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 28, 2005
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
(Exact name of Registrant as specified in its charter)
California 0-10831 94-2744492
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Registrant's telephone number)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Consolidated Capital Institutional Properties (the "Registrant") owns a 100%
interest in CCIP Indian Creek Village, LLC, a Delaware limited liability company
(the "Partnership"), which owns Indian Creek Village Apartments ("Indian
Creek"), a 273-unit apartment complex located in Overland Park, Kansas. On
November 28, 2005 (the "Effective Date"), the Partnership entered into a
Purchase and Sale Contract (the "Purchase Agreement") with a third party,
Northview Realty Group, Inc., a Canadian corporation (the "Purchaser") to sell
Indian Creek to the Purchaser for a total sales price of $15,675,000.
The following is a summary of the terms and conditions of the Purchase
Agreement, which summary is qualified in its entirety by reference to the
Purchase Agreement, a copy of which is attached as an exhibit.
PURCHASE PRICE. The total purchase price is $15,675,000 subject to certain
prorations and adjustments at the closing. The Purchaser delivered an initial
deposit of $156,750 to Fidelity National Title Insurance Company ("Escrow
Agent").
FEASIBILITY PERIOD. The feasibility period ends 30 days after the Effective Date
of the Purchase Agreement. Upon termination of the feasibility period, the
Purchaser is required to deliver to Escrow Agent an additional deposit of
$156,750.
CLOSING. The expected closing date of the transaction is January 27, 2006. The
Partnership has the right to extend the closing for up to thirty days by
delivering written notice to the Purchaser. The closing is also subject to
customary closing conditions and deliveries.
COSTS AND FEES. 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 Partnership 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 Partnership and the Purchaser each made
limited representations and warranties to the other.
RISK OF LOSS. The risk of loss or damage to Indian Creek by reason of any
insured or uninsured casualty during the period through and including the
closing date will be borne by the Partnership. The Partnership must maintain in
full force and effect until the closing date all existing insurance coverage on
Indian Creek.
ASSIGNMENT. With the exception of an assignment to an affiliate of the
Purchaser, the Purchase Agreement is not assignable by the Purchaser without
first obtaining the prior written approval of the Partnership.
DEFAULTS AND REMEDIES. If the Purchaser defaults on 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 Partnership, and
neither party will be obligated to proceed with the purchase and sale. The
Partnership expressly waives the remedies of specific performance and additional
damages for any such defaults by the Purchaser.
If the Partnership, prior to the closing, defaults in its representations,
warranties, covenants, or obligations then the Purchaser has the option of (i)
terminating the Purchase Agreement, 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 $20,000 or (ii) seeking specific
performance of the Partnership's obligation to deliver the deed pursuant to the
Purchase Agreement.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
10.41 Purchase and Sale Contract between CCIP Indian Creek
Village, LLC, a Delaware limited liability company, and
Northview Realty Group, Inc. a Canadian corporation, dated
November 28, 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 INSTITUTIONAL PROPERTIES
By: CONCAP EQUITIES, INC.
General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
Date: December 2, 2005
Exhibit 10.41
PURCHASE AND SALE CONTRACT
BETWEEN
CCIP INDIAN CREEK VILLAGE, L.L.C.,
a Delaware limited liability company
AS SELLER
AND
NORTHVIEW REALTY GROUP, INC.,
a Canadian corporation
AS PURCHASER
INDIAN CREEK VILLAGE APARTMENTS
CITY OF OVERLAND PARK, JOHNSON COUNTY, KANSAS
ARTICLE I DEFINED TERMS.............................................4
ARTICLE II PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT..............10
2.1 Purchase and Sale. ...........................................10
2.2 Purchase Price and Deposit.....................................10
2.3 Escrow Provisions Regarding Deposit............................11
ARTICLE III FEASIBILITY PERIOD.......................................12
3.1 Feasibility Period.............................................12
3.2 Expiration of Feasibility Period...............................13
3.3 Conduct of Investigation.......................................13
3.4 Purchaser Indemnification......................................13
3.5 Property Materials.............................................14
3.6 Property Contracts.............................................15
ARTICLE IV TITLE....................................................16
4.1 Title Documents................................................16
4.2 Survey.........................................................16
4.3 Objection and Response Process.................................16
4.4 Permitted Exceptions...........................................17
4.5 Existing Mortgage..............................................17
4.6 Purchaser Financing. .........................................18
ARTICLE V CLOSING..................................................18
5.1 Closing Date...................................................18
5.2 Seller Closing Deliveries......................................18
5.3 Purchaser Closing Deliveries...................................19
5.4 Closing Prorations and Adjustments.............................20
5.5 Post Closing Adjustments.......................................23
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SELLER AND
PURCHASER................................................24
6.1 Seller's Representations.......................................24
6.2 AS-IS..........................................................25
6.3 Survival of Seller's Representations...........................26
6.4 Definition of Seller's Knowledge...............................26
6.5 Representations And Warranties Of Purchaser....................26
ARTICLE VII OPERATION OF THE PROPERTY................................27
7.1 Leases and Property Contracts..................................27
7.2 General Operation of Property..................................28
7.3 Liens..........................................................28
ARTICLE VIII CONDITIONS PRECEDENT TO CLOSING..........................28
8.1 Purchaser's Conditions to Closing..............................28
8.2 Seller's Conditions to Closing.................................29
ARTICLE IX BROKERAGE................................................30
9.1 Indemnity......................................................30
9.2 Broker Commission. ...........................................30
9.3 Broker Signature Page..........................................30
ARTICLE X DEFAULTS AND REMEDIES....................................30
10.1 Purchaser Default..............................................30
10.2 Seller Default.................................................31
ARTICLE XI RISK OF LOSS OR CASUALTY.................................32
11.1 Major Damage...................................................32
11.2 Minor Damage...................................................32
11.3 Repairs........................................................32
ARTICLE XII EMINENT DOMAIN...........................................32
12.1 Eminent Domain.................................................32
ARTICLE XIII MISCELLANEOUS............................................33
13.1 Binding Effect of Contract.....................................33
13.2 Exhibits And Schedules.........................................33
13.3 Assignability..................................................33
13.4 Binding Effect.................................................33
13.5 Captions.......................................................33
13.6 Number And Gender Of Words.....................................33
13.7 Notices........................................................33
13.8 Governing Law And Venue........................................36
13.9 Entire Agreement. ............................................36
13.10 Amendments.....................................................36
13.11 Severability...................................................36
13.12 Multiple Counterparts/Facsimile Signatures.....................36
13.13 Construction. ................................................36
13.14 Confidentiality................................................36
13.15 Time Of The Essence............................................37
13.16 Waiver.........................................................37
13.17 Attorneys Fees.................................................37
13.18 Time Periods...................................................37
13.19 1031 Exchange..................................................37
13.20 No Personal Liability of Officers, Trustees or Directors
of Seller's Partners. ........................................38
13.21 No Exclusive Negotiations......................................38
13.22 ADA Disclosure.................................................38
13.23 No Recording...................................................38
13.24 Relationship of Parties........................................38
13.25 Dispute Resolution. ..........................................39
13.26 AIMCO Marks....................................................39
13.27 Non-Solicitation of Employees..................................39
13.28 Survival.......................................................39
13.29 Multiple Purchasers............................................40
ARTICLE XIV LEAD-BASED PAINT DISCLOSURE..............................40
14.1 Disclosure.....................................................40
14.2 Consent Agreement. ...........................................40
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT (this "Contract") is entered into as of
the 28th day of November, 2005 (the "Effective Date") by and between CCIP INDIAN
CREEK VILLAGE, L.L.C., a Delaware limited liability company, having an address
at 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237
("Seller"), and NORTHVIEW REALTY GROUP, INC., a Canadian corporation, having a
principal address at 550 Sherbrooke, Suite 1480, Montreal QC, Canada H3A 1B9
("Purchaser").
NOW, THEREFORE, in consideration of mutual covenants set forth herein,
Seller and Purchaser hereby agree as follows:
RECITALS
A.....Seller owns the real estate located in Johnson County, Kansas, as
more particularly described in Exhibit A attached hereto and made a part hereof,
and the improvements thereon, commonly known as Indian Creek Village.
B.....Purchaser desires to purchase, and Seller desires to sell, such
land, improvements and certain associated property, on the terms and conditions
set forth below.
ARTICLE I
DEFINED TERMS
1.1 Unless otherwise defined herein, any term with its initial letter
capitalized in this Contract shall have the meaning set forth in this ARTICLE 1.
1.1.1 "ADA" shall have the meaning set forth in Section 13.22.
1.1.2 "Additional Deposit" shall have the meaning set forth in Section 2.2.2.
1.1.3 "AIMCO" shall have the meaning set forth in Section 14.2.
1.1.4 "AIMCO Marks" means all words, phrases, slogans, materials, software,
proprietary systems, trade secrets, proprietary information and lists, and
other intellectual property owned or used by Seller, the Property Manager,
or AIMCO in the marketing, operation or use of the Property (or in the
marketing, operation or use of any other properties managed by the Property
Manager or owned by AIMCO or an affiliate of either Property Manager or
AIMCO).
1.1.5 [Intentionally left blank].
1.1.6 [Intentionally left blank].
1.1.7 [Intentionally left blank].
1.1.8 "Broker" shall have the meaning set forth in Section 9.1.
1.1.9 "Business Day" means any day other than a Saturday or Sunday or Federal
holiday or legal holiday in the States of Colorado, Texas, Iowa or Kansas.
1.1.10 "Closing" means the consummation of the purchase and sale and related
transactions contemplated by this Contract in accordance with the terms and
conditions of this Contract.
1.1.11 "Closing Date" means the date on which date the Closing of the conveyance
of the Property is required to be held pursuant to Section 5.1.
1.1.12 "Code" shall have the meaning set forth in Section 2.3.6.
1.1.13 "Consent Agreement" shall have the meaning set forth in
Section 14.2.
1.1.14 "Consultants" shall have the meaning set forth in Section 3.1.
1.1.15 "Damage Notice" shall have the meaning set forth in Section 11.1.
1.1.16 "Deed" shall have the meaning set forth in Section 5.2.1.
1.1.17 [Intentionally left blank].
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 those Permits which, under applicable law, are
nontransferable and such other Permits, if any, as may be designated as
Excluded Permits on Schedule 1.1.20.
1.1.21 "Existing Survey" shall have the meaning set forth in Section 4.2.
1.1.22 "Feasibility Period" shall have the meaning set forth in
Section 3.1.
1.1.23 "FHA" shall have the meaning set forth in Section 13.22.
1.1.24 "Final Response Deadline" shall have the meaning set forth in
Section 4.3.
1.1.25 "Fixtures and Tangible Personal Property" means all fixtures, furniture,
furnishings, fittings, equipment, machinery, apparatus, appliances and other
articles of tangible personal property located on the Land or in the
Improvements as of the Effective Date and used or usable in connection with
the occupation or operation of all or any part of the Property, but only to
the extent transferable. The term "Fixtures and Tangible Personal Property"
does not include (a) equipment leased by Seller and the interest of Seller
in any equipment provided to the Property for use, but not owned or leased
by Seller, or (b) property owned or leased by any Tenant or guest, employee
or other person furnishing goods or services to the Property, or (c)
property and equipment owned by Seller, which in the ordinary course of
business of the Property is not used exclusively for the business, operation
or management of the Property, or (d) the property and equipment, if any,
expressly identified in Schedule 1.1.25.
1.1.26 "General Assignment" shall have the meaning set forth in
Section 5.2.3.
1.1.27 "Good Funds" shall have the meaning set forth in Section 2.2.1.
1.1.28 "Improvements" means all buildings and improvements located on
the Land taken "as is."
1.1.29 "Initial Deposit" shall have the meaning set forth in
Section 2.2.1.
1.1.30 "Land" means all of those certain tracts of land located in the State of
Kansas described on Exhibit A, and all rights, privileges and appurtenances
pertaining thereto.
1.1.31 "Lease(s)" means the interest of Seller in and to all leases, subleases
and other occupancy contracts, whether or not of record, which provide for
the use or occupancy of space or facilities on or relating to the Property
and which are in force as of the Closing Date for the applicable Property.
1.1.32 "Leases Assignment" shall have the meaning set forth in
Section 5.2.4.
1.1.33 "Lender" means Federal Home Loan Mortgage Corporation, assignee
of GMAC Commercial Mortgage Corporation.
1.1.34 "Lender Fees" shall mean all fees and expenses (including, without
limitation, all prepayment penalties and pay-off fees) imposed or charged by
Lender or its counsel in connection with the Loan Payoff, and, to the extent
that the Loan Payoff occurs on a date other than as permitted under the Note
and Mortgage, any amounts of interest charged by Lender for the period from
the Closing Date to the permitted prepayment date, the amount of the Lender
Fees to be determined as of the Closing Date.
1.1.35 "Loan" means the indebtedness owing to Lender evidenced by the
Note.
1.1.36 [Intentionally left blank].
1.1.37 "Loan Balance" shall have the meaning set forth in Section 2.2.3.
1.1.38 "Loan Payoff" shall have the meaning set forth in Section 5.4.7.
1.1.39 "Losses" shall have the meaning set forth in Section 3.4.1.
1.1.40 "Materials" shall have the meaning set forth in Section 3.5.
1.1.41 "Materials Deposit" shall mean that portion of the Deposit in the amount
of Twenty Five Thousand and No/100 Dollars ($25,000.00), which shall not be
returned to Purchaser (if Purchaser is otherwise entitled to the return of
the Deposit), until all Third-Party Reports and information and Materials
provided to Purchaser have been returned to Seller.
1.1.42 "Miscellaneous Property Assets" means all contract rights, leases,
concessions, warranties, plans, drawings and other items of intangible
personal property relating to the ownership or operation of the Property and
owned by Seller, excluding, however, (a) receivables, (b) Property
Contracts, (c) Leases, (d) Permits, (e) cash or other funds, whether in
petty cash or house "banks," or on deposit in bank accounts or in transit
for deposit, (f) refunds, rebates or other claims, or any interest thereon,
for periods or events occurring prior to the Closing Date, (g) utility and
similar deposits, (h) insurance or other prepaid items, (i) Seller's
proprietary books and records, or (j) any right, title or interest in or to
the AIMCO Marks. The term "Miscellaneous Property Assets" also shall include
all of Seller's rights, if any, in and to the name "Indian Creek Village" as
it relates solely to use in connection with the Property (and not with
respect to any other property owned or managed by Seller, Property Manager,
AIMCO, or their respective affiliates).
1.1.43 "Mortgage" shall have the meaning set forth in Section 4.5.
1.1.44 "Note" means that certain Multifamily Note (Multistate) in the original
principal amount of $8,750,000, dated October 2, 2000, executed by
Consolidated Capital Equity Partners, L.P., whose obligations were assumed
by Seller, and payable to the order of GMAC Commercial Mortgage Corporation,
whose interests were assigned to Federal Home Loan Mortgage Corporation.
1.1.45 "Objection Deadline" shall have the meaning set forth in
Section 4.3.
1.1.46 "Objection Notice" shall have the meaning set forth in
Section 4.3.
1.1.47 "Objections" shall have the meaning set forth in Section 4.3.
1.1.48 "Permits" means all licenses and permits granted by any governmental
authority having jurisdiction over the Property owned by Seller and required
in order to own and operate the Property.
1.1.49 "Permitted Exceptions" shall have the meaning set forth in
Section 4.4.
1.1.50 "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.
1.1.51 "Property" means (a) the Land and Improvements and all rights of Seller,
if any, in and to all of the easements, rights, privileges, and
appurtenances belonging or in any way appertaining to the Land and
Improvements, (b) the right, if any and only to the extent transferable, of
Seller in the Property Contracts, Leases, Permits (other than Excluded
Permits), and the Fixtures and Tangible Personal Property, and (c) the
Miscellaneous Property Assets owned by Seller which are located on the
Property and used in its operation.
1.1.52 "Property Contracts" means all contracts, agreements, equipment leases,
purchase orders, maintenance, service, or utility contracts and similar
contracts, excluding Leases, which relate to the ownership, maintenance,
construction or repair and/or operation of the Property, but only to the
extent assignable by their terms or applicable law (including any contracts
that are assignable with the consent of the applicable vendor), and not
including (a) any national contracts entered into by Seller, Property
Manager, or AIMCO with respect to the Property (i) which terminate
automatically upon transfer of the Property by Seller, or (ii) which Seller,
in Seller's sole discretion, elects to terminate with respect to the
Property effective as of the Closing Date, or (b) any property management
contract for the Property. Property Contracts shall not include forward or
similar long-term contracts to purchase electricity, natural gas, or other
utilities, which contracts shall be "Utility Contracts" governed by the
provisions of Section 5.4.11.
1.1.53 "Property Contracts Notice" shall have the meaning set forth in Section
3.6.
1.1.54 "Property Manager" means the current property manager of the
Property.
1.1.55 "Proration Schedule" shall have the meaning set forth in
Section 5.4.1.
1.1.56 "Purchase Price" means the consideration to be paid by Purchaser
to Seller for the purchase of the Property pursuant to Section 2.2.
1.1.57 "Records Disposal Notice" shall have the meaning set forth in
Section 5.4.12.
1.1.58 "Records Hold Period" shall have the meaning set forth in Section
5.4.12.
1.1.59 "Regional Property Manager" shall have the meaning set forth in
Section 6.4.
1.1.60 "Rent Roll" shall have the meaning set forth in Section 3.5.3.
1.1.61 "Report" shall have the meaning set forth in Section 14.2.
1.1.62 "Required Assignment Consent" shall have the meaning set forth in
Section 3.6.
1.1.63 "Response Deadline" shall have the meaning set forth in
Section 4.3.
1.1.64 "Response Notice" shall have the meaning set forth in Section 4.3.
1.1.65 "Seller's Indemnified Parties" shall have the meaning set forth
in Section 3.4.1.
1.1.66 "Seller's Property-Related Files and Records" shall have the
meaning set forth in Section 5.4.12.
1.1.67 "Seller's Representations" shall have the meaning set forth in
Section 6.1.
1.1.68 "Survey" shall have the meaning ascribed thereto in Section 4.2.
1.1.69 "Survival Period" shall have the meaning set forth in Section 6.3.
1.1.70 "Survival Provisions" shall have the meaning set forth in Section
13.28.
1.1.71 "Tenant" means any person or entity entitled to occupy any
portion of the Property under a Lease.
1.1.72 "Tenant Deposits" means all security deposits, prepaid rentals, cleaning
fees and other refundable deposits and fees collected from Tenants, plus any
interest accrued thereon, paid by Tenants to Seller pursuant to the Leases.
Tenant Deposits shall not include any non-refundable deposits or fees paid
by Tenants to Seller, either pursuant to the Leases or otherwise.
1.1.73 "Tenant Security Deposit Balance" shall have the meaning set forth in
Section 5.4.6.2.
1.1.74 "Terminated Contracts" shall have the meaning set forth in
Section 3.6.
1.1.75 "Testing" shall have the meaning set forth in Section 14.2.
1.1.76 "Third-Party Reports" means any reports, studies or other information
prepared or compiled for Purchaser by any Consultant or other third-party in
connection with Purchaser's investigation of the Property.
1.1.77 "Title Commitment" shall have the meaning ascribed thereto in Section
4.1.
1.1.78 "Title Documents" shall have the meaning set forth in Section
4.1.
1.1.79 "Title Insurer" shall have the meaning set forth in Section 2.2.1.
1.1.80 "Title Policy" shall have the meaning set forth in Section 4.1.
1.1.81 "Uncollected Rents" shall have the meaning set forth in Section
5.4.6.1.
1.1.82 "Utility Contract" shall have the meaning set forth in Section
5.4.11.
1.1.83 "Vendor Terminations" shall have the meaning set forth in Section
5.2.5.
ARTICLE II
PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT
2.1 Purchase and Sale. Seller agrees to sell and convey the Property to
Purchaser and Purchaser agrees to purchase the Property from Seller, all in
accordance with the terms and conditions set forth in this Contract.
2.2 Purchase Price and Deposit. The total purchase price ("Purchase Price") for
the Property shall be an amount equal to Fifteen Million Six Hundred Seventy
Five Thousand and no/100 Dollars ($15,675,000.00), less the Lender Fees, which
amount shall be paid by Purchaser, as follows:
2.2.1 Within one (1) Business Day after the Effective Date, Purchaser shall
deliver to Fidelity National Title Insurance Company, 3D International
Building, 1900 West Loop South, Suite 650, Houston, Texas 77027, Attention:
Ms. Lolly Avant, 713-621-9960 ext. 201 ("Escrow Agent" or "Title Insurer")
an initial deposit (the "Initial Deposit") of One Hundred Fifty Six Thousand
Seven Hundred Fifty and no/100 Dollars ($156,750.00) by wire transfer of
immediately available funds ("Good Funds"). The Initial Deposit shall be
held and disbursed in accordance with the escrow provisions set forth in
Section 2.3.
2.2.2 On the day that the Feasibility Period expires, Purchaser shall deliver to
Escrow Agent an additional deposit (the "Additional Deposit") of One Hundred
Fifty Six Thousand Seven Hundred Fifty and no/100 Dollars ($156,750.00) 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.
2.2.3 Intentionally left blank.
2.2.4 The balance of the Purchase Price for the Property shall be paid to and
received by Escrow Agent by wire transfer of Good Funds no later than 11:00
a.m. (in the time zone in which Escrow Agent is located) on the Closing Date
(or such earlier time as required by Seller's lender).
2.3 Escrow Provisions Regarding Deposit.
2.3.1 Escrow Agent shall hold the Deposit and make delivery of the Deposit to
the party entitled thereto under the terms of this Contract. Escrow Agent
shall invest the Deposit in such short-term, high-grade securities,
interest-bearing bank accounts, money market funds or accounts, bank
certificates of deposit or bank repurchase contracts as Escrow Agent, in its
discretion, deems suitable, and all interest and income thereon shall become
part of the Deposit and shall be remitted to the party entitled to the
Deposit pursuant to this Contract.
2.3.2 Escrow Agent shall hold the Deposit until the earlier occurrence of (i)
the Closing Date, at which time the Deposit shall be applied against the
Purchase Price, or (ii) the date on which Escrow Agent shall be authorized
to disburse the Deposit as set forth in Section 2.3.3. The tax
identification numbers of the parties shall be furnished to Escrow Agent
upon request.
2.3.3 If the Deposit has not been released earlier in accordance with Section
2.3.2, and either party makes a written demand upon Escrow Agent for payment
of the Deposit, Escrow Agent shall give written notice to the other party of
such demand. If Escrow Agent does not receive a written objection from the
other party to the proposed payment within 5 Business Days after the giving
of such notice, Escrow Agent is hereby authorized to make such payment
(subject to Purchaser's obligation under Section 3.5.2 to return or certify
the destruction of all Third-Party Reports and information and Materials
provided to Purchaser as a pre-condition to the return of the Materials
Deposit to Purchaser). If Escrow Agent does receive such written objection
within such 5-Business Day period, Escrow Agent shall continue to hold such
amount until otherwise directed by written instructions from the parties to
this Contract or a final judgment or arbitrator's decision. However, Escrow
Agent shall have the right at any time to deposit the Deposit and interest
thereon, if any, with a court of competent jurisdiction in the state in
which the Property is located. Escrow Agent shall give written notice of
such deposit to Seller and Purchaser. Upon such deposit, Escrow Agent shall
be relieved and discharged of all further obligations and responsibilities
hereunder.
2.3.4 The parties acknowledge that Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, and that Escrow
Agent shall not be deemed to be the agent of either of the parties for any
act or omission on its part unless taken or suffered in bad faith in willful
disregard of this Contract or involving gross negligence. Seller and
Purchaser jointly and severally shall indemnify and hold Escrow Agent
harmless from and against all costs, claims and expenses, including
reasonable attorney's fees, incurred in connection with the performance of
Escrow Agent's duties hereunder, except with respect to actions or omissions
taken or suffered by Escrow Agent in bad faith, in willful disregard of this
Contract or involving gross negligence on the part of the Escrow Agent.
2.3.5 The parties shall deliver to Escrow Agent an executed copy of this
Contract, which shall constitute the sole instructions to Escrow Agent.
Escrow Agent shall execute the signature page for Escrow Agent attached
hereto with respect to the provisions of this Section 2.3; provided,
however, that (a) Escrow Agent's signature hereon shall not be a
prerequisite to the binding nature of this Contract on Purchaser and Seller,
and the same shall become fully effective upon execution by Purchaser and
Seller, and (b) the signature of Escrow Agent will not be necessary to amend
any provision of this Contract other than this Section 2.3.
2.3.6 Escrow Agent, as the person responsible for closing the transaction within
the meaning of Section 6045(e)(2)(A) of the Internal Revenue Code of 1986,
as amended (the "Code"), shall file all necessary information, reports,
returns, and statements regarding the transaction required by the Code
including, but not limited to, the tax reports required pursuant to Section
6045 of the Code. Further, Escrow Agent agrees to indemnify and hold
Purchaser, Seller, and their respective attorneys and brokers harmless from
and against any Losses resulting from Escrow Agent's failure to file the
reports Escrow Agent is required to file pursuant to this section.
2.3.7 The provisions of this Section 2.3 shall survive the termination of this
Contract, and if not so terminated, the Closing and delivery of the Deed to
Purchaser.
ARTICLE III
FEASIBILITY PERIOD
3.1 Feasibility Period. Subject to the terms of Section 3.3 and 3.4 and the
right of Tenants under the Leases, from the Effective Date to and including the
date which is 30 days after the Effective Date (the "Feasibility Period"),
Purchaser, and its agents, contractors, engineers, surveyors, attorneys, and
employees (collectively, "Consultants") shall have the right from time to time
to enter onto the Property:
3.1.1 To conduct and make any and all customary studies, tests, examinations,
inquiries, and inspections, or investigations (collectively, the
"Inspections") of or concerning the Property (including, without limitation,
engineering and feasibility studies, evaluation of drainage and flood plain,
soil tests for bearing capacity and percolation and surveys, including
topographical surveys);
3.1.2 To confirm any and all matters which Purchaser may reasonably desire to
confirm with respect to the Property;
3.1.3 To ascertain and confirm the suitability of the property for
Purchaser's intended use of the Property; and
3.1.4 To review the Materials at Purchaser's sole cost and expense.
3.2 Expiration of Feasibility Period. If the results of any of the matters
referred to in Section 3.1 appear unsatisfactory to Purchaser for any reason or
if Purchaser elects not to proceed with the transaction contemplated by this
Contract for any other reason, or for no reason whatsoever, in Purchaser's sole
and absolute discretion, then Purchaser shall have the right to terminate this
Contract by giving written notice to that effect to Seller and Escrow Agent on
or before 5:00 p.m. (in the time zone in which the Escrow Agent is located) on
the date of expiration of the Feasibility Period. If Purchaser exercises such
right to terminate, this Contract shall terminate and be of no further force and
effect, subject to and except for the Survival Provisions, and Escrow Agent
shall forthwith return the Initial Deposit to Purchaser (subject to Purchaser's
obligation under Section 3.5.2 to return or certify the destruction of all
Third-Party Reports and information and Materials provided to Purchaser as a
pre-condition to the return of the Materials Deposit). If Purchaser fails to
provide Seller with written notice of termination prior to the expiration of the
Feasibility Period in strict accordance with the notice provisions of this
Contract, Purchaser's right to terminate under this Section 3.2 shall be
permanently waived and this Contract shall remain in full force and effect, the
Deposit (including both the Initial Deposit and, when delivered in accordance
with Section 2.2.2, the Additional Deposit) shall be non-refundable, and
Purchaser's obligation to purchase the Property shall be non-contingent and
unconditional except only for satisfaction of the conditions expressly stated in
Section 8.1.
3.3 Conduct of Investigation. Purchaser shall not permit any mechanic's or
materialmen's liens or any other liens to attach to the Property by reason of
the performance of any work or the purchase of any materials by Purchaser or any
other party in connection with any Inspections conducted by or for Purchaser.
Purchaser shall give notice to Seller a reasonable time prior to entry onto the
Property and shall permit Seller to have a representative present during all
Inspections conducted at the Property. Purchaser shall take all reasonable
actions and implement all protections necessary to ensure that all actions taken
in connection with the investigations and inspections of the Property, and all
equipment, materials and substances generated, used or brought onto the Property
pose no material threat to the safety of persons or the environment and cause no
damage to the Property or other property of Seller or other persons. All
information made available by Seller to Purchaser in accordance with this
Contract or obtained by Purchaser in the course of its Inspections shall be
treated as confidential information by Purchaser, and, prior to the purchase of
the Property by Purchaser, Purchaser shall use its best efforts to prevent its
Consultants from divulging such information to any unrelated third parties
except as reasonably necessary to third parties engaged by Purchaser for the
limited purpose of analyzing and investigating such information for the purpose
of consummating the transaction contemplated by this Contract. The provisions of
this Section 3.3 shall survive the termination of this Contract, and if not so
terminated shall survive (except for the confidentiality provisions of this
Section 3.3) the Closing and delivery of the Deed to Purchaser.
3.4 Purchaser Indemnification.
3.4.1 Purchaser shall indemnify, hold harmless and, if requested by Seller (in
Seller's sole discretion), defend (with counsel approved by Seller) Seller,
together with Seller's affiliates, parent and subsidiary entities,
successors, assigns, partners, managers, members, employees, officers,
directors, trustees, shareholders, counsel, representatives, agents,
Property Manager, Regional Property Manager, and AIMCO (collectively,
including Seller, "Seller's Indemnified Parties"), from and against any and
all damages, mechanics' liens, liabilities, losses, demands, actions, causes
of action, claims, costs and expenses (including reasonable attorneys' fees,
including the cost of in-house counsel and appeals) (collectively, "Losses")
arising from or related to Purchaser's or its Consultants' entry onto the
Property, and any Inspections or other matters performed by Purchaser with
respect to the Property during the Feasibility Period or otherwise.
3.4.2 Notwithstanding anything in this Contract to the contrary, Purchaser shall
not be permitted to perform any invasive tests on the Property without
Seller's prior written consent, which consent may be withheld in Seller's
sole discretion. Further, Seller shall have the right, without limitation,
to disapprove any and all entries, surveys, tests (including, without
limitation, a Phase II environmental study of the Property), investigations
and other matters that in Seller's reasonable judgment could result in any
injury to the Property or breach of any contract, or expose Seller to any
Losses or violation of applicable law, or otherwise adversely affect the
Property or Seller's interest therein. Purchaser shall use best efforts to
minimize disruption to Tenants in connection with Purchaser's or its
Consultants' activities pursuant to this Section. No consent by the Seller
to any such activity shall be deemed to constitute a waiver by Seller or
assumption of liability or risk by Seller. Purchaser hereby agrees to
restore, at Purchaser's sole cost and expense, the Property to the same
condition existing immediately prior to Purchaser's exercise of its rights
pursuant to this Article 3. Purchaser shall maintain and cause its third
party consultants to maintain (a) casualty insurance and comprehensive
public liability insurance with coverages of not less than $1,000,000.00 for
injury or death to any one person and $3,000,000.00 for injury or death to
more than one person and $1,000,000.00 with respect to property damage, and
(b) worker's compensation insurance for all of their respective employees in
accordance with the law of the state in which the Property is located.
Purchaser shall deliver proof of the insurance coverage required pursuant to
this Section 3.4.2 to Seller (in the form of a certificate of insurance)
prior to the earlier to occur of (i) Purchaser's or Purchaser's Consultants'
entry onto the Property, or (ii) the expiration of 5 days after the
Effective Date. The provisions of this Section 3.4 shall survive the
termination of this Contract, and if not so terminated, the Closing and
delivery of the Deed to Purchaser.
3.5 Property Materials.
3.5.1 Within 10 days after the Effective Date, and to the extent the same exist
and are in Seller's possession or reasonable control (subject to Section
3.5.2), Seller agrees to make the documents set forth on Schedule 3.5 (the
"Materials") available at the Property for review and copying by Purchaser
at Purchaser's sole cost and expense. In the alternative, at Seller's option
and within the foregoing 10-day period, Seller may deliver some or all of
the Materials to Purchaser, or make the same available to Purchaser on a
secure web site (Purchaser agrees that any item to be delivered by Seller
under this Contract shall be deemed delivered to the extent available to
Purchaser on such secured web site). To the extent that Purchaser determines
that any of the Materials have not been made available or delivered to
Purchaser pursuant to this Section 3.5.1, Purchaser shall notify Seller and
Seller shall use commercially reasonable efforts to deliver the same to
Purchaser within 5 Business Days after such notification is received by
Seller; provided, however, that under no circumstances will the Feasibility
Period be extended and Buyer's sole remedy will be to terminate this
Contract pursuant to Section 3.2.
3.5.2 In providing such information and Materials to Purchaser, other than
Seller's Representations, Seller makes no representation or warranty,
express, written, oral, statutory, or implied, and all such representations
and warranties are hereby expressly excluded and disclaimed. Any information
and Materials provided by Seller to Purchaser under the terms of this
Contract is for informational purposes only and, together with all
Third-Party Reports, shall be returned by Purchaser to Seller (or the
destruction thereof shall be certified in writing by Purchaser to Seller) as
a condition to return of the Materials Deposit to Purchaser (if Purchaser is
otherwise entitled to such Deposit pursuant to the terms of this Contract)
if this Contract is terminated for any reason. Purchaser shall not in any
way be entitled to rely upon the accuracy of such information and Materials.
Purchaser recognizes and agrees that the Materials and other documents and
information delivered or made available by Seller pursuant to this Contract
may not be complete or constitute all of such documents which are in
Seller's possession or control, but are those that are readily available to
Seller after reasonable inquiry to ascertain their availability. Purchaser
understands that, although Seller will use commercially reasonable efforts
to locate and make available the Materials and other documents required to
be delivered or made available by Seller pursuant to this Contract,
Purchaser will not rely on such Materials or other documents as being a
complete and accurate source of information with respect to the Property,
and will instead in all instances rely exclusively on its own Inspections
and Consultants with respect to all matters which it deems relevant to its
decision to acquire, own and operate the Property.
3.5.3 In addition to the items set forth on Schedule 3.5, no later than 10 days
after the Effective Date, Seller shall deliver to Purchaser (or otherwise
make available to Purchaser as provided under Section 3.5.1) a rent roll for
the Property listing the move-in date, monthly base rent payable, lease
expiration date and unapplied security deposit for each Lease (the "Rent
Roll"). The Rent Roll shall be part of the Materials for all purposes under
this Contract and Seller makes no representations or warranties regarding
the Rent Roll other than the express representation set forth in Section
6.1.7. Seller shall update the Rent Roll in accordance with Section 5.2.10.
3.5.4 The provisions of this Section 3.5 shall survive the Closing and delivery
of the Deed to Purchaser.
3.6 Property Contracts. On or before the expiration of the Feasibility Period,
Purchaser may deliver written notice to Seller (the "Property Contracts Notice")
specifying any Property Contracts which Purchaser desires to terminate at the
Closing (the "Terminated Contracts"); provided that (a) the effective date of
such termination after Closing shall be subject to the express terms of such
Terminated Contracts (and, to the extent that the effective date of termination
of any Terminated Contract is after the Closing Date, Purchaser shall be deemed
to have assumed all of Seller's obligations under such Terminated Contract as of
the Closing Date), (b) if any such Property Contract cannot by its terms be
terminated, it shall be assumed by Purchaser and not be a Terminated Contract,
and (c) to the extent that any such Terminated Contract requires payment of a
penalty or premium for cancellation, Purchaser shall be solely responsible for
the payment of any such cancellation fees or penalties. If Purchaser fails to
deliver the Property Contracts Notice on or before the expiration of the
Feasibility Period, there shall be no Terminated Contracts and Purchaser shall
assume all Property Contracts at the Closing. To the extent that any Property
Contract to be assumed by Purchaser (including any Property Contract that,
because of advance notice requirements, will be temporarily assumed by Purchaser
pending the effective date of termination after the Closing Date) is assignable
but requires the applicable vendor to consent to the assignment or assumption of
the Property Contract by Seller to Purchaser, then, prior to the Closing,
Purchaser shall be responsible for obtaining from each applicable vendor a
consent (each a "Required Assignment Consent") to the assignment of the Property
Contract by Seller to Purchaser (and the assumption by Purchaser of all
obligations under such Property Contract). Purchaser shall indemnify, hold
harmless and, if requested by Seller (in Seller's sole discretion), defend (with
counsel approved by Seller) Seller's Indemnified Parties from and against any
and all Losses arising from or related to Purchaser's failure to obtain any
Required Assignment Consent.
ARTICLE IV
TITLE
4.1 Title Documents. Within 10 calendar days after the Effective Date, Seller
shall cause to be delivered to Purchaser a standard form commitment for title
insurance ("Title Commitment") for the Property in an amount equal to the
Purchase Price from Title Insurer for an owner's title insurance policy (the
"Title Policy") on the most recent standard American Land Title Association
form, together with copies of all instruments identified as exceptions therein
(together with the Title Commitment, referred to herein as the "Title
Documents"). Seller shall be responsible only for payment of the basic premium
for the Title Policy. Purchaser shall be solely responsible for payment of all
other costs relating to procurement of the Title Commitment, the Title Policy,
and any requested endorsements.
4.2 Survey. Within 3 Business Days after the Effective Date, Seller shall
deliver to Purchaser or make available at the Property any existing survey of
the Property (the "Existing Survey") which to Seller's knowledge is in Seller's
possession or reasonable control (subject to Section 3.5.2). Purchaser shall
reimburse Seller for one-half of the cost of the preparation of the Existing
Survey. Purchaser acknowledges and agrees that delivery of the Existing Survey
is subject to Section 3.5.2. To the extent that Purchaser desires that a new
survey of the Property be prepared (or that the Existing Survey be updated),
Purchaser shall request the same in writing to Seller no later than 5 Business
Days after the Effective Date. Seller also independently may elect to order a
new or updated survey of the Property either before or after the Effective Date
(such new or updated survey (whether requested by Purchaser or ordered by
Seller), together with the Existing Survey, is referred to herein as the
"Survey"). Any new or updated survey may be ordered by Seller from the surveyor
who prepared the Existing Survey (or from such other surveyor as Seller
determines in its reasonable discretion. Purchaser shall be solely responsible
for the cost and expense of the preparation of any new or updated survey ordered
by Seller or requested by Purchaser pursuant to the terms of this Section 4.2.
4.3 Objection and Response Process. On or before the date which is 15 days after
the Effective Date (the "Objection Deadline"), Purchaser shall give written
notice (the "Objection Notice") to the attorneys for Seller of any matter set
forth in the Title Documents or the Survey to which Purchaser objects (the
"Objections"). If Purchaser fails to tender an Objection Notice on or before the
Objection Deadline, Purchaser shall be deemed to have approved and irrevocably
waived any objections to any matters covered by the Title Documents and the
Survey. On or before 20 days after the Effective Date (the "Response Deadline"),
Seller may, in Seller's sole discretion, give Purchaser notice (the "Response
Notice") of those Objections which Seller is willing to cure, if any. Seller
shall be entitled to reasonable adjournments of the Closing Date to cure the
Objections. If Seller fails to deliver a Response Notice by the Response
Deadline, Seller shall be deemed to have elected not to cure or otherwise
resolve any matter set forth in the Objection Notice. If Purchaser is
dissatisfied with the Response Notice, Purchaser may, as its exclusive remedy,
elect by written notice given to Seller on or before 25 days after the Effective
Date (the "Final Response Deadline") either (a) to accept the Title Documents
and Survey with resolution, if any, of the Objections as set forth in the
Response Notice (or if no Response Notice is tendered, without any resolution of
the Objections) and without any reduction or abatement of the Purchase Price, or
(b) to terminate this Contract, in which event the Initial Deposit shall be
returned to Purchaser (subject to Purchaser's obligation under Section 3.5.2 to
return or certify the destruction of all Third-Party Reports and information and
Materials provided to Purchaser as a pre-condition to the return of the
Materials Deposit). If Purchaser fails to give notice to terminate this Contract
on or before the Final Response Deadline, Purchaser shall be deemed to have
elected to approve and irrevocably waived any objections to any matters covered
by the Title Documents or the Survey, subject only to resolution, if any, of the
Objections as set forth in the Response Notice (or if no Response Notice is
tendered, without any resolution of the Objections).
4.4 Permitted Exceptions. The Deed delivered pursuant to this Contract shall be
subject to the following, all of which shall be deemed "Permitted Exceptions":
4.4.1 All matters shown in the Title Documents and the Survey, other than (a)
those Objections, if any, which Seller has agreed to cure pursuant to the
Response Notice under Section 4.3, (b) mechanics' liens and taxes due and
payable with respect to the period preceding Closing, (c) the standard
exception regarding the rights of parties in possession, which shall be
limited to those parties in possession pursuant to the Leases, and (d) the
standard exception pertaining to taxes, which shall be limited to taxes and
assessments payable in the year in which the Closing occurs and subsequent
taxes and assessments;
4.4.2 All Leases;
4.4.3 [Intentionally left blank];
4.4.4 Applicable zoning and governmental regulations and ordinances;
4.4.5 Any defects in or objections to title to the Property, or title
exceptions or encumbrances, arising by, through or under Purchaser; and
4.4.6 The terms and conditions of this Contract.
4.5 Existing Mortgage. It is understood and agreed that, whether or not
Purchaser gives an Objection Notice with respect thereto, any deeds of trust
and/or mortgages which secure the Note (collectively, the "Mortgage") shall not
be deemed Permitted Exceptions, 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 Fees due in connection with the Loan Payoff shall be paid by
Purchaser.
4.6 Purchaser Financing. Purchaser assumes full responsibility to obtain the
funds required for settlement, and Purchaser's acquisition of such funds shall
not be a contingency to the Closing.
ARTICLE V
CLOSING
5.1 Closing Date. The Closing shall occur 30 days following the expiration of
the Feasibility Period (the "Closing Date") through an escrow with Escrow Agent,
whereby the Seller, Purchaser and their attorneys need not be physically present
at the Closing and may deliver documents by overnight air courier or other
means. Notwithstanding the foregoing to the contrary, Seller shall have the
option, by delivering written notice to Purchaser, to extend the Closing Date to
the last Business Day of the month in which the Closing Date otherwise would
occur pursuant to the preceding sentence, or to such other date (either in the
same month or the next) as Seller reasonably determines is desirable in
connection with the Loan Payoff. Further, the Closing Date may be extended
without penalty at the option of Seller to a date not later than 30 days
following the Closing Date specified in the first sentence of this paragraph
above (or, if applicable, as extended by Seller pursuant to the second sentence
of this paragraph) to satisfy any condition to Closing, or such later date as is
mutually acceptable to Seller and Purchaser.
5.2 Seller Closing Deliveries. No later than 1 Business Day prior to the Closing
Date, Seller shall deliver to Escrow Agent, each of the following items:
5.2.1 Special Warranty Deed (the "Deed") in the form attached as Exhibit B to
Purchaser, subject to the Permitted Exceptions.
5.2.2 A Bill of Sale in the form attached as Exhibit C.
5.2.3 A General Assignment in the form attached as Exhibit D (the "General
Assignment").
5.2.4 An Assignment of Leases and Security Deposits in the form attached as
Exhibit E (the "Leases Assignment").
5.2.5 A letter in the form attached hereto as Exhibit F prepared by Purchaser
and countersigned by Seller to each of the vendors under the Terminated
Contracts informing them of the termination of such Terminated Contract as
of the Closing Date (subject to any delay in the effectiveness of such
termination pursuant to the express terms of each applicable Terminated
Contract) (the "Vendor Terminations").
5.2.6 A closing statement executed by Seller.
5.2.7 A title affidavit or at Seller's option an indemnity, as applicable, in
the customary form reasonably acceptable to Seller to enable Title Insurer
to delete the standard exceptions to the title insurance policy set forth in
this Contract (other than matters constituting any Permitted Exceptions and
matters which are to be completed or performed post-Closing) to be issued
pursuant to the Title Commitment; provided that such affidavit does not
subject Seller to any greater liability, or impose any additional
obligations, other than as set forth in this Contract; and
5.2.8 A certification of Seller's non-foreign status pursuant to Section 1445 of
the Internal Revenue Code of 1986, as amended.
5.2.9 Resolutions, certificates of good standing, and such other organizational
documents as Title Insurer shall reasonably require evidencing Seller's
authority to consummate this transaction.
5.2.10 An updated Rent Roll reflecting the information required in Section
3.5.3; provided, however, that the content of such updated Rent Roll shall
in no event expand or modify the conditions to Purchaser's obligation to
close as specified under Section 8.1.
5.3 Purchaser Closing Deliveries. No later than 1 Business Day prior to the
Closing Date (except for the balance of the Purchase Price which is to be
delivered at the time specified in Section 2.2.4), Purchaser shall deliver to
the Escrow Agent (for disbursement to Seller upon the Closing) the following
items with respect to the Property being conveyed at such Closing:
5.3.1 The full Purchase Price (with credit for the Deposit), plus or minus the
adjustments or prorations required by this Contract.
5.3.2 A title affidavit (or at Purchaser's option an indemnity) pertaining to
Purchaser's activity on the Property prior to Closing, in the customary form
reasonably acceptable to Purchaser, to enable Title Insurer to delete the
standard exceptions to the title insurance policy set forth in this Contract
(other than matters constituting any Permitted Exceptions and matters which
are to be completed or performed post-Closing) to be issued pursuant to the
Title Commitment; provided that such affidavit does not subject Purchaser to
any greater liability, or impose any additional obligations, other than as
set forth in this Contract.
5.3.3 Any declaration or other statement which may be required to be submitted
to the local assessor with respect to the terms of the sale of the Property.
5.3.4 A closing statement executed by Purchaser.
5.3.5 A countersigned counterpart of the General Assignment.
5.3.6 A countersigned counterpart of the Leases Assignment.
5.3.7 Notification letters to all Tenants prepared and executed by Purchaser in
the form attached hereto as Exhibit G.
5.3.8 The Vendor Terminations (Purchaser shall be solely responsible for
identifying each of the Terminated Contracts (subject to the terms and
conditions of Section 3.6) and addressing and preparing each of the Vendor
Terminations for execution by Purchaser and Seller).
5.3.9 Any cancellation fees or penalties due to any vendor under any Terminated
Contract as a result of the termination thereof.
5.3.10 Resolutions, certificates of good standing, and such other organizational
documents as Title Insurer shall reasonably require evidencing Purchaser's
authority to consummate this transaction.
5.3.11 A completed Kansas Real Estate Sales Validation Questionnaire.
5.3.12 The Lender Fees (subject to reduction from the Purchase Price in
accordance with Section 2.2).
5.4 Closing Prorations and Adjustments.
5.4.1 General. All normal and customarily proratable items, including, without
limitation, collected rents, operating expenses, personal property taxes,
other operating expenses and fees, shall be prorated as of the Closing Date,
Seller being charged or credited, as appropriate, for all of same
attributable to the period up to the Closing Date (and credited for any
amounts paid by Seller attributable to the period on or after the Closing
Date, if assumed by Purchaser) and Purchaser being responsible for, and
credited or charged, as the case may be, for all of the same attributable to
the period on and after the Closing Date. Seller shall prepare a proration
schedule (the "Proration Schedule") of the adjustments described in this
Section 5.4 prior to Closing. Such adjustments shall be paid by Purchaser to
Seller (if the prorations result in a net credit to Seller) or by Seller to
Purchaser (if the prorations result in a net credit to Purchaser), by
increasing or reducing the cash to be paid by Purchaser at Closing.
5.4.2 Operating Expenses. All of the operating, maintenance, taxes (other than
real estate taxes, such as rental taxes), and other expenses incurred in
operating the Property that Seller customarily pays, and any other costs
incurred in the ordinary course of business for the management and operation
of the Property, shall be prorated on an accrual basis. Seller shall pay all
such expenses that accrue prior to Closing and Purchaser shall pay all such
expenses that accrue from and after the Closing Date.
5.4.3 Utilities. The final readings and final billings for utilities will be
made if possible as of the Closing Date, in which case Seller shall pay all
such bills as of the Closing Date and no proration shall be made at the
Closing with respect to utility bills. Otherwise, a proration shall be made
based upon the parties' reasonable good faith estimate and a readjustment
made within 30 days after the Closing, if necessary. Seller shall be
entitled to the return of any deposit(s) posted by it with any utility
company, and Seller shall notify each utility company serving the Property
to terminate Seller's account, effective as of noon on the Closing Date.
5.4.4 Real Estate Taxes. Any real estate ad valorem or similar taxes for the
Property, or any installment of assessments payable in installments which
installment is payable in the calendar year of Closing, shall be prorated to
the date of Closing, based upon actual days involved. The proration of real
property taxes or installments of assessments shall be based upon the
assessed valuation and tax rate figures (assuming payment at the earliest
time to allow for the maximum possible discount) for the year in which the
Closing occurs to the extent the same are available; provided, however, that
in the event that actual figures (whether for the assessed value of the
Property or for the tax rate) for the year of Closing are not available at
the Closing Date, the proration shall be made using figures from the
preceding year (assuming payment at the earliest time to allow for the
maximum possible discount). The proration of real property taxes or
installments of assessments shall be final and not subject to re-adjustment
after Closing.
5.4.5 Property Contracts. Purchaser shall assume at Closing the obligations
under the Property Contracts assumed by Purchaser; however, operating
expenses shall be prorated under Section 5.4.2.
5.4.6 Leases.
5.4.6.1 All collected rent (whether fixed monthly rentals, additional rentals,
escalation rentals, retroactive rentals, operating cost pass-throughs or other
sums and charges payable by Tenants under the Leases), income and expenses from
any portion of the Property shall be prorated as of the Closing Date (prorated
for any partial month). Purchaser shall receive all collected rent and income
attributable to dates from and after the Closing Date. Seller shall receive all
collected rent and income attributable to dates prior to the Closing Date.
Notwithstanding the foregoing, no prorations shall be made in relation to either
(a) non-delinquent rents which have not been collected as of the Closing Date,
or (b) delinquent rents existing, if any, as of the Closing Date (the foregoing
(a) and (b) referred to herein as the "Uncollected Rents"). In adjusting for
Uncollected Rents, no adjustments shall be made in Seller's favor for rents
which have accrued and are unpaid as of the Closing, but Purchaser shall pay
Seller such accrued Uncollected Rents as and when collected by Purchaser.
Purchaser agrees to bill Tenants of the Property for all Uncollected Rents and
to take reasonable actions to collect Uncollected Rents. After the Closing,
Seller shall continue to have the right, but not the obligation, in its own
name, to demand payment of and to collect Uncollected Rents owed to Seller by
any Tenant, which right shall include, without limitation, the right to continue
or commence legal actions or proceedings against any Tenant and the delivery of
the Leases Assignment shall not constitute a waiver by Seller of such right.
Purchaser agrees to cooperate with Seller in connection with all efforts by
Seller to collect such Uncollected Rents and to take all steps, whether before
or after the Closing Date, as may be necessary to carry out the intention of the
foregoing, including, without limitation, the delivery to Seller, within 7 days
after a written request, of any relevant books and records (including, without
limitation, rent statements, receipted bills and copies of tenant checks used in
payment of such rent), the execution of any and all consents or other documents,
and the undertaking of any act reasonably necessary for the collection of such
Uncollected Rents by Seller; provided, however, that Purchaser's obligation to
cooperate with Seller pursuant to this sentence shall not obligate Purchaser to
commence any legal action to collect Uncollected Rents, terminate any Tenant
lease with an existing Tenant or evict any existing Tenant from the Property.
5.4.6.2 At Closing, Purchaser shall receive a credit against the Purchase Price
in an amount equal to the received and unapplied balance of all cash (or cash
equivalent) Tenant Deposits, including, but not limited to, security, damage or
other refundable deposits or required to be paid by any of the Tenants to secure
their respective obligations under the Leases, together, in all cases, with any
interest payable to the Tenants thereunder as may be required by their
respective Tenant Lease or state law (the "Tenant Security Deposit Balance").
Any cash (or cash equivalents) held by Seller which constitutes the Tenant
Security Deposit Balance shall be retained by Seller in exchange for the
foregoing credit against the Purchase Price and shall not be transferred by
Seller pursuant to this Contract (or any of the documents delivered at Closing),
but the obligation with respect to the Tenant Security Deposit Balance
nonetheless shall be assumed by Purchaser. The Tenant Security Deposit Balance
shall not include any non-refundable deposits or fees paid by Tenants to Seller,
either pursuant to the Leases or otherwise.
5.4.6.3 With respect to operating expenses, taxes, utility charges, other
operating cost pass-throughs, retroactive rental escalations, sums or charges
payable by Tenants under the Tenant Leases, to the extent that Seller has
received as of the Closing payments allocable to periods subsequent to Closing,
the same shall be properly prorated with an adjustment in favor of Purchaser,
and Purchaser shall receive a credit therefor at Closing. With respect to any
payments received by Purchaser after the Closing allocable to Seller prior to
Closing, Purchaser shall promptly pay the same to Seller.
5.4.7 Existing Loan. Purchaser acknowledges that Purchaser had the opportunity
to assume the Note or to cause prepayment of the Note at Closing (but in
either event, Purchaser would pay the Lender Fees). 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 Note together with all interest accrued
under the 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 Seller at the Closing unless credited by Lender against the amount
due under the Note.
5.4.8 Insurance. No proration shall be made in relation to insurance premiums
and insurance policies will not be assigned to Purchaser.
5.4.9 Employees. All of Seller's and Seller's manager's on-site employees shall
have their employment at the Property terminated as of the Closing Date.
5.4.10 Closing Costs. Purchaser shall pay any transfer, sales, use, gross
receipts or similar taxes, the cost of recording any instruments required to
discharge any liens or encumbrances against the Property, any premiums or
fees required to be paid by Purchaser with respect to the Title Policy
pursuant to Section 4.1, and one-half of the customary closing costs of the
Escrow Agent. Seller shall pay the base premium for the Title Policy to the
extent required by Section 4.1, and one-half of the customary closing costs
of the Escrow Agent.
5.4.11 Utility Contracts. If Seller has entered into an agreement for the
purchase of electricity, gas or other utility service for the Property or a
group of properties (including the Property) (a "Utility Contract"), or an
affiliate of Seller has entered into a Utility Contract, then, at the option
of Seller, either (a) Purchaser either shall assume the Utility Contract
with respect to the Property, or (b) the reasonably calculated costs of the
Utility Contract attributable to the Property from and after the Closing
shall be paid to Seller at the Closing and Seller shall remain responsible
for payments under the Utility Contract.
5.4.12 Possession. Possession of the Property, subject to the Leases, Property
Contracts which are not identified as Terminated Contracts during the
Feasibility Period (subject to the limitations of Section 3.6), and
Permitted Exceptions, shall be delivered to Purchaser at the Closing upon
release from escrow of all items to be delivered by Purchaser pursuant to
Section 5.3, including, without limitation, the Purchase Price. To the
extent reasonably available to Seller, originals or copies of the Leases and
Property Contracts, lease files, warranties, guaranties, operating manuals,
keys to the property, and Seller's books and records (other than proprietary
information) (collectively, "Seller's Property-Related Files and Records")
regarding the Property shall be made available to Purchaser at the Property
after the Closing. Purchaser agrees, for a period of not less than 3 years
after the Closing (the "Records Hold Period"), to (a) provide and allow
Seller reasonable access to Seller's Property-Related Files and Records for
purposes of inspection and copying thereof, and (b) reasonably maintain and
preserve Seller's Property-Related Files and Records. If at any time after
the Records Hold Period, Purchaser desires to dispose of Seller's
Property-Related Files and Records, Purchaser must first provide Seller
prior written notice (the "Records Disposal Notice"). Seller shall have a
period of 30 days after receipt of the Records Disposal Notice to enter the
Property (or such other location where such records are then stored) and
remove or copy those of Seller's Property-Related Files and Records that
Seller desires to retain. Purchaser agrees (i) to include the covenants of
this Section 5.4.12 pertaining to Seller's Property-Related Files and
Records in any management contract for the Property (and to bind the manager
thereunder to such covenants), and (ii) to bind any future purchaser of the
Property to the covenants of this Section 5.4.12 pertaining to Seller's
Property-Related Files and Records. Purchaser shall indemnify, hold harmless
and, if requested by Seller (in Seller's sole discretion), defend (with
counsel approved by Seller) Seller's Indemnified Parties from and against
any and all Losses arising from or related to Purchaser's failure to comply
with the provisions of this Section 5.4.12.
5.4.13 Survival. The provisions of this Section 5.4 shall survive the Closing
and delivery of the Deed to Purchaser.
5.5 Post Closing Adjustments. In general, and except as provided in this
Contract or the Closing Documents, Seller shall be entitled to all income, and
shall pay all expenses, relating to the operation of the Property for the period
prior to the Closing Date and Purchaser shall be entitled to all income, and
shall pay all expenses, relating to the operation of the Property for the period
commencing on and after the Closing Date. Purchaser or Seller may request that
Purchaser and Seller undertake to re-adjust any item on the Proration Schedule
(or any item omitted therefrom) in accordance with the provisions of Section 5.4
of this Contract; provided, however, that neither party shall have any
obligation to re-adjust any items (a) after the expiration of 60 days after
Closing, or (b) subject to such 60-day period, unless such items exceed
$5,000.00 in magnitude (either individually or in the aggregate). The provisions
of this Section 5.5 shall survive the Closing and delivery of the Deed to
Purchaser.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER
6.1 Seller's Representations. Except, in all cases, for any fact, information or
condition disclosed in the Title Documents, the Permitted Exceptions, the
Property Contracts, or the Materials, or which is otherwise known by Purchaser
prior to the Closing, Seller represents and warrants to Purchaser the following
(collectively, the "Seller's Representations") as of the Effective Date and as
of the Closing Date (provided that Purchaser's remedies if any such Seller's
Representations are untrue as of the Closing Date are limited to those set forth
in Section 8.1):
6.1.1 Seller is duly organized, validly existing and in good standing under the
laws of the state of its formation set forth in the initial paragraph of
this Contract; and, subject to Section 8.2.4, has or at the Closing shall
have the entity power and authority to sell and convey the Property and to
execute the documents to be executed by Seller and prior to the Closing will
have taken as applicable, all corporate, partnership, limited liability
company or equivalent entity actions required for the execution and delivery
of this Contract, and the consummation of the transactions contemplated by
this Contract. The compliance with or fulfillment of the terms and
conditions hereof will not conflict with, or result in a breach of, the
terms, conditions or provisions of, or constitute a default under, any
contract to which Seller is a party or by which Seller is otherwise bound,
which conflict, breach or default would have a material adverse affect on
Seller's ability to consummate the transaction contemplated by this Contract
or on the Property. Subject to Section 8.2.4, this Contract is a valid,
binding and enforceable agreement against Seller in accordance with its
terms;
6.1.2 Other than the Leases, the Property is not subject to any written lease
executed by Seller or, to Seller's knowledge, any other possessory interests
of any person;
6.1.3 Seller is not a "foreign person," as that term is used and defined in the
Internal Revenue Code, Section 1445, as amended;
6.1.4 Except for (a) any actions by Seller to evict Tenants under the Leases, or
(b) any matter covered by Seller's current insurance policy(ies), to
Seller's knowledge, there are no actions, proceedings, litigation or
governmental investigations or condemnation actions either pending or
threatened against the Property;
6.1.5 To Seller's knowledge, Seller has not received any written notice from a
governmental agency of any uncured material violations of any federal,
state, county or municipal law, ordinance, order, regulation or requirement
affecting the Property; and
6.1.6 To Seller's knowledge, Seller has not received any written notice of any
material default by Seller under any of the Property Contracts that will not
be terminated on the Closing Date.
6.1.7 To the knowledge of Seller, the Rent Roll (as updated pursuant to Section
5.2.10) is accurate in all material respects.
6.2 AS-IS. Except for Seller's Representations, the Property is expressly
purchased and sold "AS IS," "WHERE IS," and "WITH ALL FAULTS." The Purchase
Price and the terms and conditions set forth herein are the result of
arm's-length bargaining between entities familiar with transactions of this
kind, and said price, terms and conditions reflect the fact that Purchaser shall
have the benefit of, and is not relying upon, any information provided by Seller
or Broker or statements, representations or warranties, express or implied, made
by or enforceable directly against Seller or Broker, including, without
limitation, any relating to the value of the Property, the physical or
environmental condition of the Property, any state, federal, county or local
law, ordinance, order or permit; or the suitability, compliance or lack of
compliance of the Property with any regulation, or any other attribute or matter
of or relating to the Property (other than any covenants of title contained in
the Deed conveying the Property and Seller's Representations). Purchaser agrees
that Seller shall not be responsible or liable to Purchaser for any defects,
errors or omissions, or on account of any conditions affecting the Property.
Purchaser, its successors and assigns, and anyone claiming by, through or under
Purchaser, hereby fully releases Seller's Indemnified Parties from, and
irrevocably waives its right to maintain, any and all claims and causes of
action that it or they may now have or hereafter acquire against Seller's
Indemnified Parties with respect to any and all Losses arising from or related
to any defects, errors, omissions or other conditions affecting the Property.
Purchaser represents and warrants that, as of the date hereof and as of the
Closing Date, it has and shall have reviewed and conducted such independent
analyses, studies (including, without limitation, environmental studies and
analyses concerning the presence of lead, asbestos, water intrusion and/or
fungal growth and any resulting damage, PCBs and radon in and about the
Property), reports, investigations and inspections as it deems appropriate in
connection with the Property. If Seller provides or has provided any documents,
summaries, opinions or work product of consultants, surveyors, architects,
engineers, title companies, governmental authorities or any other person or
entity with respect to the Property, including, without limitation, the offering
prepared by Broker, Purchaser and Seller agree that Seller has done so or shall
do so only for the convenience of both parties, Purchaser shall not rely thereon
and the reliance by Purchaser upon any such documents, summaries, opinions or
work product shall not create or give rise to any liability of or against
Seller's Indemnified Parties. Purchaser shall rely only upon any title insurance
obtained by Purchaser with respect to title to the Property. Purchaser
acknowledges and agrees that no representation has been made and no
responsibility is assumed by Seller with respect to current and future
applicable zoning or building code requirements or the compliance of the
Property with any other laws, rules, ordinances or regulations, the financial
earning capacity or expense history of the Property, the continuation of
contracts, continued occupancy levels of the Property, or any part thereof, or
the continued occupancy by tenants of any Leases or, without limiting any of the
foregoing, occupancy at Closing. Prior to Closing, Seller shall have the right,
but not the obligation, to enforce its rights against any and all Property
occupants, guests or tenants. Purchaser agrees that the departure or removal,
prior to Closing, of any of such guests, occupants or tenants shall not be the
basis for, nor shall it give rise to, any claim on the part of Purchaser, nor
shall it affect the obligations of Purchaser under this Contract in any manner
whatsoever; and Purchaser shall close title and accept delivery of the Deed with
or without such tenants in possession and without any allowance or reduction in
the Purchase Price under this Contract. Purchaser hereby releases Seller from
any and all claims and liabilities relating to the foregoing matters. The
provisions of this Section 6.2 shall survive the Closing and delivery of the
Deed to Purchaser.
6.3 Survival of Seller's Representations. Seller and Purchaser agree that
Seller's Representations shall survive Closing for a period of 6 months (the
"Survival Period"). Seller shall have no liability after the Survival Period
with respect to Seller's Representations contained herein except to the extent
that Purchaser has requested arbitration against Seller during the Survival
Period for breach of any of Seller's Representations. Under no circumstances
shall Seller be liable to Purchaser for more than $250,000 in any individual
instance or in the aggregate for all breaches of Seller's Representations, nor
shall Purchaser be entitled to bring any claim for a breach of Seller's
Representations unless the claim for damages (either in the aggregate or as to
any individual claim) by Purchaser exceeds $5,000. In the event that Seller
breaches any representation contained in Section 6.1 and Purchaser had knowledge
of such breach prior to the Closing Date, Purchaser shall be deemed to have
waived any right of recovery, and Seller shall not have any liability in
connection therewith.
6.4 Definition of Seller's Knowledge. Any representations and warranties made
"to the knowledge of Seller" shall not be deemed to imply any duty of inquiry.
For purposes of this Contract, the term Seller's "knowledge" shall mean and
refer only to actual knowledge of the Designated Representative of the Seller
and shall not be construed to refer to the knowledge of any other partner,
officer, director, agent, employee or representative of the Seller, or any
affiliate of the Seller, or to impose upon such Designated Representative any
duty to investigate the matter to which such actual knowledge or the absence
thereof pertains, or to impose upon such Designated Representative any
individual personal liability. As used herein, the term Designated
Representative shall refer to Dennis Watts, who is the Regional Property Manager
handling this Property (the "Regional Property Manager").
6.5 Representations And Warranties Of Purchaser. For the purpose of inducing
Seller to enter into this Contract and to consummate the sale and purchase of
the Property in accordance herewith, Purchaser represents and warrants to Seller
the following as of the Effective Date and as of the Closing Date:
6.5.1 Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of Canada.
6.5.2 Purchaser, acting through any of its or their duly empowered and
authorized officers or members, has all necessary entity power and authority
to own and use its properties and to transact the business in which it is
engaged, and has full power and authority to enter into this Contract, to
execute and deliver the documents and instruments required of Purchaser
herein, and to perform its obligations hereunder; and no consent of any of
Purchaser's partners, directors, officers or members are required to so
empower or authorize Purchaser. The compliance with or fulfillment of the
terms and conditions hereof will not conflict with, or result in a breach
of, the terms, conditions or provisions of, or constitute a default under,
any contract to which Purchaser is a party or by which Purchaser is
otherwise bound, which conflict, breach or default would have a material
adverse affect on Purchaser's ability to consummate the transaction
contemplated by this Contract. This Contract is a valid, binding and
enforceable agreement against Purchaser in accordance with its terms.
6.5.3 No pending or, to the knowledge of Purchaser, threatened litigation exists
which if determined adversely would restrain the consummation of the
transactions contemplated by this Contract or would declare illegal, invalid
or non-binding any of Purchaser's obligations or covenants to Seller.
6.5.4 Other than Seller's Representations, Purchaser has not relied on any
representation or warranty made by Seller or any representative of Seller
(including, without limitation, Broker) in connection with this Contract and
the acquisition of the Property.
6.5.5 The Broker and its affiliates do not, and will not at the Closing, have
any direct or indirect legal, beneficial, economic or voting interest in
Purchaser (or in an assignee of Purchaser, which pursuant to Section 13.3,
acquires the Property at the Closing), nor has Purchaser or any affiliate of
Purchaser granted (as of the Effective Date or the Closing Date) the Broker
or any of its affiliates any right or option to acquire any direct or
indirect legal, beneficial, economic or voting interest in Purchaser.
6.5.6 Purchaser is not a Prohibited Person.
6.5.7 To Purchaser's knowledge, none of its investors, affiliates or brokers or
other agents (if any), acting or benefiting in any capacity in connection
with this Contract is a Prohibited Person.
6.5.8 The funds or other assets Purchaser will transfer to Seller under this
Contract are not the property of, or beneficially owned, directly or
indirectly, by a Prohibited Person.
6.5.9 The funds or other assets Purchaser will transfer to Seller under this
Contract are not the proceeds of specified unlawful activity as defined by
18 U.S.C. ss.1956(c)(7).
The provisions of this Section 6.5 shall survive the Closing and delivery
of the Deed to Purchaser.
ARTICLE VII
OPERATION OF THE PROPERTY
7.1 Leases and Property Contracts. During the period of time from the Effective
Date to the Closing Date, in the ordinary course of business Seller may enter
into new Property Contracts, new Leases, renew existing Leases or modify,
terminate or accept the surrender or forfeiture of any of the Leases, modify any
Property Contracts, or institute and prosecute any available remedies for
default under any Lease or Property Contract without first obtaining the written
consent of Purchaser; provided, however, Seller agrees that any such new
Property Contracts or any new or renewed Leases shall not have a term in excess
of 1 year (or such longer period of time for which such Property Contracts or
Leases are entered into by Seller in the ordinary course of its operation of the
Property) without the prior written consent of Purchaser, which consent shall
not be unreasonably withheld, conditioned or delayed; provided, further,
however, Seller agrees that any such new Property Contracts entered into after
the expiration of the Feasibility Period shall be terminable upon 30 days notice
to the vendor without penalty or costs thereunder, unless Purchaser gives its
prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed.
7.2 General Operation of Property. Except as specifically set forth in this
Article 7, Seller shall operate the Property after the Effective Date in the
ordinary course of business, and except as necessary in the Seller's sole
discretion to address (a) any life or safety issue at the Property or (b) any
other matter which in Seller's reasonable discretion materially adversely
affects the use, operation or value of the Property, Seller will not make any
material alterations to the Property or remove any material Fixtures and
Tangible Personal Property without the prior written consent of Purchaser which
consent shall not be unreasonably withheld, denied or delayed.
7.3 Liens. Other than utility easements and temporary construction easements
granted by Seller in the ordinary course of business, Seller covenants that it
will not voluntarily create or cause any lien or encumbrance to attach to the
Property between the Effective Date and the Closing Date (other than Leases and
Property Contracts as provided in Section 7.1) unless Purchaser approves such
lien or encumbrance, which approval shall not be unreasonably withheld or
delayed. If Purchaser approves any such subsequent lien or encumbrance, the same
shall be deemed a Permitted Encumbrance for all purposes hereunder.
ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING
8.1 Purchaser's Conditions to Closing. Purchaser's obligation to close
under this Contract, shall be subject to and conditioned upon the fulfillment
of each and all of the following conditions precedent:
8.1.1 All of the documents required to be delivered by Seller to Purchaser at
the Closing pursuant to the terms and conditions hereof shall have been
delivered;
8.1.2 Each of Seller's Representations shall be true in all material respects as
of the Closing Date;
8.1.3 Seller shall have complied with, fulfilled and performed in all material
respects each of the covenants, terms and conditions to be complied with,
fulfilled or performed by Seller hereunder; and
8.1.4 Neither Seller nor Seller's general partner shall be a debtor in any
bankruptcy proceeding nor shall have been in the last 6 months a debtor in
any bankruptcy proceeding.
Notwithstanding anything to the contrary, there are no other conditions on
Purchaser's obligation to Close except as expressly set forth in this Section
8.1. If any condition set forth in Sections 8.1.1, 8.1.3 or 8.1.4 is not met,
Purchaser may (a) waive any of the foregoing conditions and proceed to Closing
on the Closing Date with no offset or deduction from the Purchase Price, or (b)
if such failure constitutes a default by Seller, exercise any of its remedies
pursuant to Section 10.2. If the condition set forth in Section 8.1.2 is not
met, Purchaser may, as its sole and exclusive remedy, (i) notify Seller of
Purchaser's election to terminate this Contract and receive a return of the
Deposit from the Escrow Agent, or (ii) waive such condition and proceed to
Closing on the Closing Date with no offset or deduction from the Purchase Price.
8.2 Seller's Conditions to Closing. Without limiting any of the rights of Seller
elsewhere provided for in this Contract, Seller's obligation to close with
respect to conveyance of the Property under this Contract shall be subject to
and conditioned upon the fulfillment of each and all of the following conditions
precedent:
8.2.1 All of the documents and funds required to be delivered by Purchaser to
Seller at the Closing pursuant to the terms and conditions hereof shall have
been delivered;
8.2.2 Each of the representations, warranties and covenants of Purchaser
contained herein shall be true in all material respects as of the Closing
Date;
8.2.3 Purchaser shall have complied with, fulfilled and performed in all
material respects each of the covenants, terms and conditions to be complied
with, fulfilled or performed by Purchaser hereunder;
8.2.4 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 Seller's (or Seller's affiliates') partnership or
other organizational documents in connection therewith), (a) from Seller's
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; and
8.2.5 There shall not be pending or, to the knowledge of either Purchaser or
Seller, any litigation or threatened litigation which, if determined
adversely, would restrain the consummation of any of the transactions
contemplated by this Contract or declare illegal, invalid or nonbinding any
of the covenants or obligations of the Purchaser;
8.2.6 [Intentionally deleted].
If any of the foregoing conditions to Seller's obligation to close with
respect to conveyance of the Property under this Contract are not met, Seller
may (a) waive any of the foregoing conditions and proceed to Closing on the
Closing Date, or (b) terminate this Contract, and, if such failure constitutes a
default by Purchaser, exercise any of its remedies under Section 10.1.
ARTICLE IX
BROKERAGE
9.1 Indemnity. Seller represents and warrants to Purchaser that it has dealt
only with Apartment Realty Advisors|Central States ("Broker") in connection with
this Contract. Seller and Purchaser each represents and warrants to the other
that, other than Broker, it has not dealt with or utilized the services of any
other real estate broker, sales person or finder in connection with this
Contract, and each party agrees to indemnify, hold harmless, and, if requested
in the sole and absolute discretion of the indemnitee, defend (with counsel
approved by the indemnitee) the other party from and against all Losses relating
to brokerage commissions and finder's fees arising from or attributable to the
acts or omissions of the indemnifying party. The provisions of this Section 9.1
shall survive the termination of this Contract, and if not so terminated, the
Closing and delivery of the Deed to Purchaser.
9.2 Broker Commission. If the Closing occurs, Seller agrees to pay Broker a
commission according to the terms of a separate contract. Broker shall not be
deemed a party or third party beneficiary of this Contract.
9.3 Broker Signature Page. As a condition to Seller's obligation to pay the
commission pursuant to Section 9.2, Broker shall execute the signature page for
Broker attached hereto solely for purposes of confirming the matters set forth
therein; provided, however, that (a) Broker's signature hereon shall not be a
prerequisite to the binding nature of this Contract on Purchaser and Seller, and
the same shall become fully effective upon execution by Purchaser and Seller,
and (b) the signature of Broker will not be necessary to amend any provision of
this Contract.
ARTICLE X
DEFAULTS AND REMEDIES
10.1 Purchaser Default. If Purchaser defaults in its obligations hereunder to
(a) deliver the Initial Deposit or Additional Deposit, (or any other deposit or
payment required of Purchaser hereunder), (b) deliver to the Seller the
deliveries specified under Section 5.3 on the date required thereunder, or (c)
deliver the Purchase Price at the time required by Section 2.2.4 and close on
the purchase of the Property on the Closing Date, then, immediately and without
notice or cure, Purchaser shall forfeit the Deposit, and the Escrow Agent shall
deliver the Deposit to Seller, and neither party shall be obligated to proceed
with the purchase and sale of the Property. If, Purchaser defaults in any of its
other representations, warranties or obligations under this Contract, and such
default continues for more than 10 days after written notice from Seller, then
Purchaser shall forfeit the Deposit, and the Escrow Agent shall deliver the
Deposit to Seller, and neither party shall be obligated to proceed with the
purchase and sale of the Property. The Deposit is liquidated damages and
recourse to the Deposit is, except for Purchaser's indemnity and confidentiality
obligations hereunder, Seller's sole and exclusive remedy for Purchaser's
failure to perform its obligation to purchase the Property or breach of a
representation or warranty. Seller expressly waives the remedies of specific
performance and additional damages for such default by Purchaser. SELLER AND
PURCHASER ACKNOWLEDGE THAT SELLER'S DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND
THAT THE DEPOSIT IS A REASONABLE ESTIMATE OF SELLER'S DAMAGES RESULTING FROM A
DEFAULT BY PURCHASER IN ITS OBLIGATION TO PURCHASE THE PROPERTY. SELLER AND
PURCHASER FURTHER AGREE THAT THIS SECTION 10.1 IS INTENDED TO AND DOES LIQUIDATE
THE AMOUNT OF DAMAGES DUE SELLER, AND SHALL BE SELLER'S EXCLUSIVE REMEDY AGAINST
PURCHASER, BOTH AT LAW AND IN EQUITY, ARISING FROM OR RELATED TO A BREACH BY
PURCHASER OF ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS
CONTRACT, OTHER THAN WITH RESPECT TO PURCHASER'S INDEMNITY AND CONFIDENTIALITY
OBLIGATIONS HEREUNDER.
10.2 Seller Default. If Seller, prior to the Closing, defaults in its
representations, warranties, covenants, or obligations under this Contract,
including to sell the Property as required by this Contract and such default
continues for more than 10 days after written notice from Purchaser, then, at
Purchaser's election and as Purchaser's sole and exclusive remedy, either (a)
this Contract shall terminate, and all payments and things of value, including
the Deposit, provided by Purchaser hereunder shall be returned to Purchaser
(subject to Purchaser's obligation under Section 3.5.2 to return or certify the
destruction of all Third-Party Reports and information and Materials provided to
Purchaser as a pre-condition to the return of the Materials Deposit) and
Purchaser may recover, as its sole recoverable damages (but without limiting its
right to receive a refund of the Deposit), its direct and actual out-of-pocket
expenses and costs (documented by paid invoices to third parties) in connection
with this transaction, which damages shall not exceed $20,000 in aggregate, or
(b) Purchaser may seek specific performance of Seller's obligation to deliver
the Deed pursuant to this Contract (but not damages). Purchaser agrees that it
shall promptly deliver to Seller an assignment of all of Purchaser's right,
title and interest in and to (together with possession of) all plans, studies,
surveys, reports, and other materials paid for with the out-of-pocket expenses
reimbursed by Seller pursuant to the foregoing sentence. SELLER AND PURCHASER
FURTHER AGREE THAT THIS SECTION 10.2 IS INTENDED TO AND DOES LIMIT THE AMOUNT OF
DAMAGES DUE PURCHASER AND THE REMEDIES AVAILABLE TO PURCHASER, AND SHALL BE
PURCHASER'S EXCLUSIVE REMEDY AGAINST SELLER, BOTH AT LAW AND IN EQUITY ARISING
FROM OR RELATED TO A BREACH BY SELLER OF ITS REPRESENTATIONS, WARRANTIES, OR
COVENANTS OR ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS
CONTRACT. UNDER NO CIRCUMSTANCES MAY PURCHASER SEEK OR BE ENTITLED TO RECOVER
ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR INDIRECT DAMAGES, ALL OF
WHICH PURCHASER SPECIFICALLY WAIVES, FROM SELLER FOR ANY BREACH BY SELLER, OF
ITS REPRESENTATIONS, WARRANTIES OR COVENANTS OR ITS OBLIGATIONS UNDER THIS
CONTRACT. PURCHASER SPECIFICALLY WAIVES THE RIGHT TO FILE ANY LIS PENDENS OR ANY
LIEN AGAINST THE PROPERTY UNLESS AND UNTIL IT HAS IRREVOCABLY ELECTED TO SEEK
SPECIFIC PERFORMANCE OF THIS CONTRACT AND HAS FILED AN ACTION SEEKING SUCH
REMEDY.
ARTICLE XI
RISK OF LOSS OR CASUALTY
11.1 Major Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to Closing, and the cost of repair is more than
$250,000, then Seller shall have no obligation to repair such damage or
destruction and shall notify Purchaser in writing of such damage or destruction
(the "Damage Notice"). Within 10 days after Purchaser's receipt of the Damage
Notice, Purchaser may elect at its option to terminate this Contract by
delivering written notice to Seller. In the event Purchaser fails to terminate
this Contract within the foregoing 10-day period, this transaction shall be
closed in accordance with the terms of this Contract for the full Purchase Price
notwithstanding any such damage or destruction and Purchaser shall receive all
insurance proceeds pertaining thereto (plus a credit against the Purchase Price
in the amount of any deductible payable by Seller in connection therewith) at
Closing.
11.2 Minor Damage. In the event that the Property is damaged or destroyed by
fire or other casualty prior to the Closing, and the cost of repair is equal to
or less than $250,000, this transaction shall be closed in accordance with the
terms of this Contract, notwithstanding the damage or destruction; provided,
however, Seller shall make such repairs to the extent of any recovery from
insurance carried on the Property if they can be reasonably effected before the
Closing. Subject to Section 11.3, if Seller is unable to effect such repairs,
then Purchaser shall receive all insurance proceeds pertaining thereto (plus a
credit against the Purchase Price in the amount of any deductible payable by
Seller in connection therewith) at Closing.
11.3 Repairs. To the extent that Seller elects to commence any repair,
replacement or restoration of the Property prior to Closing, then Seller shall
be entitled to receive and apply available insurance proceeds to any portion of
such repair, replacement or restoration completed or installed prior to Closing,
with Purchaser being responsible for completion of such repair, replacement or
restoration after Closing from the balance of any available insurance proceeds.
The provisions of this Section 11.3 shall survive the Closing and delivery of
the Deed to Purchaser.
ARTICLE XII
EMINENT DOMAIN
12.1 Eminent Domain. In the event that, at the time of Closing, any material
part of the Property is (or previously has been) acquired, or is about to be
acquired, by any governmental agency by the powers of eminent domain or transfer
in lieu thereof (or in the event that at such time there is any notice of any
such acquisition or intent to acquire by any such governmental agency),
Purchaser shall have the right, at Purchaser's option, to terminate this
Contract by giving written notice within 10 days after Purchaser's receipt from
Seller of notice of the occurrence of such event, and if Purchaser so terminates
this Contract, Purchaser shall recover the Deposit hereunder (subject to
Purchaser's obligation under Section 3.5.2 to return or certify the destruction
of all Third-Party Reports and information and Materials provided to Purchaser
as a pre-condition to the return of the Materials Deposit). If Purchaser fails
to terminate this Contract within such 10-day period, this transaction shall be
closed in accordance with the terms of this Contract for the full Purchase Price
and Purchaser shall receive the full benefit of any condemnation award. It is
expressly agreed between the parties hereto that this section shall in no way
apply to customary dedications for public purposes which may be necessary for
the development of the Property.
ARTICLE XIII
MISCELLANEOUS
13.1 Binding Effect of Contract. This Contract shall not be binding on either
party until executed by both Purchaser and Seller. As provided in Section 2.3.5
and Section 9.3 above, neither the Escrow Agent's nor the Broker's execution of
this Contract shall be a prerequisite to its effectiveness.
13.2 Exhibits And Schedules. All Exhibits and Schedules, whether or not annexed
hereto, are a part of this Contract for all purposes.
13.3 Assignability. This Contract is not assignable by Purchaser without first
obtaining the prior written approval of the Seller, except that Purchaser may
assign this Contract to one or more entities so long as (a) Purchaser is an
affiliate of the purchasing entity(ies), (b) Purchaser is not released from its
liability hereunder, and (c) Purchaser provides written notice to Seller of any
proposed assignment no later than 10 days prior to the Closing Date. As used
herein, an affiliate is a person or entity controlled by, under common control
with, or controlling another person or entity.
13.4 Binding Effect. Subject to Section 13.3, this Contract shall be binding
upon and inure to the benefit of Seller and Purchaser, and their respective
successors, heirs and permitted assigns.
13.5 Captions. The captions, headings, and arrangements used in this Contract
are for convenience only and do not in any way affect, limit, amplify, or modify
the terms and provisions hereof.
13.6 Number And Gender Of Words. Whenever herein the singular number is used,
the same shall include the plural where appropriate, and words of any gender
shall include each other gender where appropriate.
13.7 Notices. All notices, demands, requests and other communications required
or permitted hereunder shall be in writing, and shall be (a) personally
delivered with a written receipt of delivery; (b) sent by a
nationally-recognized overnight delivery service requiring a written
acknowledgement of receipt or providing a certification of delivery or attempted
delivery; (c) sent by certified or registered mail, return receipt requested; or
(d) sent by confirmed facsimile transmission with an original copy thereof
transmitted to the recipient by one of the means described in subsections (a)
through (c) no later than 3 Business Days thereafter. All notices shall be
deemed effective when actually delivered as documented in a delivery receipt;
provided, however, that if the notice was sent by overnight courier or mail as
aforesaid and is affirmatively refused or cannot be delivered during customary
business hours by reason of the absence of a signatory to acknowledge receipt,
or by reason of a change of address with respect to which the addressor did not
have either knowledge or written notice delivered in accordance with this
paragraph, then the first attempted delivery shall be deemed to constitute
delivery. Each party shall be entitled to change its address for notices from
time to time by delivering to the other party notice thereof in the manner
herein provided for the delivery of notices. All notices shall be sent to the
addressee at its address set forth following its name below:
To Purchaser:
Northview Realty Group, Inc.
550 Sherbrooke, Suite 1480
Montreal QC, Canada H3A 1B9
Attention: Mr. Doug Reim
Telephone: (514) 904-0124
Facsimile: (514) 987-9500
with a copy to:
Brick Gentry Bowers Swartz Stoltze Schuling & Levis, PC
550 39th Street, Suite 200
Des Moines, IA 50312
Attention: Amy S. Beattie
Telephone: (515) 274-1450
Facsimile: (515) 274-1488
To Seller:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Bill Porter
Telephone: (303) 691-4362
Facsimile: (303) 300-3253
And:
c/o AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Attention: Mr. Harry Alcock
Telephone: 303-691-4344
Facsimile: 303-300-3282
with a copy to:
Trent Johnson, Esq.
Senior Counsel-Real Estate
AIMCO
4582 South Ulster Street Parkway
Suite 1100
Denver, Colorado 80237
Telephone: 303-691-3126
Facsimile: 720-200-6881
and a copy to:
Loeb & Loeb LLP
10100 Santa Monica Blvd.
Suite 2200
Los Angeles, CA 90067
Attention: Karen N. Higgins, Esq. and Ian Landgreen, Esq.
Telephone: 310-282-2000
Facsimile: 310-282-2100
Any notice required hereunder to be delivered to the Escrow Agent shall be
delivered in accordance with above provisions as follows:
Fidelity National Title Insurance Company
3D International Building,
1900 West Loop South, Suite 650
Houston, Texas 77027
Attention: Ms. Lolly Avant
Telephone: 713-621-9960 ext. 201
Facsimile: 713-623-4406
Unless specifically required to be delivered to the Escrow Agent pursuant
to the terms of this Contract, no notice hereunder must be delivered to the
Escrow Agent in order to be effective so long as it is delivered to the other
party in accordance with the above provisions.
13.8 Governing Law And Venue. The laws of the State of Kansas shall govern the
validity, construction, enforcement, and interpretation of this Contract, unless
otherwise specified herein except for the conflict of laws provisions thereof.
Subject to Section 13.25, all claims, disputes and other matters in question
arising out of or relating to this Contract, or the breach thereof, shall be
decided by proceedings instituted and litigated in a court of competent
jurisdiction in the state in which the Property is situated, and the parties
hereto expressly consent to the venue and jurisdiction of such court.
13.9 Entire Agreement. This Contract embodies the entire Contract between the
parties hereto concerning the subject matter hereof and supersedes all prior
conversations, proposals, negotiations, understandings and contracts, whether
written or oral.
13.10 Amendments. This Contract shall not be amended, altered, changed,
modified, supplemented or rescinded in any manner except by a written contract
executed by all of the parties; provided, however, that, (a) as provided in
Section 2.3.5 above, the signature of the Escrow Agent shall not be required as
to any amendment of this Contract other than an amendment of Section 2.3, and
(b) as provided in Section 9.3 above, the signature of the Broker shall not be
required as to any amendment of this Contract.
13.11 Severability. In the event that any part of this Contract shall be held to
be invalid or unenforceable by a court of competent jurisdiction, such provision
shall be reformed, and enforced to the maximum extent permitted by law. If such
provision cannot be reformed, it shall be severed from this Contract and the
remaining portions of this Contract shall be valid and enforceable.
13.12 Multiple Counterparts/Facsimile Signatures. This Contract may be executed
in a number of identical counterparts. This Contract may be executed by
facsimile signatures which shall be binding on the parties hereto, with original
signatures to be delivered as soon as reasonably practical thereafter.
13.13 Construction. No provision of this Contract shall be construed in favor
of, or against, any particular party by reason of any presumption with respect
to the drafting of this Contract; both parties, being represented by counsel,
having fully participated in the negotiation of this instrument.
13.14 Confidentiality. Purchaser shall not disclose the terms and conditions
contained in this Contract and shall keep the same confidential, provided that
Purchaser may disclose the terms and conditions of this Contract (a) as required
by law, (b) to consummate the terms of this Contract, or any financing relating
thereto, or (c) to Purchaser's or Seller's lenders, attorneys and accountants.
Any information and Materials provided by Seller to Purchaser hereunder are
confidential and Purchaser shall be prohibited from making such information
public to any other person or entity other than its agents and legal
representatives, without Seller's prior written authorization, which may be
granted or denied in Seller's sole discretion. Notwithstanding the provisions of
Section 13.9, Purchaser agrees that the covenants, restrictions and agreements
of Purchaser contained in any confidentiality agreement executed by Purchaser
prior to the Effective Date shall survive the execution of this Contract and
shall not be superceded hereby.
13.15 Time Of The Essence. It is expressly agreed by the parties hereto that
time is of the essence with respect to this Contract.
13.16 Waiver. No delay or omission to exercise any right or power accruing upon
any default, omission, or failure of performance hereunder shall impair any
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient. No waiver, amendment, release, or modification of this Contract shall
be established by conduct, custom, or course of dealing and all waivers must be
in writing and signed by the waiving party.
13.17 Attorneys Fees. In the event either party hereto commences litigation or
arbitration against the other to enforce its rights hereunder, the prevailing
party in such litigation shall be entitled to recover from the other party its
reasonable attorneys' fees and expenses incidental to such litigation and
arbitration, including the cost of in-house counsel and any appeals.
13.18 Time Periods. Should the last day of a time period fall on a weekend or
legal holiday, the next Business Day thereafter shall be considered the end of
the time period.
13.19 1031 Exchange. Seller and Purchaser acknowledge and agree that the
purchase and sale of the Property may be part of a tax-free exchange under
Section 1031 of the Code for either Purchaser or Seller. Each party hereby
agrees to take all reasonable steps on or before the Closing Date to facilitate
such exchange if requested by the other party, provided that (a) no party making
such accommodation shall be required to acquire any substitute property, (b)
such exchange shall not affect the representations, warranties, liabilities and
obligations of the parties to each other under this Contract, (c) no party
making such accommodation shall incur any additional cost, expense or liability
in connection with such exchange (other than expenses of reviewing and executing
documents required in connection with such exchange), and (d) no dates in this
Contract will be extended as a result thereof. Notwithstanding anything to the
contrary contained in the foregoing, if Seller so elects to close the transfer
of the Property as an exchange, then (i) Seller, at its sole option, may
delegate its obligations to transfer the Property under this Contract, and may
assign its rights to receive the Purchase Price from Purchaser, to a deferred
exchange intermediary (an "Intermediary") or to an exchange accommodation
titleholder, as the case may be; (ii) such delegation and assignment shall in no
way reduce, modify or otherwise affect the obligations of Seller pursuant to
this Contract; (iii) Seller shall remain fully liable for its obligations under
this Contract as if such delegation and assignment shall not have taken place;
(iv) Intermediary or exchange accommodation titleholder, as the case may be,
shall have no liability to Purchaser; and (v) the closing of the transfer of the
Property to Purchaser shall be undertaken by direct deed from Seller (or, if
applicable, from other affiliates of Seller whom Seller will cause to execute
such deeds) to Purchaser or to exchange accommodation titleholder, as the case
may be. Notwithstanding anything to the contrary contained in the foregoing, if
Purchaser so elects to close the acquisition of the Property as an exchange,
then (i) Purchaser, at its sole option, may delegate its obligations to acquire
the Property under this Contract, and may assign its rights to receive the
Property from Seller, to an Intermediary or to an exchange accommodation
titleholder, as the case may be; (ii) such delegation and assignment shall in no
way reduce, modify or otherwise affect the obligations of Purchaser pursuant to
this Contract; (iii) Purchaser shall remain fully liable for its obligations
under this Contract as if such delegation and assignment shall not have taken
place; (iv) Intermediary or exchange accommodation titleholder, as the case may
be, shall have no liability to Seller; and (v) the closing of the acquisition of
the Property by Purchaser or the exchange accommodation titleholder, as the case
may be, shall be undertaken by direct deed from Seller (or, if applicable, from
other affiliates of Seller whom Seller will cause to execute such deeds) to
Purchaser (or to exchange accommodation titleholder, as the case may be).
Notwithstanding anything in this Section 13.19 to the contrary, Seller shall
have the right to extend the Closing Date (as extended pursuant to the second or
third sentences of Section 5.1) for up to 30 days in order to facilitate a tax
free exchange pursuant to this Section 13.19, and to obtain all documentation in
connection therewith.
13.20 No Personal Liability of Officers, Trustees or Directors of Seller's
Partners. Purchaser acknowledges that this Contract is entered into by Seller
which is a Delaware limited liability company, and Purchaser agrees that none of
Seller's Indemnified Parties shall have any personal liability under this
Contract or any document executed in connection with the transactions
contemplated by this Contract.
13.21 No Exclusive Negotiations. Seller shall have the right, at all times prior
to the expiration of the Feasibility Period, to solicit backup offers and enter
into discussions, negotiations, or any other communications concerning or
related to the sale of the Property with any third-party; provided, however,
that such communications are subject to the terms of this Contract, and that
Seller shall not enter into any contract or binding Contract with a third-party
for the sale of the Property unless such Contract is contingent on the
termination of this Contract without the Property having been conveyed to
Purchaser.
13.22 ADA Disclosure. Purchaser acknowledges that the Property may be subject to
the federal Americans With Disabilities Act (the "ADA") and the federal Fair
Housing Act (the "FHA"). The ADA requires, among other matters, that tenants
and/or owners of "public accommodations" remove barriers in order to make the
Property accessible to disabled persons and provide auxiliary aids and services
for hearing, vision or speech impaired persons. Seller makes no warranty,
representation or guarantee of any type or kind with respect to the Property's
compliance with the ADA or the FHA (or any similar state or local law), and
Seller expressly disclaims any such representation.
13.23 No Recording. Purchaser shall not cause or allow this Contract or any
contract or other document related hereto, nor any memorandum or other evidence
hereof, to be recorded or become a public record without Seller's prior written
consent, which consent may be withheld at Seller's sole discretion. If the
Purchaser records this Contract or any other memorandum or evidence thereof,
Purchaser shall be in default of its obligations under this Contract. Purchaser
hereby appoints the Seller as Purchaser's attorney-in-fact to prepare and record
any documents necessary to effect the nullification and release of the Contract
or other memorandum or evidence thereof from the public records. This
appointment shall be coupled with an interest and irrevocable.
13.24 Relationship of Parties. Purchaser and Seller acknowledge and agree that
the relationship established between the parties pursuant to this Contract is
only that of a seller and a purchaser of property. Neither Purchaser nor Seller
is, nor shall either hold itself out to be, the agent, employee, joint venturer
or partner of the other party.
13.25 Dispute Resolution. Any controversy, dispute, or claim of any nature
arising out of, in connection with, or in relation to the interpretation,
performance, enforcement or breach of this Contract (and any closing document
executed in connection herewith), including any claim based on contract, tort or
statute, shall be resolved at the written request of any party to this Contract
by binding arbitration. The arbitration shall be administered in accordance with
the then current Commercial Arbitration Rules of the American Arbitration
Association. Any matter to be settled by arbitration shall be submitted to the
American Arbitration Association in the state in which the Property is located.
The parties shall attempt to designate one arbitrator from the American
Arbitration Association. If they are unable to do so within 30 days after
written demand therefor, then the American Arbitration Association shall
designate an arbitrator. The arbitration shall be final and binding, and
enforceable in any court of competent jurisdiction. The arbitrator shall award
attorneys' fees (including those of in-house counsel) and costs to the
prevailing party and charge the cost of arbitration to the party which is not
the prevailing party. Notwithstanding anything herein to the contrary, this
Section 13.25 shall not prevent Purchaser or Seller from seeking and obtaining
equitable relief on a temporary or permanent basis, including, without
limitation, a temporary restraining order, a preliminary or permanent injunction
or similar equitable relief, from a court of competent jurisdiction located in
the state in which the Property is located (to which all parties hereto consent
to venue and jurisdiction) by instituting a legal action or other court
proceeding in order to protect or enforce the rights of such party under this
Contract or to prevent irreparable harm and injury. The court's jurisdiction
over any such equitable matter, however, shall be expressly limited only to the
temporary, preliminary, or permanent equitable relief sought; all other claims
initiated under this Contract between the parties hereto shall be determined
through final and binding arbitration in accordance with this Section 13.25.
13.26 AIMCO Marks. Purchaser agrees that Seller, the Property Manager or AIMCO,
or their respective affiliates, are the sole owners of all right, title and
interest in and to the AIMCO Marks (or have the right to use such AIMCO Marks
pursuant to license agreements with third parties) and that no right, title or
interest in or to the AIMCO Marks is granted, transferred, assigned or conveyed
as a result of this Contract. Purchaser further agrees that Purchaser will not
use the AIMCO Marks for any purpose.
13.27 Non-Solicitation of Employees. Purchaser acknowledges and agrees that,
without the express written consent of Seller, neither Purchaser nor any of
Purchaser's employees, affiliates or agents shall solicit any of Seller's
employees or any employees located at the Property (or any of Seller's
affiliates' employees located at any property owned by such affiliates) for
potential employment.
13.28 Survival. Except for (a) all of the provisions of this Article 13 (other
than Section 13.19 and 13.21), and (b) any provision of this Contract which
expressly states -that it shall so survive, and (c) any payment obligation of
Purchaser under this Contract (the foregoing (a), (b) and (c) referred to herein
as the "Survival Provisions"), none of the terms and provisions of this Contract
shall survive the termination of this Contract, and, if the Contract is not so
terminated, all of the terms and provisions of this Contract (other than the
Survival Provisions) shall be merged into the Closing documents and shall not
survive Closing.
13.29 Multiple Purchasers. As used in this Contract, the term "Purchaser" means
all entities acquiring any interest in the Property at the Closing, including,
without limitation, any assignee(s) of the original Purchaser pursuant to
Section 13.3 of this Contract. In the event that "Purchaser" has any obligations
or makes any covenants, representations or warranties under this Contract, the
same shall be made jointly and severally by all entities being a Purchaser
hereunder. In the event that Seller receives notice from any entity being a
Purchaser hereunder, the same shall be deemed to constitute notice from all
entities being a Purchaser hereunder. In the event that any entity being a
Purchaser hereunder takes any action, breaches any obligation or otherwise acts
pursuant to the terms of this Contract, the same shall be deemed to be the
action of the other entity(ies) being a Purchaser hereunder and the action of
"Purchaser" under this Contract. In the event that Seller is required to give
notice or take action with respect to Purchaser under this Contract, notice to
any entity being a Purchaser hereunder or action with respect to any entity
being a Purchaser hereunder shall be a notice or action to all entities being a
Purchaser hereunder. In the event that any entity being a Purchaser hereunder
desires to bring an action or arbitration against Seller, such action must be
joined by all entities being a Purchaser hereunder in order to be effective. In
the event that there is any agreement by Seller to pay any amount pursuant to
this Contract to Purchaser under any circumstance, that amount shall be deemed
maximum aggregate amount to be paid to all parties being a Purchaser hereunder
and not an amount that can be paid to each party being a Purchaser hereunder. In
the event that Seller is required to return the Initial Deposit, Additional
Deposit or other amount to Purchaser, Seller shall return the same to any entity
being a Purchaser hereunder and, upon such return, shall have no further
liability to any other entity being a Purchaser hereunder for such amount. The
foregoing provisions also shall apply to any documents, including, without
limitation, the General Assignment and Assumption and the Assignment and
Assumption of Leases and Security Deposits, executed in connection with this
Contract and the transaction(s) contemplated hereby.
ARTICLE XIV
LEAD-BASED PAINT DISCLOSURE
14.1 Disclosure. Seller and Purchaser hereby acknowledge delivery of the Lead
Based Paint Disclosure attached as Exhibit H hereto. The provisions of this
Section 14.1 shall survive the Closing and delivery of the Deed to Purchaser.
14.2 Consent Agreement. Testing (the "Testing") has been performed at the
Property with respect to lead-based paint. Law Engineering and Environmental
Services, Inc. performed the Testing and reported its findings in the Lead Based
Paint Certification dated May 14, 2001, a copy of which is attached hereto as
Exhibit I (the "Report"). The Report certifies the Property as lead-based paint
free. By execution hereof, Purchaser acknowledges receipt of a copy of the
Report, the Lead-Based Paint Disclosure Statement attached hereto as Exhibit H,
and acknowledges receipt of that certain Consent Agreement (the "Consent
Agreement") by and among the United States Environmental Protection Agency
(executed December 19, 2001), the United States Department of Housing and Urban
Development (executed January 2, 2002), and Apartment Investment and Management
Company ("AIMCO") (executed December 18, 2001). Because the Property has been
certified as lead-based paint free, Seller is not required under the Consent
Agreement to remediate or abate any lead-based paint condition at the Property
prior to the Closing. Purchaser acknowledges and agrees that (1) after Closing,
the Purchaser and the Property shall be subject to the Consent Agreement and the
provisions contained herein related thereto and (2) that Purchaser shall not be
deemed to be a third party beneficiary to the Consent Agreement. The provisions
of this Section 14.2 shall survive the termination of this Contract, and if not
so terminated, the Closing and delivery of the Deed to Purchaser.
[Remainder of Page Intentionally Left Blank]
NOW, THEREFORE, the parties hereto have executed this Contract as of the
date first set forth above.
Seller:
CCIP INDIAN CREEK VILLAGE, L.L.C.,
a Delaware limited liability company
By: Consolidated Capital Institutional
Properties
a California limited partnership,
its sole member
By: ConCap Equities, Inc.,
a Delaware corporation,
its sole general partner
By:/s/Kristian D. Vercauteren
Name: Kristian D. Vercauteren
Title: Vice President
Purchaser:
NORTHVIEW REALTY GROUP, INC.,
a Canadian corporation
By: /s/Doug Reim
Name: Doug Reim
Title: Principal
Purchaser's Tax Identification
Number/Social Security Number:
98-0459795