CONTRACT TO PURCHASE AND SELL PROPERTY
This Contract to Purchase and Sell Property ("Contract") is made and
entered into as of August 18, 1997 ("Effective Date'), by and between
CONSOLIDATED CAPITAL PROPERTIES VI, a California limited partnership ('Seller'),
THE VANDENBURG ORGANIZATION, a Texas corporation d/b/a TVO Realty Partners
("Purchaser") and CHICAGO TITLE INSURANCE COMPANY ("Escrow Agent").
Purchaser desires to purchase and Seller desires to sell certain real
property pursuant to the terms of this Contract.
In consideration of the mutual covenants and agreements herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
SALE OF THE PROPERTY
SECTION 1.1 PROPERTY. Subject to the terms of this Contract, Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase from
Seller, Seller's respective rights, titles and interests in and to all
of the following described property (collectively, the "property"):
(a) The land ("Land") located in El Paso, Texas more
particularly described on Exhibit A hereto commonly known as
Celina Plaza Apartments, together with all improvements and
fixtures located on the Land ("Improvements"), and all
rights, titles and interests of Seller appurtenant to the
Land and Improvements, including, without limitation, all
appurtenant easements, adjacent roads, highways and
rights-of-way;
(b) All tangible personal property of any kind ("Personalty")
owned by Seller and attached to or located on the Land or
Improvements; provided, however, the Personalty does not
include computer software owned or leased by Seller's
property manager;
(c) Any leases or other agreements demising space in or
providing for the use or occupancy of the Improvements or
Land ("Tenant Leases"), and all unapplied deposits, whether
security or otherwise ("Deposits"), paid by tenants
("Tenants") under the Tenant Leases, together with all
collateral therefor, all guarantees by third parties of the
agreements and obligations thereunder of Tenants and, except
to the extent otherwise set forth in SECTION 8.6, all
rentals, advance rentals, receivables, reimbursements and
other items payable by Tenants;
(d) All service contracts, warranties, guaranties and bonds in
effect at Closing relating to the Land, the Improvements or
the Personalty, to the extent the same are assignable
("Service Contracts");
(e) All certificates, permits, licenses, franchises,
authorizations and approvals relating to the Property and/or
the Personalty or the ownership, use, access, occupancy or
operation thereof, running to or in favor of Seller or the
Property and/or the Personalty, and which Purchaser
hereafter elects to accept; and
(f) All drawings, plans and specifications covering the Property
and in Seller's possession; all rights to the name "Celina
Plaza Apartments" with respect to the Property or any other
project in the El Paso, Texas area, and all trademarks,
trade names, service marks, registrations, logos, good will
and other rights associated therewith (including the right
to sue for past and present infringements thereof); all
other intellectual property used in connection with the
ownership and operation of the Property; all telephone
numbers; all tenant files; all operating and maintenance
files; and all books, records and other files which are used
in connection with the ownership and operation of the
Property and the conduct of the business of Seller relating
to the Property.
ARTICLE II
PURCHASE PRICE
SECTION 2.1 PURCHASE PRICE The total Purchase Price ("Purchase
Price") to be paid by Purchaser to Seller for the Property shall be
Six Million Six Hundred Thousand Dollars ($6,600,000). The Purchase
Price shall be payable at the Closing in Current Funds (as defined in
SECTION 3.1).
ARTICLE III
EARNEST MONEY DEPOSIT
SECTION 3.1 AMOUNT AND TIMING.
(a) Within three (3) business days after the Effective Date,
Purchaser shall deliver to Chris Haynes, Esq. ("Haynes")
$33,000 in cash or Current Funds (such deposit and all
interest earned thereon shall be referred to as "Initial
Earnest Money Deposit") to be held and disbursed in
accordance with the terms, conditions and provisions of this
Contract. Immediately upon receipt by Haynes of the
Earnest Money Deposit, Haynes shall deliver written notice
to Seller of such receipt via telefax in accordance with
SECTION 13.1 of this Contract. If Purchaser fails to
deposit the Initial Earnest Money Deposit with Haynes as
herein provided, then this Contract shall automatically
terminate and neither Seller nor Purchaser shall have any
further obligations hereunder except that the provisions of
SECTIONS 5.1.5 and 11.1 of this Contract shall survive the
termination of this Contract. "Current Funds" shall mean
wire transfers, certified funds or a cashier's check in a
form acceptable to Escrow Agent which would permit Escrow
Agent to immediately disburse such funds.
(b) If Purchaser does not terminate this Contract pursuant to
SECTION 5.2 of this Contract, then within one (1) business
day following the end of the Inspection Period, Purchaser
shall deliver to Escrow Agent $33,000 in cash or Current
Funds (as defined in SECTION 3.1(A)) (such deposit and all
interest earned thereon shall be referred to as "Additional
Earnest Money Deposit") to be held and disbursed in
accordance with the terms, conditions and provisions of this
Contract. If Purchaser fails to deliver the Additional
Earnest Money Deposit as herein provided, then such failure
shall constitute a default of this Contract by Purchaser.
(c) If Purchaser does not terminate this Contract pursuant to
SECTION 5.2 of this Contract, then within one (1) business
day following the end of the Inspection Period, Haynes shall
deliver to Escrow Agent the Initial Earnest Money Deposit to
be held by Escrow Agent in escrow, invested in an interest
bearing account through a bank or financial institution
approved by Purchaser, and to be applied or disposed of by
Escrow Agent as provided in this Contract. If Haynes fails
to deliver the Initial Earnest Money Deposit as herein
provided, then such failure shall constitute a default of
this Contract by Purchaser.
(d) The Initial Earnest Money Deposit and Additional Earnest
Money Deposit shall be hereafter referred to as the "Earnest
Money Deposit".
SECTION 3.2 APPLICATION AND INTEREST. If the purchase and sale
contemplated hereunder is consummated, then the Earnest Money Deposit
shall be applied to the Purchase Price at Closing. In all other
events, the Earnest Money Deposit shall be disposed of by Escrow Agent
as provided in this Contract. The Earnest Money Deposit shall be
invested by Escrow Agent in a manner reasonably acceptable to
Purchaser and Seller. All interest earned on the Earnest Money Deposit
is part of the Earnest Money Deposit, to be applied or disposed of in
the same manner as the Earnest Money Deposit under this Contract.
ARTICLE IV
TITLE AND SURVEY
SECTION 4.1 TITLE COMMITMENT. Within five (5) business days following
the Effective Date, Seller shall deliver to Purchaser a copy of the
existing title insurance policy in Seller's possession. Not later than
ten (10) days after the Effective Date, Purchaser shall obtain a
current ALTA Commitment for Title Insurance ("Title Commitment") from
a title company of Purchaser's choice ("Title Company"). The Title
Commitment shall set forth the state of title to the Property,
including a list of conditions or exceptions to title affecting the
Property that would appear in an Owner's Policy of Title Insurance, if
one were issued. Purchaser shall pay all costs associated with
obtaining the Commitment and the Owner's Policy.
SECTION 4.2 SURVEY. Within five (5) business days following the
Effective Date, Seller shall deliver to Purchaser a copy of the most
complete survey of the Land and Improvements in Seller's possession.
Not later than ten (10) days after the Effective Date, Purchaser shall
have the option to obtain an updated Survey (any such updated or new
survey hereinafter referred to as the "Survey"). Purchaser shall pay
all costs associated with updating and recertifying the existing
Survey
.
SECTION 4.3 REVIEW OF TITLE AND SURVEY. Purchaser shall have until the
end of the Inspection Period to notify Seller in writing of any
objections Purchaser has to any matters affecting title to the
Property, including any matters shown or referred to in the Title
Commitment or on the Survey. Any title encumbrances, exceptions or
other matters to which Purchaser does not object in writing within the
aforementioned period shall be deemed to be permitted exceptions to
the status of Seller's title (such encumbrances, exceptions or other
matters, together with such other matters permitted pursuant to other
provisions of this Contract, shall be referred to as the "Permitted
Exceptions").
SECTION 4.4 OBJECTIONS TO STATUS OF TITLE AND SURVEY. Subject to the
terms hereof, Seller shall be obligated to deliver marketable title to
Purchaser. If Purchaser objects to any matter affecting title to the
Property within the time set forth in SECTION 4.3, then Seller shall
have fifteen (15) days to notify Purchaser whether or not Seller will
cure, prior to Closing, any such title objection. If Seller notifies
Purchaser that it elects not to cure any such objection, then
Purchaser may, at its option exercisable in writing within seven (7)
days following the date of receipt by Purchaser of written notice from
Seller stating that Seller is unable or unwilling to cure such
objections, either (a) accept such title as Seller can deliver, in
which case all exceptions to title which Seller has stated it will not
cure shall be deemed to be Permitted Exceptions, or (b) terminate this
Contract by notice in writing to Seller in which event, subject to the
provisions of SECTION 10.1 of this Contract, Escrow Agent shall Return
the Earnest Money Deposit. If Purchaser fails to notify Seller,
within such seven (7) day period, that Purchaser has elected to
proceed under either subpart (a) or (b) of the immediately preceding
sentence, then Purchaser shall be deemed to have elected to proceed
under subpart (a), and this Contract shall remain in full force and
effect.
If Seller notifies Purchaser that it elects to cure any such objections but
is unable to cure such objections by Closing or if Seller fails to notify
Purchaser of its intentions with respect to such objections and fails to cure
such objections by Closing, then Purchaser may, at its option, either (x) accept
such title as Seller can deliver in which case the parties shall proceed with
Closing and all exceptions to title which are not removed shall be deemed to be
Permitted Exceptions, or (y) terminate this Contract by notice in writing to
Seller at Closing, in which event Escrow Agent shall Return the Earnest Money
Deposit.
-Return the Earnest Money Deposit" shall mean Escrow Agent shall return the
Earnest Money to Purchaser and neither party shall have any further rights,
duties or obligations hereunder except as otherwise provided in SECTIONS 5.1.5
and 11.1 hereof.
SECTION 4.5 OTHER PERMITTED EXCEPTIONS. The Permitted Exceptions shall
include those matters which become Permitted Exceptions pursuant to
SECTIONS 4.3 and 4.4 above and, in addition, the following: (a) the
Tenant Leases; (b) taxes and assessments for the year in which the
Closing occurs and subsequent years; (c) liens and encumbrances
arising after the date hereof to which Purchaser consents in writing;
and (d) any liens or encumbrances of a definite or ascertainable
amount and caused by Seller, provided that Seller causes such liens or
encumbrances to be cured or discharged from the public record at
closing, or to be insured over by the Title Company, so that such
liens or encumbrances do not appear as an exception in the Owner's
Policy of Title Insurance issued to Purchaser pursuant to the Title
Commitment (the "Owner's Policy").
ARTICLE V
INSPECTION BY PURCHASER
SECTION 5.1 INSPECTION PERIOD.
5.1.1Purchaser shall have a period of time commencing on the
Effective Date and expiring at 5:00 p.m., El Paso, Texas time on
the twenty first (21st) day thereafter (the "Inspection Period")
within which to examine the Property. During the Inspection
Period, Seller shall allow Purchaser and Purchaser's agents
access to the Property during normal business hours to (i)
conduct soil and engineering, hazardous waste (including asbestos
and formaldehyde), marketing, feasibility, zoning and other
studies or tests and to otherwise determine the feasibility of
the Property for Purchaser's intended use and (ii) review and/or
photocopy at Property Manager's office during normal business
hours, all currently effective Tenant leases, lease amendments,
improvement agreements, and any other currently effective
agreements relating to the use or occupancy of the Property,
which documents Property Manager will make available to Purchaser
for this purpose. Notwithstanding the foregoing, (a) the costs
and expenses of Purchaser's investigation shall be borne solely
by Purchaser, (b) prior to the expiration of the Inspection
Period, Purchaser shall restore any damage to the Property caused
by Purchaser or its agents to the condition which existed prior
to Purchaser's entry thereon and investigation thereof, (c)
Purchaser shall not unreasonably interfere with, interrupt or
disrupt the operation of Seller's business on the Property, and
such access by Purchaser and/or its agents shall be subject to
the rights of Tenants under Tenant Leases, (d) Purchaser shall
not permit any mechanic's or materialman'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 its
agents in connection with any studies or tests conducted pursuant
to this Section 5.1, (e) Purchaser shall have the right to enter
vacant units and, with the consent of the respective tenants,
leased units, provided that Purchaser shall give notice to Seller
forty-eight (48) hours prior to entry onto the Property and shall
permit Seller to have a representative present during all
investigations and inspections conducted with respect to the
Property, (f) Seller agrees Property Manager and maintenance
supervisor will be available to answer questions which Purchaser
may reasonably ask concerning the Property, and (g) Purchaser
shall take all reasonable actions and implement all reasonable
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 in the course of such
investigations and inspections 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.
5.1.2If following the effective date of the Title Commitment (a)
any additional title encumbrances (other than as caused by
Purchaser) become effective against the Property, which Seller
does not cause to be cured or insured over so that such matters
do not appear as an exception in the Owner's Policy or (b) a
survey update reveals any new adverse matters which Seller does
not cure by Closing, then Purchaser may terminate this Contract
by delivery of written notice to Seller given in accordance with
the provisions of SECTION 13.1, in which event, subject to the
provisions of SECTION 10.1, Escrow Agent shall Return the Earnest
Money Deposit. Seller shall cause any such encumbrance of a
monetary nature to be satisfied or discharged from the public
record at Closing.
5.1.3All information made available by Seller to Purchaser in
accordance with this Contract or obtained by Purchaser in the
course of its investigations shall be treated as confidential
information by Purchaser (except to the extent Purchaser is
required by law or legal process to disclose such information, or
reasonably needs to disclose such information in order to give
information to private investors for the transaction contemplated
herein). Prior to Closing, Purchaser shall use reasonable
efforts to prevent its agents and employees from divulging such
information to any 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,
including Purchaser's attorneys and representatives, prospective
lenders, investors and engineers.
5.1.4Purchaser shall have the right to reject any Service
Contracts (except the laundry contract, which is hereby deemed
accepted by Purchaser) during the Inspection Period. Any and all
Service Contracts not rejected by Purchaser before the end of the
Inspection Period shall be deemed accepted by Purchaser, except
for the Management Agreement which shall be terminated at Closing
without penalty to Purchaser. Any and all Service Contracts
accepted or deemed accepted by Purchaser shall be assumed by
Purchaser at Closing.
5.1.5Purchaser shall indemnify, defend and hold harmless Seller
and its general and limited partners and each of their affiliates
and their respective affiliates' officers, directors, employees,
agents and representatives from and against any claims,
liabilities, causes of action, damages, liens, losses, fines,
fees and expenses (including, without limitation, attorneys' fees
and expenses) incident to, resulting from or in any way arising
out of any intentional, reckless or negligent infliction of
injury or distress to persons or damage to property caused by
Purchaser or its agents on the Property. The agreements contained
in this SECTION 5.1.5 shall survive the Closing forever (subject
to any applicable statutes of limitation) and shall not be merged
therein and shall also survive any termination of this Contract.
SECTION 5.2 APPROVAL OF INSPECTIONS. If Purchaser determines at any time
prior to the end of the Inspection Period that any aspect of the
Property (except for the Permitted Exceptions) is not satisfactory to
Purchaser, then Purchaser may terminate this Contract by delivery of
written notice to Seller within the Inspection Period given in
accordance with the provisions of SECTION 13.1, in which event,
subject to the provisions of SECTION 10.1 of this Contract, Escrow
Agent shall Return the Earnest Money Deposit. If Purchaser does not
timely deliver to Seller written notice of termination within the
Inspection Period, the conditions of this SECTION 5.2 shall be deemed
satisfied, and Purchaser may not thereafter terminate this Contract
pursuant to this SECTION 5.2.
SECTION 5.3 MATTERS TO BE DELIVERED BY SELLER. No later than five (5)
business days from the Effective Date, Seller shall deliver to
Purchaser the following items (collectively, the "Submission
Matters"):
(a) A copy of the form used for Tenant Leases with respect to
the Property;
(b) An inventory of all Personalty current to within thirty (30)
days prior to the Effective Date;
(c) Copies of any and all Service Contracts in Seller's
possession relating to the ownership and operation of the
Property, as identified on SCHEDULE 5.3(C);
(d) Copies of all warranties and guarantees in Seller's
possession relating to the Property, or any part thereof, or
to the Personalty owned by Seller and located on or used in
connection with the Property;
(e) Copies of all plans and specifications in Seller's
possession with respect to the Property and copies of all
licenses and permits in Seller's possession or control with
respect to the ownership and operation of the Property,
including building permits and certificates of occupancy;
(f) A certificate of hazard, liability and other insurance
policies held by Seller with respect to the Property; and
(g) Copies of the most recent real estate and personal property
tax statements in Seller's possession applicable to the
Property (including, if applicable, any rental tax and
special assessment statements).
(h) The Rent Roll to be attached hereto as SCHEDULE 6.2(E).
(i) A copy of the most recent Phase 1 Environmental Site
Assessment in Seller's possession ("Existing Phase 1").
ARTICLE VI
REPRESENTATIONS AND WARRANTIES; DISCLAIMERS AND WAIVERS
SECTION 6.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to Seller as of the date hereof (and Purchaser
shall reassert in writing to Seller as of the Closing Date) as
follows, which representations and warranties shall survive the
Closing as provided herein: (1) Purchaser is a corporation, duly
authorized and validly existing under the laws of the State of Texas;
(2) Purchaser has full right and authority to enter into this Contract
and to consummate the transactions contemplated herein; (3) each of
the persons executing this Contract on behalf of Purchaser is
authorized to do so; and (4) this Contract constitutes a valid and
legally binding obligation of Purchaser, enforceable in accordance
with its terms. Provided, each of the representations and warranties
of Purchaser set forth in this SECTION 6.1(A) shall survive the
Closing for only nine (9) months except as to any such representation
or warranty as to which Seller has within such nine (9) month period
asserted with a reasonable basis a claim against Purchaser.
SECTION 6.2 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents
and warrants to Purchaser as of the date hereof as follows, provided,
Seller shall also certify to Purchaser at Closing that there has been
no material change in any of the following representations and
warranties, and each of the representations and warranties of Seller
below shall survive the Closing for only nine (9) months except as to
any such representation or warranty as to which Purchaser has within
such nine (9) month period asserted with reasonable basis a claim
against Seller:
(a) Seller (i) is a duly organized and validly existing limited
partnership under the laws of the State of California; (ii)
is duly bound by the actions and execution hereof by the
general partner of Seller who executed this Contract; (iii)
has the authority and power to enter into this Contract and
to consummate (including the execution of all necessary
documents and contracts) the transaction provided for
herein; (iv) is the owner of the landlord's interest in the
Tenant Leases; and (v) to the extent required to own,
operate and sell the Property, is authorized to own and
transfer real estate under the laws of the State of Texas
and to otherwise transact and conduct business in the State
of Texas.
(b) The execution and delivery by Seller of, and the performance
and compliance by Seller with the terms and provisions of
this Contract do not violate any of the terms, conditions or
provisions of (i) any judgment, order, injunction, decree,
regulation or ruling of any court or other governmental
authority to which Seller is subject, or (ii) any agreement
or contract listed on any Schedule to this Contract or any
other agreement or contract to which Seller is a party or to
which it or the Property is subject (except for the
agreements listed on any Schedule to this Contract, as the
terms of such agreements speak for themselves).
(c) Seller is the sole owner of, and has title to, the Property
free and clear of all liens, encumbrances, claims and
demands, other than the Permitted Exceptions. Seller has not
entered into any agreement to sell, mortgage, lease (other
than to residential tenants for personal occupancy) or
otherwise encumber or dispose of its interest in the
Property or any part thereof, except for the Permitted
Exceptions and this Contract.
(d) (I) As of the date of this Contract, Seller has not
received any notice of (nor to its knowledge are) any
actions, suits, proceedings or claims pending or threatened
against or affecting Seller (in respect of the Property), at
law or equity or before or by any governmental authority.
Provided, if Seller is unable to restate this representation
at Closing because such a matter has arisen affecting Seller
(but which is not a lien against the Property), then such
inability to restate shall not constitute a breach of this
Contract or a failure of an obligation hereunder so long as
Seller is able, despite such action, suit, proceeding or
claim to convey good and marketable title to the Property to
Purchaser.
(II) As of the date of this Contract, Seller has not
received any notice of (nor to its knowledge are there) any
actions, suits, proceedings or claims which constitute a
lien or encumbrance on the Property.
(e) All of the information contained in the Rent Roll,
including, without limitation the tenants and occupants of
the Property as of the date of the "Rent Roll" to be
attached hereto as SCHEDULE 6.2(E), the space leased, the
Lease expiration dates, the security deposits, arrearages,
the rentals and the concessions, if any, granted to the
tenants is substantially true and complete.
(f) Seller is not aware of any existing landlord defaults under
the Tenant Leases.
(g) To the actual knowledge of Seller, without independent
investigation or inquiry, and except for such matters as are
disclosed in the Existing Phase I or as may be disclosed by
the environmental report to be performed by Purchaser or its
agents during the Inspection Period, (i) no Hazardous
Substances exist on the Property and no leak, spill, release
or discharge of Hazardous Substances has occurred on the
Property, and (ii) neither the Property nor any land
adjacent to the Property is in violation or subject to any
existing investigation by any governmental authority under
any applicable federal, state or local law, regulation or
ordinance pertaining to Hazardous Substances or other
environmental matters. "Hazardous Substances" means all
chemical substances, asbestos, oil, petroleum products,
formaldehyde, PCB's, toxic, carcinogenic, radioactive or
hazardous waste or materials, existing in such
concentrations or amounts as would require removal or
remediation under applicable federal, state or local laws,
regulations or ordinances, and also shall include any
underground storage tanks. Simultaneously herewith, Seller
and Purchaser shall complete and execute a "Disclosure of
Information on Lead-Based Paint and/or Lead-Based Paint
Hazards", the form of which is attached hereto as Schedule
6.2(g).
SECTION 6.3 NO ADDITIONAL REPRESENTATIONS OR WARRANTIES OF SELLER.
Except as expressly specified in this Contract or the special warranty
deed or other documents to be delivered at closing, Seller has not
made, and Seller hereby specifically disclaims, any warranty, guaranty
or representation, oral or written, past, present or future, of, as
to, or concerning, (a) the nature and condition of the Property,
including, without limitation, the water, soil and geology, and the
suitability thereof and of the Property for any and all activities and
uses which Purchaser may elect to conduct thereon; (b) the existence,
nature and extent of any right-of-way, lease, right to possession or
use, lien, encumbrance, license, reservation, condition or other
matter affecting title to the Property; and (c) whether the use or
operation of the Property complies with any and all laws, ordinances
or regulations of any government or other regulatory body. Except as
expressly specified in this Contract or the special warranty deed or
other documents to be delivered at Closing, PURCHASER AGREES TO ACCEPT
THE PROPERTY, AND ACKNOWLEDGES THAT THE SALE OF THE PROPERTY AS
PROVIDED FOR HEREIN IS MADE BY SELLER, ON AN "AS IS, WHERE IS, AND
WITH ALL FAULTS" BASIS. EXCEPT AS EXPRESSLY SPECIFIED IN THIS CONTRACT
OR THE SPECIAL WARRANTY DEED OR OTHER DOCUMENTS TO BE DELIVERED AT
CLOSING, PURCHASER EXPRESSLY ACKNOWLEDGES THAT SELLER MAKES NO
REPRESENTATION OR WARRANTY OF ANY KIND, ORAL OR WRITTEN, EXPRESS OR
IMPLIED, OR ARISING BY OPERATION OF LAW, WITH RESPECT TO THE PROPERTY,
INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO
HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE
(OTHER THAN SELLER'S WARRANTY OF TITLE TO BE SET FORTH IN THE SPECIAL
WARRANTY DEED), ZONING, TAX CONSEQUENCES, PHYSICAL OR ENVIRONMENTAL
CONDITION, UTILITIES, OPERATING HISTORY (EXCEPT TO THE EXTENT SET
FORTH IN SECTION 6.2(e)) OR PROJECTIONS, VALUATION, GOVERNMENTAL
APPROVALS, THE COMPLIANCE OF THE PREMISES WITH GOVERNMENTAL LAWS, THE
TRUTH, ACCURACY OR COMPLETENESS OF ANY INFORMATION (INCLUDING, WITHOUT
LIMITATION, THE SUBMISSION MATTERS) PROVIDED BY OR ON BEHALF OF SELLER
TO PURCHASER, OR ANY OTHER MATTER OR THING REGARDING THE PROPERTY.
PURCHASER ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY SPECIFIED IN ANY
WRITTEN INSTRUMENT DELIVERED BY SELLER TO PURCHASER INCLUDING, WITHOUT
LIMITATION, THIS CONTRACT, SELLER MAKES NO REPRESENTATION OR WARRANTY
OF ANY KIND, ORAL OR WRITTEN, EXPRESS OR IMPLIED, OR ARISING BY
OPERATION OF LAW REGARDING OR WITH RESPECT TO ANY SUCH INFORMATION
(INCLUDING, WITHOUT LIMITATION, THE SUBMISSION MATTERS) PROVIDED OR TO
BE PROVIDED BY SELLER REGARDING THE PROPERTY.
Further, and without in any way limiting any other provision of this
Contract, except as expressly specified in this Contract, Seller has made and
makes no representation, warranty or guaranty, and hereby specifically disclaims
any warranty, guaranty or representation, oral or written, past, present or
future, with respect to the presence or disposal on or beneath the Property (or
any parcel in proximity thereto) of Hazardous Substances and shall have no
liability to Purchaser therefor (except for a breach of Seller's representations
or warranties set forth in SECTION 6.2(I). Without limitation of the preceding
sentence, except as expressly specified in this Contract, Seller specifically
disclaims any representation, warranty or guaranty regarding the accuracy of any
environmental reports which may be included within the Submission Matters. By
acceptance of this Contract and the special warranty deed to be delivered by
Seller at the Closing, Purchaser acknowledges that Purchaser's opportunity for
inspection and investigation of the Property (and other parcels in proximity
thereto) will be adequate to enable Purchaser to make Purchaser's own
determination with respect to the presence or disposal on or beneath the
Property (and other parcels in proximity thereto) of Hazardous Substances.
SECTION 6.4 NO RELIANCE ON DOCUMENTS. Except as expressly stated
herein, Seller makes no representation or warranty as to the truth,
accuracy or completeness of any materials, data or information
(including, without limitation, the Submission Matters) delivered by
Seller, or its general partner or their respective affiliates or
representatives to Purchaser in connection with the transaction
contemplated hereby. Except as expressly stated herein, Purchaser
acknowledges and agrees that all materials, data and information
(including, without limitation, the Submission Matters) delivered by
Seller, its general partner or their respective affiliates or
representatives to Purchaser in connection with the transaction
contemplated hereby are provided to Purchaser as a convenience only
and that any reliance on or use of such materials, data or information
by Purchaser shall be at the sole risk of Purchaser.
SECTION 6.5 EFFECT AND SURVIVAL OF DISCLAIMERS. Seller and Purchaser
agree that the provisions of SECTIONS 6.3 and 6.4 shall survive
Closing and the termination of this Contract forever.
ARTICLE VII
CONDITIONS PRECEDENT TO PURCHASER'S AND SELLER'S PERFORMANCE
SECTION 7.1 CONDITIONS TO PURCHASER'S OBLIGATIONS. Purchaser's
obligation under this Agreement to purchase the Property is subject to
the fulfillment of each of the following conditions (any or all of
which may be waived by Purchaser):
(a) Seller shall be ready, willing and able to deliver title to
the Property in accordance with the terms and conditions of
this Contract;
(b) The representations and warranties of Seller contained
herein shall be true, accurate and correct as of the Closing
Date; and
(c) Seller shall have delivered all the documents and other
items required pursuant to SECTION 8.2(A), and shall have
performed, in all material respects, all other covenants,
undertakings and obligations, and complied with all
conditions required by this Contract to be performed or
complied with by Seller at or prior to the Closing.
If any of the above conditions are not satisfied by Closing, then
Purchaser may terminate this Contract in accordance with SECTION 5.2(B).
SECTION 7.2 CONDITIONS TO SELLER'S OBLIGATIONS. Seller's obligation
under this Contract to sell the Property to Purchaser is subject to
the fulfillment of each of the following conditions (all or any of
which may be waived by Seller):
(a) the representations and warranties of Purchaser contained
herein shall be true, accurate and correct as of the Closing
Date;
(b) Purchaser shall have delivered the funds required hereunder
and all the documents to be executed by Purchaser set forth
in SECTION 8.2(B), and shall have performed, in all material
respects, all other covenants, undertakings and obligations,
and complied with all conditions required by this Contract
to be performed or complied with by Purchaser at or prior to
the Closing, time being of the essence for all purposes; and
(c) Purchaser shall have delivered all the documents and other
items required pursuant to SECTION 8.2(B), and shall have
performed, in all material respects, all other covenants,
undertakings and obligations, and complied with all
conditions required by this Contract to be performed or
complied with by
Purchaser at or prior to the Closing
ARTICLE VIII
CLOSING
SECTION 8.1 TIME AND PLACE. The consummation of the purchase and sale of
the Property ("Closing") shall take place at Escrow Agent's office in
El Paso, Texas on the date which is no later than thirty (30) days
following the end of the Inspection Period. Notwithstanding the
above, each party will reasonably cooperate with the other party in
accomplishing the Closing by mail using appropriate escrows, if either
party so requests.
SECTION 8.2 ITEMS TO BE DELIVERED AT THE CLOSING.
(a) SELLER. At the Closing, Seller shall deliver, or cause to be
delivered, to Purchaser each of the following items:
(i) A Special Warranty Deed duly executed and acknowledged
by Seller in the form attached hereto as Exhibit B.
(ii) An Assignment and Assumption of Leases ("Assignment of
Leases") duly executed and acknowledged by Seller in
the form attached hereto as Exhibit C.
(iii) A Blanket Conveyance, Bill of Sale and Assignment
("Bill of Sale") duly executed by Seller in the form
attached hereto as Exhibit D.
(iv) All keys and master keys to all locks located on the
Property that are in Seller's possession.
(v) All original Tenant Leases that are in Seller's
possession.
(vi) An executed form letter to the Tenants regarding the
sale of the Property ("Notice Letters") in the form
attached hereto as Exhibit F.
(vii)All original Service Contracts relating to the
Property that are in Seller's possession.
(viii)A Non-Foreign Affidavit in the form attached
hereto as Exhibit E.
(ix) Such resolutions and certificates of Seller or its
partners reasonably required by the Title Company as to
the authority of the persons signing on behalf of
Seller to consummate this Contract.
(x) A rent roll prepared with respect to the Property in
the form attached hereto as SCHEDULE 6.2(E) which shall
be certified, to Seller's knowledge, as being true and
correct as of a date not more than three (3) days prior
to Closing.
(xi) At the Property, all tenant files and other files which
are used in connection with the ownership and operation
of the Property or any part thereof and the conduct of
the business of Seller relating to the Property or any
part thereof.
(xii)Duly executed closing statement.
(xiii)Seller's duly executed certificate of
reaffirmation and remaking dated as of the Closing
Date, confirming that the warranties and
representations of Seller as made herein are materially
true and correct as of the Closing Date.
(xiv)A credit on the closing statement to Purchaser in
the amount of all unapplied deposits held and all
advance rentals received under Tenant Leases, together
with a certified list of each Tenant who has made such
a deposit or advance rental and the amount thereof.
(xv) A certificate from the Manager to the effect that the
Management Agreement has been terminated and that the
Manager has no claim whatsoever against Purchaser and
the Property or any part thereof under or in connection
with the Management Agreement, the agreements and
obligations thereunder or otherwise.
(b) PURCHASER. At the Closing, Purchaser shall deliver to Seller
each of the following items:
(i) The cash portion of the Purchase Price in Current
Funds.
(ii) The Assignment of Leases, duly executed and
acknowledged by Purchaser.
(iii)Such additional funds in cash or Current Funds, as
may be necessary to cover Purchaser's share of the
closing costs and prorations hereunder.
(iv) Evidence satisfactory to the Title Company that the
person or persons executing this Contract and the
closing documents on behalf of Purchaser have full
right, power and authority to do so.
(v) The Notice Letters duly executed by Purchaser.
SECTION 8.3 COSTS OF CLOSING. The costs of the escrow fees of Escrow
Agent (if any) shall be shared equally by Purchaser and Seller.
Purchaser shall pay for the Title Policy, an updated Survey, and the
costs of recording the Special Warranty Deed. All other expenses
incurred by Seller and Purchaser with respect to the Closing,
including, but not limited to, the attorneys' fees and costs and
expenses incurred in connection with negotiating, preparing and
closing the transaction contemplated by this Contract, shall be borne
and paid exclusively by the party incurring such expense.
SECTION 8.4 PRORATIONS.
8.4.1All normal and customarily proratable items, including,
without limitation, rents, operating expenses and other expenses
and fees, and payments relating to any agreements affecting the
Property which survive the Closing, shall be prorated as of the
Closing Date, Seller being charged and credited for all of same
attributable to the period up to, and including, the day prior to
the Closing Date (and credited for any amounts paid by Seller
attributable to the period thereafter) and Purchaser being
responsible for, and credited or charged, as the case may be, for
all of same attributable to the period on and after the Closing
Date.
8.4.2All unapplied Deposits under Tenant Leases in the possession
of Seller, if any, shall be transferred (or credited) by Seller
to Purchaser at the Closing. There shall be no application of
security deposits to unpaid rent unless the tenant has vacated
without paying Rent.
8.4.3Any real estate ad valorem or similar taxes for the
Property, or any installment of assessments payable in
installments which installment is payable in the year of Closing
and those which are attributable to the calendar year in which
the Closing occurs (due and payable in a succeeding calendar
year), shall be prorated to the date of Closing, based upon
actual days involved. In connection with the proration of real
property taxes or installments of assessments, such proration
shall be based upon the assessed valuation and tax rate figures
for the year in which the Closing occurs to the extent the same
are available; provided, if 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, then the
proration shall be based upon the amounts from the preceding
year. In such event, the parties shall reprorate such amounts
within thirty (30) days after the actual bills are received by
Purchaser. The proration shall be final and unadjustable except
as provided in the following paragraph. If the Property has been
assessed for property tax purposes at such rates as would result
in "roll back" taxes upon the changes in land usage or ownership
of the Property, then Seller shall pay all such taxes and hereby
indemnifies, holds harmless and agrees to defend Purchaser from
and against any and all causes of action, expenses, fines and
liabilities for or relating to such taxes.
8.4.4Prorations should be governed by the following additional
provisions:
(a) Utilities, if any, payable by Seller, shall be prorated.
Seller shall obtain meter readings on the Closing Date or
the day immediately preceding the Closing Date ("Proration
Date"), and if such readings are obtained, there shall be no
proration of such items and Seller shall pay the bills
therefor for the period through the Proration Date, and
Purchaser shall pay the bills therefor for the period
subsequent to the Proration Date as and when rendered. If
Seller is unable to obtain meter readings as of the
Proration Date, utilities shall be prorated at the Proration
Date based upon the most recent utility bills, adjusted for
seasonality (such adjustment being reasonably acceptable to
both parties), and reprorated upon issuance of the actual
bills. In addition, if there are any utility charges
submetered to Tenants and payable by them directly to
Seller, Seller shall use reasonable efforts to obtain
readings thereof at the Closing Date, and such items shall
be prorated in mode and manner as with respect to rents.
Provided, however, Seller may have utility service at the
Property terminated in accordance with SECTION 8.5.
(b) Prepaid and unpaid expenses and charges respecting utilities
and all other expenses incurred in the operation of the
Property shall be prorated at and as of the Closing Date.
(c) In the case of any charges payable by Tenants to Seller
applicable to periods of time ending before the Closing Date
but to become payable thereafter when bills are rendered
(such as service charges, supply charges and utility
charges), Seller shall after settlement prepare and promptly
deliver to Purchaser the information necessary to prepare
the bills to the tenants. Seller warrants and represents
that such information will be true, complete and correct.
All such charges shall be paid to Purchaser and adjusted in
the same manner as provided herein.
Except as otherwise provided herein, prorations shall be
made as of the end of business on the day prior to the
Closing Date.
The provisions of this SECTION 8.4 shall survive the Closing and the
termination of this Contract forever.
Except for those items for which this Contract specifically provides for
reprorations, all prorations shall be considered final and absolute as of
Closing. Those items which specifically require reproration in accordance with
the terms hereof, upon the tendering from the "owing" party to the "owed" party
of the amounts due, shall be considered final and absolute.
SECTION 8.5 POSSESSION AND CLOSING. Possession of the Property shall be
delivered to Purchaser by Seller at the Closing, subject to the
Permitted Exceptions and the rights of the Tenants. Purchaser shall
make its own arrangements for the provision of public utilities to the
Property and Seller shall terminate its Contracts with such utility
companies that provide services to the Property as of the end of
business on the Closing Date.
SECTION 8.6 DELINQUENT RENT.
(a) APPLICATION OF DELINQUENT RENT. If on the Closing Date any
Tenant is in arrears in the payment of any rent under any
Tenant Lease (the "Delinquent Rent") payable by it, any
Delinquent Rent received by Purchaser and Seller from such
Tenant after the Closing shall be applied to amounts due and
payable by such Tenant during the following periods in the
following order of priority: (A) first, to reimburse the
party who made the collection effort for attorneys' fees and
costs and expenses expended in connection with the
collection thereof and to the Delinquent Rent due such
party; and (B) second, to the Delinquent Rent owed to the
other party. The provisions of this SECTION 8.6(A) shall
survive the Closing and the termination of this Contract
forever.
(b) COLLECTION OF DELINQUENT RENT. Purchaser shall have no
obligation to collect past due rentals and other amounts
from Tenants after the Proration Date. Seller retains its
rights in and to such past due rentals, but shall not
disturb or otherwise interfere with any Tenant in its
occupancy and use and enjoyment of its demised premises.
ARTICLE IX
CONDEMNATION OR CASUALTY
SECTION 9.1 CONDEMNATION.
(a) If all or any Significant Portion (as defined in SECTION
9.1(B)) of the Property is condemned or taken by eminent
domain or conveyed by deed in lieu thereof, or if any
condemnation proceeding is commenced for all or any
Significant Portion of the Property, prior to Closing, then
Purchaser may elect to terminate this Contract by written
notice thereof to Seller within fifteen (15) days after
Purchaser receives notification of the condemnation, taking
or deed in lieu or institution of such condemnation
proceeding (which notice Seller shall deliver to Purchaser
within ten (10) days of Seller's receipt thereof). If
Purchaser does not terminate this Contract pursuant to this
SECTION 9.1(A), then both parties shall proceed to close the
transaction contemplated herein pursuant to the terms
hereof, in which event Seller shall, except as limited in
SECTION 9.1(B) hereof, deliver to Purchaser at the Closing
any proceeds actually received by Seller attributable to the
Property from such condemnation, eminent domain proceeding
or deed in lieu thereof (except for proceeds previously used
to restore or repair the Property ) and assign its interest
in and to any such proceeds, and there shall be no reduction
in the Purchase Price.
(b) For purposes of SECTION 9.1(A), "Significant Portion" of the
Property shall be deemed to be any portion of the Property
with either a fair market value or replacement cost in an
amount equal to or greater than $150,000. Notwithstanding
anything to the contrary contained in SECTION 9.1(A), if
Purchaser has not timely elected to terminate in accordance
with SECTION 9.1(A), and if the proceeds payable with
respect to the Property as a result of condemnation exceed
the Purchase Price for the Property, then the portion of
such proceeds in excess of the Purchase Price shall be paid
to Purchaser at the Closing. The foregoing provision shall
survive the Closing and the termination of this Contract
forever.
(c) If less than a Significant Portion of the Property is
condemned, taken by eminent domain, conveyed by deed in lieu
thereof or is the subject of a condemnation proceeding, then
neither party shall have the right to terminate this
Contract pursuant to this SECTION 9.1, but Seller shall
deliver to Purchaser at Closing any proceeds actually
received by Seller attributable to the Property from such
condemnation or eminent domain proceeding or deed in lieu
thereof, and assign its interest in and to such proceeds to
Purchaser, and there shall be no reduction of the Purchase
Price.
SECTION 9.2 CASUALTY.
(a) If all or any Substantial Portion (as defined in SECTION
9.2(B)) of the Property shall be damaged or destroyed by
fire or other casualty prior to Closing, then Purchaser may
terminate this Contract by written notice thereof to Seller
within fifteen (15) days after Purchaser receives
notification of the casualty (which notice Seller shall
deliver to Purchaser within ten (10) days of Seller's
receipt thereof). If Purchaser does not terminate this
Contract as aforesaid, then both parties shall proceed to
close the transaction contemplated herein pursuant to the
terms hereof, in which event Seller shall, except as limited
in SECTION 9.2(B) hereof, deliver to Purchaser at the
Closing any insurance proceeds actually received by Seller
attributable to the Property from such casualty (except for
proceeds previously used to repair the Property or held by
or paid to the lender) and assign to Purchaser all of
Seller's right, title and interest in and to any claims
which Seller may have under the insurance policies covering
the Property, and Purchaser shall receive a proration credit
at Closing in the aggregate amount of any deductible or
self-insurance and there shall be no reduction in the
Purchase Price. In addition, Seller shall deliver to
Purchaser at Closing any proceeds from its loss of rents
insurance policy which are attributable to the time period
after Closing and Seller shall assign its rights to receive
any such loss of rents insurance proceeds after Closing.
Provided, however, if the payment of such proceeds by the
company writing the loss of rents insurance policy is
contingent upon continuation of the payment of premiums
after Closing, then Purchaser shall be responsible for such
payments. Seller shall also assign to Purchaser at Closing
any construction contracts for the repair of such damage to
which Seller is a party. If less than a Substantial Portion
of the Property shall be damaged or destroyed by fire or
other casualty prior to Closing, then the parties shall
proceed in accordance with the second sentence in this
SECTION 9.2(A).
(b) For the purposes of SECTION 9.2(A), a "Substantial Portion"
of the Property shall be deemed to be any portion of the
Property with either a fair market value or replacement cost
in an amount equal to or greater than $150,000.
Notwithstanding anything in SECTION 9.2(A) to the contrary,
if Purchaser has not timely elected to terminate in
accordance with SECTION 9.2(A), and if the proceeds payable
with respect to the Property as a result of casualty exceed
the Purchase Price for the Property, then the portion of
such proceeds in excess of the Purchase Price shall be paid
to Purchaser at the Closing. The foregoing provision shall
survive the Closing and the termination of this Contract
forever.
ARTICLE X
DEFAULTS AND REMEDIES
SECTION 10.1 DEFAULT BY PURCHASER. If Seller is not in default hereunder
and Purchaser refuses or fails to consummate the Closing under this
Contract for reasons other than as expressly set forth in SECTION 4.4,
SECTION 5.2, or ARTICLE IX hereof or other than due to a failure of a
condition precedent to Purchaser's obligation to close as set forth in
ARTICLE VII hereof, then Seller may terminate this Contract in which
event neither party shall have any further rights, duties, or
obligations hereunder except as provided in SECTIONS 5.1.5 and 11.1
hereof, and, as its sole and exclusive remedy for Purchaser's failure
to close, Seller shall be entitled to receive and retain the Earnest
Money Deposit as liquidated damages (Seller and Purchaser hereby
acknowledging that the amount of damages in the event of Purchaser's
default is difficult or impossible to ascertain but that such amount
is a fair estimate of such damage). Notwithstanding the above
provisions contained in this SECTION 10.1, if Purchaser breaches its
representations set forth in SECTIONS 5.1.6, 5.1.7, 6.1(A) or (B) and
if the Closing does not occur for any reason, other than Seller's
default, then Seller shall be entitled to receive and retain the
Earnest Money Deposit as liquidated damages (Seller and Purchaser
hereby acknowledging that the amount of damages in the event of
Purchaser's default is difficult or impossible to ascertain but that
such amount is a fair estimate of such damage).
SECTION 10.2 DEFAULT BY SELLER. If Purchaser shall not be in default
hereunder and if Seller refuses or fails to consummate the Closing
under this Contract other than due to a termination by Seller
permitted hereunder or a failure of a condition precedent to Seller's
obligation to close as set forth in ARTICLE VII, then Purchaser may,
at Purchaser's sole option, as its sole and exclusive remedy, either
(a) terminate this Contract whereupon Escrow Agent shall Return the
Earnest Money Deposit; or (b) enforce specific performance of this
Contract against Seller. In no event shall Seller be liable to
Purchaser for any punitive, speculative or consequential damages or
damages for loss of opportunity or lost profit.
SECTION 10.3 COSTS OF ENFORCEMENT. If it shall be necessary for either
Purchaser or Seller to employ an attorney to enforce its rights
pursuant to this Contract, the non-prevailing party shall reimburse
the prevailing party for the prevailing party's reasonable attorneys'
fees and other reasonable out-of-pocket expenses incurred by the
prevailing party in pursuit of such enforcement.
ARTICLE XI
BROKERAGE COMMISSIONS
SECTION 11.1 BROKERAGE COMMISSION. Seller and Purchaser each represent to
the other that each has no agreement with any broker, finder or other
party requiring payment of a commission with respect to the sale or
purchase of the Property, except that Seller may reimburse the costs
and expenses of Insignia Capital Advisors, Inc. Seller agrees to
indemnify and defend Purchaser and its officers, directors, trustees,
shareholders, representatives and agents and hold each of them
harmless from any loss, liability, damage, cost or expense (including,
without limitation, reasonable attorneys' fees and expenses) arising
out of or paid or incurred by Purchaser by reason of any claim to any
broker's, finder's or other fee in connection with this transaction by
any party claiming by, through or under Seller. Purchaser agrees to
indemnify and defend Seller and its general partner and their
respective affiliates and their and their affiliates' officers,
directors, employees, agents and representatives, and hold each of
them harmless from any and all loss, liability, damage, claim, cause
of action, fine, fee, lien, cost or expense (including, without
limitation, reasonable attorneys' fees and expenses ) arising out of
or paid or incurred by any of them by reason of any claim to any
broker's, finder's or other fee in connection with this transaction by
any party claiming by, through or under Purchaser or its affiliates.
Notwithstanding anything to the contrary contained herein, the
indemnities set forth in this ARTICLE XI shall survive the Closing and
the termination of this Contract forever.
ARTICLE XII
OPERATION OF THE PROPERTY PRIOR TO THE CLOSING
SECTION 12.1 OPERATION OF THE PROPERTY PRIOR TO THE CLOSING. During the
term of this Contract:
(a) Seller shall not voluntarily create or permit to be created,
any liens, encumbrances, defects in title, restrictions or
easements affecting the Property (except for mechanic's and
materialmen's liens arising in the normal course of Seller's
business of operating the Property, and which will be paid
by Seller in the normal course of business and to the extent
not paid by Closing, Seller will cause to be discharged or
insured over on or before the Closing in accordance with
SECTION 5.1.2 or accounted for as a proration credit to
Purchaser).
(b) Seller shall operate and maintain the Property in
substantially the same manner as operated and maintained
prior to the Effective Date.
(c) Without Purchaser's prior written consent, Seller shall not
settle any protest or appeal of the real estate tax
assessment for the Property for the current tax year or for
any prior tax year if the settlement would increase, or
compromise Purchaser's ability to challenge, the assessment
for the current tax year or any future tax year.
(d) Seller shall maintain all of Seller's insurance policies
relating to or affecting the Property in full force and
effect until Closing.
(e) All available unrented apartment units shall be made "rent
ready", unless such apartment unit is vacated within ten
(10) days prior to Closing. 'Rent ready' shall mean
Seller's normal and customary standard for rental units
prior to occupancy by new Tenants, including new painting
and carpet cleaning.
(f) Seller shall be required to notify Purchaser of all
personnel changes which occur after the Effective Date until
Closing.
(g) Following the Effective Date, Seller shall be required to
notify Purchaser of any changes in the market rent of units
at the Property. After the end of the Inspection Period,
Seller shall obtain the approval of Purchaser for any such
changes.
(h) Seller shall continue to pay bills from third party vendors
on a thirty (30) day basis between the Effective Date and
Closing.
(i) One (1) day prior to Closing, the Purchaser shall be
entitled to physically inspect all apartment units with a
current rent delinquency.
(j) One (1) day prior to Closing, Purchaser shall be allowed to
inventory the Personalty to confirm that all items disclosed
on the inventory of Personalty delivered pursuant to SECTION
5.3(B) are still located on the Property.
(k) All actions required pursuant to this Contract which are
necessary to effectuate the transaction contemplated herein
will be taken promptly and in good faith by Seller and
Purchaser, and each shall furnish the other with such
documents or further assurances as each may reasonably
require.
ARTICLE XII
MISCELLANEOUS
SECTION 13.1 NOTICES. Any notice provided or permitted to be given under
this Contract must be in writing and may be served by (a) depositing
same in the United States mail, addressed to the party to be notified,
postage prepaid and registered or certified with return receipt
requested, (b) delivering the same in person to such party via a hand
delivery service, Federal Express or any other nationally recognized
courier service that provides a return receipt showing the date of
actual delivery of same to the addressee thereof, or (c) facsimile
transmission. Notice given in accordance herewith shall be effective
upon receipt at the address of the addressee. For purposes of notice,
the addresses of the parties shall be as follows:
If to Seller: c/o Insignia Financial Group, Inc.
One Insignia Financial Plaza
Greenville, South Carolina 29601
Attention: Hugh Wall
Facsimile No.: (803) 239-1066
Telephone No.: (803) 239-1000
With copies to: Alan G. Dexter, Esq.
Parker, Poe, Adams & Bernstein L.L.P.
2500 Charlotte Plaza
Charlotte, North Carolina 28244
Facsimile No.: (704) 334-4706
Telephone No.: (704) 335-9042
If to Purchaser: TVO Realty
c/o Wayne Vandenburg
70 E. Lake Street
Suite 600
Chicago, Illinois 60601
Telephone No.: (312) 553-1133
With copies to: Chris Haynes, Esq.
501 Executive Center Blvd.
Suite 100
El Paso, TX 79902
Facsimile No.: 915-544-2619
Telephone No.: 915-544-1991
If to Escrow
Agent: Chicago Title Insurance Company
Attn: Janet Karr
909 Fannin, Suite 100
Houston, Texas 77010
Facsimile No.: 713-658-1029
Telephone No.: 713-659-1411
SECTION 13.2 GOVERNING LAW. THIS CONTRACT IS INTENDED TO BE PERFORMED IN
THE STATE OF TEXAS, AND THE LAWS OF SUCH STATE SHALL GOVERN THE
VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THIS
CONTRACT.
SECTION 13.3 ENTIRETY AND AMENDMENTS. This Contract embodies the entire
agreement between the parties and supersedes all prior agreements and
understandings, if any, relating to the transaction described herein,
and may be amended or supplemented only by an instrument in writing
executed by the party against whom enforcement is sought.
SECTION 13.4 PARTIES BOUND. Subject to the provisions of SECTION 13.5
hereof, this Contract shall be binding upon and inure to the benefit
of Seller and Purchaser, and their respective heirs, personal
representatives, successors and assigns.
SECTION 13.5 ASSIGNMENT. This Contract may not be assigned in whole or
in part by Purchaser without the prior written consent of Seller. Any
assignment of this Contract by Purchaser without Seller's prior
written consent shall, at Seller's option, be null and void and of no
effect. In the event that this Contract is assigned by Purchaser,
then, unless Seller expressly agrees to the contrary in writing,
Purchaser shall not be released from any liability or obligations
hereunder.
SECTION 13.6 HEADINGS. Headings used in this Contract are used for
reference purposes only and do not constitute substantive matter
to be considered in construing the terms of this Contract.
SECTION 13.7 SURVIVAL. Except as otherwise expressly provided herein, no
representations, warranties, covenants, acknowledgments or agreements
contained in this Contract shall survive the Closing of this Contract
and the delivery of the Special Warranty Deed by Seller to Purchaser.
SECTION 13.8 INTERPRETATION. The parties acknowledge that each party and
its counsel have reviewed this Contract, and the parties hereby agree
that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Contract or any amendments or
exhibits hereto. In case any one or more of the provisions contained
in this Contract shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions hereof, and
this Contract shall be construed as if such invalid, illegal or
unenforceable provisions had never been contained herein. When the
context in which words are used in this Contract indicates that such
is the intent, words in the singular number shall include the plural
and vice versa, and words in the masculine gender shall include the
feminine and neuter genders and vice versa.
SECTION 13.9 EXHIBITS. All references to "Exhibits" or "Schedules"
contained herein are references to exhibits or schedules attached
hereto, all of which are hereby made a part hereof for all purposes.
SECTION 13.10 TIME OF ESSENCE. It is expressly agreed by the parties
hereto that time is of the essence with respect to this Contract and
Closing hereunder.
SECTION 13.11 MULTIPLE COUNTERPARTS. This Contract may be executed in a
number of identical counterparts. If so executed, each of such
counterparts is to be deemed an original for all purposes, and all
such counterparts shall, collectively, constitute one agreement, but,
in making proof of this Contract, it shall not be necessary to produce
or account for more than one such counterpart.
SECTION 13.12 RISK OF LOSS. Risk of loss or damage to the Property, or any
part thereof, by fire or any other casualty following Seller's
delivery of the special warranty deed transferring title to the
Property to the Purchaser will be on the Purchaser; the risk of loss
prior to the Closing remains on Seller.
SECTION 13.13 BUSINESS DAYS. All references to "business days" contained
herein are references to normal working business days, i.e., Monday
through Friday of each calendar week, exclusive of federal and
national bank holidays.
SECTION 13.14 NO RECORDATION OF CONTRACT. In no event shall this Contract
or any memorandum hereof be recorded in the public records of the
place in which the Property is situated, and any such recordation or
attempted recordation shall constitute a breach of this Contract by
the party responsible for such recordation or attempted recordation.
SECTION 13.15 GENERAL.
13.15.1 Seller acknowledges that Purchaser shall not be liable to
any employees of Seller for or in respect of salaries, bonuses,
vacations, vacation pay and other leave programs, employee
benefit plans or programs, welfare benefits plans, retirement
plans, excess benefit plans, plans maintained to provide workers'
compensation or unemployment benefits and pay practices which
Seller has funded or been obligated to fund for its past or
present employees, independent contractors or either of their
beneficiaries or dependents.
13.15.2 A. Seller shall indemnify, defend and hold harmless
Purchaser and any person or entity affiliated with or owning or
controlling, in whole or in part, directly or indirectly,
Purchaser, the joint venturers, partners, trustees, officers,
directors, shareholders, employees, agents and attorneys at any
time and from time to time of any of the foregoing, and the
heirs, legal representatives, successors and assigns of each and
all of the foregoing (collectively "Related Parties") of and from
any and all claims, demands, damages, losses, injuries,
liabilities, penalties, costs and expenses (including without
limitation reasonable attorneys' fees), incurred or suffered by
Purchaser or its Related Parties arising out of or in connection
with any one or more of the following:
1. any use, occupancy, ownership or operation of any of the
Property or any occurrence in, on or about the Property
before the Closing;
2. any accident, injury (including death) or damage, regardless
of the cause thereof to any person or property occurring in,
on or about the Property before Closing.
Seller's obligation to indemnify and hold Purchaser and its Related Parties
harmless under this SECTION 13.15.2.A shall survive Closing or termination
of this Contract.
Notwithstanding anything contained herein to the contrary, Seller shall be
obligated to indemnify and hold Purchaser and its Related Parties harmless under
this SECTION 13.15.2.A only if Seller has the opportunity to defend any claim
referred to herein for which Purchaser or its Related Parties may be liable.
B. Provided, Seller shall have no obligation or liability
under this Contract to indemnify, defend or hold harmless Purchaser or
its Related Parties of or from any claims, demands, damages, losses,
injuries, liabilities, penalties, costs, expenses (including without
limitation reasonable attorneys' fees), incurred or suffered by
Purchaser or its Related Parties arising out of or in connection with
the threatened or actual existence of Hazardous Materials or other
environmental conditions relating to the Property except to the extent
that such threatened or actual existence was known by Seller as of the
Effective Date or the Closing Date or is contrary to any
representation or warranty made by Seller herein.
C. Purchaser shall indemnify, defend and hold harmless
Seller and any person or entity affiliated with or owning or
controlling, in whole or in part, directly or indirectly, Seller, the
joint venturers, partners, trustees, officers, directors,
shareholders, employees, agents and attorneys at any time and from
time to time of any of the foregoing, and the heirs, legal
representatives, successors and assigns of each and all of the
foregoing (collectively "Related Parties") of and from any and all
claims, demands, damages, losses, injuries, liabilities, penalties,
costs and expenses (including without limitation reasonable attorneys'
fees), incurred or suffered by Seller or its Related Parties arising
out of or in connection with any one or more of the following:
1. any use, occupancy, ownership or operation of any of the
Property or any occurrence in, on or about the Property on or after
the Closing;
2. any accident, injury (including death) or damage, regardless
of the cause thereof to any person or property occurring in, on or
about the Property on or after Closing;
Purchaser's obligation to indemnify and hold Seller and its Related
Parties harmless under this SECTION 13.15.2.C shall survive Closing or
termination of this Contract.
Notwithstanding anything contained herein to the contrary, Purchaser shall
be obligated to indemnify and hold Seller and its Related Parties harmless under
this SECTION 13.15.2.A only if Purchaser has the opportunity to defend any claim
referred to herein for which Purchaser or its Related Parties may be liable.
13.15.3 Purchaser on the one hand and Seller on the other hand shall
use their best efforts to promptly and timely file all filings, reports,
certificates and applications required to carry out the transactions
contemplated by this Agreement or to consummate the transactions contemplated
hereby required, if at all, by (i) the federal securities laws, (ii) the United
States or any commission, department, agency, law, rule or regulation thereof,
or (iii) the State of Texas or any commission, agency or department thereof.
ARTICLE XIV
ESCROW TERMS
SECTION 14.1 ACCEPTANCE OF ESCROW. Escrow Agent hereby agrees to perform
the obligations of Escrow Agent under the terms of this Contract.
Escrow Agent has executed this Contract to evidence its acceptance of
the terms of the escrow created hereby; provided, however,
notwithstanding anything to the contrary contained herein, Escrow
Agent shall not be a required party or signatory to any modification
of the terms of this Contract unless such modification directly
affects the obligations of Escrow Agent hereunder. Escrow Agent shall
be given fully executed copies of all modifications of this Contract
to which it is not a party promptly after execution thereof by
Purchaser and Seller.
SECTION 14.2 HOLDING FUNDS. Escrow Agent shall hold all cash portions of
the Earnest Money in a separate interest bearing account at Escrow
Agent's regular federally insured banking institution in Texas, or in
whichever state Escrow Agent is located, and shall otherwise hold,
invest and disburse the Earnest Money as provided herein.
SECTIN 14.3 DISBURSEMENT OF EARNEST MONEY. Escrow Agent shall disburse
the Earnest Money pursuant to the terms hereof.
SECTION 14.4 LIMITED LIABILITY. In performing any of its duties
hereunder, Escrow Agent shall not incur any liability to anyone for
any damages or expenses, except as may arise due to willful misconduct
or breach of trust by Escrow Agent hereunder. Accordingly, Escrow
Agent shall not incur any such liability with respect to (i) any
action taken or omitted in good faith upon advice of its legal counsel
relating to the responsibilities of Escrow Agent under this Contract,
or (ii) any action taken or omitted in reliance on any instrument,
including any written notice or instruction provided for in this
Contract, not only as to the due execution and validity of its
provisions but also as to the truth and accuracy of any information
contained therein, which Escrow Agent shall in good faith believe to
be genuine, to have been signed or presented by a person or persons
having authority to sign or present such instrument and to conform
with the provisions of this Contract.
SECTION 14.5 INDEMNITY. Purchaser and Seller hereby indemnify Escrow
Agent against, and hold Escrow Agent harmless from, any and all
claims, actions, demands, loses, damages, expenses (including, without
limitation, court costs, attorneys' fees, and accountants' fees) and
liabilities that may be imposed upon performance of its duties
hereunder, including, without limitation, any litigation arising from
this Contract or involving the subject matter hereof, but excluding
any such claims, actions, demands, losses, damages, expenses and
liabilities resulting from or arising out of any willful misconduct or
breach of trust by Escrow Agent hereunder. In the event of any
litigation arising from this Contract or involving the subject matter
hereof, and in the event Purchaser and Seller are opposing parties in
such litigation, the party prevailing in such litigation shall be
reimbursed promptly upon demand by the other such party in an amount
equal to that amount which the prevailing party shall have paid Escrow
Agent with respect to such litigation and the subject matter thereof
pursuant to the indemnification agreement contained in this SECTION
14.5. The provisions of this SECTION 14.5 shall survive the Closing or
any termination, cancellation' rescission or consummation of this
Contract.
SECTION 14.6 ESCROW FEE. Seller and Purchaser shall each pay one-half of
the fees and expenses, if any, due to Escrow Agent in compensation for
its services pursuant hereto and shall each reimburse Escrow Agent for
one-half of the expenses incurred in discharging its duties and
obligations hereunder.
IN WITNESS WHEREOF, the parties hereby execute this Contract as of the date
first above written.
SELLER:
CONSOLIDATED CAPITAL PROPERTIES VI, a California
limited partnership
By: CONCAP EQUITIES, INC., its general partner
By: /s/ William H. Jarrard, Jr.
Name: William H. Jarrard, Jr.
Title: President
PURCHASER:
THE VANDENBURG ORGANIZATION, a Texas corporation d/b/a
TVO Realty Partners
By: /s/ David Vandenburg
Printed Name: David Vandenburg
Title: President
ESCROW AGENT:
CHICAGO TITLE INSURANCE COMPANY
By: /s/ Janet Karr
Printed Name: Janet Karr
Title: Commercial Division Manager
/s/ Chris Haynes
Chris Haynes, Esq.