations. Each
Seller shall be liable only for the breach of its own Seller's Representations.
Further, the liability for each Seller for breach of its Seller's
Representations shall be limited to, and capped at, $100,000 for each such
Seller's Property for which a breach of Seller's Representations occurred, on a
Property-by-Property basis if a Seller is selling more than one Property. Such
cap on liability shall apply for any individual breach or in the aggregate for
all breaches of such Seller's Representations with respect to such Property.
Purchaser shall not be entitled to bring any claim for a breach of Seller's
Representations unless the claim for damage (either in the aggregate or as to
any individual claim) by Purchaser for a Property exceeds $5,000. In the event
that a Seller breaches any representation contained in Section 6.1 and Purchaser
had knowledge of such breach prior to the Closing Date, Purchaser shall be
deemed to have waived any right of recovery, and such Seller shall not have any
liability in connection therewith.
6.4 Definition of Seller's Knowledge. Any representations and warranties made
"to the knowledge of [such] Seller" shall not be deemed to imply any duty of
inquiry. For purposes of this Contract, the term Seller's "knowledge" shall mean
and refer only to actual knowledge of the Regional Property Manager and Property
Manager of such Seller and shall not be construed to refer to the knowledge of
any other partner, officer, director, agent, employee or representative of such
Seller, or any affiliate of such Seller, or to impose upon such Regional
Property Manager or Property Manager any duty to investigate the matter to which
such actual knowledge or the absence thereof pertains, or to impose upon such
Regional Property Manager or Property Manager any individual personal liability.
6.5 Representations And Warranties Of Purchaser. For the purpose of inducing
Sellers to enter into this Contract and to consummate the sale and purchase of
the Properties in accordance herewith, Purchaser represents and warrants to
Sellers the following as of the Effective Date and as of the Closing Date:
6.5.1 Purchaser is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of California.
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
(including bankruptcy) exists which if determined adversely would restrain the
consummation of the transactions contemplated by this Contract or would declare
illegal, invalid or non-binding any of Purchaser's obligations or covenants to
Sellers.
6.5.4 Other than Seller's Representations, Purchaser has not relied on any
representation or warranty made by Sellers or any representative of Sellers
(including, without limitation, any broker) in connection with this Contract and
the acquisition of the Properties.
6.5.5 Neither any broker involved in this transaction nor any of its affiliates
have, or will at the Closing, have any direct or indirect legal, beneficial,
economic or voting interest in Purchaser (or in an assignee of Purchaser, which
pursuant to Section 13.3, acquires any Property at the Closing), nor has
Purchaser or any affiliate of Purchaser granted (as of the Effective Date or the
Closing Date) any broker involved in this transaction 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 To Purchaser's knowledge, the funds or other assets Purchaser will
transfer to Seller under to this Contract are not the property of, or are
beneficially owned, directly or indirectly, by a Prohibited Person.
6.5.9 To Purchaser's knowledge, 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 Deeds to Purchaser.
ARTICLE VII
OPERATION OF THE PROPERTIES
7.1 Leases and Property Contracts. During the period of time from the Effective
Date to the Closing Date, in the ordinary course of business each Seller may,
with respect to its Property, enter into new Property Contracts, new Leases,
renew existing Leases or modify, terminate or accept the surrender or forfeiture
of any of the Leases, modify any Property Contracts, or institute and prosecute
any available remedies for default under any Lease or Property Contract without
first obtaining the written consent of Purchaser; provided, however, each Seller
agrees that any such new Property Contracts or any new or renewed Leases shall
not have a term in excess of 1 year (or such longer period of time for which
such Property Contracts or Leases are entered into by such Seller in the
ordinary course of its operation of its Property) without the prior written
consent of Purchaser, which consent shall not be unreasonably withheld,
conditioned or delayed.
7.2 General Operation of Property. Except as specifically set forth in this
Article 7, each Seller shall operate its Property after the Effective Date in
the ordinary course of business, and except as necessary in such Seller's sole
discretion to address (a) any life or safety issue at its Property or (b) any
other matter which in such Seller's reasonable discretion materially adversely
affects the use, operation or value of such Property, such Seller will not make
any material alterations to its Property or remove any material Fixtures and
Tangible Personal Property without the prior written consent of Purchaser which
consent shall not be unreasonably withheld, denied or delayed.
7.3 Liens. Other than utility easements and temporary construction easements
granted by a Seller in the ordinary course of business (of which such Seller
shall provide Purchaser reasonable notice), each Seller covenants that it will
not voluntarily create or cause any lien or encumbrance to attach to its
Property between the Effective Date and the Closing Date (other than Leases and
Property Contracts as provided in Section 7.1) unless Purchaser approves such
lien or encumbrance, which approval shall not be unreasonably withheld or
delayed. If Purchaser approves any such subsequent lien or encumbrance, the same
shall be deemed a Permitted Encumbrance for all purposes hereunder.
ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING
8.1 Purchaser's Conditions to Closing. Subject to the provisions of this Section
8.1, Purchaser's obligation to close under this Contract, shall be subject to
and conditioned upon the fulfillment of each and all of the following conditions
precedent:
8.1.1 All of the documents required to be delivered by Sellers to Purchaser at
the Closing pursuant to the terms and conditions hereof shall have been
delivered;
8.1.2 Each of the representations and warranties of each Seller to Purchaser
shall be true in all material respects as of the Closing Date;
8.1.3 Each Seller shall have complied with, fulfilled and performed in all
material respects each of the covenants, terms and conditions to be complied
with, fulfilled or performed by such Seller hereunder; and
8.1.4 No Seller nor any of Seller's general partners shall be a debtor in any
bankruptcy proceeding nor shall have been in the last 6 months a debtor in any
bankruptcy proceeding.
8.1.5 Sellers and Lenders shall have received any consents from the U.S.
Department of Housing and Urban Development to payoff the Loans on the
Properties and release the Mortgages/Deeds of Trust.
8.1.6 With respect to West Winds, any necessary pre-Closing HAP Approval is
obtained and any necessary HAP Assumption is approved.
8.1.7 With respect to Braesview, Eagle's Nest and La Jolla, the applicable LURA
Assumption is approved.
.............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 through 8.1.7 is not
met, but subject to Seller's rights pursuant to Section 4.6.3 with respect to
the HAP Assumption and LURA Assumptions and Section 5.1 with respect to any Loan
Payoff, Purchaser may (a) waive any of the foregoing conditions and proceed to
Closing on the Closing Date with no offset or deduction from the Purchase Price
for any Property, or (b) notify Seller's Representative (a "Termination Notice")
in writing of Purchaser's decision to terminate this Contract for the Property
for which there was such a failure of condition or default and receive a return
of the Applicable Share of the Additional Deposit from the Escrow Agent (but the
Applicable Share of the Initial Deposit shall be released to the applicable
Seller, unless this Contract is terminated with regard to such Seller's Property
because of the default of such Seller, in which case Purchaser shall have such
rights to such Seller's Applicable Share of the Initial Deposit as set forth in
Section 10.2). If Seller's Representative receives a Termination Notice,
Seller's Representative may, within 3 Business Days after receiving the
Termination Notice, give Purchaser written notice (a "Reinstatement Notice")
that Purchaser either must purchase all of the Properties or terminate this
Contract for all of the Properties. Purchaser shall, within 3 Business Days
after receiving a Reinstatement Notice, give Seller's Representative written
notice of whether it desires to purchase all of the Properties or terminate this
Contract in its entirety; Purchaser's failure to provide Seller's Representative
with written notice that it desires to terminate this Contract in its entirety
shall be deemed Purchaser's decision to purchase all of the Properties. If this
Contract is terminated in its entirety, then Escrow Agent shall deliver the
Applicable Share of the Initial Deposit to the applicable Sellers and the
Additional Deposit to Purchaser (except if this Contract is terminated in its
entirety because of the default of Sellers, Purchaser shall have such rights to
the Initial Deposit as set forth in Section 10.2).
8.2 Sellers' Conditions to Closing. Without limiting any of the rights of any
Seller elsewhere provided for in this Contract, each Seller's obligation to
close with respect to conveyance of its Property under this Contract shall be
subject to and conditioned upon the fulfillment of each and all of the following
conditions precedent:
8.2.1 All of the documents and funds required to be delivered by Purchaser to
Seller at the Closing pursuant to the terms and conditions hereof shall have
been delivered;
8.2.2 Each of the representations and warranties of Purchaser to such Seller
contained herein shall be true in all material respects as of the Closing Date;
8.2.3 Purchaser shall have complied with, fulfilled and performed in all
material respects each of the covenants, terms and conditions to be complied
with, fulfilled or performed by Purchaser hereunder;
8.2.4 Such Seller shall have received all consents, documentation and approvals
necessary to consummate and facilitate the transactions contemplated hereby,
including, without limitation, a tax-free exchange pursuant to Section 13.19
(and the amendment of such Seller's (or such Seller's affiliates') partnership
or other organization documents in connection therewith (a) from Seller's
unaffiliated partners, members, managers, shareholders or directors to the
extent required by Seller's (or Seller's affiliates') organizational documents,
and (b) as required by law. If a Seller fails to obtain any consents required by
Section 8.2.4(a) hereof, and this Contract is terminated with respect to such
Seller's Property and such Property is not conveyed to Purchaser because of such
failures, then each Seller shall pay Purchaser its direct and actual
out-of-pocket expenses and costs (documented by paid invoices to third parties)
in connection with its Property for which this Contract has been so terminated,
which damages shall not exceed $45,000 (individually) for each Property so
terminated; and
8.2.5 Sellers and Lenders shall have received any consents from the U.S.
Department of Housing and Urban Development to payoff the Loans on the
Properties and release the Mortgages/Deeds of Trust.
8.2.6 With respect to West Winds, any necessary pre-Closing HAP Approval is
obtained and any necessary HAP Assumption is approved.
8.2.7 With respect to Braesview, Eagle's Nest and La Jolla, the applicable LURA
Assumption is approved.
.............If any of the foregoing conditions in Sections 8.2.1 through 8.2.5
to a Seller's obligation to close with respect to conveyance of its Property
under this Contract are not satisfied, such Seller may (a) waive any of the
foregoing conditions and proceed to Closing on the Closing Date, (b) terminate
this Contract either in its entirety or with respect to its Property, and, if
such failure constitutes a default by Purchaser, exercise any of its remedies
under Section 10.1. If a Seller terminates this Contract with respect to its
Property, the remaining Sellers may elect either to terminate this Contract or
proceed to close the remaining Properties.
If the condition set forth in Section 8.2.5 is not satisfied with respect
to a Property, the applicable Seller also shall have the rights set forth in
Section 5.1.
If the conditions set forth in Section 8.2.6 or 8.2.7 are not satisfied on
or before the Closing Date, then Sellers shall have the rights set forth in
Section 4.6.3.
The termination of this Contract by any Seller pursuant to this Section
8.2 shall be exercised by written notice from Seller's Representative to
Purchaser by 12:00 p.m. (of the time zone in which the Escrow Agent is located)
of the Closing Date.
ARTICLE IX
BROKERAGE
9.1 Indemnity. The Sellers of Cooper's Pond, Sawgrass, Oakwood Village and
Ventura Landing, severally and individually, represent and warrant to Purchaser
that they have dealt only with Holliday Fenoglio Fowler, L.P., 950 East Paces
Ferry Road, Suite 825, Atlanta, GA 30326, Attention Jason Nettles, and the
Sellers of Deerfield represent and warrant that it has dealt only with Walchle
Lear Multifamily Advisors, 1506 Roberts Drive, Jacksonville Beach, Florida
32250, Attention Stephen D. Lear (together with Holiday Fengolio Fowler
("Sellers' Brokers"), in connection with this Contract. Purchaser and Sellers
represent and warrant that SMG Investment Partners, Inc., a California
corporation, 2960 Champion Way, #503, Tustin, California 92782 ("Transaction
Broker"), is a Transaction Broker under this Contract and his relationship is
governed by a separate agreement among Sellers, Purchaser and SMG Investment
Partners, Inc.. Each Seller, severally and individually, and Purchaser each
represents and warrants to the other that, other than with respect to a
designated Sellers' Brokers and Transaction Broker, it has not dealt with or
utilized the services of any other real estate broker, sales person or finder in
connection with this Contract, and each party agrees to indemnify, hold
harmless, and, if requested in the sole and absolute discretion of the
indemnitee, defend (with counsel approved by the indemnitee) the other party
from and against all Losses relating to brokerage commissions and finder's fees
arising from or attributable to the acts or omissions of the indemnifying party.
The provisions of this Section 9.1 shall survive the termination of this
Contract, and if not so terminated, the Closing and delivery of the Deeds to
Purchaser.
9.2 Seller Broker Commission. If the Closing occurs, the applicable Seller of
each of Cooper's Pond, Sawgrass, Oakwood Village, Ventura Landing and Deerfield
individually agrees to pay its applicable Sellers' Broker a commission according
to the terms of a separate contract. No Broker shall be deemed a party or third
party beneficiary of this Contract.
9.3 Broker Signature Page. As a condition to each Seller's obligation to pay the
commission pursuant to Section 9.2, each Seller's Broker shall execute the
signature page for such Seller's Broker attached hereto solely for purposes of
confirming the matters set forth therein; provided, however, that (a) such
Seller's Broker's signature hereon shall not be a prerequisite to the binding
nature of this Contract on Purchaser and Sellers, and the same shall become
fully effective upon execution by Purchaser and Sellers, and (b) the signature
of such Seller's Broker will not be necessary to amend any provision of this
Contract.
9.4 Texas Real Estate License Act With respect to any Broker licensed in Texas,
the Texas Real Estate License Act requires written notice to Purchaser from any
licensed real estate broker or salesman who is to receive a commission from
Purchaser that Purchaser should have any attorney of its own selection examine
an abstract of title to the property being acquired or that Purchaser should be
furnished with or should obtain a title insurance policy. Notice to that effect
is, therefore, hereby given to Purchaser on behalf of Broker.
ARTICLE X
DEFAULTS AND REMEDIES
10.1 Purchaser Default. IF PURCHASER DEFAULTS IN ITS OBLIGATIONS HEREUNDER TO
(A) DELIVER THE INITIAL DEPOSIT OR ADDITIONAL DEPOSIT (OR ANY OTHER DEPOSIT OR
PAYMENT REQUIRED OF PURCHASER HEREUNDER), (B) DELIVER TO SELLERS THE DELIVERIES
SPECIFIED UNDER SECTION 5.3 ON THE DATE REQUIRED THEREUNDER, OR (C) DELIVER THE
PURCHASE PRICE FOR EACH PROPERTY AT THE TIME REQUIRED BY SECTION 2.2.4 AND CLOSE
ON THE PURCHASE OF THE PROPERTIES ON THE CLOSING DATE, THEN, IMMEDIATELY AND
WITHOUT NOTICE OR CURE, PURCHASER SHALL FORFEIT THE DEPOSIT, AND THE ESCROW
AGENT SHALL DELIVER THE APPLICABLE SHARE OF THE DEPOSIT TO THE APPLICABLE
SELLER, AND NEITHER PARTY SHALL BE OBLIGATED TO PROCEED WITH THE PURCHASE AND
SALE OF THE PROPERTIES. IF PURCHASER DEFAULTS IN ANY OF ITS OTHER
REPRESENTATIONS, WARRANTIES OR OBLIGATIONS UNDER THIS CONTRACT, AND SUCH DEFAULT
CONTINUES FOR MORE THAN 10 DAYS AFTER WRITTEN NOTICE FROM SELLER'S
REPRESENTATIVE, THEN PURCHASER SHALL FORFEIT THE DEPOSIT, AND THE ESCROW AGENT
SHALL DELIVER THE APPLICABLE SHARE OF THE DEPOSIT TO THE APPLICABLE SELLER, AND
NEITHER PARTY SHALL BE OBLIGATED TO PROCEED WITH THE PURCHASE AND SALE OF THE
PROPERTIES. THE DEPOSIT IS LIQUIDATED DAMAGES AND RECOURSE TO THE DEPOSIT IS,
EXCEPT FOR PURCHASER'S INDEMNITY AND CONFIDENTIALITY OBLIGATIONS HEREUNDER,
SELLERS' SOLE AND EXCLUSIVE REMEDY FOR PURCHASER'S FAILURE TO PERFORM ITS
OBLIGATION TO PURCHASE THE PROPERTIES OR BREACH OF A REPRESENTATION OR WARRANTY.
SELLERS EXPRESSLY WAIVE THE REMEDIES OF SPECIFIC PERFORMANCE AND ADDITIONAL
DAMAGES FOR SUCH DEFAULT BY PURCHASER. SELLERS AND PURCHASER ACKNOWLEDGE THAT
SELLERS' DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND THAT THE DEPOSIT IS A
REASONABLE ESTIMATE OF SELLERS' DAMAGES RESULTING FROM A DEFAULT BY PURCHASER IN
ITS OBLIGATION TO PURCHASE THE PROPERTIES. SELLERS AND PURCHASER FURTHER AGREE
THAT THIS SECTION 10.1.1 IS INTENDED TO AND DOES LIQUIDATE THE AMOUNT OF DAMAGES
DUE SELLERS, AND SHALL BE SELLERS' EXCLUSIVE REMEDY AGAINST PURCHASER, BOTH AT
LAW AND IN EQUITY, ARISING FROM OR RELATED TO A BREACH BY PURCHASER OF ITS
OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS CONTRACT, OTHER
THAN WITH RESPECT TO PURCHASER'S INDEMNITY AND CONFIDENTIALITY OBLIGATIONS
HEREUNDER.
_______H.A._____________ _______G.G._____________
SELLER'S INITIALS PURCHASER'S INITIALS
10.2 Seller Default. If a Seller, prior to the Closing, defaults in its
representations, warranties, covenants, or obligations under this Contract,
including to sell its Property as required by this Contract and such default
continues for more than 10 days after written notice from Purchaser, then, at
Purchaser's election and as Purchaser's sole and exclusive remedy, Purchaser may
either (A) seek specific performance of the defaulting Seller's obligations to
deliver its Deed pursuant to this Contract (but not damages), or (B) give a
Termination Notice to Seller's Representative of Purchaser's decision to
terminate this Contract for the Property for which there was such a default and
receive a return of the Applicable Share of the Deposit for the terminated
Property from the Escrow Agent. If Seller's Representative receives a
Termination Notice, Seller's Representative may, within 3 Business Days after
receiving the Termination Notice, give Purchaser a Reinstatement Notice that
Purchaser either must purchase all of the Properties or terminate this Contract
for all of the Properties. Purchaser shall, within 3 Business Days after
receiving a Reinstatement Notice, give Seller's Representative notice of whether
it desires to purchase all of the Properties or terminate this Contract in its
entirety; Purchaser's failure to provide Seller's Representative notice that it
desires to terminate this Contract in its entirety shall be deemed Purchaser's
decision to purchase all of the Properties. If this Contract is terminated in
whole or in part, Purchaser shall recover the Applicable Share of the Deposit
for the terminated Properties and Purchaser may recover, as its sole recoverable
damages (but without limiting its right to receive a refund of the Applicable
Share of the Deposit for the terminated Properties), its direct and actual
out-of-pocket expenses and costs (documented by paid invoices to third parties)
in connection with each Property for which this Contract has been terminated,
which damages shall not exceed $45,000 (individually) for each Property so
terminated. If this Contract is terminated in whole or in part, Purchaser agrees
that it shall promptly deliver to each Seller an assignment of all of
Purchaser's right, title and interest in and to (together with possession of)
all plans, studies, surveys, reports, and other materials paid for with the
out-of-pocket expenses reimbursed by Sellers pursuant to the foregoing sentence.
SELLERS AND PURCHASER FURTHER AGREE THAT THIS SECTION 10.2 IS INTENDED TO AND
DOES LIMIT THE AMOUNT OF DAMAGES DUE PURCHASER AND THE REMEDIES AVAILABLE TO
PURCHASER, AND SHALL BE PURCHASER'S EXCLUSIVE REMEDY AGAINST SELLERS, BOTH AT
LAW AND IN EQUITY ARISING FROM OR RELATED TO A BREACH BY ANY SELLER OF ITS
REPRESENTATIONS, WARRANTIES, OR COVENANTS OR ITS OBLIGATION TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED BY THIS CONTRACT. UNDER NO CIRCUMSTANCES MAY PURCHASER
SEEK OR BE ENTITLED TO RECOVER ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, SPECULATIVE
OR INDIRECT DAMAGES, ALL OF WHICH PURCHASER SPECIFICALLY WAIVES, FROM SELLERS
FOR ANY BREACH BY A SELLER, OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS OR
ITS OBLIGATIONS UNDER THIS CONTRACT. PURCHASER SPECIFICALLY WAIVES THE RIGHT TO
FILE ANY LIS PENDENS OR ANY LIEN AGAINST ANY PROPERTY UNLESS AND UNTIL IT HAS
IRREVOCABLY ELECTED TO SEEK SPECIFIC PERFORMANCE OF THIS CONTRACT AND HAS FILED
AN ACTION SEEKING SUCH REMEDY.
ARTICLE XI
RISK OF LOSS OR CASUALTY
11.1 Major Damage. If, between the Effective Date and the Closing Date, a
Property is damaged or destroyed by fire or other casualty, and the cost of
repair is more than $250,000 for such Property, then the applicable Seller shall
have no obligation to repair such damage or destruction and shall notify
Purchaser in writing of such damage or destruction (the "Damage Notice"). Within
10 days after Purchaser's receipt of the Damage Notice, Purchaser may elect at
its option to give a Termination Notice for the damaged Property to Seller's
Representative. If Seller's Representative receives a Termination Notice,
Seller's Representative may, within 3 Business Days after receiving the
Termination Notice, give Purchaser a Reinstatement Notice that Purchaser either
must purchase all of the Properties or terminate this Contract for all of the
Properties. Purchaser shall, within 3 Business Days after receiving a
Reinstatement Notice, give Seller's Representative notice of whether it desires
to purchase all of the Properties or terminate this Contract in its entirety;
Purchaser's failure to provide Seller's Representative notice that it desires to
terminate this Contract in its entirety shall be deemed Purchaser's decision to
purchase all of the Properties. If this Contract is not terminated as to the
damaged Property, this transaction shall be closed in accordance with the terms
of this Contract for the full Purchase Price for the damaged Property
notwithstanding any such damage or destruction and Purchaser shall receive all
insurance proceeds pertaining thereto (plus a credit against the applicable
Purchase Price in the amount of any deductible payable by the applicable Seller
in connection therewith) at Closing. If this Contract is terminated in whole or
in part from such damage, Purchaser shall recover the Applicable Share of the
Deposit (including the Initial Deposit) for the terminated Properties.
11.2 Minor Damage. If, prior to the Closing, a Property is damaged or destroyed
by fire or other casualty, and the cost of repair is equal or less than $250,000
for such Property, this transaction shall be closed in accordance with the terms
of this Contract, notwithstanding the damage or destruction; provided, however,
the applicable Seller shall make such repairs to the extent of any recovery from
insurance carried on such Property if they can be reasonably effected before the
Closing. Subject to Section 11.3, if the applicable Seller is unable to effect
such repairs, then Purchaser shall receive all insurance proceeds pertaining
thereto (plus a credit against the Purchase Price for the damaged Property in
the amount of any deductible payable by the applicable Seller in connection
therewith) at Closing.
11.3 Repairs. To the extent that a Seller elects to commence any repair,
replacement or restoration of its damaged Property prior to Closing, then such
Seller shall be entitled to receive and apply available insurance proceeds to
any portion of such repair, replacement or restoration completed or installed
prior to Closing, with Purchaser being responsible for completion of such
repair, replacement or restoration after Closing from the balance of any
available insurance proceeds. After the expiration of the Feasibility Period, to
the extent any single repair, replacement or restoration exceeds $25,000, the
applicable Seller shall give notice to Purchaser and obtain Purchaser's consent
(which shall not be unreasonably withheld, delayed or conditioned) prior to
commencing such repair, replacement or restoration; provided, that, Purchaser's
consent shall not be required if such Seller reasonably believes that such
repair, replacement or restoration is necessary to prevent harm to persons or
property. The provisions of this Section 11.3 shall survive the Closing and
delivery of the Deeds to Purchaser.
ARTICLE XII
EMINENT DOMAIN
12.1 Eminent Domain. If, at the time of Closing, any material part of a Property
is (or previously has been) acquired (including an acquisition that materially
limits access to such Property), or is about to be acquired, by any governmental
agency by the powers of eminent domain or transfer in lieu thereof (or in the
event that at such time there is any notice of any such acquisition or intent to
acquire by any such governmental agency), Purchaser shall have the right, at
Purchaser's option, to give a Termination Notice to Seller's Representative for
the Property for which there was such a condemnation. If Seller's Representative
receives a Termination Notice, Seller's Representative may, within 3 Business
Days after receiving the Termination Notice, give Purchaser a Reinstatement
Notice that Purchaser either must purchase all of the Properties or terminate
this Contract for all of the Properties. Purchaser shall, within 3 Business Days
after receiving a Reinstatement Notice, give Seller's Representative written
notice of whether it desires to purchase all of the Properties or terminate this
Contract in its entirety; Purchaser's failure to provide Seller's Representative
with written notice that it desires to terminate this Contract in its entirety
shall be deemed Purchaser's decision to purchase all of the Properties. If this
Contract is not terminated, this transaction shall be closed in accordance with
the terms of this Contract for the full Purchase Price for the affected Property
and Purchaser shall receive the full benefit of any condemnation award. It is
expressly agreed between the parties hereto that this section shall in no way
apply to customary dedications for public purposes which may be necessary for
the development of a Property. If this Contract is terminated in whole or in
part from such condemnation, Purchaser shall recover the Applicable Share of the
Deposit (including the Initial Deposit) for the terminated Properties.
ARTICLE XIII
MISCELLANEOUS
13.1 Binding Effect of Contract. This Contract shall not be binding on any party
until executed by both Purchaser and all Sellers. As provided in Section 2.3.5
and Section 9.3, neither Escrow Agent's nor any Broker's execution of this
Contract shall be a prerequisite to its effectiveness.
13.2 Exhibits And Schedules. All Exhibits and Schedules, whether or not
annexed hereto, are a part of this Contract for all purposes.
13.3 Assignability. This Contract is not assignable by Purchaser without first
obtaining the prior written approval of the Seller's Representative, except that
Purchaser may assign this Contract to one or more entities so long as (a)
Purchaser is an affiliate of the purchasing entity(ies), (b) Purchaser is not
released from its liability hereunder, (c) Purchaser provides written notice to
Seller's Representative of any proposed assignment no later than 10 days prior
to the Closing Date, and (d) Seller's Representative consents thereto (which
consent shall not be unreasonably withheld or delayed). As used herein, an
affiliate is a person or entity controlled by, under common control with, or
controlling another person or entity.
13.4 Binding Effect. Subject to Section 13.3, this Contract shall be
binding upon and inure to the benefit of Sellers and Purchaser, and their
respective successors, heirs and permitted assigns.
13.5 Captions. The captions, headings, and arrangements used in this Contract
are for convenience only and do not in any way affect, limit, amplify, or modify
the terms and provisions hereof.
13.6 Number And Gender Of Words. Whenever herein the singular number is used,
the same shall include the plural where appropriate, and words of any gender
shall include each other gender where appropriate.
13.7 Notices. All notices, demands, requests and other communications required
or permitted hereunder shall be in writing, and shall be (a) personally
delivered with a written receipt of delivery; (b) sent by a nationally
recognized overnight delivery service requiring a written acknowledgement of
receipt or providing a certification of delivery or attempted delivery; (c) sent
by certified mail, return receipt requested, or (d) sent by confirmed facsimile
transmission with an original copy thereof transmitted to the recipient by one
of the means described in subsections (a) through (c) no later than 3 Business
Days thereafter. All notices shall be deemed effective when actually delivered
as documented in a delivery receipt; provided, however, that if the notice was
sent by overnight courier or mail as aforesaid and is affirmatively refused or
cannot be delivered during customary business hours by reason of the absence of
a signatory to acknowledge receipt, or by reason of a change of address with
respect to which the addressor did not have either knowledge or written notice
delivered in accordance with this paragraph, then the first attempted delivery
shall be deemed to constitute delivery. Each party shall be entitled to change
its address for notices from time to time by delivering to the other party
notice thereof in the manner herein provided for the delivery of notices. All
notices shall be sent to the addressee at its address set forth following its
name below:
......To Purchaser:
......Bethany Group, LLC
......c/o Jason Kurtz and Greg Garmon
......Prior to November 1, 2005:
......17595 Harvard, Suite C-541
......Irvine, California 92614
......Telephone: 949-660-0677
......Facsimile: 949-660-0685
......From and after November 1, 2005:
......1920 Main Street, Suite 770
......Irvine, California 92614
......Telephone: 949-660-0677
......Facsimile: 949-660-0685
......with a copy to:
......Thomas and Simondi
......Attention Mike Simondi
......4685 MacArthur Court, Suite 450
......Newport Beach, California 92660
......Telephone: 949-476-2379
......Facsimile: 949-476-2477
......To any Seller or Seller's Representative:
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:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Kris Vercauteren
......Telephone: 303-691-4345
Facsimile: 303-300-3382
......and a copy to:
Trent Johnson, Esq.
......Senior Counsel
......AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
......Telephone: 303-691-4303
Facsimile: 303-300-3260
......and a copy to:
......Brownstein Hyatt & Farber, P.C.
......410 17th Street, 22nd Floor
......Denver, Colorado 80202
......Attention: Gary M. Reiff, Esq.
......Telephone: 303-223-1100
.............Facsimile: 303-223-1111
.............Any notice required hereunder to be delivered to the Escrow Agent
shall be delivered in accordance with above provisions as follows:
......Stewart Title Guaranty Company
......1980 Post Oak Boulevard, Suite 610
......Houston, Texas 77056
......Attention: Wendy Howell
......National Commercial Closing Specialist
.............Telephone: 800-729-1906
.............Unless specifically required to be delivered to the Escrow Agent
pursuant to the terms of this Contract, no notice hereunder must be delivered to
the Escrow Agent in order to be effective so long as it is delivered to the
other party in accordance with the above provisions.
13.8 Governing Law And Venue. The laws of the State of Colorado (other than its
conflicts of laws provisions) shall govern the validity, construction,
enforcement, and interpretation of this Contract, except to the extent the law
of a state or commonwealth in which a Property is situated is required to govern
matters concerning the transfer, titling or ownership of real property in such
state or commonwealth. 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 of Colorado except to the extent that
matters are required by law to be brought in a court situated in the state or
commonwealth in which the Property is situated, and the parties hereto expressly
consent to the venue and jurisdiction of such courts.
13.9 Entire Agreement. This Contract embodies the entire Contract between the
parties hereto concerning the subject matter hereof and supersedes all prior
conversations, proposals, negotiations, understandings and agreements, whether
written or oral.
13.10 Amendments. This Contract shall not be amended, altered, changed,
modified, supplemented or rescinded in any manner except by a written contract
executed by all of the parties; provided, however, that,(a) as provided in
Section 2.3.5 above, the signature of the Escrow Agent shall not be required as
to any amendment of this Contract other than an amendment of Section 2.3, and
(b) as provided in Section 9.3 above, the signature of Brokers shall not be
required as to any amendment of this Contract.
13.11 Severability. If any part of this Contract shall be held to be invalid or
unenforceable by a court of competent jurisdiction, such provision shall be
reformed, and enforced to the maximum extent permitted by law. If such provision
cannot be reformed, it shall be severed from this Contract and the remaining
portions of this Contract shall be valid and enforceable.
13.12 Multiple Counterparts/Facsimile Signatures. This Contract may be executed
in a number of identical counterparts. This Contract may be executed by
facsimile signatures which shall be binding on the parties hereto, with original
signatures to be delivered as soon as reasonably practical thereafter.
13.13 Construction. No provision of this Contract shall be construed in favor
of, or against, any particular party by reason of any presumption with respect
to the drafting of this Contract; both parties, being represented by counsel,
having fully participated in the negotiation of this instrument.
13.14 Confidentiality. Purchaser shall not disclose the terms and conditions
contained in this Contract and shall keep the same confidential, provided that
Purchaser may disclose the terms and conditions of this Contract (a) as required
by law, (b) to consummate the terms of this Contract, or any financing relating
thereto, or (c) to Purchaser's or Sellers' lenders, attorneys and accountants.
Any information and Materials provided by Sellers to Purchaser hereunder are
confidential and Purchaser shall be prohibited from making such information
public to any other person or entity other than its agents and legal
representatives, without the prior written authorization of Seller's
Representative, which may be granted or denied in the sole discretion of
Seller's Representative. Notwithstanding the provisions of Section 13.9,
Purchaser agrees that the covenants, restrictions and agreements of Purchaser
contained in any confidentiality agreement executed by Purchaser prior to the
Effective Date shall survive the execution of this Contract and shall not be
superseded hereby.
13.15 Time Of The Essence. It is expressly agreed by the parties hereto that
time is of the essence with respect to this Contract.
13.16 Waiver. No delay or omission to exercise any right or power accruing upon
any default, omission, or failure of performance hereunder shall impair any
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient. No waiver, amendment, release, or modification of this Contract shall
be established by conduct, custom, or course of dealing and all waivers must be
in writing and signed by the waiving party.
13.17 Attorneys Fees. In the event either party hereto commences litigation or
arbitration against the other to enforce its rights hereunder, the 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. Sellers and Purchaser acknowledge and agree that the
purchase and sale of each Property may be part of a tax-free exchange under
Section 1031 of the Code for either Purchaser or a 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 a Seller so elects to close the transfer
of a Property as an exchange, then (i) such Seller, at its sole option, may
delegate its obligations to transfer a 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 such Seller pursuant
to this Contract; (iii) such 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 such Seller (or, if applicable, from other affiliates of such Seller whom
such 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 a Property as an exchange, then (i) Purchaser, at its sole
option, may delegate its obligations to acquire such Property under this
Contract, and may assign its rights to receive the Property from such 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 such Seller; and (v) the closing of the acquisition of such Property by
Purchaser or the exchange accommodation titleholder, as the case may be, shall
be undertaken by direct deed from the applicable Seller (or, if applicable, from
other affiliates of such Seller whom such 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, any Seller
shall have the right to extend the Closing Date (as previously extended pursuant
to 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 agrees that none of any Seller's Indemnified Parties shall
have any personal liability under this Contract or any document executed in
connection with the transactions contemplated by this Contract.
13.21 No Exclusive Negotiations. Sellers shall have the right, at all times
prior to the expiration of the Feasibility Period, to solicit backup offers and
enter into discussions, negotiations, or any other communications concerning or
related to the sale of any Property with any third-party; provided, however,
that such communications are subject to the terms of this Contract, and that
Sellers shall not enter into any contract with a third-party for the sale of any
Property unless such contract is contingent on the termination of this Contract
without the Property having been conveyed to Purchaser.
13.22 ADA Disclosure. Purchaser acknowledges that the Properties may be subject
to the federal Americans With Disabilities Act (the "ADA") and the federal Fair
Housing Act (the "FHA"). The ADA requires, among other matters, that tenants
and/or owners of "public accommodations" remove barriers in order to make a
property accessible to disabled persons and provide auxiliary aids and services
for hearing, vision or speech impaired persons. Sellers make no warranty,
representation or guarantee of any type or kind with respect to any Property's
compliance with the ADA or the FHA (or any similar state or local law), and
Sellers expressly disclaim any such representation.
13.23 No Recording. Purchaser shall not cause or allow this Contract or any
contract or other document related hereto, nor any memorandum or other evidence
hereof, to be recorded or become a public record without the prior written
consent of Seller's Representative, which consent may be withheld in the sole
discretion of Seller's Representative. If the Purchaser records this Contract or
any other memorandum or evidence thereof, Purchaser shall be in default of its
obligations under this Contract. Purchaser hereby appoints the Seller's
Representative as Purchaser's attorney-in-fact to prepare and record any
documents necessary to effect the nullification and release of the contract or
other memorandum or evidence thereof from the public records. This appointment
shall be coupled with an interest and irrevocable.
13.24 Relationship of Parties. Purchaser and Sellers acknowledge and agree that
the relationship established between the parties pursuant to this Contract is
only that of a seller and a purchaser of property. Neither Purchaser nor Sellers
is, nor shall either hold itself out to be, the agent, employee, joint venturer
or partner of the other party.
13.25 Dispute Resolution. Any controversy, dispute, or claim of any nature
arising out of, in connection with, or in relation to the interpretation,
performance, enforcement or breach of this Contract (and any closing document
executed in connection herewith), including any claim based on contract, tort or
statute, shall be resolved at the written request of any party to this Contract
by binding arbitration. The arbitration shall be administered in accordance with
the then current Commercial Arbitration Rules of the American Arbitration
Association. Any matter to be settled by arbitration shall be submitted to the
American Arbitration Association in the state of Colorado. 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 Sellers from seeking and obtaining equitable relief on a temporary or
permanent basis, including, without limitation, a temporary restraining order, a
preliminary or permanent injunction or similar equitable relief, from a court of
competent jurisdiction located in the state of Colorado is located (to which all
parties hereto consent to venue and jurisdiction) by instituting a legal action
or other court proceeding in order to protect or enforce the rights of such
party under this Contract or to prevent irreparable harm and injury. The court's
jurisdiction over any such equitable matter, however, shall be expressly limited
only to the temporary, preliminary, or permanent equitable relief sought; all
other claims initiated under this Contract between the parties hereto shall be
determined through final and binding arbitration in accordance with this Section
13.25.
13.26 AIMCO Marks. Purchaser agrees that Sellers, the Property Manager or AIMCO,
or their respective affiliates, are the sole owners of all right, title and
interest in and to the AIMCO Marks (or have the right to use such AIMCO Marks
pursuant to license agreements with third parties) and that no right, title or
interest in or to the AIMCO Marks is granted, transferred, assigned or conveyed
as a result of this Contract. Purchaser further agrees that Purchaser will not
use the AIMCO Marks for any purpose. Notwithstanding the foregoing, each Seller
will convey to Purchaser all of such Seller's right, title and interest in any
computer located at its Property (wiped clean of all software and files).
13.27 Non-Solicitation of Employees. Purchaser acknowledges and agrees that,
without the express written consent of Seller's Representative, neither
Purchaser nor any of Purchaser's employees, affiliates or agents shall (a) prior
to the expiration of the Feasibility Period, solicit any of Seller's employees
or any employees located at any Property for potential employment, or (b) for a
period of 2 years after the Effective Date, directly solicit any employees of
any other affiliates of Sellers located at any property owned by such affiliates
(other than the Properties).
13.28 Survival. Except for (a) all of the provisions of this Article 13 (other
than Section 13.19 and 13.21), and (b) any provision of this Contract which
expressly states that it shall so survive, and (c) any payment obligation of
Purchaser under this Contract (the foregoing (a), (b) and (c) referred to herein
as the "Survival Provisions"), none of the terms and provisions of this Contract
shall survive the termination of this Contract, and, if the Contract is not so
terminated, all of the terms and provisions of this Contract (other than the
Survival Provisions) shall be merged into the Closing documents and shall not
survive Closing.
13.29 Multiple Purchasers. As used in this Contract, the term "Purchaser" means
all entities acquiring any interest in any Properties at the Closing, including,
without limitation, any assignee(s) of the original Purchaser pursuant to
Section 13.3 of this Contract. In the event that "Purchaser" has any obligations
or makes any covenants, representations or warranties under this Contract, the
same shall be made jointly and severally by all entities being a Purchaser
hereunder. In the event that a Seller receives notice from any entity being a
Purchaser hereunder, the same shall be deemed to constitute notice from all
entities being a Purchaser hereunder. In the event that any entity being a
Purchaser hereunder takes any action, breaches any obligation or otherwise acts
pursuant to the terms of this Contract, the same shall be deemed to be the
action of the other entity(ies) being a Purchaser hereunder and the action of
"Purchaser" under this Contract. In the event that a Seller or Seller's
Representative is required to give notice or take action with respect to
Purchaser under this Contract, notice to any entity being a Purchaser hereunder
or action with respect to any entity being a Purchaser hereunder shall be a
notice or action to all entities being a Purchaser hereunder. In the event that
any entity being a Purchaser hereunder desires to bring an action or arbitration
against a Seller, such action must be joined by all entities being a Purchaser
hereunder in order to be effective. In the event that there is any agreement by
a Seller to pay any amount pursuant to this Contract to Purchaser under any
circumstance, that amount shall be deemed the maximum aggregate amount to be
paid to all parties being a Purchaser hereunder and not an amount that can be
paid to each party being a Purchaser hereunder. In the event that a Seller is
required to return the Initial Deposit, Additional Deposit or other amount to
Purchaser, such Seller shall return the same to any entity being a Purchaser
hereunder and, upon such return, shall have no further liability to any other
entity being a Purchaser hereunder for such amount. The foregoing provisions
also shall apply to any documents, including, without limitation, the General
Assignment and Assumption and the Assignment and Assumption of Leases and
Security Deposits, executed in connection with this Contract and the
transaction(s) contemplated hereby.
13.30 Sellers' Several Obligations. Purchaser agrees that, notwithstanding any
other provision of this Contract to the contrary, the representations,
warranties, obligations, and covenants of each Seller are individual and
several, and not joint and several, and that each Seller is responsible and
liable only for its own Property and its own representations, warranties,
obligations, and covenants. Purchaser agrees that it shall look solely to the
applicable Seller for any amount due hereunder or, obligation owed hereunder,
and further waives any and all claims against any other party or Property for
payment or performance of the same, including, without limitation, any other
Seller or AIMCO, or any partner, member, manager, shareholder, director,
officer, employee, affiliate, representative or agent of any Seller or AIMCO.
13.31 Obligation to Close on all Properties. Except as expressly set forth in
this Contract, Purchaser's obligation to purchase the Properties is not
severable and Purchaser must purchase all of the Properties. Similarly, except
as expressly stated this Contract, Sellers' obligations to sell the Properties
are not severable and Sellers must sell all of the Properties to Purchaser.
13.32 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(5), Florida Statutes.]
13.33 Energy Efficiency. Purchaser may have the building's energy efficiency
rating determined. Each Seller of a Property in Florida 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 Statutes.]
ARTICLE XIV
LEAD-BASED PAINT DISCLOSURE
14.1 Disclosure. Sellers and Purchaser hereby acknowledge delivery of the Lead
Based Paint Disclosure attached as Exhibit H hereto. The provisions of this
Section 14.1 shall survive the Closing and delivery of the Deeds to Purchaser.
As an additional "Seller's Representation," and subject to all limitations and
qualifications set forth in Article VI (including limitations on survival and
cap on damages for breach of representation), and further subject to the
limitations in Section 3.5, each Seller severally and individually, represents
as to itself only, that it will include in the Materials copies of any reports
on lead-based paint or asbestos testing and remediation for its Property readily
available to such Seller and commissioned during such Seller's ownership of its
Property.
14.2 Consent Agreement - Pre-1978 - Not Certified. The provisions of this
Section 14.2 apply to those properties identified on the Seller Information
Schedule as "Pre-1978, Not Certified." Using commercially reasonable efforts,
the applicable Seller shall (a) perform any testing (the "Testing") required at
its Property with respect to lead-based paint in accordance with the
requirements of the 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 AIMCO (executed December 18, 2001), and (b) if required under the
Consent Agreement, as reasonably determined by such Seller and its counsel,
remediate or abate (the "Remediation") any lead-based paint condition at such
Property prior to the Closing using commercially reasonable efforts. In the
event that such Seller does not complete such Testing or Remediation, if any is
required under the Consent Agreement, prior to the Closing, such Seller shall
initiate, continue or complete such Testing or Remediation, if any is required
under the Consent Agreement, promptly after Closing. Purchaser shall provide
such Seller with full and unimpeded access to its Property, including, without
limitation, access to all units located thereon, for the purposes of completing
such Testing or Remediation, if any is required under the Consent Agreement, and
Purchaser shall fully cooperate with such Seller regarding, and allow such
Seller to perform, such Testing or Remediation, if any is required under the
Consent Agreement, as determined by such Seller and its counsel in their sole
and absolute discretion, including, without limitation, allowing any alterations
to such Property, to comply with the Consent Agreement, until such time as such
Testing or Remediation, if any is required under the Consent Agreement, has been
completed. Seller shall provide 24 hours' notice to Purchaser in the event that
access to a unit is required to perform such Testing or Remediation, if any is
required under the Consent Agreement; provided, however, such Seller's
obligations hereunder after Closing shall be contingent on Purchaser's
compliance herewith, and such Seller shall be relieved of all liability and
obligations regarding such Testing or Remediation or otherwise under the Consent
Agreement, if any is required under the Consent Agreement, as a result of any
failure by Purchaser to comply with this Section 14.2. Purchaser acknowledges
and agrees that (1) after Closing, the Purchaser and the applicable Property
shall be subject to the Consent Agreement and the provisions contained herein
related thereto; (2) after Closing, Purchaser agrees to undertake the
obligations required by the Consent Agreement; (3) such Seller will need
necessary access to the applicable Property to comply with the requirements of
the Consent Agreement; (4) that Purchaser will provide such access to such
Property after Closing so that such Seller can comply with the requirements of
the Consent Agreement; and (5) Purchaser shall not be deemed to be a third party
beneficiary to the Consent Agreement. By execution hereof, Purchaser further
acknowledges receipt of notice in writing of the existence of the Consent
Agreement and receipt of a copy thereof. Upon completion of its testing and
remediation efforts, the applicable Seller, at its sole cost and expense, shall
restore the affected Property to substantially the condition (exclusive of
remediation effects) as existed immediately prior to the applicable Seller's
testing and remediation activities. The provisions of Sections 3.3 and 3.4 that
are applicable to Purchaser under the provisions of such Sections shall apply to
each Seller in the conduct of the activities contemplated by this Section 14.2
upon any of the Properties and the rights of and benefits to the Sellers that
are specified in such Sections 3.3 and 3.4 shall apply to Purchaser in the case
of activities conducted by any Seller hereunder. 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 Deeds to Purchaser. Each Seller whose Property
is covered by this Section 14.2 shall, individually, severally and only with
respect to its own Property, hold harmless and indemnify Purchaser from any
Losses to the extent arising from such Seller's entry upon such Property
post-Closing for the purpose of Testing and Remediation.
14.3 Consent Agreement - Pre-1978 Certified The provisions of this Section 14.3
apply to those Properties identified on the Seller Information Schedule as
"Pre-1978-Certified Lead-Based Paint Free." Testing has been performed at each
Property identified as "Pre-1978, Certified Lead-Based Paint Free" with respect
to lead-based paint. The "LPB Consultant" identified on the Seller Information
Schedule prepared the Report with respect to the Property identified therein.
Purchaser may, at its sole cost and expense, and not as a condition to Closing,
request the LPB Consultant to certify such report directly to Purchaser. A copy
of each report will be provided to Purchaser with the Materials. Each Report
certifies the respective Property as lead based paint free. By execution hereof,
Purchaser acknowledges receipt of a copy of the Reports, the Lead-Based Paint
Disclosure Statement attached hereto as Exhibit H, and acknowledges receipt of
the Consent Agreement. Because the applicable Property has been certified as
lead based paint free, the applicable Seller is not required under the Consent
Agreement to remediate or abate any lead-based paint condition at its Property
prior to the Closing. Purchaser acknowledges and agrees that (1) after Closing,
Purchaser and the applicable Property shall be subject to the Consent Agreement
and the provisions contained herein related thereto and (2) Purchaser shall not
be deemed to be a third party beneficiary to the Consent Agreement. The
provisions of this Section 14.3 shall survive the termination of this Contract,
and if not so terminated, the Closing and delivery of the Deeds to Purchaser.
14.3.1......Consent Agreement - Pre-1978-LBP, But No LBP Hazards The provisions
of this Section 14.4 apply to those Properties identified on the Seller
Information Schedule as "Pre-1978, certified with Lead-Based Paint Present, but
without Lead-Based Hazard." Testing has been performed at the applicable
Property with respect to lead-based paint. The "LBP Consultant" identified on
the Seller Information Schedule prepared the Report with respect to the Property
identified therein. Purchaser may, at its sole cost and expense, and not as a
condition to Closing, request the LBP Consultant to certify such report directly
to Purchaser. A copy of the Report with respect to the Property will provided to
Purchaser with the Materials. The Report certifies the applicable Property as
free of (a) lead-based hazards, (b) dust lead hazards and (c) soil lead hazards.
By execution hereof, Purchaser acknowledges receipt of a copy of the Report, the
Lead-Based Paint Disclosure Statement attached hereto as Exhibit H, and the
Consent Agreement. Because the applicable Property has been certified as free of
(x) lead based hazards, (y) dust lead hazards and (z) soil lead hazards, the
applicable Seller is not required under the Consent Agreement to remediate or
abate any lead-based paint condition at such Property prior to the Closing.
Purchaser acknowledges and agrees that (1) after Closing, the Purchaser and the
applicable Property shall be subject to the Consent Agreement and the provisions
contained herein related thereto and (2) Purchaser shall not be deemed to be a
third party beneficiary to the Consent Agreement. The provisions of this Section
14.4 shall survive the termination of this Contract, and if not so terminated,
the Closing and delivery of the Deeds to Purchaser.
[Remainder of Page Intentionally Left Blank]
NOW, THEREFORE, the parties hereto have executed this Contract as of the
date first set forth above.
Seller:
Braesview, Eagle's Nest and La Jolla:
AMBASSADOR VIII, L.P.,
a Delaware limited partnership
By: Ambassador VIII, Inc.,
a Delaware corporation
Its General Partner
By:/s/Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
Cooper's Pond:
CENTURY PROPERTIES FUND XVII, a
California limited partnership
By: FOX PARTNERS, a California general
partnership,
Its General Partner
By: FOX CAPITAL MANAGEMENT
CORPORATION,
a California corporation
Its General Partner
By:/s/Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
Deerfield:
(Parcels A and B)
AIMCO DEERFIELD, L.P.,
a Delaware limited partnership
By: AIMCO HOLDINGS, L.P.,
a Delaware limited partnership,
Its General Partner
By: AIMCO HOLDINGS QRS, INC.
a Delaware corporation
Its General Partner
By:/s/Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
(Parcel C)
AIMCO DEERFIELD II, L.P.,
a Delaware limited partnership
By: AIMCO HOLDINGS, L.P.,
a Delaware limited partnership,
Its General Partner
By: AIMCO HOLDINGS QRS, INC.
a Delaware corporation
Its General Partner
By:/s/Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
Essex Park:
SHELTER PROPERTIES III LIMITED
PARTNERSHIP,
a South Carolina limited partnership
By: SHELTER REALTY III CORPORATION,
a South Carolina corporation,
Its General Partner
By:/s/Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
Oakwood Village:
NATIONAL PROPERTY INVESTORS 5,
a California limited partnership
By: NPI Equity Investments, Inc.
a Florida limited partnership,
Its General Partner
By:/s/Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
Quail Run:
QUAIL RUN IV LIMITED PARTNERSHIP,
a South Carolina limited partnership
By: Shelter IV GP Limited Partnership,
a South Carolina limited
partnership,
Its General Partner
By: Shelter Realty IV Corporation,
a South Carolina corporation
Its General Partner
By:/s/Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
Sawgrass:
P.A.C. LAND II LIMITED PARTNERSHIP, an Ohio
limited partnership
By: AIMCO Holdings, L.P.,
a Delaware limited partnership,
its General Partner
By: AIMCO Holdings QRS, Inc.,
a Delaware corporation,
its General Partner
By:/s/Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
Ventura Landing:
CONSOLIDATED CAPITAL PROPERTIES III,
a California limited partnership
By: ConCap Equities, Inc.
a Delaware limited partnership,
Its General Partner
By:/s/Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
West Winds:
TREESLOPE APARTMENTS, LP,
a South Carolina limited partnership
By: THE NATIONAL HOUSING PARTNERSHIP,
a District of Columbia partnership,
Its General Partner
By: NATIONAL CORPORATION FOR HOUSING
PARTNERSHIPS
a District of Columbia corporation
Its General Partner
By:/s/Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
Woodlands Village:
SHELTER PROPERTIES V LIMITED PARTNERSHIP,
a South Carolina limited partnership
By: SHELTER REALTY V CORPORATION,
a South Carolina corporation,
Its Managing General Partner
By:/s/Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
Purchaser:
THE BETHANY GROUP, LLC,
a California limited liability company
By:/s/Greg Garmon
Name: Greg Carmon
Title: Managing Member
Purchaser's Tax Identification
Number/Social Security Number:
20-2858098