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10 (i)(d)
PURCHASE
AND SALE CONTRACT
AMONG
SHELTER PROPERTIES III LIMITED PARTNERSHIP,
a South Carolina limited partnership,
SPARTANBURG-OXFORD LIMITED PARTNERSHIP,
a Maryland limited partnership,
DAVIDSON INCOME REAL ESTATE, L.P.,
a Delaware limited partnership,
PELHAM PLACE L.P.,
a Southern Carolina limited partnership,
GREENVILLE-OXFORD ASSOCIATES LIMITED
PARTNERSHIP,
a Maryland limited partnership,
WINDRIDGE-OXFORD ASSOCIATES LIMITED
PARTNERSHIP,
a Maryland limited partnership,
SHELTER PROPERTIES I LIMITED PARTNERSHIP,
a South Carolina limited partnership,
LONG CREEK-OXFORD ASSOCIATES LIMITED
PARTNERSHIP,
a Maryland limited partnership,
MONROE-OXFORD ASSOCIATES LIMITED PARTNERSHIP,
a Maryland limited partnership,
and
TREESLOPE APARTMENTS, A LIMITED PARTNERSHIP,
a South Carolina limited partnership,
AS SELLERS
AND
NORTHVIEW REALTY GROUP, INC.,
a Canadian Corporation
AS PURCHASER
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINED TERMS
1
ARTICLE II
PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT
9
2.1
Purchase and Sale
9
2.2
Purchase Price and Deposit
9
2.3
Escrow Provisions Regarding Deposit
10
ARTICLE III
FEASIBILITY PERIOD
11
3.1
Feasibility Period
11
3.2
Expiration of Feasibility Period
11
3.3
Conduct of Investigation
12
3.4
Purchaser Indemnification
12
3.5
Property Materials
13
3.6
Property Contracts
14
ARTICLE IV
TITLE
15
4.1
Title Documents
15
4.2
Survey
15
4.3
Objection and Response Process
16
4.4
Permitted Exceptions
16
4.5
Existing Deed of Trust/Purchaser Financing
17
4.6
Intentionally Omitted
17
4.7
HUD Approval; HAP Approval; HAP Voucher Approval
17
ARTICLE V
CLOSING
25
5.1
Closing Date
25
5.2
Seller Closing Deliveries
25
5.3
Purchaser Closing Deliveries
27
5.4
Closing Prorations and Adjustments
28
5.5
Post Closing Adjustments
33
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER
33
6.1
Seller's Representations
33
6.2
AS-IS
34
6.3
Survival of Seller's Representations
35
6.4
Definition of Seller's Knowledge
36
6.5
Representations And Warranties Of Purchaser
36
ARTICLE VII
OPERATION OF THE PROPERTIES
37
7.1
Leases and Property Contracts
37
7.2
General Operation of Property
38
7.3
Liens
38
7.4
Pre-Closing Improvements
38
ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING
38
8.1
Purchaser's Conditions to Closing
38
8.2
Sellers' Conditions to Closing
39
ARTICLE IX
BROKERAGE
40
9.1
Indemnity
40
9.2
[Intentionally left blank]
41
9.3
[Intentionally left blank]
41
ARTICLE X
DEFAULTS AND REMEDIES
41
10.1
Purchaser Default
41
10.2
Seller Default
41
ARTICLE XI
RISK OF LOSS OR CASUALTY
42
11.1
Major Damage
42
11.2
Minor Damage
43
11.3
Repairs
43
ARTICLE XII
EMINENT DOMAIN
44
12.1
Eminent Domain
44
ARTICLE XIII
MISCELLANEOUS
44
13.1
Binding Effect of Contract
44
13.2
Exhibits And Schedules
44
13.3
Assignability
44
13.4
Binding Effect
45
13.5
Captions
45
13.6
Number And Gender Of Words
45
13.7
Notices
45
13.8
Governing Law And Venue
47
13.9
Entire Agreement
47
13.10
Amendments
47
13.11
Severability
47
13.12
Multiple Counterparts/Facsimile Signatures
47
13.13
Construction
47
13.14
Confidentiality
48
13.15
Time Of The Essence
48
13.16
Waiver
48
13.17
Attorneys Fees
48
13.18
Time Periods
48
13.19
1031 Exchange
48
13.20
No Personal Liability of Officers, Trustees or Directors of
Seller's Partners
49
13.21
No Exclusive Negotiations
49
13.22
ADA Disclosure
49
13.23
No Recording
50
13.24
Relationship of Parties
50
13.25
Dispute Resolution
50
13.26
AIMCO Marks
50
13.27
Non-Solicitation of Employees
51
13.28
Survival
51
13.29
Multiple Purchasers
51
13.30
Sellers' Several Obligations
51
13.31
Obligation to Close on all Properties
52
ARTICLE XIV
LEAD–BASED PAINT DISCLOSURE
52
14.1
Disclosure
52
14.2
Consent Agreement – Pre-1978 Certified
52
PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT
(this " Contract ") is entered into as of the 23
rd day of May, 2007 (the " Effective
Date "), by the selling parties identified on
Schedule A (the " Seller Information
Schedule ") having an address at 4582 South Ulster
Street Parkway, Suite 1100, Denver, Colorado 80237 (individually
a " Seller " and collectively "
Sellers "), and 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, Sellers and Purchaser hereby agree
as follows:
RECITALS
A.
Each Seller owns the real estate commonly known
as and identified by the "Community Name" listed on the Seller
Information Schedule and as more particularly described in
Exhibits A-1 to A-11 attached hereto and made a
part hereof, and the improvements thereon.
B.
Purchaser desires to purchase, and each Seller
desires to sell, the land, improvements and certain associated
property described in this Contract on the terms and conditions
set forth below.
ARTICLE I
DEFINED TERMS
1.1
Unless otherwise defined herein, any term with its initial letter
capitalized in this Contract shall have the meaning set forth in
this ARTICLE 1 .
1.1.1
" ADA " shall have the meaning set forth in
Section 13.22 .
1.1.2
" Additional Deposit " shall have the meaning set
forth in Section 2.2.2 .
1.1.3
" AIMCO " means Apartment Investment and Management
Company.
1.1.4
" AIMCO Marks " means all words, phrases, slogans,
materials, software, proprietary systems, trade secrets,
proprietary information and lists, and other intellectual property
owned or used by a Seller, its Property Manager, or AIMCO in the
marketing, operation or use of a Property (or in the marketing,
operation or use of any other properties managed by the Property
Manager or owned by AIMCO or an affiliate of either Property
Manager or AIMCO).
1.1.5
" Applicable Share " means a fraction, the numerator
of which is the Property's Purchase Price set forth on the Seller
Information Schedule, and the denominator of which is the aggregate
of all Purchase Prices.
1.1.6
" Assignment of HAP Contract " shall have the meaning
set forth in Section 5.2.11.
1.1.7
[Intentionally left blank]
1.1.8
[Intentionally left blank]
1.1.9
[Intentionally left blank]
1.1.10
[Intentionally left blank]
1.1.11
[Intentionally left blank]
1.1.12
" Broker " shall have the meaning set forth in
Section 9.1 .
1.1.13
" Business Day " means any day other than a Saturday
or Sunday or Federal holiday or legal holiday in the States of
Colorado, Texas, South Carolina or North Carolina.
1.1.14
" Closing " means the consummation of the purchase
and sale and related transactions contemplated by this Contract in
accordance with the terms and conditions of this Contract.
1.1.15
" Closing Date " means the date on which date the
Closing of the conveyance of the Properties is required to be held
pursuant to Section 5.1 .
1.1.16
" Code " shall have the meaning set forth in
Section 2.3.6 .
1.1.17
" Consent Agreement " shall have the meaning set
forth in Section 14.2 .
1.1.18
" Consultants " shall have the meaning set forth in
Section 3.1 .
1.1.19
" Damage Notice " shall have the meaning set forth in
Section 11.1 .
1.1.20
" Deed " shall have the meaning set forth in
Section 5.2.1 .
1.1.21
" Deed of Trust " means any deeds of trust and/or
mortgages which secure a Note against a Payoff Property.
1.1.22
" Deposit " means, to the extent actually deposited
by Purchaser with Escrow Agent, the Initial Deposit and the
Additional Deposit.
1.1.23
" Escrow Agent " shall have the meaning set forth in
Section 2.2.1 .
1.1.24
" Excluded Permits " means, with respect to each
Property, those Permits which, under applicable law, are
nontransferable and such other Permits, if any, as may be
designated as Excluded Permits on the Seller Information
Schedule.
1.1.25
" Existing Survey " shall have the meaning set forth
in Section 4.2 .
1.1.26
" Feasibility Period " shall have the meaning set
forth in Section 3.1 .
1.1.27
" FHA " shall have the meaning set forth in
Section 13.22 .
1.1.28
" Final Response Deadline " shall have the meaning
set forth in Section 4.3 .
1.1.29
" Fixtures and Tangible Personal Property " means,
with respect to each Property, all fixtures, furniture,
furnishings, fittings, equipment, machinery, apparatus, appliances
and other articles of tangible personal property located on such
Property as of the Effective Date and used or usable in connection
with the occupation or operation of all or any part of such
Property, but only to the extent transferable. The term
"Fixtures and Tangible Personal Property" does not include (a)
equipment leased by the applicable Seller and the interest of the
applicable Seller in any equipment provided to its Property for
use, but not owned or leased by such Seller, or (b) property owned
or leased by any Tenant or guest, employee or other person
furnishing goods or services to such Property, or (c) property and
equipment owned by the applicable Seller, which in the ordinary
course of business of such Property is not used exclusively for the
business, operation or management of such Property, or (d) the
property and equipment, if any, expressly identified in
Schedule 1.1.29 or listed on the Seller Information
Schedule as "Excluded FF&E."
1.1.30
" General Assignment " shall have the meaning set
forth in Section 5.2.3 .
1.1.31
" Good Funds " shall have the meaning set forth in
Section 2.2.1 .
1.1.32
" HAP Assumption " shall have the meaning set forth
in Section 4.7.4.1 .
1.1.33
" HAP Contract " shall mean any Housing Assistance
Payments Contract by which rent subsidies under Section 8 of the
United States Housing Act of 1937, as amended, are provided to the
Property, as such contract may be amended from time to time.
1.1.34
" HAP Properties " means Riverwinds at St. Andrews
and West Winds.
1.1.35
" HAP Sellers " means the Riverwinds at St. Andrews
Seller and the West Winds Seller.
1.1.36
" HAP Voucher Approval " shall have the meaning set
forth in Section 4.7.14.1 .
1.1.37
" HAP Voucher Assumption " shall have the meaning set
forth in Section 4.7.4.2 .
1.1.38
" HAP Voucher Assumption Application " shall have the
meaning set forth in Section 4.7.14.1 .
1.1.39
" HAP Voucher Contract " shall mean any Housing
Assistance Payment Contract which regulates Section 8 payments to
the Property under existing vouchers issued by the applicable local
housing authority (the " Housing Authority ").
1.1.40
" Housing Authority Requirements " shall have the
meaning set forth in Section 4.7.14.1 .
1.1.41
" HUD " means the United States Department of Housing
and Urban Development.
1.1.42
" HUD Application " shall mean any application
required to be submitted to HUD in order to obtain HUD
Approval.
1.1.43
" HUD Approval " shall mean any approval required to
be obtained from HUD in order to consummate the Closing, including,
but not limited to, any approval of an assignment of a HAP
Contract.
1.1.44
" Improvements " means all buildings and improvements
located on the Land corresponding to each Property, taken "as
is."
1.1.45
" Initial Deposit " shall have the meaning set forth
in Section 2.2.1 .
1.1.46
" Land " means, with respect to each Property, the
corresponding tract of land described on Exhibits A-1 to
A-11 , and all rights, privileges and appurtenances
pertaining thereto.
1.1.47
" LBP Report " means, with respect to a Property, the
report identified on the Seller Information Schedule, prepared by
the consultant identified therein with respect to lead-based
paint.
1.1.48
" Lease(s) " means, with respect to each Property,
the interest of the applicable Seller in and to all leases,
subleases and other occupancy contracts, whether or not of record,
which provide for the use or occupancy of space or facilities on or
relating to such Seller's Property and which are in force as of the
Closing Date for the applicable Property.
1.1.49
" Leases Assignment " shall have the meaning set
forth in Section 5.2.4 .
1.1.50
" Lender " means, with respect to each Property,
those "Lenders" identified on the Seller Information Schedule, each
of whose servicer, if any, also is identified on the Seller
Information Schedule.
1.1.51
[Intentionally left blank] .
1.1.52
" Loan " means the indebtedness owing to Lender
evidenced by a Note.
1.1.53
[ Intentionally left blank ]
1.1.54
[Intentionally left blank]
1.1.55
[Intentionally left blank ]
1.1.56
[Intentionally left blank]
1.1.57
" Loan Payoff " shall have the meaning set forth in
Section 5.4.7 .
1.1.58
" Losses " shall have the meaning set forth in
Section 3.4.1 .
1.1.59
" LURA Properties " shall mean the Hunt Club and
North Slope Properties.
1.1.60
" LURA Sellers " shall mean the Hunt Club and North
Slope Sellers.
1.1.61
" Material Item " means either (a) a hazardous
environmental condition, or (b) title or survey defect, having a
material and adverse effect on the operation or marketability of a
Property. For purposes of the foregoing, an item shall be
deemed to have a "material and adverse effect" only if such item
has a quantifiable and measurable obligation, liability, or expense
in excess of $100,000 for any Property, or when taken together with
all other Material Items on all other Properties, would have a
value in excess of $1,100,000 for all Properties.
1.1.62
" Materials " shall have the meaning set forth in
Section 3.5 .
1.1.63
" Materials Deposit " shall mean that portion of the
Deposit in the amount of $75,000 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.
1.1.64
" Miscellaneous Property Assets " means, with respect
to each Property (including, without limitation, rights under any
HAP Contract or HAP Voucher Contract), all contract rights, leases,
concessions, warranties, plans, drawings and other items of
intangible personal property relating to the ownership or operation
of a Property and owned by its respective Seller, excluding,
however, with respect to each Property (a) receivables, (b)
Property Contracts, (c) Leases, (d) Permits, (e) cash or other
funds, whether in petty cash or house "banks," or on deposit in
bank accounts or in transit for deposit, (f) refunds, rebates or
other claims, or any interest thereon, for periods or events
occurring prior to the Closing Date, (g) utility and similar
deposits, (h) insurance or other prepaid items, (i) such
Seller's proprietary books and records, or (j) any right, title or
interest in or to the AIMCO Marks, or (k) HAP Contract subsidy
payments accrued up to the Closing Date. The term
"Miscellaneous Property Assets" also shall include all of the
applicable Seller's rights, if any, in and to the name "Community
Name" identified in the Seller Information Schedule as it relates
solely to use in connection with the applicable Property (and not
with respect to any other property owned or managed by any Seller,
Property Manager, AIMCO, or their respective affiliates).
1.1.65
" Non-Refundable Initial Deposit Component " shall
have the meaning set forth in Section 2.2.1 .
1.1.66
" Note " means, with respect to each Property, the
promissory note(s) identified in the Seller Information
Schedule.
1.1.67
" Objection Deadline " shall have the meaning set
forth in Section 4.3 .
1.1.68
" Objection Notice " shall have the meaning set forth
in Section 4.3 .
1.1.69
" Objections " shall have the meaning set forth in
Section 4.3 .
1.1.70
" Payoff Property " means those Properties for which
the Loan will be paid off at Closing and identified as a Payoff
Property on the Seller Information Schedule.
1.1.71
" Permits " means, with respect to each Property, all
licenses and permits granted by any governmental authority having
jurisdiction over such Property and required in order to own and
operate such Property.
1.1.72
" Permitted Exceptions " shall have the meaning set
forth in Section 4.4 .
1.1.73
" 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.
1.1.74
" Property " means (a) the Land and Improvements and
all rights of the applicable Seller, if any, in and to all of the
easements, rights, privileges, and appurtenances belonging or in
any way appertaining to such Land and Improvements, (b) the
Property Contracts, Leases, Permits (other than Excluded Permits),
and the right, if any, of the applicable Seller in and to the
Fixtures and Tangible Personal Property related to such Land and
Improvements, and (c) the Miscellaneous Property Assets owned by
the applicable Seller which are located on such Land and
Improvements and used in its operation.
1.1.75
" Property Contracts " means, with respect to each
Property, all contracts, agreements, equipment leases, purchase
orders, maintenance, service, or utility contracts and similar
contracts, excluding Leases, regardless of whether entered into by
the applicable Seller, the applicable Property Manager, or an
affiliate of either, which relate to the ownership, maintenance,
construction or repair and/or operation of such Property, whether
or not assignable by their terms, but not including (a) any
national contracts entered into by the applicable Seller, Property
Manager, or AIMCO with respect to the applicable Property
(i) which terminate automatically upon transfer of such
Property by such Seller, or (ii) which such Seller, in
Seller's sole discretion, elects to terminate with respect to such
Property effective as of the Closing Date, (b) any property
management contract for such Property, or (c) any HAP Contract or
HAP Voucher Contract.
1.1.76
" Property Contracts Notice " shall have the meaning
set forth in Section 3.6 .
1.1.77
" Property Manager " means the current property
manager of each Property.
1.1.78
" Proration Schedule " shall have the meaning set
forth in Section 5.4.1 .
1.1.79
" Purchase Price " shall have the meaning set forth
in Section 2.2 .
1.1.80
" Records Disposal Notice " shall have the meaning
set forth in Section 5.4.13 .
1.1.81
" Records Hold Period " shall have the meaning set
forth in Section 5.4.13 .
1.1.82
" Refundable Initial Deposit Component " shall have
the meaning set forth in Section 2.2.1 .
1.1.83
" Regional Property Manager " means, with respect to
each Property, the individual identified in the Seller Information
Schedule.
1.1.84
" Reinstatement Notice " shall have the meaning set
forth in Section 8.1 .
1.1.85
" Remediation " shall have the meaning set forth in
Section 14.2 .
1.1.86
" Required Assignment Consent " shall have the
meaning set forth in Section 3.6 .
1.1.87
" Required Loan Fund Amounts " shall have the meaning
set forth in Section 4.6.6 .
1.1.88
" Residual Receipts Account " shall have the meaning
set forth in Section 4.7.10 .
1.1.89
" Response Deadline " shall have the meaning set
forth in Section 4.3 .
1.1.90
" Response Notice " shall have the meaning set forth
in Section 4.3 .
1.1.91
" Restriction Properties " means Riverwinds at St.
Andrews, West Winds, Hunt Club and North Slope.
1.1.92
" Restriction Sellers " means the Riverwinds at St.
Andrews, West Winds, Hunt Club and North Slope Sellers.
1.1.93
" Seller-Provided Notice " shall have the meaning set
forth in Section 4.7.7 .
1.1.94
" Seller's Indemnified Parties " shall have the
meaning set forth in Section 3.4.1 .
1.1.95
" Seller Information Schedule " shall have the
meaning set forth in the introductory paragraph.
1.1.96
" Seller's Property-Related Files and Records " shall
have the meaning set forth in Section 5.4.13
.
1.1.97
" Seller's Representations " shall have the meaning
set forth in Section 6.1 .
1.1.98
" Seller's Representative " means AIMCO.
1.1.99
" Specific AIMCO Provisions " shall have the meaning
set forth in Section 4.6.2 .
1.1.100
" Survey " shall have the meaning ascribed thereto in
Section 4.2 .
1.1.101
" Survival Period " shall have the meaning set forth
in Section 6.3 .
1.1.102
" Survival Provisions " shall have the meaning set
forth in Section 13.28 .
1.1.103
" Tax Appeal Properties " means Essex Park, Quail
Hollow, Riverwinds at St. Andrews, and West Winds.
1.1.104
" Tax Appeal Sellers " means the Essex Park, Quail
Hollow, Riverwinds at St. Andrews, and West Winds Sellers.
1.1.105
" Tenant " means any person or entity entitled to
occupy any portion of the applicable Property under a Lease.
1.1.106
" Tenant Deposits " means, with respect to a
Property, all security deposits, prepaid rentals, cleaning fees and
other refundable deposits and fees collected from Tenants, plus any
interest accrued thereon, paid by Tenants to the applicable Seller
pursuant to its Leases. Tenant Deposits shall not include any
non-refundable deposits or fees paid by Tenants to the applicable
Seller, either pursuant to the Leases or otherwise.
1.1.107
" Tenant Security Deposit Balance " shall have the
meaning set forth in Section 5.4.6.2 .
1.1.108
" Terminated Contracts " shall have the meaning set
forth in Section 3.6 .
1.1.109
" Termination Notice " shall have the meaning set
forth in Section 8.1 .
1.1.110
" Testing " shall have the meaning set forth in
Section 14.2 .
1.1.111
" Third-Party Reports " means any reports, studies or
other information prepared or compiled for Purchaser by any
Consultant or other third-party in connection with Purchaser's
investigation of a Property.
1.1.112
" Title Commitment " shall have the meaning ascribed
thereto in Section 4.1 .
1.1.113
" Title Documents " shall have the meaning set forth
in Section 4.1 .
1.1.114
" Title Insurer " shall have the meaning set forth in
Section 2.2.1 .
1.1.115
" Title Policy " shall have the meaning set forth in
Section 4.1 .
1.1.116
" Uncollected Rents " shall have the meaning set
forth in Section 5.4.6.1 .
1.1.117
" Vendor Terminations " shall have the meaning set
forth in Section 5.2.5 .
ARTICLE II
PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT
2.1
Purchase and Sale . Each
Seller agrees to sell and convey its Property listed on the
Seller Information Schedule to Purchaser and Purchaser agrees to
purchase such Property from each Seller, all in accordance with
the terms and conditions set forth in this Contract.
2.2
Purchase Price and Deposit .
The purchase price for each Property is set forth in the
Seller Information Schedule (the " Purchase Price
"). The Purchase Price for each Property shall be paid as
follows:
2.2.1
Within one (1) Business Day after the Effective
Date, Purchaser shall deliver to Stewart Title Guaranty Company
c/o Wendy Howell, National Commercial Closing Specialist 1980
Post Oak Boulevard, Suite 610, Houston, TX 77056, 800-729-1906
(" Escrow Agent " or " Title Insurer
") an initial deposit (the " Initial Deposit ") of
$1,000,000 by wire transfer of immediately available funds ("
Good Funds "). An amount equal to $500,000
of the Initial Deposit (the "Non -Refundable Initial
Deposit Component ") shall, immediately upon delivery,
be non-refundable under all circumstances other than as set
forth in Section 3.2 or Seller's default hereunder
(the remaining $500,000 of the Initial Deposit is referred to
herein as the " Refundable Initial Deposit
Component "). The Initial Deposit shall be held
and disbursed in accordance with the escrow provisions set forth
in Section 2.3 . The Initial Deposit
shall be allocated among the Sellers of the Properties pursuant
to the Applicable Share attributable to each of their respective
Properties.
2.2.2
On the day that the Feasibility Period expires,
Purchaser shall deliver to Escrow Agent an additional deposit
(the " Additional Deposit ") of $1,000,000 by wire
by transfer of Good Funds. The Additional Deposit shall be
held and disbursed in accordance with the escrow provisions set
forth in Section 2.3 . The Additional
Deposit shall be allocated among the Sellers of the Properties
pursuant to the Applicable Share attributable to each of their
respective Properties.
2.2.3
Intentionally Omitted .
2.2.4
The balance of the Purchase Price for each
Property shall be paid to and received by Escrow Agent by wire
transfer of Good Funds no later than 11:00 a.m. (in the
time zone in which Escrow Agent is located) on the Closing Date
(or such earlier time as required by any Seller's lender).
2.2.5
Intentionally Omitted .
2.2.6
The allocations of Purchase Prices for the
Properties set forth on the Seller Information Schedule have
been established by Purchaser, and Seller has not, in any way,
influenced such allocations among the Properties.
2.3
Escrow Provisions Regarding
Deposit .
2.3.1
Escrow Agent shall hold the Deposit and make
delivery of the Deposit to the party entitled thereto under the
terms of this Contract. Escrow Agent shall invest the
Deposit in such short-term, high-grade securities,
interest-bearing bank accounts, money market funds or accounts,
bank certificates of deposit or bank repurchase contracts as
Escrow Agent, in its discretion, deems suitable, and all
interest and income thereon shall become part of the Deposit and
shall be remitted to the party entitled to the Deposit pursuant
to this Contract.
2.3.2
Escrow Agent shall hold the Deposit until the
earlier occurrence of (i) the Closing Date, at which time the
Deposit shall be applied against the Purchase Price for each
Property, or (ii) the date on which Escrow Agent shall be
authorized to disburse the Deposit as set forth in
Section 2.3.3 . The tax identification
numbers of the parties shall be furnished to Escrow Agent upon
request.
2.3.3
If the Deposit has not been released earlier in
accordance with Section 2.3.2 , and Purchaser
or Seller's Representative makes a written demand upon Escrow
Agent for payment of the Deposit, Escrow Agent shall give
written notice to the other parties of such demand. If
Escrow Agent does not receive a written objection from another
party to the proposed payment within 5 Business Days after the
giving of such notice, Escrow Agent is hereby authorized to make
such payment (subject to Purchaser's obligation under
Section 3.5.2 to return all Third-Party Reports
and information and Materials provided to Purchaser as a
pre-condition to the return of the 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 a Property is located. Escrow Agent
shall give written notice of such deposit to Seller's
Representative and Purchaser. Upon such deposit, Escrow
Agent shall be relieved and discharged of all further
obligations and responsibilities hereunder. Sellers hereby
appoint Seller's Representative to give and receive notices to
Escrow Agent regarding the Deposit.
2.3.4
The parties acknowledge that Escrow Agent is
acting solely as a stakeholder at their request and for their
convenience, and that Escrow Agent shall not be deemed to be the
agent of any of the parties for any act or omission on its part
unless taken or suffered in bad faith in willful disregard of
this Contract or involving gross negligence. Sellers and
Purchaser jointly and severally shall indemnify and hold Escrow
Agent harmless from and against all costs, claims and expenses,
including reasonable attorney's fees, incurred in connection
with the performance of Escrow Agent's duties hereunder, except
with respect to actions or omissions taken or suffered by Escrow
Agent in bad faith, in willful disregard of this Contract or
involving gross negligence on the part of the Escrow Agent.
2.3.5
The parties shall deliver to Escrow Agent an
executed copy of this Contract, which shall constitute the sole
instructions to Escrow Agent. Escrow Agent shall execute
the signature page for Escrow Agent attached hereto with respect
to the provisions of this Section 2.3 ;
provided, however, that (a) Escrow Agent's signature hereon
shall not be a prerequisite to the binding nature of this
Contract on Purchaser and Sellers, and the same shall become
fully effective upon execution by Purchaser and Sellers, and (b)
the signature of Escrow Agent will not be necessary to amend any
provision of this Contract other than this
Section 2.3 .
2.3.6
Escrow Agent, as the person responsible for
closing the transaction within the meaning of
Section 6045(e)(2)(A) of the Internal Revenue Code of 1986,
as amended (the " Code "), shall file all
necessary information, reports, returns, and statements
regarding the transaction required by the Code including, but
not limited to, the tax reports required pursuant to
Section 6045 of the Code. Further, Escrow Agent
agrees to indemnify and hold Purchaser, Sellers, and their
respective attorneys and brokers harmless from and against any
Losses resulting from Escrow Agent's failure to file the reports
Escrow Agent is required to file pursuant to this section.
2.3.7
The provisions of this
Section 2.3 shall survive the termination of
this Contract, and if not so terminated, the Closing and
delivery of the Deeds to Purchaser.
ARTICLE III
FEASIBILITY PERIOD
3.1
Feasibility Period . Subject
to the terms of Sections 3.3 and 3.4 and the
right of Tenants under the Leases, from the Effective Date to
and including June 5, 2007 (the " Feasibility
Period "), Purchaser, and its agents, contractors,
engineers, surveyors, attorneys, and employees (collectively, "
Consultants ") shall have the right from time to
time to enter onto the Properties:
3.1.1
To conduct and make any and all customary
studies, tests, examinations, inquiries, and inspections, or
investigations (collectively, the " Inspections ")
of or concerning the Properties (including, without limitation,
engineering and feasibility studies, evaluation of drainage and
flood plain, soil tests for bearing capacity and percolation and
surveys, including topographical surveys);
3.1.2
To confirm any and all matters which Purchaser
may reasonably desire to confirm with respect to the
Properties;
3.1.3
To ascertain and confirm the suitability of the
property for Purchaser's intended use of the Properties; and
3.1.4
To review the Materials at Purchaser's sole cost
and expense.
3.2
Expiration of Feasibility Period .
If the results of any of the matters referred to in
Section 3.1 appear unsatisfactory to
Purchaser for any reason or if Purchaser elects not to proceed
with the transaction contemplated by this Contract for any other
reason, or for no reason whatsoever, in Purchaser's sole and
absolute discretion, then Purchaser shall have the right to
terminate this Contract in its entirety with respect to all
Properties (but not in part with respect to less than all
Properties) by giving written notice to that effect to Seller's
Representative and Escrow Agent on or before 5:00 p.m. (in the
time zone in which the Escrow Agent is located) on the date of
expiration of the Feasibility Period. If Purchaser
exercises such right to terminate, this Contract shall terminate
and be of no further force and effect subject to and except for
the Survival Provisions, and Escrow Agent shall forthwith return
the Refundable Initial Deposit Component to Purchaser (subject
to Purchaser's obligation under Section 3.5.2 to
return all Third-Party Reports and information and Materials
provided to Purchaser as a pre-condition to the return of the
Materials Deposit); provided, however, that if, prior to
expiration of the Feasibility Period, Purchaser gives written
notice identifying in reasonable detail a Material Item, and
Purchaser terminates this Contract as to all Properties in
strict accordance with this Section 3.2 , then the
Escrow Agent also shall deliver to Purchaser the Non-Refundable
Initial Deposit Component (subject to Purchaser's obligation
under Section 3.5.2 to return all Third-Party
Reports and information and Materials provided to Purchaser as a
pre-condition to the return of the Materials Deposit). If
Purchaser fails to provide Seller's Representative with written
notice of termination prior to the expiration of the Feasibility
Period in strict accordance with the notice provisions of this
Contract, Purchaser's right to terminate under this
Section 3.2 shall be permanently waived and
this Contract shall remain in full force and effect, the Deposit
(including both the Initial Deposit (including the Refundable
Initial Deposit Component) and, when delivered in accordance
with Section 2.2.2 , the Additional Deposit) shall
be non-refundable, and Purchaser's obligation to purchase the
Properties shall be non-contingent and unconditional except only
for satisfaction of the conditions expressly stated in
Section 8.1 .
3.3
Conduct of Investigation .
Purchaser shall not permit any mechanic's or materialmen's
liens or any other liens to attach to any Property by reason of
the performance of any work or the purchase of any materials by
Purchaser or any other party in connection with any Inspections
conducted by or for Purchaser. Purchaser shall give notice
to the applicable Seller a reasonable time prior to entry onto
its Property and shall permit such Seller to have a
representative present during all Inspections conducted at its
Property. 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
each Property, and all equipment, materials and substances
generated, used or brought onto each Property pose no material
threat to the safety of persons or the environment and cause no
damage to such Property or other property of any Seller or other
persons. All information made available by any of the
Sellers to Purchaser in accordance with this Contract or
obtained by Purchaser in the course of its Inspections shall be
treated as confidential information by Purchaser, and, prior to
the purchase of the Properties by Purchaser, Purchaser shall use
its best efforts to prevent its Consultants from divulging such
information to any unrelated third parties except as reasonably
necessary to third parties engaged by Purchaser for the limited
purpose of analyzing and investigating such information for the
purpose of consummating the transaction contemplated by this
Contract. The provisions of this
Section 3.3 shall survive the termination of
this Contract, and if not so terminated shall survive (except
for the confidentiality provisions of this
Section 3.3 ) the Closing and delivery of the
Deeds to Purchaser.
3.4
Purchaser Indemnification .
3.4.1
Purchaser shall indemnify, hold harmless and, if
requested by a Seller (in such Seller's sole discretion), defend
(with counsel approved by such Seller) such Seller, together
with such Seller's affiliates, parent and subsidiary entities,
successors, assigns, partners, managers, members, employees,
officers, directors, trustees, shareholders, counsel,
representatives, agents, Property Manager, Regional Property
Manager, and AIMCO (collectively, including such Seller, "
Seller's Indemnified Parties "), from and against
any and all damages, mechanics' liens, liabilities, penalties,
interest, losses, demands, actions, causes of action, claims,
costs and expenses (including reasonable attorneys' fees,
including the cost of in-house counsel and appeals)
(collectively, " Losses ") arising from or related
to Purchaser's or its Consultants' entry onto such Seller's
Property, and any Inspections or other matters performed by
Purchaser with respect to such Property during the Feasibility
Period or otherwise.
3.4.2
Notwithstanding anything in this Contract to the
contrary, Purchaser shall not be permitted to perform any
invasive tests on any Property without Seller's Representative's
prior written consent, which consent may be withheld in Seller's
Representative's sole discretion. Further, Seller's
Representative shall have the right, without limitation, to
disapprove any and all entries, surveys, tests (including,
without limitation, a Phase II environmental study of its
Property), investigations and other matters that in such
Seller's Representative's reasonable judgment could result in
any injury to its Property or breach of any contract, or expose
the applicable Seller to any Losses or violation of applicable
law, or otherwise adversely affect such Property or such
Seller's interest therein. Purchaser shall use best
efforts to minimize disruption to Tenants in connection with
Purchaser's or its Consultants' activities pursuant to this
Section. No consent by Seller' Representative to any such
activity shall be deemed to constitute a waiver by the
applicable Seller or assumption of liability or risk by such
Seller. Purchaser hereby agrees to restore, at Purchaser's
sole cost and expense, each Property to the same condition
existing immediately prior to Purchaser's exercise of its rights
pursuant to this Article 3 . Purchaser
shall maintain and cause its third party consultants to maintain
(a) casualty insurance and commercial general liability
insurance with coverages of not less than $1,000,000.00 for
injury or death to any one person and $3,000,000.00 for injury
or death to more than one person and $1,000,000.00 with respect
to property damage, and (b) worker's compensation insurance
for all of their respective employees in accordance with the law
of the state(s) in which the Properties are located.
Purchaser shall deliver proof of the insurance coverage
required pursuant to this Section 3.4.2 to Sellers
(in the form of a certificate of insurance) prior to the earlier
to occur of (i) Purchaser's or Purchaser's Consultants' entry
onto any of the Properties, or (ii) the expiration of 5 days
after the Effective Date.
3.4.3
The provisions of this
Section 3.4 shall survive the termination of
this Contract, and if not so terminated, the Closing and
delivery of the Deeds to Purchaser.
3.5
Property Materials .
3.5.1
Within 5 Business Days after the Effective Date,
and to the extent the same exist and are in a Seller's
possession or reasonable control (subject to Section
3.5.2 ), each Seller agrees to make the documents set
forth on Schedule 3.5 (the "
Materials ") relating to its Property available at
its Property for review and copying by Purchaser at Purchaser's
sole cost and expense. In the alternative, at a Seller's
option and within the foregoing 5-Business-Day period, such
Seller may deliver some or all of its Materials to Purchaser, or
make the same available to Purchaser on a secure web site
(Purchaser agrees that any item to be delivered by a Seller
under this Contract shall be deemed delivered to the extent
available to Purchaser on such secured web site). To the
extent that Purchaser determines that any of the Materials have
not been made available or delivered to Purchaser pursuant to
this Section 3.5.1 , Purchaser shall notify the
applicable Seller and such Seller shall use commercially
reasonable efforts to deliver the same to Purchaser within 5
Business Days after such notification is received by such
Seller; provided, however, that under no circumstances will the
Feasibility Period be extended and 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, each Seller
makes no representation or warranty, express, written, oral,
statutory, or implied, and all such representations and
warranties are hereby expressly excluded and disclaimed.
Any information and Materials provided by any of the
Sellers to Purchaser under the terms of this Contract is for
informational purposes only and, together with all Third-Party
Reports, shall be returned by Purchaser to all applicable
Sellers as a condition to return of the Materials Deposit to
Purchaser (if Purchaser is otherwise entitled to such Deposit
pursuant to the terms of this Contract) if this Contract is
terminated for any reason. Purchaser shall not in any way
be entitled to rely upon the accuracy of such information and
Materials. Purchaser recognizes and agrees that the
Materials and other documents and information delivered or made
available by Sellers pursuant to this Contract may not be
complete or constitute all of such documents which are in a
Seller's possession or control, but are those that are readily
available to such Seller after reasonable inquiry to ascertain
their availability. Purchaser understands that, although
each Seller will use commercially reasonable efforts to locate
and make available the Materials and other documents required to
be delivered or made available by it pursuant to this Contract,
Purchaser will not rely on such Materials or other documents as
being a complete and accurate source of information with respect
to such Seller's Property, and will instead in all instances
rely exclusively on its own Inspections and Consultants with
respect to all matters which it deems relevant to its decision
to acquire, own and operate the Properties.
3.5.3
In addition to the items set forth on Schedule
3.5, no later than 5 Business Days after the Effective Date,
each Seller shall deliver to Purchaser (or otherwise make
available to Purchaser as provided under Section 3.5.1) a rent
roll for such Seller's 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 no Seller makes any
representations or warranties regarding the Rent Roll other than
the express representation set forth in Section 6.1.7.
Sellers shall update their respective 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 each Seller (a " Property
Contracts Notice ") specifying any Property Contracts of
such Seller which Purchaser desires to terminate at the Closing
(the " Terminated Contracts "); provided that (a)
the effective date of such termination after Closing shall be
subject to the express terms of such Terminated Contracts (and,
to the extent that the effective date of termination of any
Terminated Contract is after the Closing Date, Purchaser shall
be deemed to have assumed all of the applicable Seller's
obligations under such Terminated Contract as of the Closing
Date), (b) if any such Property Contract cannot by its terms be
terminated, it shall be assumed by Purchaser and not be a
Terminated Contract, and (c) to the extent that any such
Terminated Contract requires payment of a penalty or premium for
cancellation, Purchaser shall be solely responsible for the
payment of any such cancellation fees or penalties. If
Purchaser fails to deliver a Property Contracts Notice to a
Seller on or before the expiration of the Feasibility Period,
there shall be no Terminated Contracts with respect to such
Seller (or its Property) and Purchaser shall assume all Property
Contracts of such Seller at the Closing. To the extent
that any Property Contract to be assumed by Purchaser (including
any Property Contract that, because of advance notice
requirements, will be temporarily assumed by Purchaser pending
the effective date of termination after the Closing Date) is
either (i) assignable but requires the applicable vendor to
consent to the assignment or assumption of the Property Contract
by the applicable Seller to Purchaser, or (ii) is not assignable
(either by its terms or applicable law), 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
the applicable Seller to Purchaser (and the assumption by
Purchaser of all obligations under such Property Contract).
Purchaser shall indemnify, hold harmless and, if requested
by the applicable Seller (in such Seller's sole discretion),
defend (with counsel approved by such Seller) such Seller's
Indemnified Parties from and against any and all Losses arising
from or related to Purchaser's failure to obtain any Required
Assignment Consent.
ARTICLE IV
TITLE
4.1
Title Documents . Seller has
delivered to Purchaser a standard form commitment for title
insurance (" Title Commitment ") for such Seller's
Property in an amount equal to the Property's 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 "). Each Seller shall be responsible
only for payment of the basic premium for the Title Policy for
its Property. 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
with respect to each of the Properties, including for "extended"
coverage.
4.2
Survey . Seller has
delivered to Purchaser any existing survey of such Property (the
" Existing Survey ") which to such Seller's
knowledge is in such Seller's possession or reasonable control
(subject to Section 3.5.2 ). If such
Existing Survey was prepared within 6 months prior to the
Effective Date, Purchaser shall reimburse the applicable Seller
for the cost of the preparation thereof. 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 a Property be
prepared (or that the Existing Survey be updated), Purchaser
shall order such new or updated survey of such Property either
before or within three (3) Business Days of the Effective Date
(each 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 ").
Purchaser shall be solely responsible for the cost and
expense of the preparation of any new or updated survey
requested pursuant to the terms of this Section
4.2 .
4.3
Objection and Response Process .
On or before May 25, 2007 (the " Objection
Deadline "), Purchaser shall, on a Property-by-Property
basis, give written notice (the " Objection Notice
") to the attorneys for Sellers of any matter set forth in any
Title Documents or Surveys to which Purchaser objects (the "
Objections "). If Purchaser fails to tender
an Objection Notice with respect to a Property on or before the
Objection Deadline, Purchaser shall be deemed to have approved
and irrevocably waived any objections to any matters covered by
the Title Documents and the Survey for such Property. On
or before May 30, 2007 (the " Response Deadline
"), a Seller who has received an Objection Notice may, in such
Seller's sole discretion, give Purchaser notice (the "
Response Notice ") of those Objections which such
Seller is willing to cure, if any. Sellers shall be
entitled to reasonable adjournments of the Closing Date to cure
any Objections applicable to any Seller. If a Seller fails
to deliver a Response Notice by the Response Deadline, such
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 any Response Notice, Purchaser
may, as its exclusive remedy, elect by written notice given to
Seller's Representative on or before the expiration of the
Feasibility Period (the " Final Response Deadline
") either (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 its entirety regarding all Properties (but not less
than all Properties), in accordance with the terms and
conditions of Section 3.2 . If Purchaser
fails to give notice to terminate this Contract on or before the
Final Response Deadline, Purchaser shall be deemed to have
elected to approve and irrevocably waived any objections to any
matters covered by the Title Documents or the Survey applicable
to each Property, subject only to resolution, if any, of the
Objections as set forth in the Response Notice for such Property
(or if no Response Notice is tendered, without any resolution of
the Objections).
4.4
Permitted Exceptions . The
Deed for each Property delivered pursuant to this Contract shall
be subject to the following, all of which shall be deemed "
Permitted Exceptions ":
4.4.1
All matters shown in the Title Documents and the
Survey for such Property, other than (a) those Objections, if
any, which the applicable Seller has agreed to cure pursuant to
the Response Notice under Section 4.3 , (b)
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 for such Property;
4.4.3
Intentionally Omitted;
4.4.4
All Assumed Restrictions;
4.4.5
Applicable zoning and governmental regulations
and ordinances;
4.4.6
Any defects in or objections to title to such
Property, or title exceptions or encumbrances, arising by,
through or under Purchaser; and
4.4.7
The terms and conditions of this Contract.
4.5
Existing Deed of Trust/Purchaser
Financing .
4.5.1
The provisions of this Section 4.5
apply only to Payoff Properties. It is understood and
agreed that, whether or not Purchaser gives an Objection Notice
with respect thereto for a Payoff Property, any deeds of trust
and/or mortgages which secure a Note for a Payoff Property
(collectively, a " Deed of Trust ") shall not be
deemed Permitted Exceptions for such Property, whether Purchaser
gives further written notice of such or not, and shall, pursuant
to Section 5.4.7 , be paid off, satisfied,
discharged and/or cured from proceeds of the Purchase Price at
Closing .
4.5.2
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.
4.5.3
Intentionally Omitted
4.6
Intentionally Omitted
4.7
HUD Approval; HAP Approval; HAP Voucher
Approval .
4.7.1
Purchaser recognizes and agrees that the
Restriction Properties presently are encumbered by the
encumbrances set forth on Schedule 4.7.1
following: (collectively, the " Assumed
Restrictions "). From and after the Closing,
Purchaser shall be responsible for complying with each of the
Assumed Restrictions at Purchaser's sole cost and expense (the
foregoing covenant shall survive the Closing). Within 5
Business Days after the Effective Date, each of the Restriction
Sellers agrees that it will make available to Purchaser (in the
same manner in which each of the Restriction Sellers is
permitted to make the Materials available to Purchaser under
Section 3.5.1 ) copies of the Assumed Restrictions
which are in each of the Restriction Sellers' possession or
reasonable control (subject to Section 3.5.2
).
4.7.2
Intentionally Omitted .
4.7.3
Purchaser recognizes and agrees that the HAP
Properties presently are benefited by a HAP Contract and/or a
HAP Voucher Contract(s) which shall be deemed an "Assumed
Restriction" for all purposes under this Contract. Within
5 Business Days after the Effective Date, Seller agrees that it
will make available to Purchaser (in the same manner in which
each of the HAP Sellers is permitted to make the Materials
available to Purchaser under Section 3.5.1 ) a copy of
the HAP Contract and/or the HAP Voucher Contract(s) which is in
each of the HAP Sellers' possession or reasonable control
(subject to Section 3.5.2 ).
4.7.4
With respect to the HAP Assumption and/or HAP
Voucher Assumption:
4.7.4.1
Purchaser agrees that, at the Closing, the
Riverwinds at St. Andrews Seller shall assign and Purchaser
shall assume the HAP Contract for the Riverwinds at St. Andrews
Property (the " HAP Assumption "). Purchaser
further acknowledges that the HAP Contract for the Riverwinds at
St. Andrews Property requires the satisfaction by Purchaser of
certain requirements as set forth therein and established by HUD
to allow for the HAP Assumption with respect to that
Property.
4.7.4.2
Purchaser further acknowledges that each of the
HAP Voucher Contracts for the West Winds Property requires the
satisfaction by Purchaser of certain requirements as set forth
therein and established by the Housing Authority to allow for
each HAP Voucher Assumption. Purchaser agrees that, at the
Closing, either (a) Purchaser shall assume all obligations
under each HAP Voucher Contracts and accept title to the West
Winds Property subject to the same, or (b) the existing HAP
Voucher Contracts shall be terminated, and Purchaser shall enter
into replacement HAP Voucher Contracts which are acceptable to
the Housing Authority (collectively, each of the foregoing (a)
and (b) referred to herein as the " HAP Voucher
Assumption ").
4.7.5
Prior to the Closing, Purchaser shall, at its
sole cost and expense, obtain HUD Approval. In connection
with the foregoing, Purchaser, at its sole cost and expense and
no later than June 7, 2007 (the " HUD Submittal
Deadline "), shall submit a complete HUD Application in
order to request HUD Approval, including, without limitation,
all application documents, certificates, agreements, information
and fees required by HUD to allow for HUD's approval of the
Riverwinds at St. Andrews Seller's assignment and Purchaser's
assumption of the HAP Contract. In addition to the
foregoing, (x) Purchaser shall obtain 2530 approval from HUD,
and, in addition to such 2530 approval, shall satisfy all other
requirements imposed by HUD field offices in connection with any
other process imposed as a prerequisite to obtaining HUD
Approval, and (y) if the Property's Real Estate Assessment
Center physical inspection score is a 59 or below and the
Property is involved in an assignment of the HAP Contract, then
the Purchaser shall enter into an agreement with HUD whereby the
Purchaser will hire an independent professional inspector (if an
in-house HUD inspector is unavailable) to inspect all of the
Property's units to determine if they meet the Uniform Physical
Condition Standards (UPCS, and all units that meet the UPCS may
continue to receive Section 8 subsidy and any units that fail to
meet the UPCS shall be repaired by Purchaser and re-inspected,
and may voucher for Section 8 funds once they satisfy UPCS.
Purchaser shall be in default hereunder if Purchaser fails
to submit the HUD Application to HUD by the HUD Submittal
Deadline, in which event the Riverwinds at St. Andrews Seller
may terminate this Contract as to the Riverwinds at St. Andrews
Property, or all Sellers may terminate this Contract as to all
Properties, and the Deposit shall be immediately released by the
Escrow Agent to Sellers (or if this Contract is terminated only
as to the Riverwinds at St. Andrews Property, then the
Applicable Share of the Deposit shall be released by Escrow
Agent to the Riverwinds at St. Andrews Seller). To the
extent necessary and reasonable, the Riverwinds at St. Andrews
Seller will provide authorization to HUD, or any other
appropriate federal or state agency, to release to Purchaser
copies of each HAP Contract, or other documents or agreements
with HUD for Purchaser's reference in connection with obtaining
HUD Approval.
4.7.6
Purchaser agrees promptly to deliver to HUD all
documents and information required in order to obtain HUD
Approval, and such other information or documentation as HUD
reasonably may request, including, without limitation, financial
statements, income tax returns and other financial information
for Purchaser and any required guarantor, materials, documents,
certificates, signatures, and other items. Without
limiting the generality of the foregoing, Purchaser agrees to
submit each of the required documents listed on Schedule
4.7.6 attached hereto. The Riverwinds at St.
Andrews Seller agrees that it will cooperate with Purchaser and
HUD, at no cost or expense to such Riverwinds at St. Andrews
Seller, in connection with Purchaser's application to HUD for
HUD Approval. The Riverwinds at St. Andrews Seller
reserves the right to reject, in such Riverwinds at St. Andrews
Seller's sole discretion, the terms and conditions imposed by
HUD or the Housing Authority in connection with HUD Approval
(including, without limitation, any condition imposed by HUD
which would impose liability on such Riverwinds at St. Andrews
Seller or adversely affect the economic remuneration due such
Riverwinds at St. Andrews Seller from the sale contemplated
hereby) or the HAP Assumption. Purchaser agrees to provide
the Riverwinds at St. Andrews Seller with a copy of the HUD
Application no later than 2 Business Days prior to the HUD
Submittal Deadline and shall provide evidence of Purchaser's
submission of each of the foregoing to HUD on or before the HUD
Submittal Deadline. Purchaser shall be responsible at its
sole cost and expense for correcting and re-submitting any
deficiencies noted by HUD in connection with the application for
HUD Approval no later than 3 Business Days after notification
from HUD of such deficiency. Purchaser also shall provide
the Riverwinds at St. Andrews Seller with a copy of any
correspondence from HUD with respect to the HUD Application no
later than 3 Business Days after receipt of such correspondence
from HUD. In the event that HUD or the Housing Authority
at any time disapproves the HUD Application or the HAP Voucher
Assumption Application, the Riverwinds at St. Andrews Seller may
terminate this Contract as to the Riverwinds at St. Andrews
Property, or all Sellers may terminate this Contract as to all
Properties, and the Deposit shall be immediately released by the
Escrow Agent to Sellers (or if this Contract is terminated only
as to the Riverwinds at St. Andrews Property, then the
Applicable Share of the Deposit shall be released by Escrow
Agent to the Riverwinds at St. Andrews Seller). Purchaser
shall pay all fees and expenses (including, without limitation,
transfer fees, assumption fees, title fees, endorsement fees,
and other fees) imposed or charged by HUD or its counsel in
connection with either the HUD Application and HUD Approval
(which obligation shall survive the termination of this Contract
and the Closing). Without limiting the generality of the
foregoing, Purchaser shall pay the cost of any physical
inspection report required in connection with obtaining HUD
Approval or HAP Voucher Approval.
4.7.7
Intentionally Omitted .
4.7.8
Intentionally Omitted .
4.7.9
Intentionally Omitted .
4.7.10
Notwithstanding anything in this Contract to the
contrary, any residual receipts account maintained by the
Riverwinds at St. Andrews Seller or the West Winds Seller (a "
Residual Receipts Account ") shall be disposed of
at the Closing as follows: (A) if the Residual Receipts Account
is required by HUD to be maintained because of the applicable
mortgage program, then the Residual Receipts Account will be
released to the applicable Seller at the Closing, and (B) if the
Residual Receipts Account is required by HUD in connection with
a Section 8 Housing program at the Property, then the Residual
Receipts Account will remain with the Property following the
Closing and Purchaser shall reimburse the applicable Seller at
the Closing for the amount of such Residual Receipts
Account.
4.7.11
Intentionally Omitted .
4.7.12
Purchaser recognizes and agrees that HUD may
require that any Assignment of HAP Contract contain a provision,
in accordance with the Memorandum of Beverly J. Miller,
Director, Asset Management, Office of Housing, dated January 6,
2005, that amends such HAP Contract to include the following
additional provisions:
Physical Conditions Standards and Inspection
Requirements. The Owner shall comply with the Physical
Condition Standards and Inspection Requirements of 24 CFR Part
5, Subpart G, including any changes in the regulation and
related Directives. In addition, the Owner shall comply
with HUD's Physical Condition Standards of Multifamily
Properties of 24 CFR Part 200, Subpart P, including any changes
in the regulation and related Directives. This obligation
shall apply both during the current term of the HAP contract and
during each successive renewal term.
Financial Reporting Standards. The Owner
shall comply with the Uniform Financial Reporting Standards of
24 CFR Part 5, Subpart H, including any changes in the
regulation and related Directives. This obligation shall
apply both during the current term of the HAP contract and
during each successive renewal term.
4.7.13
Purchaser acknowledges and agrees that, in
connection with HUD Approval, HUD may require the funding of
additional escrows and reserves, including without limitation,
additional repair escrows (collectively, the " Additional
Required Escrows "). Purchaser agrees that, at the
Closing, Purchaser shall fund all Additional Required Escrows in
Good Funds and in addition to the Purchase Price or any other
amount Purchaser is required to pay pursuant to this
Contract.
4.7.14
With respect to the HAP Voucher Assumption,
Purchaser agrees as follows:
4.7.14.1
Purchaser agrees that, no later than May 29,
2007 (the " HAP Submittal Deadline "), Purchaser,
at its sole cost and expense, shall meet with the Housing
Authority and, pursuant to the HAP Voucher Contracts and Form
HUD-52641, shall submit all applications, documents,
information, materials and fees (collectively, the " HAP
Voucher Assumption Application ") required by the
Housing Authority in order for the Housing Authority to review
and approve Purchaser's request that the Housing Authority
approve each HAP Voucher Assumption (the " HAP Voucher
Approval "). In addition to the foregoing,
Purchaser recognizes and agrees that the Housing Authority
requires Purchaser to complete and return the items listed on
Schedule 4.7.14.1 (together with such other
requirements as the Housing Authority may from time to time
impose, the " Housing Authority Requirements ").
Purchaser agrees, at Purchaser's sole cost and expense, to
submit the Housing Authority Requirements to the Housing
Authority at such times and in such form as the Housing
Authority requires, together with any fee required by the
Housing Authority in connection therewith. All such
Housing Authority Requirements shall be submitted by Purchaser
within such time frames as are necessary in order for the
Closing to proceed on the scheduled Closing Date. Further,
Purchaser shall make such filings post-Closing as required by
the Housing Authority for the HAP Voucher Approval. The
provisions of this Section 4.7.14.1 shall survive
Closing.
4.7.14.2
Purchaser agrees to provide the West Winds
Seller with a copy of the HAP Voucher Assumption Application no
later than 2 Business Days prior to the HAP Submittal Deadline
and shall provide evidence of its submission to the Housing
Authority on or before the HAP Submittal Deadline.
Purchaser acknowledges and agrees that Purchaser is solely
responsible for the preparation and submittal of each HAP
Voucher Assumption Application, including the collection of all
materials, documents, certificates, financials, signatures, and
other items required to be submitted to the Housing Authority in
connection therewith.
4.7.14.3
Purchaser shall comply with the Housing
Authority's guidelines in connection with each HAP Voucher
Assumption. Purchaser shall be responsible, at its sole
cost and expense, for correcting and re-submitting any
deficiencies noted by the Housing Authority in connection with
each HAP Voucher Assumption Application no later than 3 Business
Days after notification from the Housing Authority of such
deficiency. Purchaser also shall provide the West Winds
Seller with a copy of any correspondence from the Housing
Authority with respect to each HAP Voucher Assumption
Application no later than 3 Business Days after receipt of such
correspondence from the Housing Authority.
4.7.14.4
Purchaser shall pay all fees and expenses
(including, without limitation, transfer fees, assumption fees,
title fees, endorsement fees, and other fees to release the West
Winds Seller of all liability under each HAP Voucher Contract)
imposed or charged by the Housing Authority or their counsel,
including the cost of any physical inspection report required in
connection with obtaining HAP Voucher Approval (such fees and
expenses collectively being referred to as the "
Assumption HAP Voucher Fees "), in connection with
each HAP Voucher Assumption Application and each HAP Voucher
Assumption. The provisions of this Section
4.7.14.4 shall survive the termination of this Contract
and the Closing.
4.7.14.5
In connection with the HAP Voucher Assumption,
Purchaser agrees to deliver to the Housing Authority all
information or documentation as the Housing Authority reasonably
may request, including, without limitation, financial
statements, income tax returns and other financial information
for Purchaser and any required guarantor. The West Winds
Seller agrees that it will cooperate with Purchaser and the
Housing Authority, at no cost or expense to the West Winds
Seller, in connection with Purchaser's application to the
Housing Authority for approval of the HAP Voucher
Assumption.
4.7.14.6
Purchaser shall be in default hereunder if
Purchaser fails to submit a complete HAP Voucher Assumption
Application by the HAP Submittal Deadline, in which event the
West Winds Seller may terminate this Contract as to the West
Winds Property, or all Sellers may terminate this Contract as to
all Properties, and the Deposit shall be immediately released by
the Escrow Agent to Sellers (or if this Contract is terminated
only as to the West Winds Property, then the Applicable Share of
the Deposit shall be released by Escrow Agent to the West Winds
Seller).
4.7.14.7
If Purchaser has complied with Sections
4.7.14.1 through 4.7.14.5 , to the extent applicable,
but the Housing Authority provides Purchaser with a written
response that the Housing Authority will not issue a formal
approval of any HAP Voucher Assumption Application until after
the Closing has occurred and title has been transferred to
Purchaser, then, notwithstanding any other provision herein to
the contrary, Purchaser shall not be in default hereunder and
such HAP Voucher Approval shall not be a condition to either
Purchaser's or the West Winds Seller's obligation to proceed
with the Closing; provided, however, that no later than 3
Business Days following the occurrence of the Closing, Purchaser
shall submit, to the extent not previously submitted to, or
accepted or held by, the Housing Authority, all documentation
and information required by the Housing Authority to complete
such HAP Voucher Assumption Application and, in any event,
Purchaser shall use its best efforts to obtain such HAP Voucher
Approval no later than 30 days following the date that the
Closing occurs. The requirements set forth and referenced
in this Section 4.7.14.7 shall survive
Closing.
4.7.15
Purchaser represents and warrants that, prior to
the HUD Submittal Deadline, Purchaser has taken all steps and
provided all information required by HUD in order to register
its approved assignee as a participant under HUD's Active
Partner Performance System or any similar electronic filing
system presently maintained by HUD (the " APPS ").
Purchaser or its approved assignee agrees to make all
filings required to be made electronically to HUD through the
APPS, including, without limitation, any advanced notification
required in connection with an event that will trigger 2530
approval.
4.7.16
Purchaser recognizes and agrees that (i) the
Hunt Club Property is subject to an Amended and Restated
Agreement as to Restrictive Covenants dated as of June 1, 1990
and recorded September 7, 2001, in Book 74L, Page 599 in the
real property records in Spartanburg County, South
Carolina, between the Hunt Club Seller and the South
Carolina State Housing Finance and Development Authority ("
Issuer ") relating to bonds for which the trustee
is The Bank of New York (" Trustee "),
and (ii) the North Slope Property is subject to an Amended and
Restated Agreement as to Restrictive Covenants dated as of June
1, 1990 and recorded September 6, 2001, in Book 1966, Page 821
in the real property records in Greenville County, South
Carolina, between the North Slope
Seller and Issuer relating to bonds for which Trustee
serves as the trustee (individually each of the foregoing
documents being a " LURA " and collectively the "
LURAs "). Each LURA shall be deemed an
Assumed Restriction for all purposes hereunder.
4.7.16.1
With respect to the LURAs, at the Closing, (a)
Purchaser shall assume all obligations under the LURAs and
accept title to the applicable Properties subject to the same,
and (b) each applicable
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